Panic: The Story of Modern Financial Insanity | 
| Creator: Michael Lewis
Publisher: W.W. Norton & Co.
List Price: $27.95
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Rating:  17 reviews
Sales Rank: 190
Media: Hardcover
Pages: 352
Number Of Items: 1
Shipping Weight (lbs): 1.2
Dimensions (in): 9.2 x 6.3 x 1.4
ISBN: 0393065146
Dewey Decimal Number: 338.542
EAN: 9780393065145
ASIN: 0393065146
Publication Date: November 17, 2008
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Product Description
A masterful account of today's money culture, showing how the underpricing of risk leads to catastrophe. When it comes to markets, the first deadly sin is greed. Michael Lewis is our jungle guide through five of the most violent and costly upheavals in recent financial history: the crash of '87, the Russian default (and the subsequent collapse of Long-Term Capital Management), the Asian currency crisis of 1999, the Internet bubble, and the current sub-prime mortgage disaster. With his trademark humor and brilliant anecdotes, Lewis paints the mood and market factors leading up to each event, weaves contemporary accounts to show what people thought was happening at the time, and then, with the luxury of hindsight, analyzes what actually happened and what we should have learned from experience. As he proved in Liar's Poker, The New New Thing, and Moneyball, Lewis is without peer in his understanding of market forces and human foibles. He is also, arguably, the funniest serious writer in America.
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| Customer Reviews: Read 12 more reviews...
 Very Misleading November 25, 2008
a reader (Pittsburgh, PA)
104 out of 151 found this review helpful
As I look at the Amazon product page for the book I've just received, there's nothing that indicates that this is NOT a book written by Michael Lewis. Rather, it's a collection of short articles (a lot of them, probably 50-75 in total, of which he wrote 6) that he selected to discuss various topics. My rating doesn't reflect the quality of the articles - I'm sure they're good, and I've actually read some of them in the past year. My rating reflects the fact that this isn't a new Michael Lewis book, and that isn't indicated anywhere. Disappointing.
 Putting the pieces together November 26, 2008
Al Bass (Chicago)
57 out of 70 found this review helpful
Michael Lewis, who previously wrote the popular book "Liar's Poker," takes his own spin on our country's most notable financial catastrophes of the last twenty years. These include:
1. The 1987 stock market crash
2. Russian default and eventual failure of Long-Term Capital Management (hedge fund)
3. The Asian currency crisis
4. The bursting of the Internet stock bubble
5. And, of course, the recent subprime debacle
This book's analysis is quite comprehensive, and, as you can imagine, the shortcoming of looking at so many factors is the treatment of each could be more thorough. The commentary and analysis that is there is excellent, and I learned a lot from it. Lewis spends a lot of time rehashing the best of past analyses from the likes of economists Joseph Stieglitz and Paul Krugman and Wall Street Journal reporters Gregory Zuckerman and Roger Lowenstein. There are excerpts from his own previous books and articles, including an account of his time as a trader at Salomon Brothers in the midst of the junk bond crash of 1987 and his observations on the Internet boom and bust. Overall his narrative is elegant and profound, and the arguments are on-target, including his lambasting of shoddy risk management at financial firms, foolish principles guiding sophisticated Wall Street traders, and the problems caused "by the new complexities of the financial markets."
Another book I strongly recommend that has been a somewhat surprising recent discovery for me and an extremely helpful guide for dealing with the pressures of the current economy is The Emotional Intelligence Quick Book
Bursting Bubbles November 24, 2008
Julie Neal (Sanibel Island, Fla.)
27 out of 43 found this review helpful
I have to admit, I read the Dave Barry segment first. In it I learned that there are three proven techniques guaranteed to lose you money in real estate: Buy an old house, buy a new house, or get a mortgage. After I finished laughing about OHDD (Old House Delusion Disease), I moved on.
This anthology has a simple idea: "to re-create the more recent financial panics, in an attempt to show how financial markets now operate." Each of the four parts of the book has articles written during the heat of the crisis, and more penned afterwards about the causes and effects and repercussions of the event. Part I examines the stock market crash of 1987. Part II looks at the Asian currency crisis of 1999 which triggered the Russian government bond default that brought down the hedge fund Long-Term Capital Management. In Part III the Internet bubble bursts. Lastly, and most poignantly, Part IV delves into the current subprime mortgage debacle.
A segment by Peter S. Goodman of the New York Times titled "This is the Sound of a Bubble Bursting" sobered me up. Written at Christmas time 2007, this article is all about the real estate bust in Cape Coral, Florida, on the mainland near where I live. Goodman gives example after example of people losing everything, of communities gone dark after being abandoned, and the crime rate rising in these darkened neighborhoods. The only good news for Elaine Pellegrino's family, who haven't paid their mortgage for four months, is "the courts are so stuffed with foreclosures that they assume they can stay for a while."
