false 4216241 0393065146 9780393065145 132 42 http://photo.goodreads.com/books/1255580250m/4216241.jpg http://www.goodreads.com/book/show/4216241.Panic_The_Story_of_Modern_Financial_Insanity 776 Michael Lewis 10877 1799 4 0 false Sun Mar 15 00:00:00 -0700 2009 Fri Mar 13 15:09:47 -0700 2009 Mon Mar 16 12:46:14 -0700 2009
These are the four recent market panics:
1. Black Monday 1987

I was in college during this crash. I remember my college roommate watching TV and getting very upset that he lost the meager savings (from our summer co-op jobs) that he invested in mutual funds. I thought he was stupid for saving his money instead of buying guitars, guitar magazines, guitar effects, and records like I had. (I'm pretty sure my 1972 Les Paul turned out to be a better investment -- plus there are no management fees.)

2. 1997 Asian financial crisis-> Russian default -> LTCM crisis

In August 1998, Diana and I were vacationing in Santorini while we were waiting to move in to our new house. (We'd rather stay in a hotel in Santorini than Pacifica.) When called our loan broker from a pay phone to lock in interest rates, she said that there was a big problem with interest rates right now and to call back a week later. A week later everything was fine, and we locked in a low rate. I guess it had something to do with this Russian default thing.

3. Dot com crash

This one we were right in the middle of. Our net worth went wildly up and down, all on paper. The article about Books A Million going up ~900% because they updated their web site made me feel kind of nostalgic for both the boom and the crash.

One of the articles has a some quotes from Bernard Madhoff saying that he was selling Amazon and other Internet stocks. We now know that he did no such thing.

4. Investment bank failures and subprime mortgage problems

Thankfully this panic hasn't touched us. Property values are holding up here in Elysium. Fortunately we lost all our money in the previous crash, so we weren't invested in any mortgage-backed securities.

This series of articles was my favorite of the four. There's a fascinating article about the Bear Stearns CEO playing bridge with no phone or email access as the company cratered. And there's a New Yorker article that basically predicted the whole thing (and put the blame on Alan Greenspan) a few years before the crash.

If you are not already sick of reading dire business news then check out this book. However, if you are sensitive to fraud, chicanery, and schadenfreude this is not the book for you.
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