Mr. Market Miscalculates: The Bubble Years and Beyond (Hardcover)

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Editorial Reviews

From Publishers Weekly

Collected from speeches and editorials by Grant, the editor of Grant's Interest Rate Observer, these essays are remarkable for their prescience: two years before subprime mortgages collapsed, the author described them as not one borrower left behind and when other analysts were worried about the effect of a Fed interest rate increase, he foresaw that the risk to house prices lies not with interest rates but with lending standards. Other chapters attack bubbles in stocks and the dollar with erudition and wit (Economics, mistaking itself for physics, is wont to turn up its nose at history, but the past has much to teach; as dress on Wall Street has become more casual, so have the monetary arrangements... the gold standard and swallowtail coats have given way to Greenspan and open-neck shirts). It's hard to imagine reading any other investment newsletter even a week after publication. Grant's is the exception; it paints on a larger canvas and is infused with the author's generous spirit and rich sense of humor. (Nov.)
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Review

James Grant's Mr. Market Miscalculates may well be the most perceptive book on the current financial crisis yet published. What is most impressive is that almost all of it was written years before the crisis finally struck in July last year.

Grant's views on the markets are well-known and consistent. A strong critic of the decision to take the dollar off the gold standard in 1971, he has used Grant's Interest Rate Observer, which he founded 25 years ago, to criticise the money-printing policies of the Federal Reserve. He has earned a steady and loyal following.

Grant ... draws his title from Benjamin Graham, the investment theorist, who coined the term "Mr. Market" in the 1930s. Thanks to Mr. Market's irrational behaviour, Graham said, it was possible for opportunistic investors to make money. Grant paraphrases Mr. Market's attitude thus: "Price is never an object; he just wants in, or he wants out. You, the sane one, could get rich just by availing yourself of the opportunities served up by your unbalanced partner."...The essays in the book show how easy the opportunities were to spot.

There are many other uncanny examples of prescience in [Grant's] diagnosis of the conditions that led to the current crisis. His trademark clarity of thought and of expression are there throughout. So, thankfully in an analyst who is generally pessimistic, is a crackling sense of humour. --Financial Times

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Product Details

• Hardcover: 430 pages
• Publisher: Axios Press (November 7, 2008)
• Language: English
• ISBN-10: 1604190086
• ISBN-13: 978-1604190083
• Product Dimensions: 9.1 x 6 x 1.4 inches
• Shipping Weight: 1.9 pounds (View shipping rates and policies)
• Average Customer Review: 4.4 out of 5 stars  See all reviews (18 customer reviews)
• Amazon.com Sales Rank: #27,561 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

49 of 51 people found the following review helpful:

5.0 out of 5 stars In a Rising Market, It's More Profitable not to Ask, November 2, 2008

By	Arlen Kessler - See all my reviews (REAL NAME)

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"The Cassandra industry is not so remunerative as the hedge fund business, so the professional investors and bankers stay in the race, taking the kind of risks that their better judgment tells them to avoid." states James Grant in his 'Mr. Market Miscalculates, The Bubble Years and Beyond,' a work comprised of pieces from his 'Grant's Interest Rate Observor.'

Grant has been charting the course of market excesses on a fortnightly basis for 25 years, and he has a remarkable record of getting it right. Most pointedly, Grant illuminates the human foibles to which we all fall prey and how these foibles precipitate the daily gyrations of stock and bond price levels. Grant's wealth of understanding is outstanding enough to recommend the book, but his ability to generously lace his writing with his sense of humor makes his writing simply priceless.

About the dismal financial crisis, Grant wryly remarks that there is more than enough blame to go around. Grant faults human nature in general for markets gone wild, yet he is particularly impressed by the level of incompetence exhibited by recent leaders who, according to Grant, "failed almost to the man."

The no-holds-barred book journeys through the missteps of the economic leaders of our times, and it does so with a breath-taking straightforwardness. Given the state of the world's economic affairs, I hope 'Mr. Market' becomes required reading for the legislators, the judiciary, and the executives charged with fixing the world's financial systems.

17 of 19 people found the following review helpful:

5.0 out of 5 stars 4.5 stars-Bankers started loaning hundreds of billions to speculators, December 2, 2008

By	Michael Emmett Brady "mandmbrady" (Bellflower, California ,United States) - See all my reviews (TOP 1000 REVIEWER)    (REAL NAME)

Grant has written a very nice critique of the deregulation of the financial markets that has been going on since the late 1970's.The Federal Reserve System(Fed) and SEC(Securities and Exchange Commission)simply allowed the big commercial banks and investment banks to ignore all of their OWN creditworthiness standards on who qualifies for a loan ,as well as letting them load up on all types of highly speculative types of assets, like collateralized debt obligations(CDO's). He pinpoints the major problem that led to the current collapse of both the housing bubble and the stock market bubble.It was not the low interest rate policies of the Fed.It was the decisions made to loan money to speculators and well known house flippers(in some real estate markets, 35% -40% of the housing loans were going to house flippers)that set the stage that created the housing bubble and then led to the total collapse of the construction sector in the vast majority of the 50 states.
I have deducted 1/2 of a star because the author is apparently unaware that Adam Smith spent 80 pages of The Wealth of Nations(1776;pp.260-340, especially pp.339-340) warning about the dangers of allowing banks to make loans to projectors,imprudent risk takers,and prodigals(These categories of borrower are equivalent to the speculators and rentiers responsible for creating the housing bubble of the mid-to late 1920's and the stock market bubble of the late 1920's).Smith made it clear that such categories of borrower will waste and destroy the loans generated from the savings of the bank's depositors.The central bank should aim at maintaining low rates of interest while simultaneously restricting loans to the three categories of borrower mentioned above.

8 of 8 people found the following review helpful:

4.0 out of 5 stars "Maestro" exposed, May 3, 2009

By	RobRoy (Lakeview, Arkansas) - See all my reviews

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Interesting book for those who wonder how we messed up our financial system. Book consists of 60 articles/essays by Grant, originally written during the years 1999-1Q08, so it takes you back in time to when the bubble was inflating. Each article is 6-10 pages long, so ordinary readers who normally avoid reading economics can enjoy and finish each one, plus Grant is a witty/skillful writer. Biggest revelation is Grant's plain-English criticism of Alan Greenspan's policies (made during Greenspan's reign). We all know the "Maestro" kept rates too low too long, now we see why. Makes you wonder why Congress and the public treat Fed chairmen with fawning exaltation.