Panic!: The Story of Modern Financial Insanity

Panic!: The Story of Modern Financial Insanity

by Michael Lewis (Editor)

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Overview

The New York Times bestseller: 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. In this New York Times bestseller, Michael Lewis is our jungle guide through five of the most violent and costly upheavals in recent financial history. 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, with the luxury of hindsight, analyzes what actually happened and what we should have learned from experience.

Product Details

ISBN-13: 9780393065145
Publisher: Norton, W. W. & Company, Inc.
Publication date: 12/01/2008
Pages: 352
Product dimensions: 5.80(w) x 8.30(h) x 1.30(d)

About the Author

Michael Lewis is the best-selling author of Liar’s Poker, Moneyball, The Blind Side, The Big Short, and The Undoing Project. He lives in Berkeley, California, with his wife and three children.

Date of Birth:

October 15, 1960

Place of Birth:

New Orleans, LA

Education:

Princeton University, B.A. in Art History, 1982; London School of Economics, 1985

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Panic: The Story of Modern Financial Insanity 2.9 out of 5 based on 0 ratings. 21 reviews.
willyvan More than 1 year ago
Michael Lewis, author of Liar's Poker, an account of Wall Street in the 1980s, has edited this fascinating collection. The articles are by Joseph Stiglitz, Jeffrey Sachs, Paul Krugman, Robert Shiller, Lester Thurow, the Economist, the New York Times and Lewis himself, among others. They look at the US stock market crash of 1987, the 1997 Southeast Asia crisis, the 1998 collapse in Russia, the dotcom bubble bust of 2000 and the crash of 2007. Throughout, City of London and Wall Street traders were 'making a fortune from the misery of others', as Lewis noted. The IMF made things worse by always forcing countries to cut spending and raise taxes. In 1997-98, it told Brazil and Russia to defend their currencies and raise interest rates (which benefited Wall Street, if not Brazil and Russia). Stiglitz concluded, "capital market liberalization . is dangerous. It was not an accident that the only two major developing countries to be spared a crisis were India and China. Both had resisted capital market liberalization. Yet today, both are under pressure to liberalize." In 1998 short-term money panic, ironically, destroyed the hedge fund Long-Term Capital Management. But the US government vetoed proposals to curb speculation, improve debt restructuring and restrict bank secrecy. Stiglitz wrote in July 2007, "the fact that so many countries hold large reserves means that the likelihood of the problem spreading into a global financial crisis is greatly reduced." Wrong, Joe - capitalism isn't that rational. The City, like Wall Street, is a casino. US credit agencies rated bonds using a formula called - appropriately - the Monte Carlo simulation. The City's only purpose is to make money for its members. Its speculators make their profits by taking wealth from savers and investors and gambling with it. The City serves no any wider public, social or economic purpose. Its claims to place resources where they maximise growth are bogus.
Clif on LibraryThing More than 1 year ago
I was hoping that by reading about the folly of others I could be a bit wiser for the current financial crisis. But I still don't feel wise. This book does provide some relief for today's remorseful investor by telling stories of others who lost more. "Everything, in retrospect, is obvious. But if everything were obvious, authors of histories of financial folly would be rich . . ." It is incredible how naive and stupid some of the pre-panic articles are. But on the other hand, many of the post-panic articles are equally over the top in finding conspiracies where in reality only simple capitalistic greed is present. Is being greedy (or stupid) against the law? An example of pre-panic swagger is this quote by Dave Barry; "You don¿t have to take any risk, or work hard, or even have a central nervous system. That¿s how profitable real estate is!" This book was published November 17, 2008, and the current financial crisis has continued to play out since then. So the comments about the current sub-prime mortgage crisis probably will become quickly dated. Nevertheless, I found his predictions related to the current financial situation of interest. He says the coming recession will be longer and more persistent than any in recent memory. In absolute terms it won't be as bad as the 1930's depression because we're beginning from a higher starting point. However, in relative terms we may feel worse than those who lived through the 1930's. The reason is that our expectations are so high and our tolerance for discomfort so low that we'll cry like spoiled children. Perhaps this time it really is the end of the world as we know it. Of the five financial crises examined, the differences are so large that there are few morsels of wisdom that can be carried forward to avoid the next crisis. However, I will make this prediction; If you had the job in the past of flipping derivatives based on sub-prime mortgages, you'd better start looking for a new job flipping hamburgers because your old job isn't coming back. Read in January, 2009
kevinyezbick on LibraryThing More than 1 year ago
Disappointed by the audiobook. There are no notifications when you've reached the end of a disk. Perhaps I should have read the summary a bit more carefully, as this is just an overview of past events - a collection of articles in the media while those events were happening. I was hoping to hear more of the Lewis insight and investigations akin to Moneyball. Maybe that's what got cut out in this abridged version.
Bridget770 on LibraryThing More than 1 year ago
Loved this book. Loved reading articles written during the financial chaos; it gives incredible perspective to what people were thinking and feeling. This book is not a thorough analysis of what happened to cause the various periods of financial instability, but it serves as a reminder even the best minds in the world can't predict periods of instability and sometimes can't even help return the market to stability.
bruchu on LibraryThing More than 1 year ago
An Interesting Look BackThe newest book edited by Michael Lewis, aptly named "Panic" is a collection of previously published articles before, during, and after the market collapses of 1987, the Asian financial crisis of 1998, the Dot Com bust in 2001 and the latest Subprime mortgage meltdown.Though, none of the books contents represents any new analysis or synthesis of the events past, nor is much contextualization given by Lewis of the articles and events, I still felt that the book was a good read. Mostly because it was refreshing to re-read what people were feeling at the time. They give a snapshot in time of the over-confidence, anxieties, and overall market psychology that underlies the whole system. Throughout the book there are some great quotes and one-liners such as "I guess if you're neither a bull nor a bear, you're a chicken." Or great anecdotes that illustrate the silliness of some of these ventures such as the story of Books-a-million or "From Rudolph the Red-Nosed Reindeer." Mostly though, as a reader one comes away with the feeling that none of us are omniscient. Not the stock gurus, the appraisers, the agents, the economists, etc... We're all flying by the seat of our pants and nobody knows what is going to happen next, your guess is as good as mine. Which means, anytime you hear some Harvard MBA "analyst" tell you what the market's gonna do, you're just as well-off doing the opposite.I do highly recommend this book, not just because I'm a Michael Lewis fan, but because I think the book illustrates both the complexity and the folly of the economic markets. There's no trying to make sense of it all, because there is no sense to begin with.
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Al_Bass More than 1 year ago
Michael Lewis, who previously wrote the popular book "Liar's Poker," takes his own spin on our country's most notable financial catastrophes of the last twenty years. These include:

