Posts Tagged ‘Financial Crisis’

Book Review: Meltdown

Tuesday, July 14th, 2009

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Woods, Thomas E., Jr. Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse. Regnery, 2009.

What happened to the economy and what are the necessary steps restore it are complex questions. Amazingly, Thomas Woods’ has the ability to answer these questions in simple laymen’s terms. He begins with the big picture of how the economy works and then provides the two main philosophies of regulating the economy. Only reading the newspapers and watching CNN, will lead you to believe that the diagnosis is greedy Wall Street employees and real estate financers, and the treatment is an artificial stimulus. This is the Keynesian school’s perspective which believes in the marriage of economics and politics.

According to Woods, this is incorrect on both accounts, and we are currently on the wrong course. Woods is the anti-Paul Krugman and from the Austrian school of economics which advocates the separation of money and state. (more…)

Book Review: The Trillion Dollar Meltdown

Wednesday, June 11th, 2008

© amazon book cover image

Morris, Charles R. The trillion dollar meltdown : easy money, high rollers, and the great credit crash. Public Affairs, 2008.

Almost daily the Wall Street Journal reports on the deepening credit crisis. Today, the front page includes a depressing story about bad loans, excessive risk taking and the need for large capital infusions. A year ago, consumer spending was strong, the market for investment grade credit was growing and the S&P 500 jumped 9% in three months. What happened?

According to financial writer, investment banker and lawyer Charles P. Morris, we are experiencing the result of a reckless financial environment — twenty five years of free and unregulated financial markets. In the Trillion Dollar Meltdown, Morris provides a brief history of financial markets beginning with the Reagan era. He also discusses financial instruments, why they were developed and how they now contribute to the problem of leverage in our economy — instruments such as CMOs, CSOs and SIVs.