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Panic: The Story of Modern Financial Insanity Hardcover – November 17, 2008
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This book is a series of articles that form a coherent whole, discussing the four "once in a millennium" financial meltdowns we had in the last 25 years. Michael Lewis weaves them together by contributing a chapter to each of the four parts. His portions are of course the most readable and interesting (although Dave Barry gives him a run for his money writing about how to get rich in real estate). For readers that lived through these times, this book is a nice recap to jog memories for brains that may fade with time and for those that are new to the markets and think the crash of 2008 in unusual, this may be an eye-opener.
Michael Lewis's message is "financial panics have become almost commonplace; events that are to meant to occur once in a millennium now seem to occur every few years. Could this be because the financial system was built on an idea that badly underestimates the risk of catastrophes - and so conspires with human nature to create them?" After studying all four of these major panics, he also concludes that the press was at least partly complicit in the inflation of these bubbles.
Lewis starts with the crash of 87, writing "Black Monday was the first of a breed: a crash the suggested disastrous economic and social consequences but in the end had no serious effects at all." He writes: "the sweet logic of Black-Scholes was shown to be irrelevant in the real world of crashes and panics." It is truly dumbfounding how a theory that seemed to have been proved invalid on one destructive day persisted anyway, in a different form.Read more ›
So, imagine my delight when I saw (while I was rushing through an airport) a new book by Michael. I purchased the book, and could hardly wait to start reading it. When I finally got in the plane, and opened the book, I discovered that the writings in the book were not Lewis at all, but rather a collection of no-so-interesting articles about the various financial crashes.
Nothing is staler than yesterday's Wall Street journal (financial news spoils quickly) and reading WSJ or Barron's pieces from 10 to 20 years ago is just painful.
The title PANIC: The story of modern financial insanity led me to believe the book was about the current crises. The book does say, in very, very fine print "Edited by" Michael Lewis.
I feel I was misled....shame on you Michael for lending your name to this and shame on your publisher
What is very interesting and what I came away with from reading about these unique events is the realization that the panic in 1987, as well as the Asian Currency crisis, really didn't affect the average American. However, beginning with the Dot.com stocks and continuing into the current subprime crisis, the markets have evolved into such a far-reaching force that the actions of Wall Street have significantly impacted all income classes. Also, Lewis does a good job in selecting pieces that, as a whole, portrays the evolution of investment banks as firms focused on servicing individual brokerage accounts to fee-driven, relationship banks for corporate clients. This has created significant conflicts of interests with regards to investment banks pushing the sale of stocks of their corporate clients to their individual investors. I perceived an implication from Lewis, through his selection of some of the pieces, that he places a large share of the blame on Wall Street for all of these Panics.
All in all, I felt the book was a good read that you can pick up over the course of a couple of weeks and read at your pace. However, there are articles that you will read and wish you had those ten minutes of your life back.Read more ›
Most Recent Customer Reviews
This is a collection of articles written about financial collapses. Not what I expected. However it's fun to see what the perceptions were before, during, and after various... Read morePublished 17 days ago by Old Kid
If you're interested in the market collapse of 2008, you need to read this one.Published 3 months ago by GeoAggie
A lot of facts. Some conclusions could use more support. Still, well worth the money for anyone wondering about the basic degeneration of finance in America (and around the world).Published 7 months ago by Appalachian Son
Please note that Mr. Lewis didn't write this book; he is the Editor, compiling a selection of pieces written by other authors - and their writing style is not up to his level. Read morePublished 11 months ago by MasonStorm
I was surprised to see so many other reviewers attack this book as being different from what they expected. Read morePublished 12 months ago by Susan Baker