Just as "What Greenspan Can't Tell You" was a must read of 2008 (forewarning of all that would occur), so is "Bailout Nation" in 2009. These are two of the most important books written in this decade.

Barry Ritholtz has struck a nerve in the country formerly known as America---the Land of the Free. It has been hijacked by the irrational hype and reckless spending known as ObamaNation---the Land of the Free Bailout. Our new President appears destined to be known as the King of Economic Trauma; which coincidentally, rhymes with Obama. He also appears destined to be a one term wonder, ala Jimmy Carter; a nice enough guy, but as effective at stirring the imagination of the country as an incompetent banker.

Ritholtz has a sharp, compelling & witty style of laying the facts on the table, which is something this country desperately needs to digest. The dubious fiscal policy of the past decade has done a good job of "stimulating" financial disaster & the current administration is only fanning the flames of economic despair. If I hear "Stimulis Package" one more time, I'm going to lose it. Bail this out, Corporate America! How's this for a new approach to dealing with failing businesses---You don't make money, you go away. Why should lousy corporations be rewarded for incompetence? The answer to that rhetorical question is, let 'em go under; don't give them one penny of the taxpayers money to get their sorry posteriors out of hot water.

In the end, it's our children's children's children's children who will still be paying for all this nonsense. I shudder to think what's in store for the world by then. Will we ever discover the basic economic principle of "supply & demand"? It's still a good system, if anybody had the courage & conviction to adher to it. Clearly the current President is too busy trying to save the world without the slightest clue about what to do. No teleprompter will help him out of this mess.

I would say this was a thought provoking book about our present crisis. Its a difficult topic but Ritholtz used a helpful format of short chapters and "Intermezzo"s. Although it's a difficult topic it's quite readable and he allows you to see the Gall of some of these highly educated,formerly respected, well heeled THIEVES of WALL STREET.

In the past year, we have seen a parade of bailouts of Wall Street's biggest firms. The cacophonic sounds of "bailout, bailout" started getting on my nerves as rich bankers went hat in hand to Captiol Hill to get their share of the largesse. I have always been against the bailouts from the get-go and Mr. Ritholtz has given us some good ammunition to prove that the bailouts were mostly of DC's and Wall Street's own doing.

Everybody wanted to get in on the action in the wake of the dot-com boom and make those millions that heretofore were only a domain of those who made their money in the tech field. CDOs were the way to reach those stratospheric heights.

But something in my mind said "If the people on Wall Street got all of these bad mortgages in the first place, where did they come from?" Mr. Ritholtz answers that question perfectly on Page 244 where he says that the problem arose with ourselves on Main Street. As a man of modest means, I knew very well that I could not afford my own home and will not for a few years down the road. Many of my neighbors thought otherwise and clamored to get the "home of their dreams" and promptly defaulted a short time later. In essence, there is plenty of blame to go around.

As an open disclosure, I am pretty libertarian when it comes to economic issues and I withhold a five-star rating because the author proposes unrealistic solutions to fix the problem. Would any of the solutions he proposes pass congressional muster? As we have seen, the big banks have pretty much have a headlock on both parties. President Obama recieved a ton of campaign money from the likes of Goldman Sachs and Citigroup and has installed a Fed crony as his Treasury Secretary. I do not hold out much hope for reform from these characters. It will be politics as usual for the next four years.

A small aside in my review. If the housing bust has been confined to the Sun Belt, what happened in Texas that spared them from the same housing bust fate as their warmer climate neighbors?

A great overview of the housing crisis and a must read, but I must have an open mind and read other related books out there to get more information.

Some books can get technical when talking about the financial meltdown, but Barry does a great job of walking you through the mess going back to the many catalysts that initiated the ensuing events in layman's terms.
Have been following his blog the "Big Picture" for a while so I was familiar with his writing style. Every one on both sides of the political aisle is taken to task so the book is non-partisan.
We need more people like him to shine the light on the shenanigans the smoke & mirrors our politicians & corporate banking elites are perpetrating on the masses!

