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It's been said daily journalism is the first draft of history. Barely a year after the collapse of Lehman Brothers, Andrew Ross Sorkin, the boy-wonder reporter for The New York Times, has bashed out no less than 539 riveting pages amounting to a second or even third draft of history.

In Too Big To Fail , Sorkin takes you inside the terrifying days just prior to the failure of Lehman, an event that proved to be the tripwire of global financial upheaval. From there, you are immediately inside the bailout of AIG, followed by the near collapse of Morgan Stanley, Goldman Sachs and perhaps General Electric. The novel-like narrative culminates with a most un-American activity, the injection of taxpayer money into banks, a pseudo-nationalization of the U.S. financial system.





Through 500 hours of interviews with hundreds of key players - all on the condition of anonymity - Sorkin pieces together the events and emotions, and also dishes dirt. What could be more vivid than former treasury secretary Henry Paulson vomiting in his office as he dealt with the crushing stress?

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Sorkin, the 32-year-old Gretzky of journalists, who began working for the Times at 18, has impeccable sources. His book makes you feel as though you are there, overhearing intimate, often desperate conversations like that of a CEO in his bedroom, confiding to his wife that he might lose his firm.

As if we didn't know before, we get confirmation that the world of high finance is full of grey areas. Hank Paulson had a brother working at Lehman Brothers in Chicago, former president George W. Bush's brother Jeb was an adviser to Lehman's private equity division, and a cousin of the president, George Walker IV, was on Lehman's executive committee. Had Paulson found a way to bail out Lehman Brothers with the help of government money, these connections would likely have raised serious questions of conflicts of interest. Was he hamstrung? We may never know.









Believe it or not, there's even something approaching a car chase. As bank CEOs gathered for a Friday-night emergency meeting organized by the New York Federal Reserve to try to save Lehman, we discover that the driver for Morgan Stanley's CEO, stuck in traffic trying to get his boss down to Wall Street, pulled his Audi onto the bicycle path along the Hudson and used it as a private roadway to roar downtown.

Then there was John Thain, the Merrill Lynch/Bank of America executive, in a Washington meeting that saw the banks forced to take government money. Sorkin reveals that the first question out of Thain's mouth was how taking taxpayer dough would affect compensation policies at the banks. So much for concern about Main Street.

Aside from the inside dope on high-stakes meetings and negotiations, the book's strength lies in the details about the people involved. We learn that Paulson, with the hundreds of millions of dollars he made as CEO of Goldman Sachs prior to joining Treasury, lived a frugal life for a big shot. He and his wife were housed in a mere 1,200-square-foot apartment in New York City when he ran the storied investment bank. We later find out that this dedicated birder, a Prius driver, also owns an enormous tract of land in the southern United States, but as a conservationist.

Lehman, on the other hand, was run by obnoxious big spenders. CEO Dick Fuld's long-time No. 2, Joe Gregory, would helicopter to work each day. Repeat: helicopter to work. Gregory, according to Sorkin, was also an SOB, making zero allowances for a fellow executive who had a daughter with cystic fibrosis, essentially ruining the man's career. As a reader, you cheer when Gregory is forced out after being Fuld's junkyard dog for 30 years.

Reading about the recklessness at Lehman prior to the crisis, one can easily conclude that it deserved to fail, notwithstanding the harrowing consequences for the world's financial markets. Mind you, one might also conclude the markets deserved what they got. Henry Paulson and Timothy Geithner had a dim view of Christopher Cox, the chairman of the Securities and Exchange Commission, the market regulator. Cox is described as useless.

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At the risk of splitting hairs, it sometimes shows that this was a rush job. There are typos and even the odd inaccuracy. The book describes $500-billion worth of toxic mortgages bundled up and sold by Merrill Lynch. By my own back-of-the-napkin calculation, that's probably impossible. The whole sub-prime fiasco has cost the U.S. government just (just!) over $1-trillion so far. Merrill was not responsible for half of it.

Don't let these minor flaws take away from what is truly a bowl-them-over book. It has movie written all over it. When I interviewed Sorkin recently and asked if it's headed to the big screen, he said, "stay tuned." He did allow that Robert DeNiro might be good in one of the leading roles.

Howard Green is anchor of Headline and Market Call at BNN television.

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