Exposing the Hidden Perils of Shadow Banking with M.E. Tuthill

M.E. Tuthill is a renowned writer, editor, poet and author. She has published two books: The Linen Man & Other Poems, and most recently Repo Madness: A Simpleton’s Guide to the Street’s Wicked Ways. In Repo Madness, readers are given guidelines to understanding the U.S. financial market. It offers insight for those who’d like to know the truth about America’s complex and out of control banking system, what goes on behind the scenes, away from common public knowledge. We’ve asked M.E. Tuthill some questions about her book!

Tell us about your book.

Repo Madness: A Simpleton’s Guide to the Street’s Wicked Ways has been written to open people’s eyes to the true nature of the shadow banking system; how it took root and how today it is out of control and so huge as to beggar the imagination.

What is the PRIMARY benefit, above all others, that your potential reader will gain from reading this book?

The primary benefit is that the reader will be provided with information that is, quite simply, nowhere else to be found. The financial press does not report on shadow banking. Politicians don’t understand it. Universities don’t teach it and those who offer reform are either silenced by their peers or choose for whatever reason to self-censor. And, most important, they will come away with the understanding elicited from several prominent economists that over the last 40 years the system has not been beneficial to society. In fact, it has been just the opposite. The opacity surrounding it must end! My book is a good start. Knowledge is power!

If you had to compare this book to any other book out there, which book would it be?

I would liken it to “The Big Short” in that my book, while not character driven, tells the story of how shadow banking evolved into what is today. How congress greased the skids and when risks arose instead of staving off future crises, stoked the flames. Many books like David Enrich’s Dark Towers home in on one bank or Enrich’s The Spider Network, about LIBOR talk about one aspect of shadow banking while my book is an explainer of markets heretofore unexplored as in the repurchase agreement market or “repo” market. The repo market is the shadow banking’s delivery system. Outside scholarly papers, it has not been revealed to the public. It is a $13 trillion market the outside world has no knowledge of, until now.

Hundreds of thousands of books come out every year. Why should someone buy THIS book? 

The front cover of Repo Madness: A Simpleton's Guide to the Street's Wicked Ways by M.E. Tuthill

I wrote about shadow banking as a professional for 11 years. Then outside of work and after leaving my position continued to research it amassing hundreds of articles, position papers, marketing material etc. Then, I chose the most compelling commentary. It allowed me to share the rare moments of candor hidden away exhibited by prominent economists who tell us that this system is of no benefit to the general population nor has it been for the last forty years! I share the quotes; they do the talking. My book also lays bare the truth about it being completely out of the reach of regulators. Think about it, the congress recently discussed the idea of the FDIC insuring all deposits. That tells you they know nothing of what’s in store but fear the repercussions will be dire. In all my years of research I only found one instance where a politician uttered the words, “repurchase agreements.” It was Ed Koch in the 1980s. Congress has no idea what’s behind the curtain and members are scared! My book lays out the whole story in just 149 pages. People will come away knowing the truth and how utterly crazy it all is! I mean really nuts! Nowhere else will readers find a compilation that lays out exactly how this financial system benefits the few at the expense of the many. 

Who is your target audience?

My book encourages activism. It’s target audience would be those who are engaged in the world and show a curiosity about the forces that inform their lives. Occupy Wall Street is over, unoccupied. Today, there is a sense of resignation and demoralization among the younger generations. Having their eyes open after reading my book would be more than gratifying. For upon its completion, they will be equipped with the knowledge that the system is nothing more than a giant casino, and that this must change. 

Did your environment or upbringing play a major role in your writing and did you use it to your advantage?

I always enjoyed learning and up until I was 40 years old was a literary person; I wrote poetry and worked as a broadcast journalist, I loved getting scoops and I guess that stayed with me. I knew nothing about money. Then I became a financial advisor. During all 13 years in this profession, I did not even know shadow banking existed! Me and everyone else! Then I took a job as a writer for a publication about money-market mutual funds. Then came the crisis and the floodgates opened, I was hooked on shadow banking and would write about it for many years. I am most gratified by the comments in my book from articulate economists who once and for all shed any doubt about the nefarious nature of shadow banking. I consider unearthing their comments to be the aspect of the book I am most proud of. 

Tell us your most rewarding experience since publishing your work?

This is an easy question. My most rewarding experience was the incredibly amazing response to the book by Mary Fricker. Fricker, is the founder of RepoWatch.org, a website devoted to shadow banking education. She is also the co-author of Inside Job: The Looting of America’s Savings & Loans. Her reaction has been by far, the most wonderful experience I have had—just great!

How would you describe your writing style?

Straightforward with a dose of humor and when appropriate cynicism. As Mary said in her comments it is “irreverent.” I mean when Lloyd Blankfein of Goldman Sachs said they are doing “God’s work,” you have to laugh! When the Office of Financial Research continues its unsuccessful years-long quest to gather data one has to smirk at the futility of it all. So, yes, I am cynical, but I am also serious about how damaging all of this is for the general population. 

Are your characters pure fiction, or did you draw from people you know?

My characters are the economists who up to now have been unheard. Their writings and speeches untended now the sun is shining on them and their clear and cogent language. I don’t know any of my characters, but the reader will, especially the Fed officials who time and again express concerns about shadow banking but do nothing. 

Are you more of a character artist or a plot-driven writer?

Plot driven, in a way. I begin with an overview then harken back to two bankruptcies in the 1980s which were instrumental in the proliferation of shadow banking. The reader is provided context as the story unfolds and constructs of shadow banking are revealed.

What do you hope to accomplish with your book other than selling it?

I want people to wake up! The recent murmurings about the FDIC insuring all deposits for me, is frightening. It tells me there is panic about what may happen. The FDIC has 2 percent of assets held in financial institutions. This is a panic-driven idea and what lies behind it is the opacity and dysfunction that we know as shadow banking. I want people to become involved in reforms I allude to at the end of the book. And of course, to further educate themselves on this daunting subject. And, they should also send a copy to their congressperson like my friend, Mary did. She sent five copies to five members of congress. 

How can our readers get in touch with you? 


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