Confidence Game: How a Hedge Fund Manager Called Wall Street's Bluff

India Infoline News Service | Mumbai |

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.

Title: Confidence Game: How a Hedge Fund Manager Called Wall Street's Bluff
Author: Christine S. Richard
Pages: 335, Hardcover
Price: US $ 27.95
Published: April 2010
Published by John Wiley & Sons, Inc.

In Confidence Game: How A Hedge Fund Manager Called Wall Street’s Bluff, Bloomberg News reporter Christine Richard tells the story of how Bill Ackman tried to warn the powers that be that MBIA and the $2.5 trillion bond insurance business was a catastrophe waiting to happen. Written with the full support of and access to Bill Ackman, the book opens when the hedge fund manager issued a research report titled Is MBIA Triple-A? in late 2002. This is an opening shot in what became a long and bitter Wall Street feud between him and MBIA. Soon after, Ackman was branded a fraud in the media and was investigated by Eliot Spitzer and the SEC. However, the investigations ultimately led nowhere and Bill Ackman turned the tables years later when MBIA crumbled and his short position made his investors more than $1 billion.

MBIA, one of the five biggest financial institutions in the country in terms of outstanding credit exposure, Moody’s Investors Service, Standard & Poor’s and Fitch Ratings all assigned MBIA’s bond-insurance unit AAA or Aaa ratings. The rating companies had determined that the firm could weather another Great Depression and still meet all of its claims. Bill Ackman wasn’t convinced. MBIA held just $1 of capital for every $140 of debt it guaranteed. The high leverage meant MBIA had virtually no margin of safety.

Given unprecedented access to one of Wall Street’s most famous investors, Richard narrates a compelling, behind-the-scenes human drama that explores many crucial issues, including the market’s unquestioning acceptance of credit ratings, their dangerous reliance on financial models, and the use of securitization to create value from thin air and assumptions. 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.


About the Author:
Christine S. Richard has covered financial markets in Washington, Hong Kong, Singapore, and New York. Her work on the bond insurers received awards from the Society of American Business Editors and Writers, the Deadline Club, the Newswoman's Club of New York, the New York Press Club, the New York State Society of Certified Public Accountants, and the National Association of Real Estate Editors. Her articles were included in a series on the municipal bond market that was nominated by Bloomberg News in 2007 for the Pulitzer Prize. She lives in Frenchtown, New Jersey, with her husband and their daughter.

About Wiley:
Founded in 1807, John Wiley & Sons, Inc. has been a valued source of information and understanding for over 200 years, helping people around the world meet their needs and fulfill their aspirations. Since 1901, Wiley and its acquired companies have published the works of more than 400 Nobel laureates in all categories: Literature, Economics, Physiology/Medicine, Chemistry, Physics and Peace.

Our core businesses include scientific, technical, medical and scholarly journals, encyclopedias, books, and online products and services; professional/trade books, subscription products, training materials, and online applications and websites; and educational materials for undergraduate and graduate students and lifelong learners. Wiley's global headquarters are located in Hoboken, New Jersey, with operations in the U.S., Europe, Asia, Canada and Australia. The Company's website can be accessed at
http://www.wiley.com. The Company is listed on the New York Stock Exchange under the symbols JWa and JWb.
 

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