Good framework for understanding the 2008 crisis
593105
This book was illuminating.  I ended up buying the book for reference after reading a library copy. Michael Pettis argues that the global financial crisis of 2008 had its roots in large and persistent Savings imbalances.

While I have some Macro Economics 101 background, I have never been strong in the subject. But reading Michael Pettis took my understanding of the Balance of Payments (BOP) mechanisms to a new level of enlightenment.  The book provides a simple but powerful framework to understanding savings/trade imbalances and their repercussions.

As a framework for better understanding the 2008 crisis, he starts off explaining three relevant BOP Accounting Identities without using equations.  So, in certain parts, I had to re-read the passages a few times (I'm dense, I know) and to Google the equations (they are quite basic, but one would need a quick refresher).  But once you remember the Accounting Identities, he shows their application, highlights the relevant cause and effect (highlighting how trained economists have misinterpreted causal relationships) and flags up wrong conclusions by fellow economists.  Absolutely eye opening.

Pettis leads the reader to the correct use of these basic BOP Accounting Identities and their second-round effects on the problems caused or faced by China, the Eurozone, and a strong US Dollar, and concludes by making predictions for these three geographies.

That Pettis could consistently apply these simple Identities to analyse complex global events gave me a renewed confidence in interpreting global economic affairs. Clearly one of the best applied economics books in decades.
3273465
One can argue that the financial turmoil of 2008 resulted from poor decision making in the face of uncertainty. Howard Wainer is a leader in applying a more visual intuitive approach to such issues. His explanation of well meaning but statistically challenged public programs, which have wasted billions of dollars will make you want to throw stuff. This book should be required reading by people entrusted to make policy. I learned a lot from it.
2844921
This comprehensive history and analysis should be a standard text for all who study economics, business and politics.  Goldmann's indepth dissection of the events leading up to and creating the atmosphere that resulted in the "meltdown of 2007-2008" provides what should be a useful tool for all of us who are living through the effects of that crisis in the US and around the world, and in particular for those who are and will become the economists and economic leaders of the future. The writing is clear, uncompromising and fully transparent about the crisis and helps the reader understand how fraud insidiously crept into economic policy-making during the years and decades preceding the crisis. Highly recommended!
1269386
For a long time, I've been concerned about how our country is spending above and beyond what we have coming in.  This book really helped me gain a better understanding of what has occurred, how it has culminated to where we are today and how to prepare.  It is well written and easy to understand.  The Biblical perspective provided on how to approach an economic downturn is something I had not considered.  I highly recommend it.
768829
A simply written but in depth look at the 2008 crisis and the risks associated with continued QE strategies. Some good advise on protecting your investments.
3839376
Outstanding- Read Krugman, Stiglitz, Bernanke, Geitner  Warren, Lewis, Stockman,and  Barofsky and you will have a good understating of the 2008 mess. The lesson from of these thoughtful writers is that markets will not protect the public from the excesses of greedy/smart people like the ones who inhabit Wall Street. It is a sad comment that Washington cannot summon the fortitude to bring this mess under control. I guess the money (what was stolen form the markets) is just too much for Washington to do the right thing. I would not vote for any politician in any party without them certifying that they had read at least 5 of the authors.
3969871
Very good analysis of financial crisis causes. Too bad the government will not admit some responsibility before they do,it again.
403392
Very good on explaining the causes and reasons on the possible collapse of the US financial systems. Also liked the factual explanation of the farse of Gore's climate myths and heresies.
2635850
This is a short book that in some ways is a summary of Reinhart and Rogoff's greater work&nbsp;<a data-hook="product-link-linked" class="a-link-normal" href="/This-Time-Is-Different-Eight-Centuries-of-Financial-Folly/dp/0691152640/ref=cm_cr_arp_d_rvw_txt?ie=UTF8">This Time Is Different: Eight Centuries of Financial Folly</a>. Think of it as an executive summary in book form.  How short is it?  Less than 160 pages, but in terms of text there's less than 40 pages of text in this 6" x 9" book, so it's a fast read.

Graphs occupy the remainder of the book, with the latter two-thirds of the book going nation-by-nation, allocating 1-3 pages to each, showing Debt/GDP, and the various sorts of financial crises they have faced.

Main Findings

1) When debt to GDP ratios get above 90%, growth rates fall by 1%.

2) Emerging markets fare worse than developed market on point #1.

3) There's no relation in the short run regarding public debt and inflation in developed nations.

