The financial and economic crisis that began in 2008 is the most alarming of our lifetime because of the warp-speed at which it is occurring. How could it have happened, especially after all that we've learned from the Great Depression? Why wasn't it anticipated so that remedial steps could be taken to avoid or mitigate it? What can be done to reverse a slide into a full-blown depression? Why have the responses to date of the government and the economics profession been so lackluster? Richard Posner presents a concise and non-technical examination of this mother of all financial disasters and of the, as yet, stumbling efforts to cope with it. No previous acquaintance on the part of the reader with macroeconomics or the theory of finance is presupposed. This is a book for intelligent generalists that will interest specialists as well.
Among the facts and causes Posner identifies are: excess savings flowing in from Asia and the reckless lowering of interest rates by the Federal Reserve Board; the relation between executive compensation, short-term profit goals, and risky lending; the housing bubble fuelled by low interest rates, aggressive mortgage marketing, and loose regulations; the low savings rate of American people; and the highly leveraged balance sheets of large financial institutions.
Posner analyzes the two basic remedial approaches to the crisis, which correspond to the two theories of the cause of the Great Depression: the monetarist--that the Federal Reserve Board allowed the money supply to shrink, thus failing to prevent a disastrous deflation--and the Keynesian--that the depression was the product of a credit binge in the 1920's, a stock-market crash, and the ensuing downward spiral in economic activity. Posner concludes that the pendulum swung too far and that our financial markets need to be more heavily regulated. Read Richard Posner's blog, and his latest article in The Atlantic.
We have entered a period of uncertainty, which has placed a huge burden on public finances. Governments have spent $10 trillion on bailing out financial institutions and other firms, including General Motors. We are at a tipping point and the future will be unlike the past - one of the most dangerous economic stages any generation can face.
In his penetrating analysis, Leigh Skene traces how we got here and what has to happen for the global economy to recover the ground it has lost in less than two years. He looks at the shift of economic power to emerging nations, the inevitability of deflation, the unfitness for purpose of the financial markets, how governments' share of output must shrink, how solvency not liquidity caused the current crisis, and how it is wrong to think you can borrow your way to growth.
The genuine prosperity of the preceding two decades slowly morphed into a false sense of wealth, brought about by excessive dependence on credit by both the public and private sector. When the credit bubble burst, the economy collapsed. In short, policy makers dismissed sound classical economics and instead relied on the false promise of Keynesianism, the theory that the government itself can generate prosperity through easy credit and heavy government spending.
Offering enlightening answers in an uncertain time, The Great Money Binge not only traces the failures of Keynesian policies and past administrations, but outlines a clear, authoritative solution: a return to supply-side economics and a rejection of the trendy but ultimately disastrous stimulus packages, which only lead to a new era of inflation and global depression.
A clear, authoritative guide to the crisis of 2008, its continuing repercussions, and the needed reforms ahead.
The U.S. economy lost the first decade of the twenty-first century to an ill-conceived boom and subsequent bust. It is in danger of losing another decade to the stagnation of an incomplete recovery. How did this happen? Read this lucid explanation of the origins and long-term effects of the recent financial crisis, drawn in historical and comparative perspective by two leading political economists.
By 2008 the United States had become the biggest international borrower in world history, with more than two-thirds of its $6 trillion federal debt in foreign hands. The proportion of foreign loans to the size of the economy put the United States in league with Mexico, Indonesia, and other third-world debtor nations. The massive inflow of foreign funds financed the booms in housing prices and consumer spending that fueled the economy until the collapse of late 2008. This was the most serious international economic crisis since the Great Depression of the 1930s.
Menzie Chinn and Jeffry Frieden explain the political and economic roots of this crisis as well as its long-term effects. They explore the political strategies behind the Bush administration’s policy of funding massive deficits with foreign borrowing. They show that the crisis was foreseen by many and was avoidable through appropriate policy measures. They examine the continuing impact of our huge debt on the continuing slow recovery from the recession. Lost Decades will long be regarded as the standard account of the crisis and its aftermath.
The Everything Economics Book: From theory to practice, your complete guide to understanding economics today
Why and how we tradeHow the government intervenes in marketsUnemployment and inflationSupply and demandCompetitive, financial, and foreign exchange marketsHow the economy is measured
You will also learn about the causes and fallout of the recent recession and how global climate change may transform the way our economy operates. Most important, with this introduction, you’ll learn how our complex and dynamic economy affects the way we actually live our lives.
The Ten Trillion Dollar Gamble: The Coming Deficit Debacle and How to Invest Now: How Deficit Economics Will Change our Global Financial Climate
"Many commentators rant about budget deficits and the country's moral failings. Russ Koesterich calmly and objectively describes our downward economic spiral over the next 20 years and recommends the investments best suited for that journey."
