This Time Is Different: Eight Centuries of Financial Folly. Oxford University Press: Slapped by the Invisible Hand: Gary B. Gorton. Slapped by the Invisible Hand: The Panic of 2007. There are many good books on the financial crisis. For an excellent survey on the topic I recommend the paper "Reading About the Financial Crisis: A 21-Book Review by Andrew Lo. " These authors typically espouse Irving Fisher's early The Debt-Deflation Theory of Great Depressions. They address moral hazard with distorted economic incentives. Creditors lent too much to seek short-term profits ignoring long term risk. Borrowers borrowed too much leading to an amount of debt they possibly could not repay. And, when borrowers could not refinance their mortgages; the ensuing defaults and foreclosures impaired the balance sheet of their creditors.
Gorton's book is interesting because it offers a different crisis theory. Gorton's disinformation theory has several building blocks. Bank of America innovated the first subprime mortgage back in 1998. Gorton goes into exhaustive detail regarding the complexity of MBS structure. By now, the information shredder is complete. The Fall of the House of Credit. How was it possible for problems in one relatively small sector in the global financial system - the American sub-prime mortgage market - to lead to the most serious economic crisis in living memory?
In this book, Alistair Milne untangles the complex world of modern banking and examines solutions to the crisis. He shows how the banks misused their ability to securitize loans and, by borrowing short and lending long, exposed themselves to exceptional risks when asset prices started to fall. But it has been above all a collapse in trust and confidence, rather than poor lending decisions, which has fuelled the crisis.
Despite all the talk of 'toxic' assets, the book argues that most assets are sound and can be repaid. The imperative is to restore confidence through collective action involving asset purchases, guarantees and recapitalization. Failure to do so will mean that taxpayers will be carrying a crippling tax burden for generations to come. To understand the financial crisis, read this book. Book Review If you only read one book about the financial crisis, read “The Fall of the House of Credit” by Alistair Milne, a professor of financial economics at Loughborough University in Leicestershire, UK, north of London.
This book, which I have just discovered, will not satisfy your blood lust to make the bankers pay, but it is the best explanation I’ve seen of what happened to the credit markets in 2007-2008. The other 40 books I have read on the events of 2007-2008 typically analyze the mortgage markets or the unfolding of the crisis. These are valuable parts of the story but do not explain how US subprime became a worldwide financial earthquake. “The Fall of the House of Credit” is one of only two books I know that dissect the freezing of the credit markets – which is where the destructive panic occurred and where reforms need to focus, but don’t. The other book is Yale University Prof. To RepoWatch readers, this is a familiar story. From Milne: Short-term borrowing Further key points.
The Global Minotaur: America, The True Origins of the Financial Crisis and the Future of the World Economy - Economic Controvers. Yanis Varoufakis, Professor of Economic Theory at the National and Capodistrian University of Athens, is mainly known for his work (with Shaun Hargreaves-Heap) on critical analysis of game theory. He is however also one of the foremost currently active left-Keynesian economists. In this book, "The Global Minotaur", he sets out his analysis of the origins and nature of the current economic depression from this perspective. The book is well-written and should be generally accessible to the interested layman, but it is also rather disjointed; it has at times insufficient theoretical depth to clearly separate causes, and at the same time insufficient structuring to make it wholly work as a popular text.
That said, it is highly informative, clear in the purely descriptive aspects of its content, and should make the Keynesian interpretation of the current crisis and global trade relations clear to all involved. None of that is to say this is not a good book, however. What a piece of work is a man - macrobusiness.com.au | macrobusiness.com.au. We live in hyper-metarialist times, both financial materialism and scientific materialism.
It has become so intense, it is scarcely noticed. Yet its consequences are profound, not least for how we understand economics. The concluding remarks of Adam Curtis’ documentary “All Watched Over By Machines of Loving Grace” detail some of them. He argues, using the example of Rwanda — a somewhat long bow — that seeing ourselves, humans, as things rather than creatures with free will — whether it be as like machines (and therefore machines) or as “selfish” genes — allows us both to explain and excuse our habit of doing appalling things to each other. Curtis highlights one of the central contradictions in the modern anthrosphere. Thus economies are not considered arrangements of human beings freely choosing to behave badly or well, they are thought to be systems subject to impersonal, scientifically identifiable, Market Forces.
