producers who either moved the mortgage markets or supervised them.
These uncensored dialogs speak for themselves, revealing a world of finance that few ever get to see. These are told by a group of Wall Street market movers who collectively contributed to the greatest financial crisis of our time. They reveal heroes, villains, and those caught in the trap. Some were brave, some weak, and some were victims of a system that does not value human beings in its pursuit of almighty profits. Their combined message is one so profound that we believe it is essential for the wounded public to understand the crisis from their view in order to heal from the havoc of the last few years and perhaps begin to remake our system. This book is our effort to right the wrongs of those hurt by the debacle on Main Street and Wall Street. Our hope is that it will bring light to some of the darker corners of the world of money.
As a reader you will notice a remarkable absence of women speakers in these pages. That is because the upper levels of Wall Street are overwhelmingly male. In fact, the few women in the mortgage markets are disguised as men; otherwise, they would be immediately recognizable by their gender. Peter and I chose to write the book in his first person voice, for we felt going back and forth between us would be too distracting for the reader. The result is the blending of our voices, writing styles and thoughts.
The book is laid out with the intention of building momentum through the crisis. We begin with Peter’s early days in the industry and how the Wall Street mortgage markets progress through his eyes from the 1980s to the present. I joined as his partner in our search firm in 1996. I left the search business in 2008 in response to the growing financial crisis to start Good BusinessInternational, Inc. (Good-B), a new media company dedicated to “building better business for a better world.” As human capital experts, we were not directly working on the fixed income desks, but instead were interfacing with the human beings behind these markets at all the key firms. This gave us a remarkably advantageous view to place the pieces of the puzzle together.
The conversations detail the human struggle behind the market collapse. They lay out the foundation for the subprime mortgage markets, and how they worked from the view of market makers. You will learn how they spun out of control and why they could not stop the momentum—although many in the industry wished they could. The earlier chapters expose the problems preceding and during the crisis, while the later chapters offer solutions and possibilities for the future. All along the way, the market makers reveal the flaws in the system and how they believe these can be repaired. Our goal is to open debate about this dark moment in our history that continues to create economic suffering for many millions, lest our recent history be swept under the rug. It needs to be discussed, debated, and re-examined if we are to learn from our mistakes.
We wish to thank our wonderful agent Bill Gladstone who never gave up on us, our talented and wise friend and business associate Ann Graham, Fast Company pioneer Alan Webber who agreed to do the Foreword conceptually before the book was written, our friend and book marketing expert David Wilk, Steve, Bruce, Tracy and the wonderful crew at FastPencil Premier, our editor Steve Vendeland, our readers and friends Doug Rauch, Hadrien Coumans, Robert Sherman, Mark Sclafani, Louise Westfall, Mai Watts, and Peter LaCoux, and my team at Good Business. We thank Martin Rutte, the author of Chicken Soup for the Soul at Work, for his astute guidance and support. After reading the unedited manuscript, Martin declared he now sees Wall Street “with different eyes” and no longer feels overwhelmed by the enormity of fixing it. It is our hope that you, our readers, will feel that way too.
Monika Mitchell
Good Business International, Inc.
New York, New York
Foreword
I first met Peter Ressler at a gathering in Boston a couple of years back. The event was sponsored by a think tank devoted to advancing the concept of “conscious capitalism”—a fancy name for examining new ways to blend the economic vitality of the market with the social values of the community.
There were a number of speakers who took turns at the podium to tell their stories, a star-studded parade of brilliant business school professors and deans who were teaching a new way of doing business, successful corporate executives who’d built their companies around values greater than pure profit, and field-tested change agents whose work offered important lessons on how to make change happen, each with a PowerPoint presentation and a solid message. But when Peter got up to speak I knew at once that we were in for something special. Not just something different. Something remarkable.
Here was a guy who came from the street—and sounded like it from his first sentence.
And here was a guy who came from the Street—and knew the real ins and outs of how the world of finance really works.
It’s not often that you get to hear from a guy who is street smart and market wise, a guy who has been in the belly of the beast, where huge sums of money are made—and huge violations of trust committed. A guy who witnessed the worst economic disaster in modern history, up close and personal. And most important, a guy who has emerged from all his experiences in the crucible of Wall Street with his own values and spirit and integrity intact.
The impression Peter made on me that day was a powerful one. He spoke with great conviction and moral clarity. He talked about the way Wall Street worked. And how the code of conduct, the rules of engagement on Wall Street were largely responsible for the economic meltdown that had destroyed the lives of millions of Americans here at home, cast the entire world into a deep global recession, put national economies at risk, and called into question the principles and practices of America’s version of capitalism.
He didn’t pull his punches in that speech—and he doesn’t pull his punches in this book, either.
He told stories in that speech, recounted conversations with real people whose lives had been demolished in the wake of Wall Street’s collapse, real people who had demolished the lives of others in the financial binge that lead up to the collapse.
That’s what made his speech so powerful and what makes this book so important. Peter isn’t a journalist trying to piece together the story of the biggest financial disaster in American history. He isn’t an outsider looking in, trying to imagine a world he’s never experienced. He isn’t reporting second-hand on conversations that other people had, recreating the experiences and attitudes of the money-hungry men at the center of this global economic debacle.
These are real conversations with real people who talked directly with Peter. This is really what Wall Street sounds like. This is really how Wall Street thinks.
“Eat what you kill.”
“The human factor is too far removed from what we do.”
“The moral code of the financial industry has gone off course.”
“No one ever thought it would end like this.”
“I wonder when you look at the financial services industry, especially finance, whether the industry is fixed. Smart people are coming to that realization.”
“It’s not whether you act with integrity; it is whether you can out-fox your colleagues—that is what makes you ‘better.’”
If you’re like me, you’re going to want to read this book with a marker to underline all the candid admissions, sad confessions, and brain-dead braggadocio that Peter and his co-author Monika Mitchell have recorded. You cannot read this book without shaking your head at what you learn, and then shaking your fist at the people whose voices you hear.
This is a book about hubris. About men whose narcissism knows no limits, whose self-regard and self-absorption can only be fed by limitless amounts of money, money created with no regard to the human consequences or social impact of their rapacious appetites.
This is a book about a massive failure of leadership in American business. It describes a culture of greed and an attitude of entitlement so detached from every-day reality as to be beyond shocking. It is appalling. And yet it is pervasive.