 "Better appreciated after having familiarity with multiple financial crisis" | 2009-09-05 |
| - Reviewed By maylinglai2 |
| A scholarly and entertaining account of the way that mismanagement of money and credit has led to financial explosions over the centuries. Covering such topics as the history and anatomy of crises, speculative manias, and the lender of last resort, this book has been hailed as "a true classic...both timely and timeless." The updated fifth edition expands upon each chapter, and includes two new chapters covering significant crises of the last fifteen years around the world. |
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 "History Really Does Ryme" | 2009-08-14 |
| - Reviewed By mpjarvis |
| I am always amazed how often history repeats itself and how quickly we forget. This book provides an amazing history of the credit markets for the last several hundred years. This should have been required reading for government officials and banks executives. |
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| "Its happened before" | 2009-06-26 |
| - Reviewed By User: A33WJSZU9OYXF5 |
| The latest financial meltdown is nothing new, we have suffered such panics before and will again. This book gives the reader a good perspective on previous financial follies and helps for understanding the current and future panics. A very readable and enjoyable financial history. |
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 "A wealth of information, badly written, poorly organized" | 2009-05-13 |
| - Reviewed By User: AHS8S5A5IL7E8 |
This investment classic offers a comprehensive survey of all the major crashes and panics in financial history from the 17th century all the way to the dotcom era. The author analyzes these phenomena with a Minksy framework and provides indispensable insights on the psychology of the markets, the relevance of historical conditions, the deep underlying fundamentals as well as policy responses.
However, it takes considerable effort to harvest the insights. The book is VERY difficult to read. The author is a non-mathematical economist but I cannot agree with other reviewers who call him a literary economist as his writing is an absolute massacre of the English language. The style is elliptical and verbose. He shovels detailed historical facts right into your face, leaving you to piece them together. The author also repeats the same facts and ideas across chapters under a different pile of verbiage.
The appendix in this edition provides a useful chronological summary of all the crises treated in the main text. It is advisable to consult this first before diving into the mess. |
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| "Classic description of the perennial business cycle" | 2009-03-20 |
| - Reviewed By User: A26CEOII995JPF |
This is a classic one-volume description of the perennial business cycle. It is not really a history and it is not really a book of economic theory. Instead, it is a description of the boom-bust cycle, which draws extensively upon both history and theory.
I have read a good deal on this subject. I think most of what is written in this area is theory, which is divorced from reality. Not this book. He knows exactly what he is talking about, and he describes it very pragmatically.
The basic argument is simple. There is an unending business cycle, driven by mass psychology. The cycle has very definite stages. First, as the economy does well, optimism builds. As people become more optimistic, business expands and credit expands. The upswing starts to feed on itself. Business expands more, because credit is expanding, and credit expands because business is expanding. At first, the expansion tends to be based on real business trends. As time goes on, however, euphoria builds. Credit tends to be expanded way beyond what is justified by any economic fundamentals. This phase is one of mania. We are all familiar with it, having been through the recent dot.com and subprime mortgage manias. What this books shows us is that these manias are not new; they have been coming along, at regular intervals for the last 400 years.
Then the cycle turns. Something happens to cast doubt on the insanity. People panic. Credit is contracted suddenly. Depositers run to their banks demanding all of their money. Shareholders all try to sell their stock simultaneously. Foreign money all tries to leave the country. In the same way that the upswing feed on itself, the downswing is also self-reinforcing.
Free market theory tells us that markets are always in equilibrium, due to supply and demand. From a long-term perspective, that may be true. From a short-term perspective, it is almost never true. In the real world, markets tend to swing from one extreme to the other. This book explains why. There is nothing new here, for those of us with extensive experience in the economy. What is new, however, is having a professional economist take reality more seriously than theory. THAT is extremely unusual.
One minor grievance. The question we all have, of course, is what can we do to stop this crazy cycle? Kindleberger very learnedly discusses all of the various answers which have been tried and which have been proposed. His conclusion? Government intervention makes things worse, some of the time, and better, some of the time. In his view, handling the business cycle is an art, not a science. Realistically speaking, that is probably the best answer anyone has yet come up with, yet I hope -- as do most of us -- that there is a better answer out there somewhere. |
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| "A Book That Must be Read" | 2009-03-16 |
| - Reviewed By User: AYWQ28CI1AGN5 |
I only had one semester of economics in college. The course was taught by an old man who had lived in the small city of Appleton, Wisconsin for most of his adult life and had therefore missed the labor wars to the extent that I took exception to his interpretation of a union factoid that I knew about because I had worked the summer previous in a union shop and learned the hard way what he had gotten out of a book. I made a deal with him; if he would pass me I would not take his class again.
Since then I have read books about economics and think that if I knew how to fill a blackboard with all those arcane formulas economists use, I too could be an economist.
You make a product and you sell it. Then sidemen figure out how things are bought and paid for and how every list bit of profit is squeezed out of the transaction.
Economists like to write about how some people are better squeezers than others, and so when you see the history of a transaction spelled out in black and white you can only think, "of course, that's the way it worked."
The author presents some transactions through history that make the reader wonder how people can be so stupid, e.g., the Great Tulip Bust. Why would anyone be so stupid as to bet the farm on flowers?
Right now we are going through an economic panic that may be more psychological than actual. The author makes the case that what we have endured before is what we are enduring now, so let us once again try not to do the damn fool things we have done in the past, and he does it in a readable manner that is not pedantic or filled with insider's jargon. |
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