“So what?” A second step is to look closely at what humans are like. Transcript of "Lost Decades: The Making of America's Debt Crisis and the Long Recovery" Washington, DC Friday, October 14, 2011Moderator: GEORGE AKERLOF, International Monetary FundPanelists: MENZIE CHINN, University of Wisconsin, Madison, Econbrowser JEFFRY FRIEDEN, Harvard University GAIL COHEN, Joint Economic Committee of the U.S.
Congress DIANE LIM ROGERS, Concord Coalition SIMON JOHNSON, Massachusetts Institute of Technology, Peterson Institute MR. AKERLOF: Welcome. So I should begin by saying that I’m tremendously honored to be the moderator of this session; that Menzie and Jeff have written a terrific book about the causes and also the implications of the financial crisis. Now, I want them to speak for themselves but maybe I can take just a few minutes to say a few words of introduction. The topic of the book is how the large scale imbalances and especially the external balances that worry us so much here at the IMF have played a major role in our current crisis.
So, the title of the book is highly leading. The book clearly sets out how we got into the crisis. MR. The Long Twentieth Century: Money, Power and the Origins of Our Time: Amazon.co.uk: Giovanni Arrighi. The Economics of Global Turbulence. The Economics of Global Turbulence. First of all, a book on economics that gets thumbs up from both The Nation & The Wall Street Journal should get a wide readership. In the field of economics, where neoclassical and neoliberal dogmatism is dominant to the point of being stifling, it is important to open the windows to let fresh air in. The book's main thrust is to provide an alternative hypothesis to explain the postwar economic boom, and the long downturn (relative to the boom) starting in the 1970s. In the orthodox neoclassical/neoliberal account, the long downturn is explained as the result of organized labor successfully fighting for high wages, which squeeze profits, which in turn reduces investment, which slows growth.
(This is an explanation that works well in economic models consistent with neoliberal ideology, but not so well in explaining empirical realities.) In Prof. Brenner's account, the downturn is due rather to an inherent feature of capitalism: a tendency to overproduction. Los Angeles Review of Books challenges the legitimacy of economic soothsayers. “Autumn of the Empire” is the title to Joshua Clover’s analysis of the current economic crisis, approached within the context of four books reviewed in the Los Angeles Review of Books. Among the titles that Clover discusses are Robert Brenner’s The Economics of Global Turbulence and two books by the late Giovanni Arrighi, The Long Twentieth Century and Adam Smith in Beijing. All of the books were first published before the economic bubble burst—a significant detail because like many before him, Clover disputes the retrospective argument that the crisis was unforeseen.
More importantly: The question of why so many danger cries went unheeded may seem to invite an inquiry into ideological blindness. On a different conceptual plane, however, it may be more interesting to ask instead: What counts as a prediction? Brenner’s argument about how this came to pass is rigorous and buttressed by extraordinarily careful empirical research. We mean stock pickers, more or less. More in #Reviews. Monetary Regimes and Inflation: History, Economic and Political Relationships.
I did not ask for this book, but I am glad the publisher sent it to me for free. There is a lot of concern over inflation in the present era, but not a lot of structured thought about what drives inflation. This book takes the long term perspective, and looks at the wide array of monetary arrangements, and analyzes which arrangements produced more or less price inflation. The author shows that there is generally an inflationary bias in all currencies. Currencies that are backed by precious metals tend to experience less inflation, but many governments using such currencies debase the metals or clip the coins.
That said, it does restrain inflation, because inflating a metallic-based currency takes a lot of work. To have significant inflation, one must have unbacked paper money. A fiat currency in and of itself, is not sufficient to create hyperinflation. One strength of the book is that at the end of each chapter, the author summarizes all of the main points. Quibbles. The Holy Grail of Macroeconomics: Lessons from Japan's Great Recession: Amazon.co.uk: Richard C. Koo. Shiller, R.: Irrational Exuberance: (Second Edition). This first edition of this book was a broad study, drawing on a wide range of published research and historical evidence, of the enormous stock market boom that started around 1982 and picked up incredible speed after 1995.
Although it took as its specific starting point this ongoing boom, it placed it in the context of stock market booms generally, and it also made concrete suggestions regarding policy changes that should be initiated in response to this and other such booms. The book argued that the boom represents a speculative bubble, not grounded in sensible economic fundamentals. Part one of the book considered structural factors behind the boom.