This is scary, depressing stuff, but the writing makes the big picture clear. I highly recommend Panic to any grownup who wants to understand what has happened in our financial world. You might want to have a Dave Barry book nearby to cheer you up afterward.
(A handy glossary in the back deciphers financial terms for readers that don't know their Derivatives from their Ninja Loans.)
Here's the chapter list:
Introduction: Inside Wall Street's Black Hole
Part I: A Brand-New Kind of Crash
1. Stephen Koepp, "Riding the Wild Bull"
2. Scott McMurray and Robert L. Rose, "The Crash of '87: Chicago's `Shadow Markets' Led Free Fall in a Plunge That Began Right at Opening"
3. From the Brady Commission Report
4. Tim Metz, from Black Monday: The Catastrophe of October 19, 1987 ... and Beyond
5. Michael Lewis, from Liar's Poker: Rising through the Wreckage on Wall Street
6. Stephen Labaton, "The Lonely Feeling of Small Investors"
7. Richard J. Meislin, "Yuppies' Last Rites Readied"
8. Eric J. Weiner, from What Goes Up
9. Lester C. Thurow, "Did the Computer Cause the Crash?"
10. Terri Thompson, "Crash-Proofing the Market; A Lot of Expert Opinions, but Few Results"
11. The Economist, "Short Circuits"
12. Robert J. Shiller, "Crash Course: Black Monday's Biggest Lesson -- Don't Run Scared"
13. Franklin Edwards, from After the Crash
Part II: Foreigners Gone Wild
14. Reed Abelson, "Mutual Funds Quarterly Report; The Forecast Looks Brighter for Adventure Travel"
15. The New York Times, "Thailand Warns Currency Speculators"
16. David Holley, "A Thai Business Wonders, Will It All Crumble?"
17. Paul Krugman, Reporter Associate Jeremy Kahn, "Saving Asia"
18. Interview with Rob Johnson, from Frontline's "The Crash"
19. The Economist, "Finance and Economics: A Detour or a Derailment?"
20. Michael Lewis, "Pulling Russia's Chain"
21. Interview with Jeffrey D. Sachs, from Frontline's "The Crash"
22. Michael Lewis, "How the Eggheads Cracked"
23. Joseph Stiglitz, "10 Years After the Asian Crisis, We're Not Out of the Woods Yet"
24. Keith Bradsher, "Asia's Long Road to Recovery"
25. Choe Sang-Hun, "Tracking an Online Trend, and a Route to Suicide"
Part III: The New New Panic
26. The New York Times, "Bigger Netscape Offering"
27. The New York Times, "Underwriters Raise Offer Price for Netscape Communication"
28. Laurence Zuckerman, "With Internet Cachet, Not Profit, a New Stock is Wall St.'s Darling"
29. Carrick Mollenkamp and Karen Lundegaard, "How Net Fever Sent Shares of a Firm on 3-Day Joy Ride"
30. Michael Lewis, "New New Money," from The New New Thing
31. Rebecca Buckman and Aaron Lucchetti, "Cooling It: Wall Street Firms Try to Keep Internet Mania from Ending Badly"
32. Jack Willoughby, "Burning Up"
33. John Cassidy, from [...]: The Greatest Story Ever Told
34. Erick Schonfeld, "The High Price of Research: Caveat Investor: Stock and Research Analysts Covering Dot-Coms Aren't as Independent as You Think"
35. Katherine Mieszkowski, "[...]: Internet Companies Threw Millions into the Air at he Super Bowl. They're Still Pretending They Scored a Touchdown."
