Crisis Economics: A Crash Course In The Future Of Finance (2010) - Plot & Excerpts
I just finished a book of this name by Nouriel Roubini (famous for predicting the 2008 crash) and Stephen Mihn. It’s hardly a work of art, and in places quite dreadfully written (how about this for a string of cliches: “[shareholders] don’t actually have much skin in the game. They’ve put up some of the bank’s capital, but not a whole lot of it, and while they don’t want to lose their shirts, they’re fine turning a blind eye when traders roll the dice”; or this: “When things go south, traders and shareholders don’t necessarily retreat from risk. Instead, they may share a willingness to double down and bet the farm in the hopes of righting the sinking ship.”)But the writing style is not the point. What the book does offer is a cogent analysis of the runup to the banking crisis, placed in a long historical context, and the sensible point of view that horror stories like this are always going to happen unless you regulate the banking system properly. The prescription they offer is entitled “Glass-Steagall on steroids”, and (put simply) consists of regulation (including the proper structuring of incentives), enforcement of that regulation, and breaking up the badly run and economically dangerous monster institutions that now seem to exist just for the enrichment of those who run them, with no regard to the social cost. That sounds about right to me, though I’ll add one of my own: tax the rich, so that society is seen to be fair.It’s dismaying that the political will to do this seems to be nowhere in sight. There were things I liked about this book and things I did not like. I thought it had some good technical explanations with market theory and hypothesized links in currency and markets and deficits and so on. I thought this was interesting.What I didn't like was a lot of unsupported statements where the author would state something about someone's criticism of why markets shouldn't be regulated for example and he would then say "That is a ridiculous statement" and then go on to cite reasons he thought it was ridiculous but didn't always provide any external evidence besides what he thought. I don't mind the opinions, but I thought a little more technical support was needed when criticizing. I read the book over a month ago so I can't remember specific examples of this, but he did it like 5 or 6 times and it was annoying. He would plant the idea of something being "ridiculous" or "preposterous" before explaining why it was. Sometimes I thought he was right and sometimes wrong, but a lot of the time when he said something like this, he didn't have a lot of evidence.Overall though, I thought the book was insightful and tied together the similarities between past financial crises and the latest crisis and had some interesting discussions on U.S. and China monetary policies (right or wrong).
What do You think about Crisis Economics: A Crash Course In The Future Of Finance (2010)?
Awesome unique insight on the financial crisis from the famous economist Nouriel Roubini. :)
—beth
Understood about half. Goldman Sachs is evil. Deleverage now. China. Follow me on twitter.
—Trisharein
Explained about how to leverage the assets and the melt down of global economy
—Casey
Lucid ideas from an NYU professor of economics.
—AimeeBarrington
