Diana B. Henriques, an award-winning financial journalist, is the author of The Wizard of Lies, a New York Times bestseller about the Bernie Madoff scandal, and three other books on business history. As a writer for The New York Times, she has largely specialized in investigative reporting on white-collar crime, market regulation and corporate governance. more
“The simple truth was that financial institutions could no longer be allowed to fail — the links among them were [in the words of Longstreth] ‘simply too extensive to prevent one failure from triggering another.’”
“What worries me about this is it completely ignores the way our financial system actually works. No bank is an island in today’s world, regardless of its size. Midsize banks sell their loans upstream. They form syndicates that take on bigger risks. They provide critical lines of credit to big local industries that are big employers, so they’re connected to the larger economy in dozens of ways we may not even see until the dominoes start to fall.”
Diana discusses the lasting lessons from Black Monday – the biggest drop in Wall Street history – and the relevance in understanding today’s markets, along with insights from her extensive reporting on the Bernie Madoff scandal. Part of the Talks at GS series of Goldman Sachs.
One of the most challenging things I’ve done lately was to prepare, memorize, and deliver a TEDx talk at Yale earlier this month. Called “Trust, Lies and Bernie Madoff,” it explores the paradox of trust. Trust is both a nourishing, enriching part of life and an essential element of a healthy economy and a healthy society. BUT it is also “the only weapon a con man needs to destroy his victims’ lives.” How should we navigate the dual nature of trust when we handle our money? See my suggestions in the video above.
“Henriques notes the crash was actually seven years in the making, and she also demonstrates how it was the predicate to the financial crisis of 2008. Sadly, investors, regulators and bankers failed to heed the lessons of 1987, even as the same patterns resurfaced.”
“Henriques gives us a gripping, almost minute-by-minute account of the weeks that followed, including the posturings, the denials and the panics, as well as the “web of trust, pluck and improvisation” that pulled the markets through.”