Belly Up: The Collapse of the Penn Square Bank

Refresh and try again. Open Preview See a Problem? Thanks for telling us about the problem. Return to Book Page. Preview — Belly Up by Phillip L. No economist could have predicted that the Penn Square Bank, a small, obscure lender in an Oklahoma shopping mall, would become the instigator of a financial charade that would see billions of dollars in loans made on the basis of imaginary oil and natural gas reserves--just as a worldwide oil glut and the repeal of regulatory gas laws were about to pull the rug from under No economist could have predicted that the Penn Square Bank, a small, obscure lender in an Oklahoma shopping mall, would become the instigator of a financial charade that would see billions of dollars in loans made on the basis of imaginary oil and natural gas reserves--just as a worldwide oil glut and the repeal of regulatory gas laws were about to pull the rug from under the Oklahoma energy boom.

Belly Up tells this amazing true story with brilliant reporting, delicious detail, and an unbelievable yet all-too-real cast of characters, from the young geologist who convinced banks to invest lots of money in a huge new source of natural gas to the banker who became notorious for lending money to every con artist and wildcatter with a lease, a rig, and a dream. Paperback , pages.

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Aug 07, Charles Ward rated it really liked it. An excellent description of cash and black gold run amok, and why times were high in Oklahoma in the 70s and early 80s, and why the whole thing crashed.

Some of the characters can be a little hard to keep track of, but the author does a great job of making complex concepts simple. Jun 06, Eryn rated it liked it Shelves: This book seems well researched and has gained much rapport over time however it isn't terribly well written. The many characters get jumbled up easily and the story does not flow at all.

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Yeah, it was pretty bad back then. Good thing we don't have to worry about repeating the same mistakes of utterly groundless, yet infinite optimism in any of our economic entities today. As a layman, I thought Zweig had just enough stories to keep me going, but just enough detail re.

Belly Up: The Collapse of the Penn Square Bank by Phillip L. Zweig

No doubt, some readers will be bored by the descriptions of the financial instrumentation employed by the Penn Square cronies et al. I guess that is the tension most authors face. It helped me to keep that in mind, but I still learned some good lessons. Jan 22, Terri rated it it was amazing Shelves: Zweig lays out lots of information about lending practices and euphoric markets that are take-aways we can apply to the current RE crisis.

I recommend this book to anyone interested in banking, markets, and politics.

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I will caution readers that while it has a lot of good information, it was published in and that our banking regulatory framework was dramatically reworked in the early s in part as a result of this collapse. I still think it's an excellent primer on mistakes banks and investors can make in lending and the short comings of regulatory oversight of the banking industry.

Apr 11, James rated it really liked it Shelves: In , Penn Square Bank, a bank located in a strip mall in Oklahoma, failed. This book chronicles how the small bank's major wheeling and dealing in oil and gas investments led to one of the biggest crises in the history of American banking. The book is perhaps even more interesting now as it parallels and perhaps foreshadows some of the issues of the more recent financial crisis. Nov 13, Chris Ramirez rated it it was amazing. This review has been hidden because it contains spoilers. To view it, click here.

Boy was this book awesome. Think subprime crisis meets oil wells. Zweig finds that most of those entities were economically doubtful from the outset, some were merely debt-pyramid schemes and others were blatantly fraudulent. The last few days of decision-making by the nation's bank regulators before closing Penn Square is especially interesting and informative. Followers of the antics of Bill Patterson, the bank's spontaneous chief energy lender, will not be disappointed in the author's discoveries about his behavior. Patterson reportedly paraded nude in the reception area of a Las Vegas hotel, wearing only a hat adorned with wings similar to those of a Greek god.

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Zweig finds the glory days of the bank not too good to be true just too good to be sustained. Those months were a fantasy-land experience enriched by private jets, million-dollar vacation homes, weekend trips to Las Vegas and a dizzying, intoxicating pace of lending.

1. Penn Square Bank | The Encyclopedia of Oklahoma History and Culture.
2. Belly Up the Collapse Of the Penn Square Bank by Zweig, Phillip L.
3. Belly Up the Collapse Of the Penn Square Bank.

Zweig contrasts that environment with the more cautious approach toward energy lending at other banks in the city and region, notably First National Bank in Oklahoma City. The oft-quoted Dale Mitchell, then president of First National and now chairman of Citizens National Bank, is portrayed as a reserved, prudent lender who tried quietly to warn out-of-state banks of Penn Square's suspected excesses.

This is a complex account of a complex event. Its detail is as impressive as its subject is astounding. Sun, July 14, The death spiral the bank began in late is fascinating in its drama and electricity. Zweig also adds to the many smaller stories within the larger tale.