Other Findings

1) Many nations default continually... I allege cultural problems, but I am willing to be corrected.

2) Banking crises were normal in developed nations prior to WWII.

3) Private debts surge prior to banking crises. This is normal, when banks lend aggressively, they lend badly.

4) When there are banking crises, other crises tend to occur.  No surprise, because restrictions in bank lending leads to difficulties in those seeking financing.

5) Banking crises are associated with sovereign debt crises.

6) Public borrowing follows a repeated boom/bust cycle, particularly in developing markets.

7) Like Michael Pettis' book,&nbsp;<a data-hook="product-link-linked" class="a-link-normal" href="/The-Volatility-Machine-Emerging-Economics-and-the-Threat-of-Financial-Collapse/dp/0195143302/ref=cm_cr_arp_d_rvw_txt?ie=UTF8">The Volatility Machine: Emerging Economics and the Threat of Financial Collapse</a>, short-term debts tend to accelerate prior to crises in developing markets.

8) Public credit ends to absorb private debts after the crisis erupts.

This is a good book,  it summarizes the dangers that come from high national debt levels.  The graphs in the back are a handy reference to the debt histories and crises of most major nations.

Quibbles

None

Who would benefit from this book: I think every serious investor and thinker on economics should be familiar with the findings of Reinhart and Rogoff.
965085
This book was a good read as it gives a detailed perspective on our government and the financial system. It discusses the need for financially strong and healthy mega banks to keep USA's competitive standing in the world as a financial super power. It also discusses who was ultimately at fault during the 2008, financial crisis.
2890773
Bookstaber has written a cogent, understandable and witty guide to the structural and human underpinnings of the current financial crisis.  While this book requires thoughtful reading, it does not assume that the reader is technically savvy about markets or the plethora of financial instruments that have come to have such a dramatic impact on U.S. and world economies.  I unhesitatingly recommend this book to anyone wishing a deeper understanding of the problems that can and have been created by financial markets and instruments.
15470
Raghuram Rajan made a name for himself at the Jackson Hole conference in 2005, which was a kind of send-off for the victorious Alan Greenspan.  Alas, but the paper he brought was not appreciated at the time, as it pointed to imbalances in the financial system.

He was ahead of the curve.  Thus his book on the economic crisis deserves our attention. More than most, he sees the problems in a global way, across nations and across asset classes.

His view is that for a variety of reasons, income inequality grew in the US, and in order to paper over that, the government encouraged a credit-oriented society to allow people to stretch for prosperity, hoping that the debts would not catch up with them.

It was a fool's bargain.  Debt deceives average people.  They overestimate their ability to repay, and end up defaulting at high frequencies.

Like me, he is critical of the Fed's monetary policy during the '00s as being too easy.  The "Great Moderation" was a result of over-stimulus, not of sound policy.

Similarly, he faults banking regulation for being too easy, leading to private profits with public risk.

This is a well-written book from a man who was ahead of the curve.  I recommend it.

Quibbles

Where I differ with Dr. Rajan is how easy it would be to fix income inequality in the US.  He suggests a number of policies, many of which sound good, but have the Federal Government intervene in matters that they can't handle effectively.  Persistent unemployment is a problem, but should that be handled by the Federal Government.  Far better in my opinion that it be handled informally and locally, by family and friends, that there would be more urgency, and more willingness to compromise in finding work.

Retraining is a good thing, but also not something the Federal Government does well.  One of the beauties of the US is that we have community colleges, which can retrain people at modest costs.

He also levels a decent amount of the blame at Fannie and Freddie and the Community Reinvestment Act, for making too many lousy loans.  He is correct in direction, but not likely in degree.  Yes, they were problems, but not the leading problems.

But these are mere quibbles on an otherwise excellent book.

Who would benefit from this book

Anyone who wants a comprehensive view of the crisis would benefit from this book.  It does a fairly complete job, and is not long at ~230 pages.
2967414
Charles R. Morris is a longtime member of the Council on Foreign Relations, as well as a lawyer, former investment banker, and contributor to NY Times, and other Left of Center media outlets.

The synopsis of this book says "...he predicted the credit and subprime mortgage crashes back in 2005, and has been preparing his book, THE TRILLION DOLLAR MELTDOWN, ever since."

I would think it fair to say he had an insiders view of where we were heading, and where the insiders would like to take us from here. He, basically, advocates a return to the Fabian Socialist economics of John Maynard Keynes.

