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Confidence Game: How a Hedge Fund Manager Called Wall Street's Bluff | 
 enlarge | Author: Christine S. Richard
Publisher: Bloomberg Press
Category: Book
List Price: $27.95
Buy New: $11.74
You Save: $16.21 (58%)
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Rating:  16 reviews
Media: Hardcover
Pages: 335
Number Of Items: 1
Shipping Weight (lbs): 1.2
Dimensions (in): 9.1 x 6.2 x 1.1
ISBN: 0470648279
Dewey Decimal Number: 368.87
EAN: 9780470648278
Publication Date: April 26, 2010
Availability: Usually ships in 1-2 business days
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Product Description
The collapse of America’s credit markets in 2008 is quite possibly the biggest financial disaster in U.S. history. Confidence Game: How a Hedge Fund Manager Called Wall Street’s Bluff is the story of Bill Ackman's six-year campaign to warn that the $2.5 trillion bond insurance business was a catastrophe waiting to happen. Branded a fraud by the Wall Street Journal and the New York Times and investigated by Eliot Spitzer and the Securities and Exchange Commission, Ackman later made his investors more than $1 billion when bond insurers kicked off the collapse of the credit markets. - Unravels the story of the credit crisis through an engaging and human drama
- Draws on unprecedented access to one of Wall Street's best-known investors
- Shows how excessive leverage, dangerous financial models and a blind reliance on triple-A credit ratings sent Wall Street careening toward disaster
Confidence Game is a real-world "Emperor's New Clothes," a tale of widespread delusion and one dissenting voice in the era leading up to the worst financial disaster since the Great Depression. Christine Richard is a reporter with Bloomberg News whose work has been recognized by The New York Press Club and The Newswomen’s Club of New York.
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Showing reviews 1-5 of 16
 A superb account of the end of the credit bubble September 3, 2010
Alva Svoboda (Oakland, CA)
Christine Richard has managed to make a story whose end we already know, about a topic that is still arcane to most (bond insurance), a page turner as good as any suspense novel I've read lately. She combines an ability to explain the big picture and the details of the economic story with a timeless David and Goliath pitting Ackman and herself against the monstrous con that was not only MBIA, but all of the multitude interested in preserving MBIA's public image because a downgrade would be so consequential to the corruption of credit: Democratic congressmen who wanted housing for their uncreditworthy constituents, Republicans who wanted to take credit for false prosperity and keep the money coming, and especially the ratings agencies, other bond insurers, and banks. This is one of the books that should endure to tell the story of the "oughts" fifty years from now.
 Amazing August 10, 2010
Ira E. Stoll
This book came out in late April, and the Wall Street Journal, the New York Times, and the Financial Times have all ignored it.
The lack of attention is a shame, because it's an amazing, amazing book.
Hedge fund manager William Ackman gave author Christine Richard impressive access. She writes, "Ackman gave me a CD-ROM containing every e-mail he had written or received that mentioned MBIA as well as years of appointment calendars and access to an office filled with more than 40 boxes of documents he'd collected in researching MBIA. He encouraged colleagues, advisers, and friends to talk with me and spent hours answering my questions."
The result is a fast-paced, behind-the-scenes look at how a "short" investor uses the press, stock analysts, and the government to beat down the price of a stock he has bet against.
Mr. Ackman's campaign that is at the heart of this book is his war against Municipal Bond Insurance Association, or MBIA.
Here the key journalist seems not to have been anyone at the New York Times, or even Ms. Richard, who worked for Dow Jones and Bloomberg. No, it was "Marty Peretz, the editor-in-chief of the New Republic magazine, who had been Ackman's thesis adviser when he was an undergraduate at Harvard."
Mr. Peretz, reports Ms. Richard became the first investor in Mr. Ackman's hedge fund after Mr. Ackman "drove from Boston to Peretz's summer house on Cape Cod to pitch him the idea." (Mr. Peretz tells me the investment was $500,000, made at the time and not subsequently increased.)
By Ms. Richard's account, Mr. Peretz wasn't exactly what you'd call a passive investor. After the SEC didn't really follow up on a meeting in which Mr. Ackman aired his allegations about MBIA to SEC staff, Mr. Peretz wrote in July 2004 to the chairman of the SEC, William Donaldson, "with whom he was friendly." Reports Ms. Richard, "Peretz's appeal stirred a response at the SEC, which asked Ackman to return to Washington."
