- ISBN13: 9781594202506
- Condition: NEW
- Notes: Brand New from Publisher. No Remainder Mark.
Product DescriptionThis myth shattering book reveals the methods Nouriel Roubini used to foretell the current crisis before other economists saw it coming and shows how those methods can help us make sense of the present and prepare for the future. Renowned economist Nouriel Roubini electrified his profession and the larger financial community by predicting the current crisis well in advance of anyone else. Unlike most in his profession who treat economic disasters as freakish once-inÂa-lifetime events without clear cause, Roubini, after decades of careful research around the world, realized that they were both probable and predictable. Armed with an unconventional blend of historical analysis and global economics, Roubini has forced politicians, policy makers, investors, and market watchers to face a long-neglected truth: financial systems are inherently fragile and prone to collapse. Drawing on the parallels from many countries and centuries, Nouriel Roubini and Stephen Mihm, a professor of economic history and a New York Times Magazine writer, show that financial cataclysms are as old and as ubiquitous as capitalism itself. The last two decades alone have witnessed comparable crises in countries as diverse as Mexico, Thailand, Brazil, Pakistan, and Argentina. All of these crises-not to mention the more sweeping cataclysms such as the Great Depression-have much in common with the current downturn. Bringing lessons of earlier episodes to bear on our present predicament, Roubini and Mihm show how we can recognize and grapple with the inherent instability of the global financial system, understand its pressure points, learn from previous episodes of “irrational exuberance,” pinpoint the course of global contagion, and plan for our immediate future. Perhaps most important, the authors-considering theories, statistics, and mathematical models with the skepticism that recent history warrants- explain how the world’s economy can get out of the mess we’re in, and stay out. In Roubini’s shadow, economists and investors are increasingly realizing that they can no longer afford to consider crises the black swans of financial history. A vital and timeless book, Crisis Economics proves calamities to be not only predictable but also preventable and, with the right medicine, curable. Amazon. com ReviewIan Bremmer and Nouriel Roubini: Author One-to-One In this Amazon exclusive, we brought together authors Ian Bremmer and Nouriel Roubini and asked them to interview each other. Ian Bremmer is the president of Eurasia Group, the world’s leading global political risk research and consulting firm. He has written for The Wall Street Journal, The Washington Post, Newsweek, Foreign Affairs, and other publications, and his books include The End of the Free Market, The J Curve, and The Fat Tail. Read on to see Ian Bremmer’s questions for Nouriel Roubini, or turn the tables to see what Roubini asked Bremmer. Bremmer: You argue in your book [Crisis Economics: A Crash Course in the Future of Finance] that financial crises are not unpredictable “black swan†events but, rather, can be forecast – in effect, white swans. What do you mean by that? Roubini: My friend Nassim Taleb popularized the concept of “Black Swans,†those economic and financial events that are sudden, unexpected and unpredictable. But if you look at financial crises through history – and the earliest is the Tulipmania in the Netherlands in the 17th Century – you see a pattern that is highly regular and predictable: An asset bubble – often in real estate or in stock markets or in a new industry – leads to financial euphoria, excessive risk taking, an accumulation of excessive debt and leverage. So the signposts of this phase — asset boom and bubble, followed by the eventual bust and crash — are highly predictable if one looks at the economic and financial indicators that show the build-up of such excesses. Thus, financial boom and bust are predictable white swan events, not unpredictable and random black swans. Financial crises have repeatedly occurred for hundreds of years and they follow quite regular pattern. That is why my book is about “crisis economicsâ€, a phenomenon that is becoming more of a rule than an exception. Financial crises that should have occurred once in 100 years now occur more frequently and with greater virulence than in the past; and their economic, fiscal, financial and social costs are rising. The trouble is that in the bubble phase nearly everyone, the exception being a few critical analysts, is swept in a delusional bubble mania of irrational euphoria: households, financial institutions, investors, governments, spinmeisters all of whom profit from the bubble, including Ponzi-schemers who concoct their houses of cards and financial con games. So, in each bubble there are cranks who argue that this time is different and that the bubble is driven by a fundamental brave new world of ever rising growth and profits. Then, when the boom and bubble turns into a bust and crash, a reality check occurs and financial depression sets in. Bremmer: Who is to blame the most for the recent financial crisis? Who were the culprits of the latest one? Roubini: The list of culprits is very long. The Fed kept interest rates too low for too long in the earlier part the past