---------------------------------------------

excerpt from "The Banker Who Predicted Mortgage, Credit Crises" by Adam Davidson"
- NPR's "All Things Considered", March 26, 2008

Banker and economic historian Charles Morris says he saw it all coming. He makes his case in The Trillion Dollar Meltdown: Easy Money, High Rollers and the Great Credit Crash. The book, published earlier in March, lays out, in precise detail, what went wrong over the past few months in the global financial system.

Morris describes exactly what brought down Bear Stearns, why the U.S. may be headed for recession and why investors around the world are terrified.

But here's the thing: He wrote much of the book last spring -- months before the first hint of any problem. Back when leading government and finance people were touting the rosiest of financial futures.

The book's life began with an e-mail Morris sent, in early 2007, to Peter Osnos, the founder of Public Affairs books, which said: "I think we're heading for the mother of all crashes, it will happen in summer of 2008, I think."

Right at the same time as that e-mail, February and March of 2007, Federal Reserve Board Chairman Ben Bernanke was telling Congress that the U.S. has a Goldilocks economy: just perfect, the right amount of inflation and growth and employment.

Financial journalist Larry Kudlow, like many others, talked about the glories of a U.S.-led period of prosperity capitalism.

You get the picture: The leading voices in Washington and on Wall Street agreed that the economy was going great and would only improve. So, why did this guy, Morris, see things so differently?

He was in the perfect position. He's not just a writer; he ran a company that created the software investment banks and hedge funds use to build these new, exotic credit instruments.
841157
This is one of the few books about financial crises that is easy to read.  It's interesting how the author tries to connect the financial problems in each country to some kind of national characteristic.  I have no idea how accurate his depictions are, but they certainly are interesting.
2921642
After the 2008 crash, TARP, and all the other alphabet list of Fed intervention and political machination, I immersed myself in learning what is really happening with our markets and country.  This book provides a solid foundation for that understanding.  It breaks new ground in identifying specific causes, and unnecessary prolongation, of the Great Depression. Smoot-Hawley tariffs and the Crash of 1929 are identified as mercantilist actions which were then compounded by wave upon wave of destructive economic legislative and executive actions, assuring the decade long Great Depression.  It traces from 1880 to the present the forces which drain capital from the middle class by using government influence.  Official malfeasance which serves the interests of the mercantilist is occurring at an alarming rate today and portends the end of our Republic if allowed to continue unchecked.  Framed in the perspective of classical economics, it lifts the curtain on the forces that actually determine markets and events.  It is a wake-up call for anyone alarmed by the current political and financial turmoil.
2362378
The book has a copyright of 2008. Alas, it does not say when in 2008 the final draft was written. There is no coverage of the fantastic financial disasters of 2008, starting with Bear Stearns and going onto the collapse of Lehman and AIG. So the book can be imagined to have a blissful ignorance of events that were soon to come to pass.

If you can ignore this, then perhaps much of the book is still germane, especially since in mid 2009, the world economy seems to have stabilised. The author analyses at a meta level the various hedge fund strategies. This lets you understand and classify a hedge fund. Useful if you represent a fund of funds, perhaps, that is considering how to allocate money across different funds for maximum return.

You also get to appreciate how a fund's strategy can be dynamic. That is, it might change over time. Presumably if the strategy is successful, this is reflected in a high alpha for the fund.

Another usage is for anyone daring enough to start up a new hedge fund today. The book gives you an appreciation on where maybe to position your fund's strategy, vis-a-vis the other funds.
627959
This is a timely, readable novel that makes much of the mortgage crisis of 2008 understandable. Everything contributed to the mortgage crash from home builders building homes without a good crystal ball, home buyers riding a wave of rising prices hoping not to get caught when the music stops, never thinking the music will stop, buyers not understanding the risk of teaser loans and trusting the wrong people, That list is not all inclusive. Sullivan doesn't even include the government in the disaster that was pushing hard to get people into homes anyway possible.

The crash hurt a lot of people and wrecked the economy. In its desire to get the economy moving, the Federal Reserve is blowing up the same old bubble with low interest rates. Housing prices are moving up and it looks like we are headed down the same road again.

Is the book worth Five Stars? No. I would give it more like 3 1/2, because it seems like the dialogue rings flat and Sullivan uses the dialogue to educate the reader too much. I like the plot and twists, but the ending might have been a little too easy. The book won a Finalist Medal 2013 in Next Generation Indie Book Awards. I think the writer will grow and this is a good start. A sequel is planned for August, 2013