| In Association With... |  |
|
|
|
The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash | 
 enlarge | Author: Charles R Morris
Creator: Nick Summers
Publisher: Phoenix Audio
Category: Book
List Price: $27.95
Buy New: $16.29
You Save: $11.66 (42%)
New (12) from $16.29
Avg. Customer Rating:  48 reviews
Sales Rank: 81388
Format: Audiobook, Cd
Media: Audio CD
Edition: Unabridged
Number Of Items: 5
Shipping Weight (lbs): 0.3
Dimensions (in): 5.8 x 5.2 x 1
ISBN: 1597772143
Dewey Decimal Number: 330
EAN: 9781597772143
ASIN: 1597772143
Publication Date: July 1, 2008
Availability: Usually ships in 1-2 business days
Shipping: Expedited shipping available
Shipping: International shipping available
Condition: Brand new Item. CD, DVD, Book, VHS more than 400 000 titles to choose from. ALL days Low Price !
|
| Also Available In:
|
| Similar Items:
|
| Editorial Reviews:
Product Description
The sub-prime mortgage crisis is only the beginning; a more profound economic and political restructuring is on its way. According to Charles R. Morris, the astronomical leverage at investment banks with their hedge fund and private equity clients virtually guarantees massive disruption in global markets. A quarter century of free-market zealotry that extolled asset stripping, abusive lending, and hedge fund secrecy will come crashing down with it. The Trillion Dollar Meltdown explains how we got here, and what is about to happen.
|
| Customer Reviews: Read 43 more reviews...
 Real title should be "Why socialism is the better way"... August 20, 2008
This book can be summed up with the words of the late great singer, Jim Morrison, "This is the end...beautiful friend...this is the end...my only friend....the end of our elaborate plans....the end of everything that stands....the end"
I enjoyed the first few chapters where Morris does a good job of detailing the history leading up to the credit crisis; however the last couple of chapters, a waste of paper are Morris' amateurish critique of free markets, Milton Friedman and the band of U Chicago economists, Reaganomics and capitalism in general.
Morris pins the greatest blame on Greenspan and the fed (i.e. a federal agency) yet his solution is to give more power to the government to regulate Wall Street - he doesn't offer an explanation of why we should believe that if one government agency caused the problem, another would be able to fix it.
I suppose when I saw George Soros acknowledged as a contributor, I should have put the book down.
The trillion dollar meltdown August 17, 2008
excellent. Very readable and enlightening. Perhaps a little too technical in places for an ordinary reader like myself.
informative and balanced book July 21, 2008
This book looks at the roots of the current Credit crisis, starting in 1980s with full embracing of Free Markets and Deregulation. It explains everything in the context of the two periods, pre-1980s era when Govt regulation was prevalent and post-1980s era of Deregulated and Open Markets.
Recently, I completed reading Alan Greenspan's book "Age of Turbulence". It is interesting to see how this book from Greenspan's book, since Greenspan is a strong cheerleader for Unregulated Free Markets. This book takes a more balanced look, acknowledging that Free Market principles contributed to the economic booms of 1980s and 1990s while asserting now the pendulum has swung too far and it is time to have more regulation for financial markets.
Most of the book is interesting to read, except at some points where author goes into nitty-gritty details of things like Mortgage Backed Securities and Collateralized Debt Obligations. But, they are important for understanding the current Credit Crisis. One thing that makes this book more authentic and balanced may be, Author doesn't seem to come from any particular ideology like conservative or liberal.
One important take away after reading this book is, the current Credit crisis is much broader and deeper in its impact than any of the previous crises like 1987 Stock market crash or 1994 Savings and Loan crisis or 1998 Long term Capitol crisis. It is kind of scarier to see the depth of the current problem.
 Good Basic Survey July 13, 2008
1 out of 2 found this review helpful
There are a number of books available offering accounts of the current credit-debt meltdown. Morris' is a slim book minus the usual graphs and charts. The style is easy and readable; however, I doubt that he presents any new material or conjectures that would shed light beyond the many other book-length discussions. There appears to be a consensus on the basic facts and causes of the debacle ( financial deregulation, an easy credit Fed, et al.), and so far as I can determine, the author doesn't depart from that consensus in a significant way.
Morris does suggest a 30-year cycle of macro-polcy, alternating between periods of regulation and de-regulation as first one approach remedies the flaws implicit in the other before exposing its own inherent defects. In his view, we're now entering a period of re-regulation following the market abuses by the credit industry and financial speculators. Of course, such a cyclical theory is valid only so long as the underlying dynamic remains intact, so it might be useful to compare Morris with Kevin Phillips' much darker view of American capitalism in his most recent book Bad Money.