decade and fed — pun intended — the housing and credit bubble. Bankers and investors on Wall Street and in financial institutions were greedy, arrogant and reckless in their risk taking and build-up of leverage because they were compensated based on short term profits. As a result, they generated toxic loans – subprime mortgages and other mortgages and loans – that borrowers could not afford and then packaged these mortgages and loans into toxic securities – the entire alphabet soup of structured finance products, so-called “SIVs†like MBSs – Mortgage-Backed Securities, or CDOs – Collateralized Debt Obligations — and even CDOs of CDOs. These were new, complex, exotic, non-transparent, non-traded, marked-to-model rather than market-to-market and mis-rated by the rating agencies. Indeed, the rating agencies were also culprits as they had massive conflicts of interest: they made most of their profits from mis-rating these new instruments and being paid handsomely by the issuers. Also, the regulators and supervisors were asleep at the wheel as the ideology in Washington for the last decade was one of laissez faire “Wild West†capitalism with little prudential regulation and supervision of banks and other financial institutions. Bremmer: In the book you express concern that following the massive leveraging of the private sector there is now a massive re-leveraging of the public sector that will put the economic recovery at risk. Why such worries? Roubini: The Great Recession of 2008-2009 was triggered by excessive debt accumulation and leverage on the part of households, financial institutions and even the corporate sector in many advanced economies. While there is much talk about de-leveraging as the crisis wanes, the reality is that private-sector debt ratios have stabilized at very high levels. By contrast, as a consequence of fiscal stimulus and socialization of part of the private sector’s losses, there is now a massive re-leveraging of the public sector. Deficits in excess of 10% of GDP can be found in many advanced economies, including America’s, and debt-to-GDP ratios are expected to rise sharply – in some cases doubling in the next few years. Such balance-sheet crises have historically led to economic recoveries that are slow, anemic, and below-trend for many years. Sovereign-debt problems are another strong possibility, given the massive re-leveraging of the public sector. In countries that cannot issue debt in their own currency (traditionally emerging-market economies), or that issue debt in their own currency but cannot independently print money (as in the eurozone), unsustainable fiscal deficits often lead to a credit crisis, a sovereign default, or other coercive form of public-debt restructuring. In countries that borrow in their own currency and can monetize the public debt, a sovereign debt crisis is unlikely, but monetization of fiscal deficits can eventually lead to high inflation. And inflation is – like default – a capital levy on holders of public debt, as it reduces the real value of nominal liabilities at fixed interest rates. Thus, the recent problems faced by Greece are only the tip of a sovereign-debt iceberg in many advanced economies (and a smaller number of emerging markets). Bond-market vigilantes already have taken aim at Greece, Spain, Portugal, the United Kingdom, Ireland, and Iceland, pushing government bond yields higher. Eventually they may take aim at other countries – even Japan and the United States – where fiscal policy is on an unsustainable path. Bremmer: Should we then worry about the risk of a collapse of the European Monetary Union–the so-called “eurozone?†Roubini: This is a serious and rising risk. The dilemma for Greece and the other fiscally challenge countries dubbed the PIIGS — that’s Portugal, Italy, Ireland, Greece, Spain — is that, whereas fiscal consolidation is necessary to prevent an unsustainable increase in the spread on sovereign bonds, the short-run effects of raising taxes and cutting government spending tend to cause economic contraction. This, too, complicates the public-debt dynamics and impedes the restoration of public-debt sustainability. Indeed, this was the trap faced by Argentina in 1998-2001, when needed fiscal contraction exacerbated recession and eventually led to default. In countries like the eurozone members, a loss of external competitiveness, caused by tight monetary policy and a strong currency, erosion of long-term comparative advantage relative to emerging markets, and wage growth in excess of productivity growth, impose further constraints on the resumption of growth. If growth does not recover, the fiscal problems will worsen while making it more politically difficult to enact the painful reforms needed to restore competitiveness. A vicious circle of public-finance deficits, current-account gaps, worsening external-debt dynamics, and stagnating growth can then set in. Eventually, this can lead to default on euro-zone members’ public and foreign debt, as well as exit from the monetary union by fragile economies unable to adjust and reform fast enough. Provision of liquidity by an international lender of last resort – the European Central Bank, the IMF, or even a new European Monetary Fund – could prevent an illiquidity problem from turning into an insolvency problem. But if a country is effectively insolvent rather than just