Customer Reviews

Money, Greed, and Risk: Why Financial Crises and Crashes Happen

5 star:		(2)
4 star:		(1)
3 star:		(1)
2 star:		(1)
1 star:		(0)

 

 

I found this to be a very well written and interesting book and learned a great deal, but much of the book was over my head. An example: "...They [Barings] were the major underwriters of the bonds for the Louisiana Purchase, and in the 1820s rapidly expanded their underwritings of American state bonds to finance internal improvements. But the bookkeeping on their securities was still following trade-based forms. Issuers of bonds were authorized to draw bills of exchange on the Barings, which they would cover by forwarding the new securities to London, just as merchants would cover a trade bill by forwarding the documents on a cotton cargo." A substantial portion of the book is similarly written, but balanced by a healthy dose of colorful characters and sharp opinions by Morris.

I found myself continuously amazed at the insights that Morris shows in his analysis of US financial markets and in their basic similarity over 150 years -- similar but more complex. I have been a student of financial markets for over forty years and I confess that I found insights being expanded consistently. As I read I kept thinking "What a great critical summary!"

Charles Morris' book, despite its historical depth, falls short of providing a new insight on financial crises. This book is great for starters but cannot compete against Chancellor's "devil take the hindmost" or Kindleberger's "manias, panics and crashes". Clearly a dominated asset...

An excellent book for the serious investor who wants historical perspective on the market changes happening today. It's added gift is that it will imbue its reader with the knowledge to preserve wealth and actually profit whenever the next financial crisis comes, since the author proves that there is not much new in modern crises, and their prescriptions, that couldn't be found in crises a hundred years ago. The author serves the reader well by constantly pointing out the irresponsibility of the nation's bankers and financial institutions especially when motivated by greed- "the opportunity to fleece the greedy proved irresistible," The author possesses the rare skill of being able to see the wood for the trees and of relating that to his readers. The foreword is right on.

Mr. Morris book provides a very readable survey of financial crisis which occured during the last 150 years. The real value of this book lies Mr. Morris's commentary which draws into focus the fundamental similarities between seemingly unrelated financial disasters.

It is banal to observe that the future is likely to include some as-yet unforseen financial meltdown. Armegeddon-peddlers, chicken-littlers, and perpetual bears have been saying this for centuries. It it brilliance on the part of Mr. Morris to explain exactly why this is the case.

Mr. Morris debunks the garden varieties of conventional wisdom, which variously held that financial crisis are "caused" by currency speculators, Michael Milken, junk bonds traders, Jews, computer trading programs, etc. Mr. Morris demonstrates that all crisis run a predictable course: economic innovation and growth, corresponding financial innovation provide capital to fuel the growth, over-shoot of valuations of the new financial mechanisms by financial markets chasing high yields, and the invevitable crash and ensuing chaos.

The USA Savings and Loan debacle, Asian currency crisis, British investments in post Civil War USA railroads are all shown as variations on this theme.

I did not award 5 stars because the book often delves into complex financial mechanisms which could have been explained in a more layman friendly manner.