I follow Barry Ritholtz blog - The Big Picture - for quite some time and it's quite interesting and educational. I was very curious about the book. The book is highly entertaining, easy and quick to read. Barry mades good points on the financial crisis and the transformation of the United States from a true enterpreneurial country to a bail out nation where the lack of accountability is truly mind boggling.
The reasons I'm not giving it five stars are twofold:

1. The timing of the book. Things are always clearer when looked in retrospective. In this regard, I can not praise enough the foresight and wisdom of Peter Schiff who wrote Crash Proof: How to Profit From the Coming Economic Collapse (Lynn Sonberg Books) in February 2007.

2. I think Barry Ritholtz does not fully grasp the Austrian School Economic theory. Although he correctly traces the root cause of the problem to the horrible Alan Greenspan interest rate policies, he supports the massive government spending in the 1930s, advocates more regulation and supervision, and most of the ideas that are proposed in the last chapter ('Advice to a New President') call for more government spending, in a classic Keynesian fashion. Here I highly recommend the book Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse by Thomas E. Woods Jr. - in my opinion the best book that accurately describes the current crisis and the way out of it.

Anyway, is still a great book!

Barry delivers his same style to his fantastic "The Big Picture. If you are a follower of the blog it has similar ideas and topics as discussed on the blog. However he has time to dive in topics that only get a few lines on the blog. A great book.

Quick and Excellent read. Barry meticulously guides readers through the recent financial crisis with both wit and wisdom. Barry accurately depicts causation and responsibility without political prejudices or subjectivity leaving readers feeling truly informed. He employs historical examples, defines nebulous concepts, and steers readers through murky financial transactions with precision and clarity. Indeterminate of fiscal or economic comprehension before reading Barry's book, readers will feel like graduates and possess the root understanding necessary to articulate and describe the failures and fallacies for the financial fiasco.

There is a full book review of Bailout Nation at Wall St. Cheat Sheet:

As of the end of spring 2009, I still get carpet bombed with the same question: "How did this financial crisis happen?" No matter how many times I repeat the same two minute recap, apparently people need to see the facts in print (to their credit, the story does have a lot of actors, locations, and other variables). Alas, the savior to your dry mouth and bewildered faces has arrived: Barry Ritholtz's Bailout Nation.

Read the rest of my review:

wallstcheatsheet dot com/?p=160

Bailout Nation is a very readable, educational, timely and comprehensive book explaining how our financial system nearly collapsed, real estate and stock markets crashed, and corporate welfare morphed into major bailouts by we taxpayers. Covering a history of bailouts, finance and credit, as well as modern bailouts and market failures, it's well-researched and documented, with lots of graphs and memorable data points -- some data is as recent as Q1 of 2009. Very readable and contains helpful explanations for readers not steeped in financial expertise.

Many good quotes and illustrative lessons, such as:
Wall Street's creation of financial derivative instruments such as CDOs were "the financial equivalent of cold fusion...Someone would either be winning a Nobel prize in economics -- or going to jail." pg 113

"With so many moving parts, too much leverage, and too much risk taking, [deregulated major] banks became too big to be effectively managed. In bailout terms, they were too big to fail, but in actual operation they were too big to succeed." pg 136.

The author pulls few punches with eye-catching chapter titles like "Dot-Com Penis Envy."

However, from a policy perspective, the author decries the government's "radical deregulatory movement" as "nonfeasance" (a play on the concept of malfeasance), but apparently puts blind faith in the superior abilities of regulation and regulators. pg 134. But the author's merely claiming that deregulation failed is too simple, and even worse, doesn't provide a better answer -- is the implication that simply more regulation and the sacred wisdom of government bureaucrats will do better?

Barry repeatedly excoriates Reagan, Bush and their administrations, as well as well as "radical deregulation" and the "radical right."
Quoting music attorney Gene Salomon, "Since the 1980's under Reagan, we have eliminated the professsional civil servants necessary for regulation to work." (pg 195) While he correctly points out the problems of excessive deregulation, he does not offer specific, credible alternatives for regulation -- HOW, who, and what to do in order to regulate effectively and without the insidious influence of political interference. He rightly decries the abuses of "casino capitalism," but offers few defenses of capitalism,or explanations of the downsides of socialism and other economic systems. The reader could easily get the impression that all deregulation and capitalism are undesirable, which would be a very destructive and erroneous lesson to learn.

