Author: Roger Lowenstein

Publisher: Penguin (Non-Classics)

Pub. in: December, 2004

ISBN: 0143034677

Pages: 288

Measurements: 7.9 x 5.3 x 0.8 inches

Origin of product: USA

Order code: BA01307

Other information: ISBN-13: 978-0143034674

In retrospect, it is always easy to be right. Of course, now we all know that the Dow Jones is not going to reach 36,000 any time soon and we know that most of those dot.coms were hopeless cases. Back then it was a different story. Back then - that was about a decade ago.
Lots of books have been written about the bubble, many from the "told you so" perspective that not always is too justified (those told-us-sos were amazingly quiet back then - maybe they were also too busy trying to get rich beyond all imagination). Many other books merely describe what happened, often focusing on the dot.coms. Lowenstein's book is a welcome alternative to these two approaches. He traces back some of the seeds of the bubble to the days when stocks were depressed - back in the 1970s and 80s - and when people were wondering how to make them rise. Tying CEO's incomes to stock prices - by giving them generous stock options - seemed like a good idea. Lowenstein shows how this eventually led to the big stock market bubble where stock prices were made to rise at all costs so that CEO's could reap in their fortunes. It's the age old story of greed, hubris and, in the end, disaster and, like in his book about Long Term Capital Management, Lowenstein tells it elegantly.

In retrospect, many of the actors remind us of old acquaintances and many of the stories - which is not to mean all the details - are only too familiar. Enron - the most "popular" disaster. Lowenstein also discusses WorldCom, a bigger disaster in terms of actual numbers. And the list goes on and on and on. Lowenstein shows that the telecoms bubble was actually worse than the dot.com/internet bubble. Those internet startups pretty much all disappeared. But the industry is still struggling with the results of the telecoms bubble.

There is one aspect of this whole story that might not make this book too popular. All this would not have happened if there had been more and better oversight at Wall Street. Deregulation is one of the culprits here. For example, tearing down the barrier between commercial and investment banking - set up as a result of the crash in 1929 - directly led to a series of amazing and entirely predictable disasters. Those same actors who now claim they want to sort out the mess back then were treating everybody who was asking for more regulation like an employee of the devil. Deregulation still is very popular and the Free Market is still treated as if it was some benevolent mythical creature, as if there was no greed that can create monsters like Enron and WorldCom. Have we really learned enough from the bubble? Lowenstein does not delve too deeply into these issues. But there are some pretty interesting comments about a certain best friend of Ken Lay, the head of Enron, or about that Senator from Connecticut who now wants to make us believe he was always in favour of stricter controls.

All in all, this is a very good book about how it all started and you can make it the only book to read about the big 1990's crash.

(From quoting Joerg Colberg, USA)

Target readers: Investment bankers, finance majors, academics, MBAs and other people interested in the topic of stock market.

Better with Irrational Exuberance :

			2 Buy with : ¥ 276.00
			Quantity:  +112345678910