illiquid, such “bailouts†cannot prevent eventual default and devaluation (or exit from a monetary union) because the international lender of last resort eventually will stop financing an unsustainable debt dynamic, as occurred Argentina (and in Russia in 1998). Thus, the weakest links of the EMU – countries such as Greece may be eventually be forced to default and to exit the monetary union to regain their competitiveness and growth through a depreciation of their new national currency. Bremmer: So how can we properly deal with the fallout of financial crises? How to properly reduce private and public debts? Roubini: Cleaning up high private-sector debt and lowering public-debt ratios by growth alone is particularly hard if a balance-sheet crisis leads to an anemic recovery. And reducing debt ratios by saving more leads to the paradox of thrift: too fast an increase in savings deepens the recession and makes debt ratios even worse. At the end of the day, resolving private-sector leverage problems by fully socializing private losses and re-leveraging the public sector is risky. At best, taxes will eventually be raised and spending cut, with a negative effect on growth; at worst, the outcome may be direct capital levies (default) or indirect ones (the inflation tax if large budget deficits are sharply monetized). Unsustainable private-debt problems must be resolved by defaults, debt reductions, and conversion of debt into equity. If, instead, private debts are excessively socialized, the advanced economies will face a grim future: serious sustainability problems with their public, private, and foreign debt, together with crippled prospects for economic growth. Bremmer: In the book you propose radical reforms of the system of regulation and supervision of banks and other financial institutions and criticize the more cosmetic reforms now considered by the US Congress and in other countries. Why the need for radical reform? Roubini: If reforms will be cosmetic we will not prevent future asset and credit bubbles and we will experience new and more virulent crises. The currently proposed reforms of “too-big-to-fail†financial institutions are not sufficient: imposing higher capital levies on these firms and have a resolution regime for an orderly shutdown of large systemically important insolvent firms will not work. If a financial firm is too-big-to-fail it is just too big: it should be broken up to make it less systemically important. And in the heat of the next crisis using a resolution regime to close down too-big-to-fail firms will be very hard; thus, the temptation to bail them out again will be dominant. Also, the modest Volcker Rule – that may not even be passed by Congress because of the banking lobbies power – does not go far enough. It correctly points out that banking institutions that have access to insured deposits and to the lender of last resort support of the Fed should not be allowed to engage into risky activities such as prop trading, hedge funds and private investments. But more needs to be done: we need to go back to the more radical separation between commercial and investment banking that the Glass Steagall Act had imposed. Repealing this Act was a mistake that led to excessive risk taking and leverage by both banks and non-bank financial institutions. Finally, the government should regulate much more tightly toxic and dangerous over-the-counter derivative instruments; and compensation of bankers and traders should be subject to radical “clawbacksâ€: bonuses should not be paid outright but go into a fund and clawed back if the initial investments/trades turned out to be risky and money losing over time. Bremmer: Have we learned the lessons from the last financial crisis or are we planting the seeds of the next one? Roubini: I fear that we have not learned those lessons and that part of the policy response is now creating a new global asset bubble that will cause a bigger financial crisis in the next few years. For one thing, there is a lot of talk about better regulation an supervision of the financial system but the financial industry is back to business as usual – rebuilding leverage, engaging in prop trading and other risk behavior, compensating bankers and traders with indecent bonuses – and is lobbying against better regulation and supervision. Governments are talking about reforms but almost no one has implemented them. In the meanwhile interest rates remain close to zero in most advanced economies and they are also very low in many overheating emerging markets. Also dollar funded carry trades are feeding asset bubbles globally. Thus, part of the sharp rise in risky asset prices since March 2009 is driven by a wall of liquidity chasing assets that are becoming overpriced: US and global equities, credit, oil and commodity prices, emerging markets asset prices. And if this bubble eventually gets out of hand the eventual bust could lead to another and bigger global financial crisis in the next two or three years. (Photo of Nouriel Roubini © RGE Monitor)
如果您通常在大约读一书的å¦è€…å†™ä½œå…´è¶£ï¼Œè¿™äº›åŠªåŠ›å°†åŠ å¼ºè¿™ç§æ惧。没有什么é‡è¦çš„或在这本书å¯å‘。 301页上的倒数第2段的结论是，“å‘市场ç»æµŽè¿ä½œæ›´å¥½…需è¦æ›´å¤šçš„，政府ä¸ä¼šå°‘ã€‚â€œä¸€åˆ‡ä½ å¸Œæœ›ä»Žè€å¸ˆè°ä¸ä¸Šè‡ªç”±çš„å¸‚åœºå·¥ä½œï¼Œåˆ›é€ å°±ä¸šæœºä¼šå’Œåˆ›é€ è´¢å¯Œã€‚è¯»åˆ«çš„ä¸œè¥¿ã€‚åˆ«æµªè´¹ä½ çš„è¿™æœ¬ä¹¦çš„æ—¶é—´ã€‚ 评分：5.2
[Translate]
Can I make it five and a half?
