great read | The Fearful Rise of Markets: Global Bubbles, Synchronized Meltdowns, and How To Prevent Them...

must read | The Fearful Rise of Markets: Global Bubbles, Synchronized Meltdowns, and How To Prevent Them in the Future | John Authers

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	• The Fearful Rise of Markets: Global Bubbles, Synchronized Meltdowns, and How To Prevent Them in the Future John Authers FT Press, 2010 - 256 pages average customer review:based on 6 reviews view larger image
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highly recommended

Easy Reading, with a Good Amount of Insightful Analysis.

My first impression of The Fearful Rise of Markets--apart from asking myself just how many books concerning the recent economic and market turmoil have been written in the last 12 months--is that this is a very fast and easy read. There are about two dozen short chapters, each averaging six or seven pages, with each chapter followed by very short, bulleted summary points. (Even if you didn't realize the author, John Authers, is the investments editor of the Financial Times, you'd soon guess that he is used to writing short blurbs on a variety of economic and investment topics.) Frankly, having read enough market meltdown books in the last several months, I was prepared to be unimpressed with this book. It turns out, however, I am impressed. Although the book does not plow a lot of new ground, it does cover many topics that are important to an understanding of the interconnectedness of markets (and the world economy). Although your reaction to this book may be different than mine, more than anything else I took away an appreciation of the way in which Authers helps pound in the observation that historical correlations among economic variables are apt to change (sometimes dramatically) when large numbers of market participants behave as if these historical correlations are set in concrete. Thus, for example, the widespread acceptance of indexing can help markets become progressively less efficient. Think about that for a bit.

Without describing all two dozen chapters, here are some of the topics (besides indexing) the book addresses: How money markets disintermediated banks, the role of junk bonds, the "oil standard," carry trades and their effects, the impact of increasingly professionally dominated investment markets (e.g., herd behavior and "closet indexing"), reflexive markets, the limits of diversification, quant trading, and modern-day bank runs.

The author's analysis is pretty good, actually, and given some of the prominent theoreticians and practitioners he consulted in preparing the articles (sorry, chapters) in this book, that's understandable. People like Robert Arnott, Benoit Mandelbrot, Michael Mauboussin and Jeremy Siegel, for example. These guys have written some very interesting material on market behavior. (Two of my favorites are Mandelbrot's "The Misbehavior of Markets" and Mauboussin's "Think Twice.")

In short, you could read this book is just a few sittings, or you could digest one or two chapters at a time if you are pushed for time. Either way, it covers a lot of ground, can be easily understood by most readers, and delivers some important analysis. If you are looking for a good summary of many of the important developments in markets over recent decades (with an emphasis on the last 10 years and the recent market turmoil), I'd say this is a very fine choice.

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great read

This was a fantastic read. Short and to the point the author knows his topic and can articulate it well! Would recommend to anyone that would like to know how your money is stolen on the stockmarket

must read

This book gives a readable and quick overview of the historical financial landmark events that got the USA into the horrible quagmire we find our economy in today.

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Excellent Book

John Authors, who is also a columnist for the FT, had done an excellent job on this book. A 'Summary' is at the end of each relatively short chapter giving the reader the basic key points. Great book and great author. Makes for a good evening read before bed.

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Dangers of Monocultures

I have only made it thru the first couple chapters so far, and right now it is propping up my desk, but that is no reflection on the book, I had a Vince Flynn book down there and wanted to read it, and this book was handy.

But, the first chapter is very good! He does an excellent job of pointing out how and why a mono culture has developed in the investing world, and how today's stock market is extremely different than the historical stock market of the post WW2 era.

When and if I finish it, since, I know right where it is, heh, I will comment on the rest of the book, so far, I can heartily recommend the information presented.

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?This enjoyable, fast-moving book is concise, relevant, and perceptive. My bottom line is a simple one: This book should be read by all those interested in the way markets operate, be they investors, analysts, or policy makers.?

From the Foreword by Mohamed A. El-Erian, CEO and co-CIO of PIMCO, and author of When Markets Collide

?This book is a must-read for anyone concerned about how we can avoid recurring debt-induced busts in the years ahead, or anyone who wonders how to invest if (when!) the crisis returns. Authers? insights on the global financial crisis are profound.?

Robert D. Arnott, Chairman, Research Affiliates, LLC, and author of The Fundamental Index: A Better Way to Invest

?This book illustrates the dangers to investors who fail to recognize that global asset markets have become more synchronized over time. In a crowded field of works on the financial crisis, Authers? work is unique in both its insight and style.?

Robert R. Johnson, Ph.D., CFA, Senior Managing Director of the CFA Institute

?John Authers has combined his journalistically honed FT skills with great insights. Serious investors and policymakers should read this book.?

David R. Kotok, Chairman and Chief Investment Officer of Cumberland Advisors

?John masterfully drives a stake through the myth of global economic decoupling one chapter and example at a time. A must-read in today?s economy.?

Vitaliy Katsenelson, Director of Research at Investment Management Associates, Inc, author of Active Value Investing: Making Money in Range-Bound Markets

Are we barreling toward another massive global financial catastrophe?

How can so many bubbles form all at once? Why are so many ?disconnected? markets now capable of collapsing in unison? In this remarkably readable book, award-winning Financial Times columnist John Authers takes on these critical questions and offers deeply sobering answers.

Authers reveals how the first truly global super bubble was inflated--and might now be inflating again. He illuminates the multiple roots of repeated financial crises: a massive shift in investing power from individuals to big institutions; the migration of key decisions from banks to capital markets; the wholesale financialization of many asset classes; and fundamental failures of both theory and policy.

The Fearful Rise of Markets presents a truly global view, avoiding oversimplifications and ideology as it outlines how we got here and where we stand. Even more valuable, it offers realistic solutions--for decision-makers who want to prevent disaster and investors who want to survive it.

? The herd grows ever larger--and more dangerous

How institutional investing, indexing, and efficient markets theory promote herding

? Cheap money and irrational exuberance

Super fuel for super bubbles

? Too big to fail: the whole story of moral hazard

Banks, hedge funds, and beyond

? Danger signs of the next bubble

Forex, equity, credit, and commodity markets move once more in alignment

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reviews: page 1, 2

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