About Bailout Nation

Alternative title: Adventures in Publishing

Since the news came out today, I might as well spill the details about my battle with McGraw Hill over the content in the book.

I did not release this news. I got a message this morning (apparently left last night) from a reporter at the NY Observer who covers the publishing industry. I assumed McGraw Hill had contacted him, but I have no direct knowledge of that.

I had previously spoken to Jesse Eisinger of Portfolio about my headaches with the publisher a few weeks ago, but asked him to keep it off the record. Once the Observer called me, I told Jesse “The cats out of the bag” and he ran with this story: McGraw Hill Drops Book Critical of S&P.

The manuscript was submitted to S&P in December (I posted on it here) and the review and revision process began. For the most part, the editing process was painless. I had been warned by other writers that most modern publishers edit for typos and grammar, but not for deep content or editorial vision. I hired Aaron Task, whom I know from TheStreet.com, to be my editor. (Aaron ended up being a whole lot more than that, but I will save that story for a later date).

Most of the changes that came back from McGraw Hill were minor stylistic copy editing stuff. Very light, very simple. They took out the word “Fuck” which appears 2x (once each in two separate chapters) and I of course put it back in. How can any book about Wall Street not have that word in it?

When it came to chapter 14 — Who is to Blame? — there were issues about the style of what I wrote about Moody’s, S&P and Fitch’s. I literally called the ratings agencies and investment bankers “Pimps and Whores;” I accused them of engaging in pay for play (buying ratings) payola, etc. Rather than describe it, I will simply post the original version here.

There was a lot of pushback on this. My editor at McGH convinced me this was a matter of style, not content. So being flexible (something I don’t usually do), I agreed to rewrite this small section. The newly edited version was far more factual, detailed — and in my opinion, more damning. You can read the revised version here.

Now, before you assume I am an idiot for doing a book that was critical of the ratings agencies with a publisher that owns S&P, understand that I properly anticipated this. My agent/lawyer Lloyd Jassin got me me Final Edit in my contract. Not only that, I had previously discussed this issue months earlier with then publisher Herb Schaffner. (He was laid off in a big Q4 round of firings).

Sometime over the summer, Herb informed me that the ratings agencies discussions would have to be handled “delicately and diplomatically.”

I responded, “Sorry, Herb, but I don’t do diplomacy.” If they wanted someone who was subtle or diplomatic, boy did they have the wrong guy. I offered to return the advance check and we could all move on. He backed down, and I assumed — apparently quite wrongly — that this was the end of this issue. How can you write a book on this subject and not lambast the ratings agencies?

I am not sure if this was in August or September, but that is my best guess as to the approximate time frame.

Where was I? Oh, yes, the pushback on the changes.

The stylistic changes were still objected to. The problems came not from Legal, but from Corporate within McGH. Legal had not even finished reviewing the manuscript at this time.

I came to the inescapable conclusion that this was an attempt by the McGH corporation to water down my content. All of the conversation with various editors strongly implied as much, and the same was made clear by them to my agent Lloyd.  I even found an email from me to him, subject matter:  “McG Hill S&P Freaking Out” dated Monday, January 05, 2009 11:14 AM.

Anyway, at this I drew my line in the sand at this point. My contract gave me FINAL EDIT.

I informed McGraw Hill that at the manuscript was now finished, and I was done. No more changes to the Ratings Agency section. It was either “Fill or Kill.” In an email, I gave them until that Friday, to accept or reject the manuscript. That deadline came and went with no answer, and the following, Monday I went to lunch with my editor and told her I was ready to show the book to other publishers, as I assumed they had rejected it. She asked for another week (I agreed) and that Friday, they told me that, as per my request, they would drop my contract and allow me to sell the manuscript to other publishers.

They gave me two nonsense excuses — the first, they were concerned about my libeling Senator Phil Gramm (My answer to that laugher: Bullshit).

The second excuse was an issue with sourcing and verifying the material. This was, of course, more nonsense. Nearly all of my sources are available online, and the others that are in books were all purchased from Amazon.com. Nothing obscure, no sources from deep within some library stacks or any unrecorded interviews with anonymous, now deceased, secret witnesses. It was all online, and readily available. And that does not address the small matter that McGraw Hill had pulled 90 pages of additional sources from the book as “redundant and unnecessary.”

All of the book’s submitted footnotes/end notes can be found here. If you cannot verify those sources, BY CLICKING ON THE URLs, then you are totally incompetent and have no business being in publishing.


I did not go to the media, they did. I was asked to say nothing to the press, and I complied. Then I got the phone call from the Observer, who obviously had been speaking to McGH.

I was stunned to read this ridiculous statement from McGraw Hill Spokesman Steven Weiss:

the publisher dropped the book because of a conflict with Ritholtz over editing, not because of his criticism of S&P. “The material needed extensive corroboration across a range of topics. We could not agree on unified approach with the author for resolving the issues”

Really? You cannot verify these footnotes?

As you can see, the overwhelming majority of the footnotes come with URL included. So I guess if you lack an internet connection or are unfamiliar with Google, you might have trouble corroborating the contents of the book. But for everyone else . . .

But to prove it even further, I challenge any of the McGraw Hill editors or publishers (or any of the editorial staff) to take a polygraph/lie detector test — at my expense. If the poly proves anything I said was false or anything Mr Weiss said was true, I will let them edit the book however they want, or kill it altogether and not publish anywhere else. (The PR flack would likely pass the poly, because he doesn’t have first hand knowledge of what transpired, only what he is told — so even if he is telling lies, he doesn’t know they are false. Hence, he would pass).

Yes, I will happily take a poly also.

But when the test proves that they are lying and I am telling the truth, I want a public apology from them in a trade magazine or the WSJ, and a waiver of the advance return.


McGraw-Hill Won’t Publish Ritholtz Book Critical of S&P Unit
Greg Bensinger
Bloomberg, Feb. 12 2009

McGraw Hill Drops Book Critical of S&P
Jesse Eisinger
Portfolio, Feb 10 2009 1:15pm EST

Did McGraw Hill Spike Barry Ritholtz’ Book Over Comments About S&P?
Joe Weisenthal
ClusterStock, Feb. 10, 2009, 3:42 PM

McGraw Hill vs Ritholtz
Portfolio.com, Feb 11 2009 1:20am

McGraw-Hill Kills Book Critical to S&P
NY Mag 2/11/09 at 12:30 PM

Publisher that Owns Credit Rating Agency Kills Book Critical of … Ratings Agencies
Mary Kane
2/11/09 9:10 AM

McGraw-Hill Mixes Its Book and Bond-Rating Businesses
Owen Thomas,
Gawker, Wed Feb 11 2009

McGraw-Hill Cancels Book Critical of S&P
Lynn Andriani
Publishers Weekly, 2/11/2009 10:09:00 AM

McGraw Hill Spikes Book That Slammed Credit Ratings Agency It Owns
Zachary Roth
TPM, February 11, 2009, 3:04PM


Original Version: Ratings Agencies: Moodys, S&P, and Fitch

Revised Version: Ratings Agencies: Moodys, S&P, and Fitch


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