Chasing Goldman Sachs – Suzanne McGee (Crown) The Rise and Fall of Bear Stearns – Alan Greenberg (Simon & Schuster)

In the wake of the 2008-2009 global financial meltdown, whose epicenter was found at the intersection of Wall Street and K Street, many books (Andrew Ross Sorkin’s ‘Too Big To Fail,’ Hank Paulson’s ‘On the Brink,’ etc.) have emerged to describe the macro view of how such events co-mingled to send the financial system spiraling out of control. Now, two new books have surfaced to open the kimono on the inside machinations that gave fuel to the financial meltdown fire.

In “Chasing Goldman Sachs”, author Suzanne McGee uses the ‘chasing’ metaphor to cover a whole range of issues, trends and examples of how investment banking has transmogrified over the past 30 years. Once Wall Street brokerage firms were no longer dependent on stock commissions (after the SEC’s ‘Mayday’ pronouncement of May 1975) firms began looking for ways to replace and increase profits through a variety of non-traditional methods. Everything from the creation of derivatives to voracious competition for business to the emergence into new markets proliferated throughout the 80’s, 90’s and 00’s.

Goldman Sachs was viewed by many as the leading progenitor of these new and advanced ways to make money by, in essence, shuffling or redirected money around and as such were the envy of the Street. (Or as Goldman CEO Lloyd Blankfien admits in the book that Goldman began ‘rationalizing it’s pushing of the ‘risk envelope’ during the credit bubble years.”) The trouble came when less informed players ineluctably began to mimic their techniques but did so with an increasing share of gusto and in a way that would ultimately, in many cases, have them driving so far ahead that they drove off the cliff. As ‘Chasing’ aptly demonstrates, Morgan Stanley, Bear Stearns, Lehman and many others ended up in hot water trying to ape Goldman’s success.

In the process, McGee’s rendering basically serves as a history of the entire Wall Street landscape of the last thirty or so years, covering the machinations of these top financial firms and their relationships with investors, the trading exchanges, the IPO market, real estate, the Fed and all the power players that were a part of the story. (Bernanke, the FDIC, the banks, etc. all have a role to play.) As McGee describes, as deals got riskier, “bankers and traders assumed that someone else higher up the food chain was doing the worrying for them.” Unfortunately, as events have borne out, such was not the case.

For another angle on the U.S. financial meltdown we look to Alan ‘Ace’ Greenberg’s latest book (his second) “The Rise and Fall of Bear Stearns.” Ace’s book is more of a memoir than a chronicle of the latest round of financial regress on the Street. The legendary Wall Street personality regales the reader with stories of his Oklahoma upbringings, his early days at Bear Stearns (where he served out his half-century career) all the way up to the days of running the company, avoiding the dot-com bust but landing head-first in the quicksand that became the mortgage backed securities, sub-prime meltdown.

Sitting and watching Bear’s stock price plummet from the high hundreds to an eventual $2 a share offer from JP Morgan Chase was both a sobering and melancholy finale for the well-respected veteran Greenberg. Though rather than crying sour grapes over this terminal ending, Greenberg saves most of his vitriol for his CEO replacement, Jimmy Cayne, who Greenberg views with unconstrained disgust as he (Cayne) appears to disregard the well-being of the company in its darkest moments, preferring to play golf or compete in bridge tournaments where he was a renowned championship player; a proverbial Nero as CEO.

The shame of the book is two-fold. One, is that Greenberg, a legend on Wall Street, shares very little of what made him the expert arbitrager of financial markets in the 70’s, 80’s and 90’s, and more importantly, that the book, only 197 pages in length, seems more designed to settle the score of his late period conflicts with those who took his position(s). If his purpose, as it appears, was to create what one writer described as a ‘memoir as revenge,” Greenberg has succeeded. If that is your view of success.

Read an excerpt of McGee’s book here.

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