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Summary: If you ever plan to retire _ a must read
Review: The excesses of government, lies and liars from wall street and corporate America are historically presented so anyone can see how the US, corporations and individuals got into this financial mess.If you have a hunch that "things" are not right and don't know why, this provides answers and allows you to draw your own conclusions on what to do and what to expect in the future. I consider it a must read for anyone expecting to retire and dares to think it is going to be a pleasant experience. A few ideas for those who didn't prepare or were taken in the stock market's bubble.
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Summary: A financial word fitly spoken
Review: Using a 300-year historical backdrop as their palette, these master word crafters paint a picture of the past, present and future that flies in the face of 'MediaEconoSpeak'. Bonner and Wiggin illustrate that when it comes to economics, it ain't so much of not knowing, as it is ... knowing what ain't so!
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Summary: The Heart of the Controversy
Review: First point: buy and read this book. What you will find is a book that goes to the heart of the controversy between Mises and Keynes. Does imbalance lead to correction or can it be managed? Does "managing" imbalances lead to more imbalance and bigger problems, or does it make any correction easier than it would have been? Comprehending this debate is central to understanding the ebb and flow of economies and markets. Bonner and Wiggin lay out the case for the problems associated with imbalance. The book should only be considered gloom and doom if your future retirement is inextricably tied to a 10% forever compounding of the S&P 500. The correction of imbalance leads to other significant opportunities, as all great macro traders know. Long time readers of Bonner can see the clear contributions to this work Addison Wiggin makes. That being said, I have been reading Bill for many years, and his thoughtful personal writing style is all over this book. That is a very good thing. Bonner makes me think, and he will make you think, too. Do I agree with every word? No, but if you only read people who think like you, you will soon find you do not do much thinking. It is in the arena of ideas that the blade of the mind gets sharpened. Bonner is a writer's writer, one of the best crafter of words I know, and simply a pleasure to read, even if his words are sobering. I have told Bill that there are times when I read his prose and feel like a housepainter in front of a Rembrandt. He is that good. The last chapter alone is worth the price of admission. Second point: buy and read this book and then recommend your friends do as well.
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Summary: Excellent Explanation of Economic History, But...
Review: This book provides great insight into investment bubbles and the madness of crowds. My only complaint is that the subtitle, "Surviving the Soft Depression of the 21st Century," is somewhat misleading. There isn't much investment advice to be found here, other than "Sell the DOW and buy GOLD." This is excellent advice as far as it goes, but in this book it doesn't go much farther. Having said this, I think the author does a great job of drawing parallels between the Japanese economy of 1989 and the U.S. economy of 1999. There are compelling arguments to be made that our economy is destined to decline in much the same way that Japan's did ten years earlier, but in greater magnitudes. I also enjoyed the political discussions about democracy and freedom, and how the first doesn't necessarily guarantee the second. The fact that the author is also a copywriter, makes the book a pretty easy read.
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Summary: There are no shortcuts to prosperity
Review: One more book that warns us about the weakness of the US economy and the possible collapse of the dollar in the short term. What sets this book apart is the approach to the topic through the route of financial history, sociology and of course a good grasp of macro-economics. History, the authors argue, has taught us many lessons, only to be quickly forgotten. Two important lessons from the past are that paper money cannot make paupers rich and empire building through military might has ultimately brought misery to mankind. However, nations have consistently repeated these mistakes and lamented when it was too late. No prizes for guessing who the latest adventurer is. This book is a brilliant expose of the "new economy", the irrational behavior of crowds and its malaise of overvalued stock and asset prices that cannot be sustained. Even the Nobel prize winning theory of efficient markets fails to describe the phenomenon in US markets during the last decade of the twentieth century. Irrational exuberance cannot be explained by rational theories. The book opens with an analysis of the new economy driven by Information technology, and blasts the myth of the new found prosperity. The new economy was supposed to signal the end of history by shortsighted economists during the days of irrational exuberance. The internet in fact amplified the behavior of crowds across continents and created bubbles that were larger than ever. Companies without any revenue, leave alone profits, were busy making money through IPOs and engaged in the most innovative forms of financial engineering to drive their stock prices north. Who cares as long as it makes us rich. But then, history has taught us that reality will catch up and so it did. There was a time in the seventeenth century when the infamous John Law ( he was mostly on the opposite side of his second name) created the concept of paper money and central banking that ultimately brought his country on its knees. Using this example, the book attacks monetarists for the unbridled expansion of liquidity in a system that temporarily believes that paper money is real. Modern day economists tend to treat the economy as a machine that can be manipulated by driving some screws and made to run a little faster. The problem , the authors feel, is that soon they will be left with no screws and also run the risk of tampering with the wrong ones. Printing more money at regular intervals, is considered a panacea for all economic ills by these pundits of prosperity. Economic lessons from Japan are described in a separate chapter and quoted in most other chapters of the book. The chapter devoted to "The Hard Math of Demography" is excellent and the topic of an aging America and its economic implications is discussed with accurate statistics and analysis to back the conclusions. Finally one gets the big picture of the big bubble. Americans are spending and the Fed is encouraging them to spend borrowed money. To make things easier, the interest raters are lowered and more money is printed. Savings rates in the US have reached an all time low close to zero while private sector debt is three times the GDP. US is now the biggest borrower and foreigners till now have believed that the paper money printed by Fed is a safe currency. This illusion may not continue. The party will soon be over, and a massive hangover is imminent. Currency that is not backed by gold or equivalent assets is nothing but what it is made of - paper. History tells us that forbearance and thrift and not profligacy lead to prosperity. Text books on history a few decades from now will probably carry a chapter on what went wrong with the worlds' once most powerful nation.