1. The 1987 stock market crash
2. Russian default and eventual failure of Long-Term Capital Management (hedge fund)
3. The Asian currency crisis
4. The bursting of the Internet stock bubble
5. And, of course, the recent subprime debacle

This book's analysis is quite comprehensive, and, as you can imagine, the shortcoming of looking at so many factors is the treatment of each could be more thorough. The commentary and analysis that is there is excellent, and I learned a lot from it. Lewis spends a lot of time rehashing the best of past analyses from the likes of economists Joseph Stieglitz and Paul Krugman and Wall Street Journal reporters Gregory Zuckerman and Roger Lowenstein. There are excerpts from his own previous books and articles, including an account of his time as a trader at Salomon Brothers in the midst of the junk bond crash of 1987 and his observations on the Internet boom and bust. Overall his narrative is elegant and profound, and the arguments are on-target, including his lambasting of shoddy risk management at financial firms, foolish principles guiding sophisticated Wall Street traders, and the problems caused "by the new complexities of the financial markets."

Another book I strongly recommend that has been a somewhat surprising recent discovery for me and an extremely helpful guide for dealing with the pressures of the current economy is The Emotional Intelligence Quick Book
KKrew More than 1 year ago
In the interest of full exclosure, I'm a Michael Lewis fan. I loved Moneyball and Blindside. I enjoy his style and find his writing easy to read. As an editor, Mr. Lewis does a decent job of piecing together a history of market upsets from 1987 to the present. If you're looking for a Moneyball followup, avoid the Panic. Otherwise, enjoy!