Further, the author's partisan tinge peeks through repeatedly:
Besides making Fed Chairman Alan Greenspan the chief bete noire (most culpable actor), the author happily disses Presidents Reagan and Bush, Senator Phil Graham, Enron CEO Ken Lay and other conservative players. Somehow, the roles of President Clinton and other luminary participants such as Democratic Senator Chris Dodd, Treasury Secretary Robert Rubin or Merrill Lynch CEO Stanley O'Neill are mentioned either only briefly or not at all.

Sometimes the author's political bias becomes a troubling distraction to his otherwise valuable points:
He lists many causes of the sub-prime loan mess, but completely lets off the hook several culprits: Congress, government-sponsored enterprises Fannie Mae and Freddie Mac, speculators who improperly did "naked" shorting of stocks, the incentives from the mortgage interest deduction, and the Community Reinvestment Act legislation which, when combined with politicians' influence pushed banks to make loans to economically-disadvantaged borrowers. pp 120 and 251. Barry excuses Democratic Rep. Barney Frank, and dismisses all "blame the Dems" viewpoints as mere partisan sniping. In spite of claims to be offering bipartisan criticisms, the pols held to task are overwhelmingly Republican and conservative. When acknowledging the corrupting influences of lobbyists, at least he "points to a bipartisan failure." pg 260, but most of the detailed blame discussions seems quite partisan.

In spite of these frustrations, the book is very well-written, entertaining, and educational -- especially for a non-finance specialist such as this reader -- and a bargain at Amazon's price.

Bailout Nation is a very readable, educational, timely and comprehensive book explaining how our financial system nearly collapsed, real estate and stock markets crashed, and corporate welfare morphed into major bailouts by we taxpayers. Covering a history of bailouts, finance and credit, as well as modern bailouts and market failures, it's well-researched and documented, with lots of graphs and memorable data points -- some data is as recent as Q1 of 2009. Very readable and contains helpful explanations for readers not steeped in financial expertise.

Many good quotes and illustrative lessons, such as:
Wall Street's creation of financial derivative instruments such as CDOs were "the financial equivalent of cold fusion...Someone would either be winning a Nobel prize in economics -- or going to jail." pg 113

"With so many moving parts, too much leverage, and too much risk taking, [deregulated major] banks became too big to be effectively managed. In bailout terms, they were too big to fail, but in actual operation they were too big to succeed." pg 136.

The author pulls few punches with eye-catching chapter titles like "Dot-Com Penis Envy."

However, the author's partisan tinge peeks through repeatedly:
Besides making Fed Chairman Alan Greenspan the chief bete noire (most culpable actor), the author happily disses Presidents Reagan and Bush, Senator Phil Graham, Enron CEO Ken Lay and other conservative players. Somehow, the roles of President Clinton and other luminary participants such as Democratic Senator Chris Dodd, Treasury Secretary Robert Rubin or Merrill Lynch CEO Stanley O'Neill are mentioned either only briefly or not at all.

Sometimes the author's political bias becomes a troubling distraction to his otherwise valuable points:
He lists many causes of the sub-prime loan mess, but completely lets off the hook several culprits: Congress, government-sponsored enterprises Fannie Mae and Freddie Mac, speculators who improperly did "naked" shorting of stocks, the incentives from the mortgage interest deduction, and the Community Reinvestment Act legislation which, when combined with politicians' influence pushed banks to make loans to economically-disadvantaged borrowers. pp 120 and 251. Barry excuses Democratic Rep. Barney Frank, and dismisses all "blame the Dems" viewpoints as mere partisan sniping. In spite of claims to be offering bipartisan criticisms, the pols held to task are Republican and conservative. And when acknowledging the corrupting influences of lobbyists, he "points to a bipartisan failure." pg 260.

From a policy perspective, the book decries the government's "radical deregulatory movement" as "nonfeasance" (a play on the concept of malfeasance), but apparently puts blind faith in the superior abilities of regulation and regulators. pg 134. But the author's merely claiming that deregulation failed is too simple, and even worse, doesn't provide a better answer -- is the implication that simply more regulation and the sacred wisdom of government bureaucrats will do better?

