Tuesday, January 27, 2009
Panic : The Story of Modern Financial Insanity, edited by Michael Lewis
The Age of Financial Unreason began with the 1987 stock market crash, according to Michael Lewis, author of the bestselling Liar's Poker, who was a bond salesman in London at the time: "It was striking how little control we had of events, particularly in view of how assiduously we cultivated the appearance of being in charge by smoking big cigars and saying fuck all the time." All of the major modern panics are here, including the Asian currency crisis and Russia's financial meltdown, but the best essays are about Black Monday, the internet bubble (when a company merely had to announce it had a new website for its stocks to rise 973%) and the dreaded sub-prime mortgage disaster. Some of it is dry stuff, unless you thrill to talk of structured investment vehicles or master-liquidity enhancement conduits, but there is a helpful glossary for those who can't tell a bear from a bull. Computerised global capitalism leads to faster booms and busts, Lewis says, but it isn't the end of the world, so try not to panic.