A little more than two years ago, at the height of the crisis, I remember saying, “They’ll write books about this for years.” 

It took about eight months, but sure enough, reporters from top news organizations like the Wall Street Journal and the New York Times who had covered the story as it unfolded were quick to capitalize on the dramatic events that took place in the fall of 2008.

Today, as the stock market finally breaks through the pre-Lehman Brothers and the pace of crisis tell all books as abated, it’s worth taking a look back at the best (and worst) of the books chronicling the decline.  Before I decided to group these books into one review, I did write a review of Street Fighters: The Last 72 Hours of Bear Stearns by Kate Kelly of the Wall Street Journal, which I would include in the “Best” list.

The “Best of the Best” was Too Big To Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System from Crisis – and Themselves, by Andrew Ross Sorkin of The New York Times.  Like Street Fighters, Sorkin writes a fast paced, detailed accounting of the crisis, with an emphasis on the epicenter, Lehman Brothers.

Clearly, Sorkin has top notch sources, including the CEO’s of seemingly every large commercial and investment bank.  This was really hit home for me when he recounted the details of a conversation between Lloyd Blankfein, CEO of Goldman Sachs and Dick Fuld, CEO of Lehman Brothers.  Although we don’t know which person provided the exact particulars, it had to be one of the two.

Although Sorkin does include Washington’s role in the crisis, it is clear that his sources are mostly Wall Street people rather than beltway insiders.  David Wessel of The Wall Street Journal picks up what Sorkin leaves out in his book, In Fed We Trust: Ben Bernanke’s War on the Great Panic.

The strength of Wessel’s book is the insiders look at the Federal Reserve and his inclusion of other important events during the panic.  AIG, the world’s largest insurer that was effectively taken over by the government is an afterthought in Sorkin’s book even though it happened within days of Lehman’s bankruptcy.  Wessel gives AIG much more attention in part because Washington played a much larger role by stepping in and taking over and that evidently where he had his best sources. 

The worst book that I read in the aftermath of the crisis was not written by a reporter, but a former employee of Lehman Brothers, Lawrence McDonald, who wrote A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers.

Like any trader or salesman trying to capitalize on the current headlines, McDonald was smart enough to hit the bookstores early with an ‘insiders’ tale of the collapse.  Unfortunately, McDonald doesn’t appear to be an insider with any insight that wasn’t found in the newspaper accounts at the time. 

He doesn’t appear to have any contacts outside of his Lehman cronies and he puffs up the page count by working in a memoir, replete with his story of being the most successful meat salesmen on the East coast at one point.

I will say that this book was the funniest, though not intentionally so.  He fills the book with hilarious streams of consciousness like: “For the first time in my life, I seemed to matter.  [Lehman] was a place where mighty weights of responsibility had been rested on my shoulders, where great men finally treated me as an equal.”  Later on that same page, he tops even himself by writing, “And there it was, a glistening seven-figure bonus.”

Of the four books, the best is Sorkin’s due to his unparalleled access to the Wall Street elite.  Too Big To Fail, along with Wessel’s In Fed We Trust are all you need for a vivid picture of what happened.  Neither book changes the world with new insights, which is entirely forgivable given how quickly they came out after the crisis.  There will be plenty of time and opportunity for deeper analysis and introspection, but as far great reads go, these two are excellent.

Too Big To Fail:

The Inside Story of How Wall Street and Washington Fought to Save the Financial System – and Themselves

By: Andrew Ross Sorkin

Penguin Books, Ltd, London England, 2009

ISBN 1-101-13480-1

Recommendation: Buy

In Fed We Trust: Ben Bernanke’s War on the Great Panic

By: David Wessel

Crown Business, New York, New York 2009

ISBN: 978-0307459695

Recommendation: Buy

Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers

By: Lawrence G McDonald & Patrick Robinson

Crown Business, New York, New York 2009

ISBN-13: 0307588340

Recommendation: Sell