Barry repeatedly excoriates Reagan, Bush and their administrations, as well as well as "radical deregulation" and the "radical right."
Quoting music attorney Gene Salomon, "Since the 1980's under Reagan, we have eliminated the professsional civil servants necessary for regulation to work." (pg 195) While he correctly points out the problems of excessive deregulation, he does not offer specific, credible alternatives for regulation -- HOW, who, and what to do in order to regulate effectively and without the insidious influence of political interference. He rightly decries the abuses of "casino capitalism," but offers few defenses of capitalism,or explanations of the downsides of socialism and other economic systems. The reader could easily get the impression that all deregulation and capitalism are undesirable, which would be a very destructive and erroneous lesson to learn.

In spite of these frustrations, the book is very well-written, entertaining, and educational -- especially for a non-finance specialist such as this reader -- and a bargain at Amazon's price.

Mr Ritholtz does an excellent job drawing a trendline from the first bailout in 70's to the latest bailouts of 2009. He illustrates how our own government cheer-led us into the Next Great Depression.

What makes this book different from books of other numerous authors?

* The book is written in a plain language an average person can understand
* The book is well-structured and sticks to historical events which led us into the mess
* For all government bailouts, Mr Ritholtz brings focus to their long-term effects rather than short-term ones
* Mr Ritholtz does not try to predict future or give investment advice (thank you)
* Illustrations are hilariously funny


I enjoyed every page, it is very well worth time and money.

i bought the book and loved it. I was wondering, are you the same Barry that worked at OPCO with Sir Russell F. ???

im sure his knowledge and tutoring helped you become the great success that you are.

It has been said that 'if you can't explain something in simple terms that anyone can understand, you don't understand it well enough yourself.' From the standpoint of that axiom, it is clear that Barry Ritholtz understands well the causes of the Great Financial Crisis of 2008. In plain terms, Ritholtz explains not only what directly led to the Crisis, but the events of the last 30 years which laid the groundwork of moral hazard which allowed the Crisis to occur as it did. Indeed, the events of the last two years were the result of a confluence of things gone wrong, and all sides of the political aisle are culpable, which Ritholtz makes clear in Bailout Nation.

If you are looking for a clear, concise, bias-free explanation in layman's terms of the Financial Crisis and, most importantly, the myriad events which led up to it, then you should read this book. Actually, I think that EVERYONE should read this book, because if the warnings implicit in the book are not heeded very soon, the US will find itself in a situation that will be impossible to recover from intact. Indeed, we may already be there...

"Capitalism without failure is like religion without sin - it just doesn't work." Allan Maultzer, economist.
"The ultimate result of shielding men from the effects of folly is to fill the world with fools." Herbert Spencer, English philosopher.


Ritholtz tells the tale of how years of trying to control the economy with easy money has finally caught up with the U.S., and how the government's practice of repeatedly rescuing Wall Street and other organizations and industries has come back to bite them.

The government's response to the credit crunch and housing bust so far has rung up over $14 trillion in taxpayer liabilities. This all began in 1971 with the rescue of Lockheed aircraft ($250 million), followed by loan guarantees for Penn Central in 1974 ($676 million), the $1.5 billion rescue of Chrysler in 1980, Continental Illinois Bank in 1984 for $1.8 billion, the S&L Crisis of the early 1990s ($179 billion), etc. Other bailouts have used Federal Reserve rate reductions - eg. the 1998 LTCM crisis., the 1987 market crash, the dot.com crash, 9/11 as the Federal Reserve morphed from a lender of last resort to a guarantor of asset prices.

Who's to blame? The author includes Greenspan, Bernanke, rating agencies, mortgage originators, mortgage borrowers, President Bush, and Senator Gramm. He also excludes the Community Reinvestment Act because the biggest mortgage messes were in areas (L.A., Florida, Las Vegas, Phoenix) were not significantly influenced by CRA rules; in addition, major sources of subprime loans were not subject to the CRA rules.

