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the_library_of_larry 's review for:
informative
tense
fast-paced
Scott Nations has written an authoritative, informative, and quite engaging history of five stock market crashes in US history that shed light on the nature of American greed and fear, high finance, and the development of technology.
I appear to be on a bit of an economics kick right now and this book scratched a narrative itch in learning about finance that I haven't had satisfied since I listened to Andrew Ross Sorkin's Too Big To Fail, which I absolutely loved as a Game of Thrones-style retelling of the 2008 crash.
Nations' book however is much broader but tighter focused. The crashes of 1907, 1929, 1987, 2008, and 2010 are his target, but within each, Nations focuses on the particular background and circumstances of the economic and political machinations of the US leading up to the crash. I find this history and analysis fascinating. Nations then follows this up with a dramatic but accurate description of each crash as systems fail, investors panic, and numbers start to drop.
While this is certainly an entertaining and informative read, I hope readers of this book come in with a strict understanding that the stock market is merely an indicator of economic health, not the cause of it. Sometimes it is a rather misinformed indicator at that, as this book should prove. But the main lessons one should take from this are nicely summed up in the epilogue: the combination of greed and fear, coupled with the invention of new and poorly understood financial tools that fail a test of their usefulness in a crash, and spurred on by sometimes years of economic, corporate, and government malfeasance, leads to stock crashes. It is unfortunately a cycle that will be repeated time and again as long as powerful and rich people continue to insist on pushing for more innovation, speed, and profit out of the stock market that is less seen as an information market on the value of companies and instead as yet another vehicle for increasing portfolio wealth.
A very high recommend for anyone with an interest in financial history and the mechanics of stock market crashes!
I appear to be on a bit of an economics kick right now and this book scratched a narrative itch in learning about finance that I haven't had satisfied since I listened to Andrew Ross Sorkin's Too Big To Fail, which I absolutely loved as a Game of Thrones-style retelling of the 2008 crash.
Nations' book however is much broader but tighter focused. The crashes of 1907, 1929, 1987, 2008, and 2010 are his target, but within each, Nations focuses on the particular background and circumstances of the economic and political machinations of the US leading up to the crash. I find this history and analysis fascinating. Nations then follows this up with a dramatic but accurate description of each crash as systems fail, investors panic, and numbers start to drop.
While this is certainly an entertaining and informative read, I hope readers of this book come in with a strict understanding that the stock market is merely an indicator of economic health, not the cause of it. Sometimes it is a rather misinformed indicator at that, as this book should prove. But the main lessons one should take from this are nicely summed up in the epilogue: the combination of greed and fear, coupled with the invention of new and poorly understood financial tools that fail a test of their usefulness in a crash, and spurred on by sometimes years of economic, corporate, and government malfeasance, leads to stock crashes. It is unfortunately a cycle that will be repeated time and again as long as powerful and rich people continue to insist on pushing for more innovation, speed, and profit out of the stock market that is less seen as an information market on the value of companies and instead as yet another vehicle for increasing portfolio wealth.
A very high recommend for anyone with an interest in financial history and the mechanics of stock market crashes!