In order to begin describing the book Crisis Economics, I have to turn this review into a a rhyme. . .
This book is so intense, it will make your mind tense, but blood boil in ecstasy as you learn more and more
About the world of economics and what’s going on in the
Well, I don’t want to repeat myself
Keynes, Austrian economics, Milton Freudman, Marx, Adam Smith, and Mills are just a few of the economists so eloquently
described
Did I say “eloquence?” Yes this book is all that and more
It’s about as simple as you could expect an economics book to be
I just go crazy rummaging through pages
I don’t know why, I just can’t stop
My passion for economics takes over and the passion of the authors’ combine, to form an unstoppable force
That can’t be stopped until I finish reading
This crazily well put together book
There’s so much material, I can’t possibly contain within a review for Amazon
So as I described how well the writing is metaphorically
I am now going to show how great and vast the scope of this material is literally. . .
Obama stimulus package, good or bad?
Of course, it might take a while to exactly know for a fact
However, this book provides plenty of analysis that’s almost like an investigation
To shade some light on that
The book is Kensyan in nature
They make such a convincing argument, that I had to change my previous Austrian opinion on solving the crisis
What are the Keynes’ “animal spririts” of capitalism?
Order this book to find out
Why is history so important in economics important to its studies?
Order this book to find out
How about, are economics crises’ the effect of a few bad apples?
Learn about “financial innovations” like Ginnie Mae
Oh and did I mention the Great Depression?
Greenspan, you heard of that guy!
Shadow banks, you don’t see them
A world awash in cash
Levearging, “oh no, don’t fall down”
Actually, it’s all about hedge borrrowers, speculators and Ponzis
Finally, the chapter, “things fall apart”
Walter Baghehot, again, who?
He anticipated the first failures of 2007
The entire financial system was one “terra incognita”
All intertwined
. . . “We are in a minefield. No one knows where mines are planted. ”
An economist of the failed Lehman Brothers observed in 2007
How about, “whack” ninja loans?
A CDO, a what?
Are you willing to take risks?
Are you a moral hazard?
Those are around the first 100 pages of a 300 page book
In order to find out the rest, you better read the book
I don’t want to give the whole book away
Okay, now let me stop rhyming
Oh no, this book has really turned on my “creative juices” and I can’t stop rhymin’
Maybe I’ll go take a nap, that’ll cool me down
I’ll stop writing this review, RIGHT NOW
By the way, no I am not a representative for this book
I am just an economics book lover
I only kept the “buys” references in this review
Just to keep the rhymes flowing
Rating: 5 / 5
[Translate]
Nouriel Roubini’s Crisis Economics is part economic history leading up to current economic crisis and part book of recommended reforms to the economic crisis.
The first part of the book describes the financial markets. Compared to other economic books that I have read, this book’s description of the financial crisis is pretty good and quite comprehensive, particularly about the Fed and banks. Not many books offer a good explanation about the Fed and not many describe the balance sheets of banks. This book has both.
In the second part, he offers a number of recommendations of how to reform financial markets. Instead of scaling back the role of government and the Fed in the financial market, the recommendations are reforms to the existing market.