If you think the collapsing economy and subsequent bailouts are too complicated to understand, this is the book for you. With wit, humor, clear insights, a healthy dose of irreverence and face-paced prose, Ritholtz delivers a book that every investor and taxpayer should read.

Bailout Nation is a great read, easy to follow logic that actually discusses the underlining problems that brought us to this financial mess. Barry Ritholtz does a fantastic job of finding the origins to the collapse of so many financial giants. He also discusses how these and past bailouts may lead to more financial problems in the future.

I would recommend this book for everyone interested in finding out how giants like Bear Stearns, Lehman Brothers and the auto makers are all connected and may lead to more problems because of corporate welfare.

You do not have to be in the financial industry to enjoy this book.

One fantastic read! This is a fast paced, fact laden walk through the entire mess which has caused us to become the BAILOUT NATION. How did the greatest capitalistic nation on earth get where we are today? Barry Ritholtz has the answers. If you are at all interested in politics or business this is a must read.

I will admit I am an outsider to the financial world. However Bailout Nation clarified current financial issues into a format that was hilarious and easy to follow. I am an avid reader of Barry Ritholtz's blog "The Big Picture," and this book showcases his ability to streamline all the best sources out there in a very comprehensive yet succinct manner. The clever artwork on the cover and between chapters proves very entertaining. I also enjoyed the section towards the end in which Ritholtz's respected contemporaries offered advice to President Obama.

Barry Ritholtz was a contrarian when it wasn't cool. He called it early and called it right. Now he deserves the praise that this great book is earning. We need more cool-headed analysts like Barry.

"Bailout Nation" is not only timely but an excellent reference source as to how we got to where we are today in our messed up economy. It's a great read and author Ritholtz is good with a turn of phrase as well as his broad overview of his subject matter.

Amazon Review


Long story short: After Bill Fleckenstein's GREENSPAN'S BUBBLES: THE AGE OF IGNORANCE AT THE FEDERAL RESERVE McGraw Hill asked him to do a follow up to that book. He (wisely) said no.

However, Bill suggested they contact me.

Which the publisher did. I turned them down (several times). Who had time to write a book? Besides, I did not want to do a fast rush-to-judgment type of thing. But they were tenacious in their pursuit, and I eventually succumbed to their flattery -- but on my terms, including having final edit on the manuscript. (This becomes important later on, as you will soon see).

Because of the way events played out, I ended up writing three separate Bailout Nation books over the next 15 months. The first version was a history of bailouts. This overview covered an arc from Lockheed (1971) to Bear Stearns (March 2008). Around the time this book was due (~Labor Day 2008), something was in the air . . . you could smell the leading edge of the approaching storm. I convinced the publisher to hold off a few weeks.

Boom! Fannie Mae blew up. Then Freddie Mac, Lehman Brothers, AIG, Citigroup, Bank of America. Soon Merrill was on the ropes, followed by Morgan Stanley, Goldman Sachs, GM and GE. All hell was breaking loose. Well, I thought, at least I had an ending. The expanded version of the manuscript, with greater emphasis on the latter part of 2008, was finished in December '08.

Or so I thought.

After I handed the book into the publisher (McGraw Hill), they let me know they had problems with my assessment of the Ratings Agencies. They were unhappy with my calling them "Pimps & Hos", or describing their business model of rating junk bonds as AAA for big fees as "Payola." (What would you call it?)

Not coincidentally, McGraw Hill owns of the largest Rating Agencies, Standard & Poor's.

The compromise was to remove the reference to Pimps, but using publicly available data and congressional testimony, to add more detailed analysis and quotations from experts. When it was finished, I found the revised section to be much more even handed -- and far more devastating -- to S&P. They (along with fellow rating agencies Moody's and Fitch's) were key enablers to the entire crisis. There were many other guilty parties, but I simply could not under-emphasize the ratings agencies.

When McGH rejected it again, I exercised my right to buy the manuscript back from them in January 2009. Numerous publishers were interested, but I went with Wiley -- they have a great deal of experience publishing business/investing related books, and as a publisher, had no conflicts of interest that would interfere with telling the full story.

The third version was the charm.

