false 49775065 751680 4216241 0393065146 9780393065145 43 <![CDATA[Panic: The Story of Modern Financial Insanity]]> http://photo.goodreads.com/books/1255580250m/4216241.jpg http://www.goodreads.com/book/show/4216241.Panic_The_Story_of_Modern_Financial_Insanity 3.48 135 A masterful account of today's money culture, showing how the underpricing of risk leads to catastrophe.

When it comes to markets, the first deadly sin is greed. Michael Lewis is our jungle guide through five of the most violent and costly upheavals in recent financial history: the crash of '87, the Russian default (and the subsequent collapse of Long-Term Capital Management), the Asian currency crisis of 1999, the Internet bubble, and the current sub-prime mortgage disaster. With his trademark humor and brilliant anecdotes, Lewis paints the mood and market factors leading up to each event, weaves contemporary accounts to show what people thought was happening at the time, and then, with the luxury of hindsight, analyzes what actually happened and what we should have learned from experience.

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As he proved in Liar's Poker, The New New Thing, and Moneyball, Lewis is without peer in his understanding of market forces and human foibles. He is also, arguably, the funniest serious writer in America.

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I'm finding that a lot of the TV/newspaper journalism about current crisis is either bogged down in the hour-by-hour changes ("how will businesses react to the Fed's decision of this morning? Let's hear some speculation from one alarmist and one reassuring, avuncular person.....") or at the other extreme (much like my "no Lionel Richie" policy guideline for managing the car radio in the 1980's, I now manage my attention by discontinuing my reading of any article that brings up the Dutch tulip craze of the 1600's). This book avoids either extreme. To a large extent it's reassuring, in that you can see from the contemporaneous writing that people really thought the economic world was coming to an end, whereas markets eventually stabilized and recovered. For time being, I'll take comfort in this.



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