Fiasco: The Inside Story of a Wall Street Trader Paperback – February 1, 1999

Where there is large volume of innovation, there is bound to be some fraud. Fraudulent intent may even precede or supersede legitimate intent. It is especially visible in financial product innovation, where incentives are twisted, risks are hidden/unknown, and short-termism is rampant.In this instance, book illustrates the dramatic growth in derivative products market. As a chicken fried equities guy, I had no clue just how exotic these instruments had become by mid-90's. FIASCO goes through painstaking detail explaining the structure and at times dubious purpose of those instruments (disguising something volatile and high-risk as a stable product, for example)... all along shedding some light on personalities involved in creating and selling those products.Makes me wonder how things have changed over the last 20 years. After all, we did have a CMO blowup only 8 years ago. I wonder what's next... Buyers and investors beware! Don't get your faces ripped off.

I actually bought this book as I was trying to learn more about the recent financial crisis. Once I got the book and started reading it I quickly realized the book was about the 80's and 90's. No matter, the story was mostly the same as any recession and why we got there, just switch around some dates.As with most Wall Street tell alls I was horrified these people are running our financial world. Buyer Beware would be an understatement in most instances, especially as you read about derivatives. I often wonder what these brilliant minds could do instead of simply trying to be as rich as they can while screwing everyone else out of their money. Sad to read that state pensions and insurance funds were tied up in this mess, however, what is really sad is the traders and salespeople knew these were risky derivatives and chose to say nothing or provide any warning (at least this is the feeling you get from the book). The author mentions the State of California and the State of Wisconsin (and I am sure New York) were part of this buying, and probably no coincidence, are going through severe financial constrains as I write this review.The author wondered out loud "why such supposedly conservative investors were taking on so much risk." His bosses said as long as they were upfront in disclosing the risks, it was none of their business what these clients bought.I found the definition of "emerging markets" as interesting. The author went on to say Bond Salesmen are very clever at inventing deceptive names for risky bonds to make them seem more desirable. The name sounds great, but they were really a disguise for junk bonds.Good explanation about inflation and Brazil and the impact this had on pricing and interest rates. This would be a fascinating part of the job to learn and understand.For me the book is a good reminder of not getting caught up in fads on Wall Street and to make sure you understand the financial instrument you are buying. The person who sells these should have your best interests in mind and share the goal of helping you reach yours. You will hate some of the people in the book, but realize they were doing a job, albeit a disgusting and ugly one at times.I still think about if these people with these beautiful financial and quantitative minds decided to help those of us who are not financial geniuses how great this country could be (and most of us might not have to work until 70 years old to retire)!

Enjoyed. Very eye-opening and educational!

This book is absolutely captivating. Portnoy will make you laugh, get angry, and marvel at the many machinations of Wall Street finance. If his descriptions of the characters and his own feelings about what he participated in weren't so entertaining on their own, the rest of the story might be a bit drab and difficult to follow for those bored with numbers and financial terminology. However, that is not the case. How this has not been made into a movie yet, I don't know!

Extremely interesting story that exposes and informs the "average-joe" of the world of derivatives.

I am a big fan of business books and I recommend this memoir of life in the Wall Street derivatives business in the late 1990's.I enjoyed Fiasco both as a personal story and as an interesting walk through of how some of the more interesting and profitable Wall Street deals of the past decade have been done. I think Liar's Poker, The Smartest Guys in the Room, When Genius Failed and Barbarians at the Gate are the best of this genre, and this one sits comfortably in their company. The basic summary is that the author gets a job at Morgan Stanley Derivative Products Group on the cutting edge of the derivatives trend sweeping wall Street at the time and he learns all about the business, including its characters, opportunities and ethical challenges. The subject is particularly interesting now that the derivative chickens have come home to roost.The only reason I didn't give it five stars is that compared to the characters discussed in the books above (Guttfreund, Michael Steinhardt, Kravis, Milken, et al.), Partnoy didn't have quite the same material to work with. Nevertheless, Fiasco was fun, informative and timely.

An enjoyable read. The author has a pleasant way of recounting his personal experience of Wall Street before he left to become a teacher of financial ethics (in San Diego?). You will be shocked at what kinds of things Wall Street got away with (and probably still does) because brokers use "suitability" as the standard for selling financial products to clients. This book, though it doesn't specifically argue for an SEC , FINRA, or federal implementation of the higher "fiduciary" standard, IS a good argument for it!

Found it ok. Preferred the enron books like conspiracy of fools.Yes, wall st seems wild.