Tubs's Reviews > Manias, Panics, and Crashes: A History of Financial Crises

Manias, Panics, and Crashes by Charles P. Kindleberger
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Apr 27, 11

bookshelves: currently-reading

it's not my book, so i can't underline stuff, so i'll just have to type my quotes here for now. first of all, omg, i hear this all so loudly. i HEAR this. most of my econ classes were just math. i could talk so much about that, and whether it was a good thing.

This book is an essay in what is derogatorily called "literary economics," as opposed to mathematical economics, econometrics, or (embracing them both) the "new economic history." A man does what he can, and in the more elegant - one is tempted to say "fancier" - techniques I am, as one who received his formation in the 1930s, untutored. A colleague has offered to provide a mathematical model to decorate the work. It might be useful to some readers, but not to me. Catastrophe mathematics, dealing with such events as falling off a height, is a new branch of the discipline, I am told, which has yet to demonstrate its rigor or usefulness. I had better wait. Econometricians among my friends tell me that rare events such as panics cannot be dealt with by the normal techniques of regression, but have to be introduced exogenously as "dummy variables." The real choice open to me was whether to follow relatively simple statistical procedures, with an abundance of charts and tables, or not. In the event, I decided against it. For those who yearn for numbers, standard series on bank reserves, foreign trade, commodity prices, money supply, security prices, rate of interest, and the like are fairly readily available in the historical statistics.


(or maybe just read this time is different, which is apparently more focused on the data)

Money is a public good; as such, it lends itself to private exploitation.
(think about this...)

In Chapter 5 we consider swindles and defalcations. It happens that crashes and panics often are precipitated by the revelation of some misfeasance, malfeasance, or malversation (the corruption of officials) engendered during the mania. It seems clear from the historical record that swindles are a response to the greedy appetite for wealth stimulated by the boom. And as the monetary system gets stretched, institutions lose liquidity, and unsuccessful swindles are about to be revealed, the temptation to take the money and run becomes virtually irresistible. It is difficult to write on this subject without permitting the typewriter to drip with irony. An attempt will be made.


(haha! written before madoff. haha, i thought of a great madoff pun a while ago (in other words, it was a teeeeerrrrible pun.) but i forgot it. frowny face. it had something to do with a retort that was like: oh, you're made of money? more like madoff money. BOOM. ha.)
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Quotes Tubs Liked

Charles P. Kindleberger
“Money is a public good; as such, it lends itself to private exploitation.”
Charles P. Kindleberger, Manias, Panics, and Crashes: A History of Financial Crises

Charles P. Kindleberger
“In Chapter 5 we consider swindles and defalcations. It happens that crashes and panics often are precipitated by the revelation of some misfeasance, malfeasance, or malversation (the corruption of officials) engendered during the mania. It seems clear from the historical record that swindles are a response to the greedy appetite for wealth stimulated by the boom. And as the monetary system gets stretched, institutions lose liquidity, and unsuccessful swindles are about to be revealed, the temptation to take the money and run becomes virtually irresistible. It is difficult to write on this subject without permitting the typewriter to drip with irony. An attempt will be made.”
Charles P. Kindleberger, Manias, Panics, and Crashes: A History of Financial Crises

Charles P. Kindleberger
“This book is an essay in what is derogatorily called "literary economics," as opposed to mathematical economics, econometrics, or (embracing them both) the "new economic history." A man does what he can, and in the more elegant - one is tempted to say "fancier" - techniques I am, as one who received his formation in the 1930s, untutored. A colleague has offered to provide a mathematical model to decorate the work. It might be useful to some readers, but not to me. Catastrophe mathematics, dealing with such events as falling off a height, is a new branch of the discipline, I am told, which has yet to demonstrate its rigor or usefulness. I had better wait. Econometricians among my friends tell me that rare events such as panics cannot be dealt with by the normal techniques of regression, but have to be introduced exogenously as "dummy variables." The real choice open to me was whether to follow relatively simple statistical procedures, with an abundance of charts and tables, or not. In the event, I decided against it. For those who yearn for numbers, standard series on bank reserves, foreign trade, commodity prices, money supply, security prices, rate of interest, and the like are fairly readily available in the historical statistics.”
Charles P. Kindleberger, Manias, Panics, and Crashes: A History of Financial Crises


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