36. Mark Gimein, "Meet the Dumbest Dot-Com in the World"
37. James Surowiecki, "The Financial Page: How Mountebanks Became Moguls"
38. Jerry Useem, "Dot Coms: What Have We Learned"
39. Michael Lewis, "In Defense of the Boom"
Part IV: The People's Panic
40. Dave Barry, "How to Get Rich in Real Estate," from Dave Barry's Money Secrets
41. John Hechinger, "Shaky Foundation: Rising Home Prices Cast Appraisers in a Harsh Light"
42. John Cassidy, "The Next Crash"
43. Robert Julavits, "As Bubble Speculation Rises, Industry Sees Little Fear"
44. Peter S. Goodman, "This Is the Sound of a Bubble Bursting"
45. Christopher Dodd, Opening Statement of Chairman Christopher Dodd, Hearing on "Mortgage Market Turmoil: Causes and Consequences"
46. James Surowiecki, "Subprime Homesick Blues"
47. Roger Lowenstein, "Triple-A Failure"
48. Larry Roberts, from "Rudolph the Red-Nosed Reindeer"
49. Kate Kelly, "Bear CEO's Handling of Crisis Raises Issues"
50. Michael Lewis, "What Wall Street's CEOs Don't Know Can Kill You"
51. David Henry and Matthew Goldstein, "The Bear Flu: How It Spread"
52. Michael Lewis, "A Wall Street Trader Draws Some Subprime Lessons"
53. Paul Krugman, "After the Money's Gone"
54. Matthew Lynn, "Hedge Funds Come Unstuck on Truth-Twisting, Lies"
55. Gregory Zuckerman, "Trader Made Billions on Subprime"
Sure, it's opportunistic and slightly misleading, but is it any _good_? November 29, 2008
David McCune (Tacoma, WA)
17 out of 26 found this review helpful
OK, this is clearly a collection of articles that Michael Lewis had sitting around. He's a good journalist, and I expect he copies and files any bit of good writing that might come in handy as a future reference. Now, about 2 months after the real estate bubble well and truly bursts, he is able to pull out the articles and collate them into a book. That is not a bad thing, per se, but it is certainly something a buyer should know before a purchase. Lewis selected the articles, wrote some, and provides some brief commentary, but this is not Moneyball or Liar's Poker.
Still, that might not be a bad thing if the collection served an overall purpose. By reviewing 5 major bubble/panic cycles since 1987, here is what I would suggest a reader should come away knowing:
1) How can you tell when a market has entered a period of "irrational exhuberance"? How can you tell when the next bubble is starting?
2) How can you tell when a bursting bubble has tipped over into a period of over-correction? How do you know you are in a panic?
3) What should you do in situations 1 or 2?
Unfortunately, my summary of the answers from Lewis's "Panic" would be:
1) When people are writing articles like these.
2) When they start writing different articles, like these others.
3) Heck, who knows, read "The Hitchhiker's Guide to the Galaxy" (which has "Don't Panic" in large, friendly letters on its cover).
In my opinion, Lewis offers too little to tie together his articles. There is no doubt wisdom in them, and maybe the points are obvious to Lewis. To me, it felt like getting the reading assignments for a college finance course, then showing up for the lectures to tie them together only to find no lecturer.
Disappointing.
Who cares that Michael Lewis didn't write all of this? December 2, 2008
S. McGee (New York, NY)
16 out of 24 found this review helpful
(Memo to those who do: I heard yesterday that he may be at work on a new book right now, so don't get too mad about your current disappointment...)
As other reviewers have noted, this is NOT by Michael Lewis. Rather, the same guy who gave us Liar's Poker: Rising Through the Wreckage on Wall Street and The New New Thing: A Silicon Valley Story has worked through a variety of sources in search of the best reportage on past financial market panics. At the time Lewis was toiling on assembling this (the last story in the anthology is dated in January 2008), it must have been hard to imagine how topical this would become. Certainly, the readings offer clear insight, from many different points of view, on how financial manias emerge, grow, build and then burst, triggering, yes, panic. In light of the events of the last six months or so, this book arrives right in time to give us a framework within which to ponder our current plight. And in some ways, I'd rather have this anthology than a book by Lewis himself -- no single viewpoint is going to give any reader a firm handle on this complex topic.
I particularly appreciate Lewis's eclectic sourcing. He goes to humorists like Dave Barry as well as outstanding business reporters like Roger Lowenstein and Greg Zuckerman to obtain insight into the phenomena that we are all seeing played out before our eyes today. Joseph Stiglitz opines on the aftermath of the Asian Crisis in a piece pulled from "Project Syndicate"; he includes blog entries and statements by politicians. He has reproduced Jack Willoughby's classic financial reporting effort on the rate at which dot.com companies were burning through cash, published by Barron's in March 2000 -- just as that market was about to turn very sour indeed.
This is a very valuable contribution to the relatively scanty ranks of accessible business/financial reporting. For those who don't scour the busienss press daily, it will provide them with insight into the way financial markets normally work and what kinds of factors can lead to them becoming distorted. Even those familiar with the way Wall Street works should find this both intriguing and useful, reminding us that there really is no such phenomenon as "it's different this time."
The one element of this collection with which I would quibble is the implication that we can learn enough from past mistakes not to repeat them. While I do believe that we should have been able to learn more from past manias about spotting a mania in development (i.e. Alan Greenspan should be ashamed at not having recognized the implications of the real estate asset bubble as it took shape), each mania (like each rogue trader) arises in different circumstances and finds its own trajectory. In this context, it would have been interesting to see a greater focus on attempts to improve risk management models -- the art of trying to prevent periods of irrational exuberance turning into manias and panics.
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