Wall Street at War: The Secret Struggle for the Global Economy

Manyoftheproblemsthatlieattheheartofthecurrentfinancialcrisisstemfromasignificantbutlittle–knowndevelopmentthatoccurredintheearly1980s:investorschangedtheirinvestmentcriteria.Thischangegaverisetoaconflict–asilentwar–betweenexecutivesinchargeoftheworld′slargestcorporations,ontheonehand,andcreditagencieswhosetaskitistoenforcethecriteriaoninvestors′behalf,ontheother.ThecreditagenciesthatflourishedinNewYork,Londonandelsewhereacquiredagreatdealofpowerbecausetheirratingsnowreflectedinvestorsnewpriorities,andsocontrolledtheabilityofcorporationstogainaccesstocapital.Theriseofthecreditagenciestherebyalsorepresentedanewmodelofcapitalism,quitedifferentfromtheoldmodeloftherisk–takingentrepreneur.Toattractinvestmentcapital,corporationsnowhavetoemployenormousresourcestocreatetheillusionthatcapitalisdirectedinlinewiththenewexpectationsimposedbythecreditagencies.Theresultisthatdeviousreportingoncompanies′activitieshasbecomeendemic.Drawingonmorethansixyearsoffieldworkcarriedoutinsomeoftheworld′smostpowerfulcorporationsandcreditratingagenciesonWallStreet,thisshortbookdescribes,forthefirsttime,theunspokenconflictthatshapestheglobaleconomy.AnthropologistAlexandraOuroussoffdescribeswithstartlingclaritytheeffectsofWallStreet′ssilentwar:fromthefinancialcommunity′sinabilitytopriceriskaccurately(nowrecognisedasamajorcauseofthefinancialcrisis)tothedeepreasonsbehindcreditanalysts′misplacedfaithinnumbers.Yetthebook′smostimportantcontributionisitspath–breakinganalysisoftheconditionsoftheconflictitself,hererevealedasanunintendedconsequenceofamuchdeepertransformationintheconditionsunderlyingcapitalism′ssuccess.