Financial Armageddon: Protecting Your Future from Four Impending Catastrophes | 
 enlarge | Author: Michael J. Panzner
Publisher: Kaplan Business
Category: Book
List Price: $25.00
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Avg. Customer Rating:  32 reviews
Sales Rank: 220761
Media: Hardcover
Number Of Items: 1
Pages: 240
Shipping Weight (lbs): 1
Dimensions (in): 9 x 6.2 x 1.2
ISBN: 141959608X
Dewey Decimal Number: 332.024
EAN: 9781419596087
ASIN: 141959608X
Publication Date: March 6, 2007
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Product Description
According to Michael Panzner, the US is less than two years away from "financial Armageddon." When the stock market bubble burst in March 2000, the collapse that followed wiped out over two-thirds of the value of the technology-laden Nasdaq Index and decimated the hopes and dreams of millions of Americans. Now, imagine not one, but four such disasters looming on the horizon. Four key elements--Debt, Derivatives, Government Guarantees, and the Retirement system--are quickly unraveling, and because they are so intricately connected, there will be an unremitting domino effect. With time running out, this is a disaster-in-the-making on which every American must be informed so they can protect themselves, their families, and their economic well-being before it's too late.
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| Customer Reviews: Read 27 more reviews...
 All Americans should read, unfortunately most will not! August 8, 2008
If you care about your family's future financial well being, this book is a must read. This is the second edition of the work, but Panzer made some predictions in the first edition, written a few years ago, that have come to pass alrady. While, I hope we never see the "armageddon" that Paznzer lays out, I do believe that we are poised for a massive recession or depression due to the recent credit and houing bubbles. Panzer lays out a series of events led by a weakening dollar, national trade budget shortfalls, and credit derivative misuse that could ultimately change the face of America and our current way of life. I would also recommend "The Demise of the Dollar" as a follow on read to this work.
Credit Default swaps make up the fastest growing segment of the $415 trillion derivatives market July 22, 2008
3 out of 4 found this review helpful
1. Hedge funds are structured around a performance-based compensation system. Hedge fund advisors are paid an incentive fee based on how well they do. Hedge fund advisors get a 20 percent cut above a preset benchmark, in addition to a 2 percent fee, of the total funds under management. Many hedge funds have become comfortable using large amounts of debt to boot returns. Many on Wall Street switch sides and became a hedge fund. The goal is too generate the highest possible returns in the shortest period of time, ignoring any long-term consequences.
2. The pricing of options is dependant on time remaining until maturity, interest rates, and investor expectations on market volatility.
3. According to Towergroup, US brokerage firms expected to generate $33.2 billion from derivatives-related revenue in 2006.
4. Credit Default swaps make up the fastest growing segment of the $415 trillion derivatives market. "The credit derivative has one party making periodic payments to other and receives the promise of a payoff if a third party defaults. The former party receives credit protection." (Wikipedia)
5. Credit Default Swaps can be used to manage risk without selling the corporate bond or government bond. Credit Default Swaps are a form of insurance for banks, pensions, and hedge funds (Party A) too protect themselves against the companies they invest in against debt default.
6. Insurance is bought to protect against loss. Without insurance, if company X defaults on debt, the bond value is lost. For example, a pension fund (Party A) buys a CDS and pays a 2% premium per year broke up over four quarterly payments, payable too a derivative bank; on the books, the risk of default is eliminated by the insurance; and CDS coverage lasts 5 years.
7. Since the CDS is not tie to a physical asset it can be bought and sold. Speculation on the credit-spread works drives buying and selling of CDS contracts. Without a CDS, a third party profits by identifying, a company with weak financial performance and offers to pay $900k for a $1 million bond from party B and profits $100k, if the company paid its debt. With CDS, party B profits: "Alternatively, one could enter into a credit default swap with the Party B, by selling credit protection and receiving a premium of $100,00. If the company does not default, one would make a profit of $100k without investing anything." Speculation profits are on the margin. Swap prices decline as credit quality increases and rise when quality worsens. "Some who believes that a company's credit quality will change could potentially profit more from investing in swaps than in the underlying bonds."
8. Problem: Party A buys the CDS from Party B, Party B can assign the insurance contract to another party; the final party may or may not be in a position to pay the bond's full value in the case of Party A default. If companies default on their obligations, buyers of credit default swaps would lose money, banks would tighten credit, and interest rates would rise.
9. In 2006, at least $200 billion of General Motor's CDS were estimated to exist, covering $30 billion of bonds. There is a risk that major financial operators are in over their heads leading to dangerous systematic pressures. The danger occurred in 2005 when 100,000 CDS had been verbally agreed to but not settled.
10. According to the US comptroller, JPMorgan Chase, Bank of America, Citibank, Wachovia, and HSBC accounted for 96 percent of the $100 trillion of derivatives controls outstanding among the 836 US banks. JPMorgan being the largest derivate player. Fannie Mae and Freddie Mac had $1.5 trillion of derivates to hedge against risk in their portfolios.
11. "Credit derivatives have never been tested in times of acute market stress, such as a collapse of the real estate market, a cratering economy, or a 1987 type stock crash."
Awakening June 29, 2008
1 out of 1 found this review helpful
Financial Armageddon: Protecting Your Future from Four Impending Catastrophes, Revised and Updated Edition
Excellent book for giving you an idea of how things might happen. Roving bands of mercinaries, Etc. Etc. Not to sound like a Pollyanna here but I think you left out the part where we downsize to the community/Township size & take care of our own. Yes, the government can & probably will have control of the money..But it's their's to start with isn't it? We the people are the ones who give it value. I enjoyed the book, gained some insight from it, and will incorporate some of the measures. If what you want is solution for Mr. Panzer's future, I suggest you get busy reading the foxfire series (A Serious course in "Self-Reliance")
 Lots of repeating statements about the collapse, no real solutions. Don't waste your time! June 27, 2008
5 out of 5 found this review helpful
The book was predominantly boring while I was waiting for actual news, something to learn. A lot of the ideas were repeating throughout the book just rephrased.
I couldn't wait to get to the "solutions" part. But when I got to it - what a disappointment! Advice like "buy insurance", "watch for deals that are too good to be true", "don't trust this or that guy, check this web site for his background", etc. were all obvious suggestions and sound like grandma's advice: "don't talk to strangers" type of statements.
This book is a complete waste of time. Even though author touched on some of the problems the economy has it could be put together in 10 pages. The other 174 pages are garbage.
Scary!!! June 20, 2008
Michael Panzer gives us a look at what potentially could be the future of this country due to outlandish spending, reckless regulation, and faulty speculative markets, i.e., Credit Default Swaps. He imagines a scenario where there is complete and utter chaos in the streets, little or no money, famine, rampant disease, and pretty much everybody fending for themselves and their families. He suggests that the best way to protect yourself is to make yourself liquid and do lots of research on your employer so that you make sure you keep your job (But if you know you will lose it, it is best to plan ahead for future events). As for networking, he merely suggests that you keep close connections with your family, friends, and neighbors because they will be there to protect you when danger lurks. The government will not be reliable due to its bankrupt state. I'd like to think something like this would never happen in this country but these are realistic and plausible situations that do not really seem far fetched- the dollar is tanking, oil is increasing in price, threats of war in Iran, loss of confidence in the United States, and general inflation throughout the entire economy. This is quite worrisome. Part of me wishes I did not read this book but part of me as well thinks it is a good idea to plan ahead and prepare for the worst. Highly recommended if you do not want to live in a fantasy land.
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