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Summary: JUST RECKON!
Review: This impressive little book helps us to recognize the historical basis of the financial follies of people since anyone noticed. It shows how millions have died, financially and physically, because of someone else's mad idea! It's better to read this book; then beware rather than regret. I consider this the most important book since THE PEOPLE'S POTTAGE by Garet Garrett, compiled in 1952!
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Summary: Best of its kind
Review: Really enjoyed. Read like a good story, not typical for a finance book. The historical perspective was great. They don't give some narrow prediction like most books. I wish somebody could, but prediction is most difficult. A clear antidote to the rosy nonsense from our government and the financial industry.
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Summary: Excellent material to think about.
Review: He brings in a lot of history as he discusses today's market. The only downside to the book is that the author's tone is kind of curlish and angry. But he makes great points and brings up the discussion from different angles.
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Summary: The history and dangers of fiat currency!
Review: Financial Reckoning Day is an excellent history lesson. I found this book informative, instructive and well written. What a WAKE UP call. I want more. From the points made on "Ought" what we ought to do, and "Find the trend whose premise is false and bet against it" (Soros) this book is an eye opener.
In the course of this read I have found my level of understanding increased ten fold.
I could not put this book down. The history provided is fascinating; from the birth of paper currency to it's present incarnation. Wow.
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Summary: Read It and Weep -- Read It and Reap
Review: I really enjoyed this book - though it was as brisk as a slap in the face.
First, these guys have a great sense of humor. Pricking bubbles and bloated reputations can be terrific fun, and they take full advantage. Second, it's easy to read writers who share your opinion of public personas: they skewer Greenspan - repeatedly, laugh at Gilder, hiss at Kudlow (who causes me to go into uncontrollable fits of channel surfing) and have a kind of love/hate relationship with Krugman. They quote a little Nietzsche and a lot of Emerson. Indeed the authors' credo might be "Whoso would be a man [investor] must be a Non-comformist." And forget the madding crowd.
Yet, despite the jokes and the pleasing presentation of some very troubling news, the book is repetitious and recycles several themes. Sometimes their story changes in the recycling: in particular when explaining the Great Bull Market of 1982 to 2000. Sometimes they say baby boomer demographics caused the Bull; other times it's Greenspan's lack of monetary restraint and asset inflation. Then they say the Bull is a natural outgrowth of a market that had been driven too low during the preceding 16-year Bear market, a simple reversion to the mean. Did it come of an Irrational Exuberance that continued to feed on the hype of its own excreta, or did the Bull owe its birth to the Laffer Curve and Reagan's tax cuts. Five explanations - take your pick.
I was a little troubled that Bonner and Wiggin praise Supply-Side Theory on one page and mock it on another, especially after their digression into Nietzsche in order to explain wissen und erfahrung. It's a simple idea. There is knowledge from theory (wissen), what we think we know and what the crowd believes, and knowledge personally derived from the school of hard knocks. Guys, we don't need to go to Nietzsche to explain that the difference between theory and practice is that in theory there is no difference and in practice there is.
But, like I said above - this is an entertaining and an important read. A literary/historical approach to the economics of the end of the American Century. Read it and weep. Read it and reap.
Hold on to your hats. It's a rough ride ahead.
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