Mr. Market Miscalculates: The Bubble Years and Beyond
Why is America in financial crisis today? This book, better than any to date, explains it all-how we got here and where we are going. The how we got here is brilliantly described in a collection of pieces from Grant's Interest Rate Observer, the Wall Street insider's Bible. The where we are going is treated in Jim Grant's up-to-the-minute introduction. No fan of Greenspan or Bernanke, Grant tells the unvarnished truth about America.Product Details
Editorial Reviews
From Publishers Weekly
Collected from speeches and editorials by Grant, the editor of Grant's Interest Rate Observer, these essays are remarkable for their prescience: two years before subprime mortgages collapsed, the author described them as not one borrower left behind and when other analysts were worried about the effect of a Fed interest rate increase, he foresaw that the risk to house prices lies not with interest rates but with lending standards. Other chapters attack bubbles in stocks and the dollar with erudition and wit (Economics, mistaking itself for physics, is wont to turn up its nose at history, but the past has much to teach; as dress on Wall Street has become more casual, so have the monetary arrangements... the gold standard and swallowtail coats have given way to Greenspan and open-neck shirts). It's hard to imagine reading any other investment newsletter even a week after publication. Grant's is the exception; it paints on a larger canvas and is infused with the author's generous spirit and rich sense of humor. (Nov.)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
Review
James Grant's Mr. Market Miscalculates may well be the most perceptive book on the current financial crisis yet published. What is most impressive is that almost all of it was written years before the crisis finally struck in July last year.
Grant's views on the markets are well-known and consistent. A strong critic of the decision to take the dollar off the gold standard in 1971, he has used Grant's Interest Rate Observer, which he founded 25 years ago, to criticise the money-printing policies of the Federal Reserve. He has earned a steady and loyal following.
Grant ... draws his title from Benjamin Graham, the investment theorist, who coined the term "Mr. Market" in the 1930s. Thanks to Mr. Market's irrational behaviour, Graham said, it was possible for opportunistic investors to make money. Grant paraphrases Mr. Market's attitude thus: "Price is never an object; he just wants in, or he wants out. You, the sane one, could get rich just by availing yourself of the opportunities served up by your unbalanced partner."...The essays in the book show how easy the opportunities were to spot.
There are many other uncanny examples of prescience in [Grant's] diagnosis of the conditions that led to the current crisis. His trademark clarity of thought and of expression are there throughout. So, thankfully in an analyst who is generally pessimistic, is a crackling sense of humour. --Financial Times
Review
After having read the book twice during the past four days, I can say without equivocation that it is a must-read item. Grant lays out on the table almost all of the key pieces involved in the current credit crisis that is enveloping the world, even though the last essay was written late this spring. Fortunately, James Grant gives us most of the last pieces of the puzzle in his op-ed, The Confidence Game, which was published in the Wall Street Journal on October 18, 2008. It, too, must be read in its entirety to be fully appreciated....
You can read all about the folly [of recent years] in Mr. Market Miscalculates and you should probably weep while doing so. But James Grant writes too well, thinks too clearly and is just too darn funny to distract one from the narratives that make this book worth every penny it might cost you to purchase it.
After having read the book twice during the past four days, I can say without equivocation that it is a must-read item. Grant lays out on the table almost all of the key pieces involved in the current credit crisis that is enveloping the world, even though the last essay was written late this spring. Fortunately, James Grant gives us most of the last pieces of the puzzle in his op-ed, The Confidence Game, which was published in the Wall Street Journal on October 18, 2008. It, too, must be read in its entirety to be fully appreciated....
You can read all about the folly [of recent years] in Mr. Market Miscalculates and you should probably weep while doing so. But James Grant writes too well, thinks too clearly and is just too darn funny to distract one from the narratives that make this book worth every penny it might cost you to purchase it.- LEWROCKWELL.COM
Customer Reviews
Clear understanding of what has happened
Jim's Book, or more accurately compendium of articles from Grant's Interest Rate Observer, shows how the warning signals for our present economic problems were in place as early as the late 1990's. It also explains in layman's language what the exotic debt instruments and derivatives are that caused much of the distress. It seems to also indicate that the future will be best fixed with time and bed rest for the economy.
Educational and Entertaining!
"Grant's Interest Rate Observer" has provided witty, contrarian, and insightful comments on the financial market for the past 25 years. You can subscribe for $850/year, or get some of the best issues for $14.96 in "Mr. Market Miscalculates."
This collection traces events from the late 1990s dot-com boom to the mortgage collapse years later. "Who is Mr. Market," you ask? He's the invention of Benjamin Graham - 1920s - 1970s author and investor. It puzzled him that stocks and bonds commanded radically different valuation from one investment phase to the next - not at all like the calculating and even-tempered human featured in economic texts. He ascribed these flucuations to a mythical "Mr. Market."
Bubbles shouldn't happen according to the efficient market theory of some economists, and one-third of institutionally-managed funds are passively invested via indexing. Efficient market exponents believe eg. Cisco Systems deserved every dollar of its $435 billion capitalization in early 2000, and its $85 billion value 18 months later was also richly deserved. Similarly, there was nothing to fear in the fact that a family earning a median income in L.A. could afford just 1.8% of houses sold during the spring of 2006 in L.A. without the use of a new-fangled mortgage.
"Financial markets exist to channel scarce capital into profitable outlets. If they can't distinguish true value from ersatz, what good are they?"
John (not Henry) Paulson, president of Paulson & Co., made more money in 2007 than Rwanda's GNP by anticipating the mortgage mess. (Cure poverty by training everyone in Rwanda to run a hedge fund!)
"Aeronautical and civil engineering have delivered safer airplanes and better skyscrapers, while financial engineering has brought us more crises." Another example of Grant's wry humor. The accompanying cartoons are also quite funny.
Per Fred Smith, FedEx CEO: Logistics costs in 1980 (inventory carrying, warehousing, and transportation costs) ran about 17% of GDP in 1980; this declined to 10% in 2007. That's a 7% (overall) productivity improvement!
U.S. financial sector profits rose from 12% of total corporate profits in 1984 to 37.6% in 2007, accompanied by a burst of deregulation and aided by lower interest rates. (So that's why we don't need manufacturing!)
The various former letters are arranged by topic, and cover everything from Boeing's supply-chain problems, AIG, various market anomalies, and the distillation of various CMO offerings. The latter I particularly appreciated, as they improved my limited understanding.
In one example, a $1.4 billion CMO launched in 2005 had 20 tranches (bulk of the dollars in AAA), spread primarily over California (1/3) and Florida (11%), having 82.2% ARMs (possible increase of 2-3% after 2 years, then 1-2% every 6 months) and 29% interest-only (possible double-counting), with 58% having full documentation. By August, 2008, 4.2% of the principal was in foreclosure, 8.8% delinquent. A contrary investor "shorted" the offering for 1.9%/year buying a CDS - enormous upside, about $750 million at the time (also excludes those paid off through home sales). (That's not bad money if you live in Rwanda!)
Grant's forecast: More inflation and higher interest rates.
James Grant is One of the Best Financial Writers of Our Time
Mr. Market Miscalculates is a multi-year collection of Grant's Interest Rate Observer investment letters, foretelling many (in fact most) of the financial predicaments we find ourselves mired in today (market bubbles, housing/mortgage-related excess, credit crisis, etc...). Jim is a very talented writer and one of the best at pointing out how certain aspects of the various markets have diverged from historic norms and, more importantly, why "it's not different this time."
Related Links : Product by Amazon or shopping-lifestyle-20 Store
ไม่มีความคิดเห็น:
แสดงความคิดเห็น