A History of the United States in Five Crashes: Stock Market Meltdowns That Defined a Nation Hardcover – June 13, 2017

Author Scott Nations' book <History of the United States in Five Crashes> (hereinafter HUSFC) can make for pleasant, informative and interesting reading. It was all of those for this reviewer. Mr. Nations must be one of the few existing writers able to make a stock market-oriented book a joy to read. By the way, the crashes were those of 1907, 1929, 1987, 2008 and the 'flash crash' of 2010.

In his Source Notes the author mentions that many existing published accounts cover one or more of the modern crashes; my point being that possibly most who pick up this book will either remember or already have read about, or even experienced the last three of the five crashes. In my opinion if you are one of the above, I believe that you will still enjoy and might even learn more about those market events -- plus the previous two. Or at least the book will firm up the events in your mind, and entertainingly so.

HUSFC's theme follows this line: With the passage of time stock market operations have become progressively influenced by the factors speed and complexity, especially since operations have entered the era of split-second electronic transmission of information. Speed and complexity now cause uncertainty such that they can and do disrupt market operations even beyond the capacity of experts to understand what is happening. And those disruptions can produce bad effects that spread far and wide in a matter of seconds or minutes. Therefore, now an investor must worry about more than the usual signs that were once deemed common to markets that were overheating. I refer here to such as speculative euphoria and the brevity of human financial memory.

The material covered by HUSFC might cause the ordinary investor to wonder if the hazards of stock market investment might outweigh those found at a gambling casino; even when the ordinary investor's money is entrusted to an expert market practitioner.

One more item: The author's epilogue nicely brings together his thoughts as expressed throughout his book.

The title of the book is misleading; that was my first disappointment. I understand that author's rarely choose the title -- publishers do. But with a title like this you'd expect it to be a book about how the 5 crashes affected the broader United States or the crashes become emblematic of some part of the national psyche or course of development.

That's not the case; the scope of this book is much narrower, being almost entirely a Wall Street view of the crashes. This isn't a "a history of the United States". This is "a history of 5 crashes".

Given that there are full-length book treatments of all of these crashes (and ones like 1929 and 2008 in particular have a wealth of extremely well researched, written, and reviewed books) it seems natural to wonder: is something new being brought to table with this book? As other reviews have noted, the author doesn't cover ALL the crashes in the 20th century. Notably, the 2000 dot com crash and the 1973 stagflation crashes aren't included. But others, like the Kennedy Crash, are also absent. Unfortunately, the author doesn't provide any insight into the reasoning behind why some crashes were chosen and others were left out.

It would be natural to assume that, given these particular five crashes, the author intends to do some kind of cross-sectional comparison and draw lessons or insights or track a broader pattern that emerges from these five crashes. But that also doesn't really happen. (There is a brief nod towards this in the epilogue but all it really boils down to is "things get faster and more complicated" which may be true but feels like may not have warranted an entire book to make that point.)

What we're left with is a fairly mainstream consensus retelling of the crashes at a very granular level. The stories of the five crashes are almost entirely independent of one another and can be read in any order. If you want more detail than Wikipedia but less detail than a dedicated book on the crash, then this compilation of five monographs seems like a good enough entry. But that seems like an extremely small market niche to target. The material isn't introductory -- the re-tellings of the crash move along at a fast clip and the author often gives thumbnail explanations that may leave readers without a background or strong interest in finance a bit out of their depth.

The re-telling of each crash feels suspiciously straightforward -- there's little of the doubt or uncertainty as to underlying causes that I would expect given the massive complexity, general opaqueness, and scholarly disagreements around markets and their behaviour. As an example, the author seems to explain the 1929 crash as almost entirely due to Federal Reserve rates, with the implication that higher rates would have prevented the whole thing. I know little about it but I'm suspicious that things could be so tidy, especially since there was a worldwide Depression and many other stock markets crashed -- not just ones affected by Federal Reserve rates. Similarly, the 1987 crash is pinned almost entirely on portfolio insurance. While that is certainly the most popular explanation -- and I don't fault the author for going with it -- it isn't an open-and-shut case. I think the author could have conveyed more of the uncertainty that still remains around the real causes of most of these crashes.

An intelligent, well-written and lively account of five great crashes. The level of detail is just right to create a narrative that really moves along well. I read the book in a day. I will go back and re-read the chapter on my favorite crash, 2008-9. All the sins of government and Wall Street are recounted with balance and insight.

I think the book is well researched and is written in such a way that folks who are not schooled in economics and finance can get a good understanding of the interplay of politics, monetary policy, and the entrepreneurial spirit affect market performance. It also explains how each crash was preceded by a new financial product that began with good intentions and met a need within the marketplace was eventually taken to an extreme. Eventually the extremes created stresses the market could not tolerate and some catalyst tipped the market into a crash.

One thing I did not understand is why the 2000 dotcom bubble and crash was not included in this book.

A good book - I enjoyed it.

Scott Nation's new book takes on a subject that could have been a dull recitation of the economics behind five U.S. financial calamities. Instead he makes his book a fascinating, fast-paced, adventure story complete with heroes, villains and those caught in the cross-fire between fear and greed.
As a fan of business history I thought I had a fairly good grasp of the reasons behind the 1907 Panic, and the 1929 Crash; but Mr. Nations brings these disasters into sharper focus through meticulous attention to details and personalities that seem to have escaped previous business histories.
His reconstruction of the climate and events regarding 1987's Black Monday, the 2008 Meltdown , and the Flash Crash of 2010 will make your palms sweat. Highly recommended!!