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Origins of the Crash: The Great Bubble and Its Undoing
With his singular gift for turning complex financial events into eminently readable stories, Roger Lowenstein lays bare the labyrinthine events of the manic and tumultuous 1990s. In an enthralling narrative, he ties together all of the characters of the dot-com bubble and offers a unique portrait of the culture of the era. Just as John Kenneth Galbraiths The Great Crash w...more
Paperback, 288 pages
Published
December 28th 2004
by Penguin (Non-Classics)
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Well-known financial journalist Lowenstein (Buffett; When Genius Failed) sets out to explain the stock market crash of 2000 and the ensuing corporate scandals. The ingredients are familiar: executive overcompensation and stock options, irrationally exuberant shareholders, friendly auditors, short-term focus by financial professionals and overemphasis on shareholder value.
The author puts his unique stamp on these factors by juxtaposing them so brilliantly that the 20-year history that i...more
The author puts his unique stamp on these factors by juxtaposing them so brilliantly that the 20-year history that i...more
The run-up to the dot-com crash is laid out briefly and sickeningly. The crash was caused by many confluent trends under the over-arching pursuit of 'shareholder value'. At least that's Loewenstein's thesis and he argues it well. Enron, Lucent, GE, Tyco aong others variously cooked the books, created fraudulent off-balance-sheet Special Purpose Vehicles, colluded with consulting accountants etc. In the process, many insiders reaped huge rewards while the small investors lost all (Enron) or almos...more
pp 103 goes over Amazon’s earnings… or to be specific the absolute lack thereof.
pp 117 he discusses a “virtuous circle” the semantic opposite of a vicious cycle.
pp 160 an awesome quote from an executive at Global Crossing who was cognizant of his firm’s duplicity: “The stock market can be fooled, but not forever.” – Leo Hindery Jr.
pp 167 in a chapter all about Enron, nothing is more damning than this: From 1996 to 2000, Enron’s net income rose from $1.08 per share to $1.12. Sta...more
pp 117 he discusses a “virtuous circle” the semantic opposite of a vicious cycle.
pp 160 an awesome quote from an executive at Global Crossing who was cognizant of his firm’s duplicity: “The stock market can be fooled, but not forever.” – Leo Hindery Jr.
pp 167 in a chapter all about Enron, nothing is more damning than this: From 1996 to 2000, Enron’s net income rose from $1.08 per share to $1.12. Sta...more
Annoyingly tendentious.
I found his research to be amazing. He went into detail on business examples used in the book.
It's amazing at what goes on in corporate America and this book certainly makes you want to never invest another dollar in the market but rather invest it in your own business--at least you can trust yourself.
It's amazing at what goes on in corporate America and this book certainly makes you want to never invest another dollar in the market but rather invest it in your own business--at least you can trust yourself.
The problem with reading books about what's gone wrong with the economy is that by the time the book's been published and gotten its way into my grubby hands even more has happened and much of the book may no longer be relevant.
Enjoyed this book a lot, especially since it was interesting to compare against the current downtown vs the last one. I was particularly caught by the "Peter Principle" of Finance quote he had.
this is a long, informative newspaper article about how Wall Street abetted the tech boom.
focuses on wall street and what led to the internet stock bubble...
Through the 1970s, the American stock market was slowly declining; when in 1976 Presidential candidate Reagan suggested that social security funds be invested in it, he was derided as being crazy; in 1979 Business Week magazine announced "The Death of Equities". Everything changed in 1980, when Congress added obscure paragraph k to section 401 of the Internal Revenue Code. A benefits consultant from Pennsylvania realized that this paragraph allows companies to switch from a guaranteed-...more
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Roger Lowenstein has reported for the Wall Street Journal for more than a decade and is a frequent contributor to The New York Times and The New Republic. He is the author of Buffet: the Making of an American Capitalist
-HarperCollins
More about Roger Lowenstein...
-HarperCollins
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“A year earlier, no company had been accorded more faith than Enron; by late November, none was trusted less. And so, a gasping gurgle, a desperate SOS: Enron, the emblem of free markets, the champion of deregulation, reached into its depleted treasury and forked over $100,000 to each of the major political parties' campaign war chests. Then, it shuttered its online trading unit - its erstwhile gem. On November 28, Standard & Poor's downgraded Enron to junk-bond level - which triggered provisions in Enron's debt requiring it to immediately repay billions of its obligations. This it could not do. Its stock was seventy cents and falling, and, now, no gatekeepers and no credit remained. Accordingly, in the first week of December, Enron, the archetype of shareholder value, availed itself of the time-honored protection for those who have lost their credit: bankruptcy.”
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