Loved this book. Loved reading articles written during the financial chaos; it gives incredible perspective to what people were thinking and feeling. This book is not a thorough analysis of what happened to cause the various periods of financial instability, but it serves as a reminder even the best minds in the world can't predict periods of instability and sometimes can't even help return the market to stability. ( )

An Interesting Look Back

The newest book edited by Michael Lewis, aptly named "Panic" is a collection of previously published articles before, during, and after the market collapses of 1987, the Asian financial crisis of 1998, the Dot Com bust in 2001 and the latest Subprime mortgage meltdown.

Though, none of the books contents represents any new analysis or synthesis of the events past, nor is much contextualization given by Lewis of the articles and events, I still felt that the book was a good read. Mostly because it was refreshing to re-read what people were feeling at the time. They give a snapshot in time of the over-confidence, anxieties, and overall market psychology that underlies the whole system.

Throughout the book there are some great quotes and one-liners such as "I guess if you're neither a bull nor a bear, you're a chicken." Or great anecdotes that illustrate the silliness of some of these ventures such as the story of Books-a-million or "From Rudolph the Red-Nosed Reindeer."

Mostly though, as a reader one comes away with the feeling that none of us are omniscient. Not the stock gurus, the appraisers, the agents, the economists, etc... We're all flying by the seat of our pants and nobody knows what is going to happen next, your guess is as good as mine. Which means, anytime you hear some Harvard MBA "analyst" tell you what the market's gonna do, you're just as well-off doing the opposite.

I do highly recommend this book, not just because I'm a Michael Lewis fan, but because I think the book illustrates both the complexity and the folly of the economic markets. There's no trying to make sense of it all, because there is no sense to begin with. ( )

I was hoping that by reading about the folly of others I could be a bit wiser for the current financial crisis. But I still don't feel wise. This book does provide some relief for today's remorseful investor by telling stories of others who lost more.

"Everything, in retrospect, is obvious. But if everything were obvious, authors of histories of financial folly would be rich . . ." It is incredible how naive and stupid some of the pre-panic articles are. But on the other hand, many of the post-panic articles are equally over the top in finding conspiracies where in reality only simple capitalistic greed is present. Is being greedy (or stupid) against the law? An example of pre-panic swagger is this quote by Dave Barry; "You don’t have to take any risk, or work hard, or even have a central nervous system. That’s how profitable real estate is!"

This book was published November 17, 2008, and the current financial crisis has continued to play out since then. So the comments about the current sub-prime mortgage crisis probably will become quickly dated. Nevertheless, I found his predictions related to the current financial situation of interest. He says the coming recession will be longer and more persistent than any in recent memory. In absolute terms it won't be as bad as the 1930's depression because we're beginning from a higher starting point. However, in relative terms we may feel worse than those who lived through the 1930's. The reason is that our expectations are so high and our tolerance for discomfort so low that we'll cry like spoiled children. Perhaps this time it really is the end of the world as we know it.

Of the five financial crises examined, the differences are so large that there are few morsels of wisdom that can be carried forward to avoid the next crisis. However, I will make this prediction; If you had the job in the past of flipping derivatives based on sub-prime mortgages, you'd better start looking for a new job flipping hamburgers because your old job isn't coming back.

Read in January, 2009 ( )

If Michael Lewis had included only his own writing, this collection of articles on the four major financial panics of the last 20 years would have been considerably better. As it is, I found the quality of the writing to be very uneven, though it seemed to get better as it went. ( )