If the SEC did not act against MBIA, Mr. Ackman would try another regulator, the attorney general of New York, Eliot Spitzer. Ms. Richard reports that in January or February 2005: "Ackman, along with Marty Peretz, and Eliot Spitzer were huddled around a small table in the attorney general's office, eating pressed turkey sandwiches. Peretz had arranged the lunch meeting. Ackman wanted to point Spitzer toward the important issues at MBIA."
If Mr. Spitzer and the SEC both did not act, there was always the chairman of the House Financial Services Committee, Barney Frank. The book recounts Mr. Ackman and his lawyer flying to Boston on June 5, 2007 for a meeting with Congressman Frank, with whom they visited only after they "picked up Marty Peretz, who knew Frank from their student days at Harvard." Mr. Frank agreed to hold hearings on MBIA.
There's plenty of other rich detail here. The broker who gave Mr. Ackman the idea to short MBIA worked for, of all places, Lehman Brothers.
The dependent relationships among short-sellers, regulators, and the press are illuminated for all to see. At one point, Mr. Ackman asks an SEC official what it would take to get the agency to act. The SEC official's reply? "A story on the front page of the Wall Street Journal or the New York Times, especially the New York Times."
What to make of the whole episode? Well, it's certainly a newsworthy tale, and not only for those interested in hedge funds or short-selling. One MBIA vehicle named something like Latin for "black hole," Ms. Richard reports, "owned liens on 11,000 properties in Pittsburgh, nearly 10 percent of the entire city."
As an investment idea, shorting MBIA was a big success. The shares lost more than 80% of their value. "Pershing Square investors made about $1.1 billion," Ms. Richard reports. About $140 million of that was Mr. Ackman's personally, though, Ms. Richard reports, he has pledged the entire amount to charity.
Those troubled by Mr. Ackman's use of the regulators to press his position at least have to concede that MBIA and its allies also used the regulators to press their own case against Mr. Ackman, subjecting him to SEC and New York attorney general inquiries that were eventually dropped.
While Ms. Richard's book is finished, the story isn't over. Some value investors are now placing bets on an MBIA recovery. And short-sellers are circling the for-profit education industry using the same strategy of press and regulatory pressure that was deployed so successfully against both Farmer Mac and MBIA.
Confidence Game - a great book! July 20, 2010
Jim U.
I think this book is a must read for anyone who is interested in how the financial crsis of the past few years could have happened. The author presents a fascinating recount of Mr Ackman, and others, who saw the inevitable on the horizon. The book does drag on a bit with the process and Mr Ackman's persistence but this is also important to understanding how long and deep the crisis was in its development. The author also got my attention with how she moved into the first person, on occasion, as she wrote about her involvement. This book definitely has a permanent place in my book collection.
Amazing insight into the financial disaster - must read. July 19, 2010
Tulsa Reader (Tulsa, OK)
Bill Ackman is an amazing investor and a great critical thinker and the book alone is worthy just to understand how he thinks and applies himself in the financial markets. He also does an incredible job of explaining through example why short sellers are so incredibly important to our financial system and why the mass media and our financial regulators miss the mark in vilifying the short seller, which is more or less cheap pandering to the establishment. Terse criticism of public companies based on facts should not only be welcomed it should be encouraged.
The book does a great job of uncovering the pivotal (albeit silent) role bond insurers played in expanding leverage into the system built on top of a house of cards, and how the concept of bond insurers and their business model is flawed beyond any measure of common sense, funded by the taxpayers of America. It also demonstrates how the Rating Agencies amazingly sat around sucking their thumbs despite the mounting evidence to the contrary. I also found it very interesting that had the regulators listened to Bill's critical analysis starting in 2002 a significant portion, perhaps as much as 80%, of the financial crises could have been avoided. The regulators failed miserably in performing their function which should serve as a strong warning for those seeking peace of mind in the mountains of new regulations flowing through Washington.
This is an excellent book, and very educational for people interested in investing and politics alike. Two thumbs up!
Worth the money July 12, 2010
Gelu Tudose (Romania)
1 out of 1 found this review helpful
Excellent book. Provides a good picture of the situation and a great example of resolute attitude. Not easy to fight the establishment, even if one is right.
Showing reviews 1-5 of 16
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