The Spider Network

As a weekday bedtime book -- a slot into which I sometimes insert a narrative finance book out of an attempt at ongoing professionalism -- I've been reading The Spider Network by David Enrich, the finance editor of the New York Times. Detailing the story of the LIBOR-fixing scandals of that followed pretty hard on the heels of the financial crisis, it's a good not great book.

For starters lets focus on its strengths. First off, it exists. There are a couple of other books about the scandals, one by one of the traders involved in it, the other seemingly by someone at Bloomberg, but that's it. When it was all going down back in the early 2010s, the LIBOR scandals were a big deal. But the whole thing was so deep in the belly of the banks that it was hard for non-finance people to grasp how it impacted them. 

The book is appropriately clear on the extent to which Tom Hayes was scapegoated and had the book thrown at him because some banker had to be shown to pay not just for LIBOR but also for the earlier unattoned sins from the financial crisis proper, after which no major bank employee get sent to jail. A head needed to roll, and it ended up being Tom Hayes. The guy was guilty as shit, no question there, but so were a lot of other people and they all walked.

In general there is too much detail in this book. It could have clocked in closer to 300 pages and covered the topic, but for some reason Enrich kept wanting to hover over the same land, like a slow moving hurricane near Houston.

Most importantly, and most interestingly, the book doesn't really touch the question of how much the scandals actually costed the many people downstream from it: first and foremost mortgage-holder. If traders all across Wall Street and its global extensions were continually exerting pressure to drag LIBOR this way and that for the benefit of their own trades, it's highly likely that in the end the impact netted out to nothing. After all, they were continually taking both sides of the trades. Unfortunately this is an entirely unprovable and unfalsifiable hypothesis. But it's quite possible it never really mattered to your average mortgage-holder. But they were a bunch of crooks and more of them should have answered for it.

The Spider Network marks, sadly, the last of the tomes of popular finance writings that came to me from the shelves of George Berridge, Jr after he passed earlier this year. Maybe Rob has a few more, but I doubt it. I still have a number of such books, admittedly, from George Sr. But they are older and written in the more stilted idiom of the 60s-80s. But maybe it's time I dug into them