—Ron Kahn, Global Head of Research, BlackRock Scientific Active Equities, and coauthor of Active Portfolio Management
"A must-read for anyone who has ever touched currency or heard of money."
—Vadim Zlotnikov, Chief Market Strategist, AllianceBernstein
"A useful book that underlines an essential reality: Americans will not be returning to the old normal. We must adapt to a changing world that presents us with new risks and opportunities. The Ten Trillion Dollar Gamble broadens and deepens a conversation we have to have."
—Ian Bremmer, President, Eurasia Group, and author of The J Curve and The End of the Free Market
"This book gives investors practical and easy-to-follow solutions on how to protect their investments and financial future."
—Arthur B. Laffer, founder and CEO, Laffer Associates, and author of The End of Prosperity
"A superb book. Russ Koesterich’s recommendations spanning financial and real assets are insightful, relevant, and pragmatic. Russ is among the select few veterans of the investment management profession who are able to project academic insights faithfully, offer compelling investment advice—and write a page-turner."
—S. P. Kothari, Deputy Dean, MIT Sloan School of Management
"The Ten Trillion Dollar Gamble is a well-crafted book. At every turn the author explains the rationale for including or excluding particular assets in a portfolio, especially as they react to higher interest rates, slower growth, and possible inflation. The investor who is worried about protecting his wealth in the coming decade(s) would do well to consider Koesterich’s advice."
"A helpful, methodical 'financial playbook' for realistic investors. Highly recommended for those planning to invest over the next five years or more. It is not easy to find books that combine debt macroeconomics with sound financial advice, but Koesterich manages it well."
About the Book:
The next financial disaster is around the corner. Are you prepared?
With the nation's deficit expanding into the trillions of dollars, investors need to be prepared for the inevitable—and potentially devastating—fallout. Most economists agree that interest rates will rise, inflation will likely be higher, and virtually every aspect of our economy will be affected. Smart investors need to ask themselves: How should I invest today to survive the storm tomorrow?
The answer is in this brilliantly calculated, forward-thinking investment guide from Black-Rock strategist Russ Koesterich. He'll show you exactly what to expect in the new deficit economy—and how to handle your finances smartly, safely, and securely . . .Stocks and Bonds: How to Invest in a Rising Rate Environment Real Estate: How the Deficit Will Affect the Market Commodities: The Benefits of Owning Real Assets Portfolio Management: What You Should Do Before It's Too Late
More than a collection of fascinating financial predictions, The Ten Trillion Dollar Gamble offers solid advice on a wide range of investment options. You'll discover which markets are hot--and which are not—when the storm finally hits.
You'll find out if Treasury bonds are right for youand why commodities will be even more important in the future. You'll learn the best ways to invest in real estate, how to handle your growing debt, and how to manage higher interest rates for everything from mortgages to savings accounts.
Most important, you'll be able to apply these professional insights into building a stronger portfolio for you and your family.
Just because the government is gambling with our future doesn't mean you should. The Ten Trillion Dollar Gamble offers a winning game plan to help you protect and build your wealth for the long term.
When the next storm hits, you won't just survive, you'll thrive.
The Meltdown Years offers the most lucid and useful explanation to date about why home values, life savings, job security, and investments around the world are in peril.
Rather than focus on who is to blame, though, author Wolfgang Münchau takes the more practical approach of focusing on what is to blame. The fact that individuals were stupid, greedy, and corrupt should come as no surprise. What’s remarkable is that our world’s financial systems—put in place to help stave off such a crisis—failed so miserably.
What is inherently wrong with the global monetary system? What happened to the regulatory process? What role did the credit market, hedge funds, and investment banks play? These are the types of questions one must answer in order to truly comprehend what caused the meltdown and, more importantly, to understand what must be done to repair it.
Münchau dissects the global financial system, exposing its flaws and weaknesses in the context of the crisis. A decidedly global perspective of the greatest financial crisis of our time, The Meltdown Years examinesThe structure of the world banking system Global events that led to financial collapse The growth of speculative bubbles The descent from financial crisis into full-out recession
Pointing to an unstable global economic system as the root of the problem, the author predicts how long the recession willand illustrates long-term consequences of the meltdown.
“Apportioning [individual] blame for this crisis may be fun,” Münchau writes, “but it is a dead-end road for anyone who seeks an understanding of what happened.” AIG, Alan Greenspan, Fannie Mae, Bear Stearns... Each is portrayed as a villain responsible for the state of the economy. In truth, the blame is much broader and lies much deeper.
The Meltdown Years is required reading for anyone who wants to follow the ongoing debate about economic recovery and understand what the collapse means for the future of financial capitalism.