Tuesday, May 19, 2009

Number 12 is The Smartest Guys in the Room by Bethany McLean. This book details the rise and fall of Enron, which earned the dubious title as filing the largest single bankruptcy in US history. Way to go guys!

I work for a company that develops risk management software, and all I could think while reading this book, is how desperately Enron could've used some. Of course, they also probably wouldn't have USED it, they were rampant in their desire to run barely legal end-games around sound risk management and accounting procedures, but still... what they tried to get away with was just wow. And the thing is, working for the company I do, I actually understood some of what they were trying to get away with. I know what credit derivatives and zero return swaps and counterparties are. Makes me feel smart :) I mean, I don't understand everything; it's kinda like knowing enough of a foreign language to get the gist of the conversation, but knowing you're still missing nuances.

Anyway, it is a fascinating, maddening book reading about all these people who got pretty damn rich yet it never seemed to be enough. And that's the problem, no one ever said 'enough', not the banks, not their accounting firm, not their lawyers, becuase everyone was too busy making money off them, until finally, the house of cards couldn't be sustained and no one was making money anymore. Then they were cut loose.

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