A list of twelve precipitating factors that appear to be its ultimate causes was given. Amplification mechanisms, naturally-occurring Ponzi processes, that enlarge the effects of these precipitating factors, were described. Review: From review of Princeton's previous edition: "Robert J. From review of Princeton's previous edition: "Mr. The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street. Chronicling the rise and fall of the efficient market theory and the century-long making of the modern financial industry, Justin Fox's 'The Myth of the Rational Market'; is as much an intellectual whodunit as a cultural history of the perils and possibilities of risk. The book brings to life the people and ideas that forged modern finance and investing, from the formative days of Wall Street through the Great Depression and into the financial calamity of today.
It's a tale that features professors who made and lost fortunes, battled fiercely over ideas, beat the house in blackjack, wrote bestselling books, and played major roles on the world stage. It's also a tale of Wall Street's evolution, the power of the market to generate wealth and wreak havoc, and free market capitalism's war with itself. The efficient market hypothesis long part of academic folklore but codified in the 1960s at the University of Chicago has evolved into a powerful myth. Justin Fox - The Daily Show with Jon Stewart - 07/01/09. ECONned: How Unenlightened Self Interest Damaged Democracy and Corrupted Capitalism: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism: Amazon.co.uk: Yves Smith. There are many good reviews of the book published already and I don't want to repeat them. But I think there is one aspect of the book that was not well covered in the published reviews and which I think is tremendously important and makes the book a class of its own: the use of neoclassical economics as a universal door opener for financial oligarchy.
I hope that the term "econned" will became a new word in English language. Neoclassical economics has become the modern religion with its own priests, sacred texts and a scheme of salvation. It was a successful attempt to legitimize the unlimited rule of financial oligarchy by using quasi-mathematical, oversimplified and detached for reality models. The net result is a new brand of theology, which proved to be pretty powerful in influencing people and capturing governments("cognitive regulatory capture").
Like Marxism, neoclassical economics is a triumph of ideology over science. Economics is essentially a political science. Free Markets and the Sinking of the Global Economy. 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown. Book Description Publication Date: 1 April 2011 | Series: Vintage In spite of its key role in creating the ruinous financial crisis of 2008, the American banking industry has grown bigger, more profitable, and more resistant to regulation than ever. Anchored by six megabanks whose assets amount to more than 60 percent of the country’s gross domestic product, this oligarchy proved it could first hold the global economy hostage and then use its political muscle to fight off meaningful reform. 13 Bankers brilliantly charts the rise to power of the financial sector and forcefully argues that we must break up the big banks if we want to avoid future financial catastrophes.
Updated, with new analysis of the government’s recent attempt to reform the banking industry, this is a timely and expert account of our troubled political economy. Frequently Bought Together Customers Who Bought This Item Also Bought What Other Items Do Customers Buy After Viewing This Item? 4.2 out of 5 stars Format:Hardcover. 13 Bankers. Fault Lines: How Hidden Fractures Still Threaten the World Economy. A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation: Amazon.co.uk: Richard Bookstaber. Book Description Publication Date: 28 Nov 2008 Inside markets, innovation, and risk Why do markets keep crashing and why are financial crises greater than ever before? As the risk manager to some of the leading firms on Wall Street–from Morgan Stanley to Salomon and Citigroup–and a member of some of the world’s largest hedge funds, from Moore Capital to Ziff Brothers and FrontPoint Partners, Rick Bookstaber has seen the ghost inside the machine and vividly shows us a world that is even riskier than we think.
The very things done to make markets safer, have, in fact, created a world that is far more dangerous. From the 1987 crash to Citigroup closing the Salomon Arb unit, from staggering losses at UBS to the demise of Long–Term Capital Management, Bookstaber gives readers a front row seat to the management decisions made by some of the most powerful financial figures in the world that led to catastrophe, and describes the impact of his own activities on markets and market crashes. Review. The Future of Finance: The LSE Report. Review The UK has been at the epicentre of both the financial crisis and the ongoing debate over the future of finance.
Here the leading figures in that debate tell us how to think about the process of financial reform. Their thoughts deserve the widest possible audience, not just in Britain but in the United States and globally. —Barry Eichengreen, University of California, Berkeley A preoccupation with public good is what distinguishes this book from others about the crisis.
The authors take a broader perspective in exploring new approaches for understanding the functions of banks and financial markets. As we look forward to the reform of the financial system, there is a need for a more fundamental review of the nature of financial intermediation, its scope and size. A preoccupation with public good is what distinguishes this book from others about the crisis. L'impasse de la crise. Dotcom bubble 2.0 - 2011, the next dotcom bust? GFC Act I - Bank Credit Crisis. THE GLOBAL FINANCIAL CRISIS. Economic Crisis.