by James Grant
|
| List Price: | $30.00 |
| Average Rating: |  |
| Lowest New Price: | $198.87 |
|
 |
|
Product Description
In Boom and Bust in the American Century, James Grant tells why the financial prosperity of the 1990s is destined to collapse. This is a book about cycles of optimism and pessimism, of bull markets and bear markets, and of orthodoxy and heresy. Boom and Bust in the American Century is sophisticated financial writing by a gifted author and analyst at the top of his form.
Amazon.com Review
Risk, according to James Grant, is our enemy. The current, seemingly endless run-up of the stock market is bound to crash around our ears at some point, sooner rather than later. The flood of cash that is lifting the current consumer economy stems from imprudent credit decisions by banks and, by extension, by the largest bank of all, the Federal Reserve. The flight of capital from bonds into mutual funds is only the most visible symbol of an America that has lost sight of fundamental economic forces. And so on. The writer and publisher of Grant's Interest Rate Observer, Grant is a born contrarian, directing investors into commodities markets, which have been flat for 15 years, and away from the booming stock market. You can disagree with his prognosis, but it's hard to argue with his diagnosis. The boom of the 1990s can't last forever.
Customers who bought this item also bought
Average Customer Review:
0 of 16 people found the following review helpful:
 Misleading Title, 2007-04-18
I was hoping to dive into this book and find proposals on what to do about all the Mexicans that have poured into this country due to our God-given prosperity but instead the author delves into a boring story of buildings in 1950's New York and rental rates.
Verdict: Boring and irrelevant.
2 of 5 people found the following review helpful:
 Markets are inevitable, irresistible, and indispensable., 2005-12-27
Record levels in marginal debt, speculation frenzy, and risk ceasing to have negative implications because financial prosperity suggested a lack of business volatility, as financial authorities stamped out emerging crisis and characterized financial prosperity, in 1996. Stability had become the goal of national economic policy. The fed fixed the 1994, Mexico Peso devaluation crisis and at the about the same time removed unwanted fluctuations in the commodities market; in 1996, the US government's intervention in oil and cattle markets drove upward adjustments in price; intervention in the copper market by Bank of Japan, Bank of England and help from regulatory authorities of United Kingdom and US coordinated policy and price for copper. Feats of macroeconomic management have only deepened the faith of steady returns through patient investment. Money poured into equity mutual funds in the 1996s but the equity never came. The growing faith for stability became a powerful force for instability. Adding equipment for growth does not create value; this can and will lead to over capacity; what is needed is an increase in productivity that matches demand.
Markets are inevitable, irresistible, and indispensable. Even if a central bank could create a state of economic perfection, measure out growth in the ideal, and control non-inflationary does of money supply; humans would respond by overpaying for stocks and bonds and would not stop until painful overvaluation occurred, as the marginal rate of return would fall short of expectation and the price return to the mean. The function of Bear markets and cyclical down turns is cut short price error.
In the 1990s, the Fed discount rate stood at 3% and caused a stock boom that saved the banks. The stock market boom was touched off by low interest rates. The Fed had bailout the Bank of New England previously and the boom helped the New England economy recover and equity capital grew propelling bank earnings to reach 10.5% per annum. The Stock market started worrying about bank prosperity and FDIC was overflowing with funds reviving from near bankruptcy. Banks implemented prosperity attenuation plans 1) repurchased their own stock 2) merged with other banks 3) and stepped up dividends attempting to neutralize capital. Investors began driving up the P/E of small banks betting they would merge with bigger banks. The big banks had lower valuation of shares and fatter dividends than the smaller banks. The 1980s there were 4,185 national banks with $114 billion in equity and by 1995, the national bank number had dropped to 2,861 with $190 billions of equity. In the 90s, it was believed that $35 billion of equity would be paid out in dividends leaving a $65 billion problem. Shareholders wanted the benefits of compounding of their equity. Marginal interest rates were cheap but not so cheap as to attract clients leading from a boom to a bust. Too much lending would lead to distortions in the credit card boom. The credit card boom was hazardous: 5 percent of CC payments dropped to 2 percent of total payments; higher risk clients were accepted because it was known, they cared higher amounts of debt even though default risk was high; increased speculation in credit card debt turning a profit and encouraged banks too extend credit.
2 of 5 people found the following review helpful:
 Superb financial history by a witty writer., 1997-04-11
For an extensive and mostly favorable review of Mr. Grant's, The Trouble with Prosperity, by an economist that shares Mr. Grants's sympathies with the Austrian school of econoimics go to the following URL:
7 of 7 people found the following review helpful:
Grant again shows mastery of market history, 1997-01-30
Mr. Grant's book is good and again he demonstrates great knowledge of the history of financial markets. His writing can be a little bit dry at times, making it sometimes difficult to follow the thread of argument in each chapter. Grant gives a compelling case that the cyclical nature of booms and busts isn't over and suggests several times that these cycles are really beneficial to a country's economic health. He suggests that efforts by governments (notably the Japanese) to suppress the effects of natural market cycles inevitably lead to disaster. I think, however, his thesis is undercut by his own research that suggests that moderate economic expansions yield only moderate economic contractions. Several times he suggests that we should strive for stronger expansions, thereby ultimately leading to more severe contractions, but never really provides a compelling case as to why. In other words, Grant does not present persuasive reasons as to why moderate economic cylces are inferior. In any event, this is another first rate book by Grant. I strongly recommend it for those people who think markets (and economies) only go UP
Price is accurate as of the date/time indicated. Prices and product availability are subject to change. Any price displayed on the Amazon website at the time of purchase will govern the sale of this product.
|
Store Categories
|