Anyway, the book does provide a fairly brief and informative survey of the meltdown, at the same time a basic literacy with how markets work is assumed, so prospective buyers should be aware. Nonetheless, no book that offers the provocative insight that economics more closely resembles ideology than science can afford to be overlooked.
 Excellent analysis of the current situation July 8, 2008
2 out of 2 found this review helpful
This is the best book on global finance I have ever read. At first, the title of the book turned me off as it seemed like a marketing driven exaggeration. But, the author defines this potential $1 trillion meltdown in well supported details. On page 130, a table outlines where this estimated trillion dollar loss comes from. About $450 billion will come from the Subprime crisis that has monopolized the headlines. But, he anticipates another $345 billion will come from corporate debt (junk bonds and leveraged loans). The remainder will come from commercial real estate MBS and credit cards securitization. He estimates only 1/3 of the meltdown will come from direct credit losses (defaults). The other 2/3 will come from drop in market values of securities because of rising credit spreads as the credit risk will have materialized in the same asset category.
The author explains with clarity the cryptic language of modern finance including its incomprehensible acronyms (in addition to CMOs, I am thinking of SIVs, ABCPs, SVs, etc...). Not only has he defined all those terms; but, he explains the purpose of those instruments and their risk ramification.
He outlines the circular cash flows of global finance. The U.S. off-shores manufacturing to China. As a result, the U.S. runs large trade deficits. China's central bank accumulates over $1.2 trillion in dollar reserves. Similar trading and $ reserve accumulation patterns occur in Japan, Russia, and Saudi Arabia. In the past, those exporting countries were happy to reinvest their $ reserves into US Treasuries. That's the savings glut that allowed the US economy to keep trucking thanks to low long term rates. But, the author thinks this party is over because those exporting nations are tired of investing their dollars in US Treasuries that steadily depreciate due to the decline of the dollar. Now, those countries are diverting their dollar reserves to Sovereign Funds that are diversifying investments into US equities including large positions in major American banks, investment banks, and private equity funds. This has material implication for the dollar, the future path of long term interest rates, US GDP growth, and the control the US financial sector. But, the author may have overlooked some positive implications as those Sovereign Fund investments should lower the cost of equity capital and boost the equity cushion within our financial system to withstand greater default losses associated with the $1 trillion meltdown.
The author explains why the whole financial system is vulnerable. He talks of an inverted pyramid when considering that total financial instruments outstanding stand now at 4 times global GDP (vs only 1 x just a few decades ago). Additionally, derivatives stand at 10 x GDP. He looks at those multiple as a form of leveraging our world economy with interconnected financial claims. The financial system relies on its ability to create tranches of securities with unprecedented level of risk (like the equity tranches in MBS that absorb most of the default). The Hedge Funds are the main buyers of those maximum risk tranches. The author explains that such tranches in essence leverage the risk sometimes up to 20 times what the risk on an overall portfolio would be. But, the hedge fund itself is leveraged 5 times resulting on a risk leverage of 100 to 1 on those tranches. In other words, he states that many hedge funds could be wiped out if an MBS portfolio could incur defaults of just 1%. And, the same is true with similar financially engineered structures with commercial real estate, corporate debt, and credit card securitization.
I hope the author has overlooked the discount or hair cut hedge funds take on their risky investments. He mentions in the book that those discounts are as high as 40%. If that is the case, the hedge funds could withstand losses of up to 3% of the overall portfolio instead of just 1%. That's a big difference. The author does mention that hedge funds do not build reserves on their balance sheet; but, hopefully he would have overlooked their potentially netting out the discount as reserves on the asset side of the balance sheet while the author was just looking at the right side where equity is. But, if the author is right (and I am wrong), we are in big trouble.
The author recalls that when Long Term Capital Management (LTCM) failed in 1998, it was resolved by its creditors. This was a $100 billion fund with a value at risk of $10 billion. The author mentions that today's value at risk within the system is 100 times that (his notorious $1 trillion meltdown), and no group of institutions is large enough to resolve such a large risk. If you want to study the related LTCM situation, I recommend the excellent When Genius Failed: The Rise and Fall of Long-Term Capital Management.
The author offers a few interesting recommendations. We should boost regulation of the financial sector. That would entail regulating hedge funds, mortgage brokers and other financial intermediaries that currently escape any safety and soundness capital requirements. He also suggests reforming health care. He does not offer a specific solution; but, he simply states that our payroll funded health care is unsustainable as it represents such a competitive disadvantage in a globalized marketplace. If you want to study similar issues but from a political science perspective, I strongly recommend The Post-American World.
|
|
|
Powered by Associate-O-Matic
| |