Roubini seems to have a Keynesian bent, more than an Austrian one, even though he believes in Keynesian as a short-term fix and Austrian for a long term solution. He finds the tax cuts foolish but makes little mention of cutting expenditures. He recommends more government involvement in regulating banks. It’s like keeping the Fed and government as regulators in the financial markets as they were but change the regulation to prevent another crisis. It’s like trying to keep all the goodies that the Fed and government offered but tweak it to prevent another crisis. This reminds of David Walker’s Comeback America.
I would recommend reading the first half of this book; it’s really good. The second half on the other hand is so-so. If you’re in the Austrian c or a libertarian, you might be disappointed. If you’re OK with Fed and government involvement in the financial market, like right now, you might not be disappointed. It is interesting that people can read the same piece of history and come up with two very different conclusions. The first part of the book is worth getting the book.
Rating: 5 / 5
[Translate]
Anyone would be a FOOL to ignore the words of Nouriel Roubini. This MUST READ is right up there with “What Greenspan Can’t Tell You”, Jan,’08, which warned of the imminent real estate, stock market, and oil crashes, and told you how you might protect yourself for years to come. Read both of these books for maximum protection from the forces lurking around the corner, waiting to strip away your wealth and security.
Rating: 4 / 5
[Translate]
I began reading this book with a great deal of skepticism. Having already read at least four books, published much earlier than this one, in which those authors in essence predicted the bursting of the housing bubble and the subsequent economic crisis; I couldn’t help but wonder if one of this book’s authors had based his more public forecast on what he had read in those books. Boy, was I surprised!
My skepticism wasn’t eased much by the book’s early chapters, however, in which the authors identified and explored the history of numerous earlier bubbles, at what seemed to me to be a rather superficial level. That all changed when the authors finally got around to the real subject of their book — the global economic crisis of 2007-08 and “crisis economics” in general.
It wasn’t long before I realized that Monsieur’s Nouriel Roubini and Stephen Mihm know more about economic crises at both the national and international levels; their causes, impacts, implications, and consequences than any other authors whose works I have thus far encountered. The depth of their knowledge, as demonstrated by this book, seemed almost breathtaking. And what made it even better was the fact that, unlike many other authors writing in this field, they appeared to have no ulterior motive for setting their thoughts down on paper — they weren’t pushing a political ideology, predicting runaway inflation or the next great depression, or anything else. And, strangely enough: Despite its depth, this book is quite readable, easily understood, and flows smoothly. It seems to have been written for the economically uninitiated lay reader. But I sensed that it wasn’t specifically intended for that reader. It is much too good for that. More likely, at least in my view, it is aimed squarely at those in positions of power in national and global governments (the Federal Reserve, other central banks, and the Treasury Department) and those in position to amend and correct the corruption and abuse of responsibility in the national and global banking systems. I, for one, hope those people take heed.
As for me: I learned more about the inner workings of the global economic and financial systems; and the nuts and bolts of the operations, the gears which turn the wheels that drive them, the levers by which governments and banking enterprises control and manipulate them (for good or evil), and the most likely consequences of the actions taken by those who move these levers from this book than from all the previous books which I have read put together.
And, even more remarkable: This book forced me to re-consider some of my most cherished notions concerning the recent crisis. I now find that the massive bailouts of the financial system were absolutely necessary. The housing bubble no longer appears to have been an inevitable result of the sub-prime loans. It is also clear that those running America’s financial system, and those of a number of other developed nations, were corrupt and indeed “greedy. ” And, just as clearly, there is a desperate need for reform — better, if not more, regulation both nationally and internationally. And, finally, there is a need to cut spending, but there is also a need to raise taxes (but both must be done cautiously).
One other thing struck me as I read this book: America’s financial system and those of its trading partners are so complex, so convoluted, so entangled, so widely dispersed, so prone to error and primed for corruption and abuse, that no president, no matter how well intentioned, can possibly have any real understanding of the possible impacts of the economic decisions which he and his administration may make. Although we constantly hear, “The president did this,” or “The president did that;” all presidents must rely on the judgment of presumed experts firmly entrenched in the Federal Reserve and in the Treasury Department who are the ones who will really determine the course of America’s economic future. I pray they are both knowledgeable and wise.
Would I trust these authors with my daughter? Probably not. Would I trust them with my country’s economy? Yes, I would. Would I recommend their book? You can bank on it.
Rating: 5 / 5
[Translate]