By this time, the amount of bailout money going to mismanaged companies, reckless speculators, and incompetent corporate executives had skyrocketed to 14 trillion dollars. This was infuriating to anyone paying attention.

Astonishing things happened as the book progresses. The more I researched and wrote, the more it was apparent we were witnessing the greatest heist ever made. By the last section of the book, history's biggest transfer of wealth -- from the taxpayer to the Banksters -- was taking place. Trillions were being shifted from the responsible to the reckless, from the prudent to the incompetent. It was infuriating -- and you will see as the book progresses my initial academic tone gets replaced with greater snark and anger.

I not only had my ending, I had a new cause -- exposing those who caused this mess, be they Democrat or Republican, Corporate CEO or derivatives trader. I hope the end result is something that will inform and illuminate, while entertaining you along the way . . .

Amazon Review


For quite some time, I have been writing about Bear Stearns and other financial train wrecks. This was long before the credit crisis and market collapsed occurred.

Bill Fleckenstein had touched on these subjects in his book, GREENSPAN'S BUBBLES: THE AGE OF IGNORANCE AT THE FEDERAL RESERVE. When McGraw Hill wanted to do a follow up to that book, they went to Fleck, and asked him to write a book on the bailouts. Being a wise and astute man, he said no. However, Bill suggested they contact me.

Which they did. Several times. I turned them down. Several times.

Who has the time to write a book? And, I did NOT want to do a fast and dirty, rush-to-judgment. They were persistent, and we eventually agreed I would cobble together 35,000 words over 6 months. Something that was more than a superficial first take on the subject. Oh, and I would have final edit on the manuscript. (This becomes important later on, as you will see).

They were tenacious in their pursuit. Eventually, I succumbed to their charm and flattery, and agreed to try to explain how all of this bailout madness came to happen.

Funny thing is, I ended up writing three separate Bailout Nation books over the next year. The first version of the book was a mere history of bailouts. It was overview, an arc from Lockheed in 1971 to Bear Stearns in 2008. But around the time the book was due (~Labor Day 2008), it was missing something. Any Wall Street veteran can tell you something was in the air . . . you could smell the leading edge of an approaching s#@t-storm. The markets were showing signs of distress in August, and I managed to convince the publisher to hold off a few weeks. I told the publisher I needed an ending, and perhaps one might arrive sooner rather than later. Little did I know what happened next . . .

Fannie Mae blew up. Then Freddie Mac, Lehman Brothers, AIG, Citigroup, Bank of America. Soon Merrill was on the ropes, followed by Morgan Stanley, Goldman Sachs, and GE. All hell was breaking loose. At least I had an ending. That expanded version of the manuscript was finished in December '08.

Or so I thought. After I handed the book into the publisher (McGraw Hill), they let me know they had problems with my assessment of the Ratings Agencies. They were unhappy with my calling them "Pimps & Hoes", or describing their business model of rating junk bonds as AAA for big money "Payola."

Not coincidentally, McGraw Hill owns of the largest Rating Agencies, Standard & Poor's.

The compromise was to remove the reference to Pimps, but using publicly available data and congressional testimony, to add more analysis and quotations from experts. When it was finished, I found the revised section to be much more even handed -- and far more devastating to S&P. They (along with fellow rating agencies Moody's and Fitch's) were key enablers to the entire crisis. There were many other guilty parties, but I simply could not ignore the ratings agencies.

When McGH rejected it again, I exercised my right to buy the manuscript back from them in January 2009. After brief bidding war, Wiley won the publishing rights to the bok.

The third version was the charm. By this time, the amount of bailout money going to mismanaged companies, reckless speculators, and incompetent corporate executives had infuriated those of us watching this closely. You will see that as the book progresses, my anger levels rise. By the last section of the book, I am spitting mad. What amounts to history's biggest transfer of wealth -- theft, really -- was taking place. Trillions were being shifted from the responsible to the reckless, from the prudent to the incompetent. It is infuriating.

I not only had my ending, I had a new cause -- exposing those who caused this mess, be they Democrat or Republican, Corporate CEO or trader. I hope the end result is something that will inform and illuminate, while entertaining you along the way . . .