Book outline:
Ron Chernow has crafted an encyclopedia of the play by play morphing of a gentlemanly, honest, and trustworthy aristocratic banker into the current greedy, unscrupulous, and spineless high finance hoodlums, scum, and scoundrels that burn jobs, destroy communities and suck out peace from financially stable companies by loading them down with crushing debt of the cost of transaction they extract in the buying and selling of the companies.
This is an accounting of the human frailties in the failings of wealthy bankers anchored around the J.P. Morgan family and their multigenerational firm. Chernow catalogs the raw ethics and pompous arrogance in the business of high finance and banking by training his eyes on the American and European bankers, royalty, US Presidents and Congress, entrepreneurs, business leaders, and influential personalities of the Far East.
The earning of honor is expensive.
It takes an iron-willed discipline to not partake in an ugly frenzy where the rogue gang is eying an innocent and unprotected fair maiden of limitless resources. When the cunning dealmakers jump upon the unsuspecting public to rape and pillage their savings with weapons like the leveraged buyouts, junk bonds, and black-box asset sales leaving the governments and public baffled, confused, drained, dazed, and scarred there are no saviors, no police, and no good samaritans close enough to halt the assault until all is lost. Every bystander financier is challenged to not plunge into the ugly financial orgy which has no obvious or imminent consequence and no penalty for looting. The industry sees no honor in walking away or stopping the injustice of the assault on the public. Instead, it chastises those who don’t partake in these rich fishing expeditions where the fish are already in the barrel and all they need to do is to pull the trigger.
The help does arrive. It is often too little and too late. It halts nepotism, privilege, and secrecy in looting. The unfairness of outward actions is checked but the vices of thought, prejudice, racism, and favoritism are always beyond the reach of legislation. After the rogue sniper fires the shot, the flash is visible, and in an instant, the target is hit. The flash of light does not reveal the target and it’s already too late to shield the target. Such is the case of politicians racing to the crime scene in a bad movie where the damage is already done and irreparable harm costs the community for a long time. The bankers and merger snipers bribe away or execute hostile takeovers crushing the company cultures, jobs, livelihoods, and wellbeing.
This book shows every aspect of human frailty, decadence, debauchery, opulence, and ruthlessness unleashed by greedy bankers and also some deeds of honor, and a few instances of courage. It reinforces in every episode that it recounts, that discretion and confidentiality have been a virtue and secrecy and conspiracy a vice and will remain so for the rest of humanity. To stand guard and protect the public, the posse arrives too late. We must be vigilant to safeguard our own welfare.
What’s the core message?
Keep your business private. Guard your financial information from do-good financiers. Trust no one except close family. Maybe don’t even trust them. Business is a hazardous journey – always has been and it remains unchanged. Bankers are bandits – moneymen always slip into mischief. Trust is absent and expecting bankers and financiers to protect a company’s wellbeing as a higher priority than the profit they can extract from selling you out is a serious miscalculation. The politicians are not bright enough to understand the gaps that allow the finance industry to exploit average investors and decimate companies, sideline innovators and suck out value from conservative well-capitalized organizations. Congress moves too slowly and is not equipped to combat or challenge-well financed industry organizations that have benefitted to the tune of billions before the outrage of greed catches the politicians’ eye.
Don’t trust any banker. The bank/banker is in business to maximize profit. Your business, profit, work, devotion, or quality of the enterprise is not a banker’s first priority. Their own profit is.
How do these concepts compare with points raised in other books?
This book dissects the world of high finance. The behaviors of modern bankers are less scrupulous than at least some of the people of the old world where loyalty, honesty, and integrity mattered and a business leader could count on his banker’s advice with confidence. However, the world of trade, merchandising, and commerce has always tested human character for the selling-out point, the point at which the bankers sell out your wellbeing for their gain.
What the book does well.
This book masterfully brings alive four generations of the Morgan family over the course of 150 years, their goodness, weaknesses, challenges, and wealth as the business of high finances transitions from a personal touch and trusted business of relationships to an automated unapologetic go-for-the-jocular creed of pure impersonal, unrestrained greed.
What could have made this book better?
The author could have converted the indignation the readers feel toward rogue bankers into actionable tools:
(1) Checklist for how bankers should operate at a macro, industry level, and micro company and individual customer level.
(2) Criteria on how businesses should evaluate bankers. Inspect the tools, procedures, and policies that shield the customer from breach of information and confidentiality.
(3) Methods or suggestions on maintaining frugality and investing for growth. Separating out what hardens the family and company welfare first before placing savings in risky investments.
Who would benefit from reading this book?
Anyone interested in pursuing business as their work should read this book to understand the evolution of a no-regulation investment world when companies and governments were weak and unable to fund industry and wars to the enactment of the Glass-Steagall Act in 1932, its essential repeal in 1999, and new regulation in the Sarbanes-Oxley law of 2002.
What I got out of the book. Insights and takeaways.
(1) High finance professionals are mercenaries. Their motive is to get rich themselves. The clients are the essential ladder they will climb, use, and burn to reach their goal. If your financiers and bankers see value in your work that you are slow to monetize, they will sell your trade secrets to whomever they can for their own benefit.
(2) As a business professional, you have no protections or safety nets. The banks and financial investment firms have deep pockets to tie you up in litigation and drain resources. Be careful whom you speak with and what you disclose. To equal the playing field, marry a Shylock, the moneylender villain in Shakespeare’s 13th century Merchant of Venice play who demands a pound of flesh for his pound of gold.
(3) Build a life that is worthy of you. Learn, grow, innovate, invest, and inspire. There will always be greedy crocodiles lurking in the shallow swamps but if you are flying on the power of brilliance and trusted teams, the alligators will not be able to rise from their swamps to snag your feet.