Crises in a Nutshell: Schiff, Otte, El-Erian, Stockman, Greenspan

Trader's Library #93 · Money, macro and economics. The 2008 crisis and Fed policy through the eyes of supporters and critics.

Author: Peter Schiff, Max Otte, Mohamed El-Erian, David Stockman, Alan Greenspan · Original: How an Economy Grows and Why It Crashes; Der Crash kommt; When Markets Collide; The Great Deformation; The Age of Turbulence; The Map and the Territory · Year: 2006 · Usefulness for traders: ★★★☆☆

What it's about

Books on macro and crises from different perspectives: Schiff's “How an Economy Grows and Why It Crashes” (economics as a parable), Otte's “Der Crash kommt” (a 2006 prediction of the crisis), El-Erian's “When Markets Collide” (changes in the global economy), Stockman's “The Great Deformation” (a critique of Fed policy) and “The Age of Turbulence” and “The Map and the Territory” by former Fed chairman Greenspan.

What it gives a trader

For a trader the most valuable thing is setting Greenspan against his critics: the same period described by the man who ran Fed policy and by people who believe that policy caused the bubbles. “The Map and the Territory” is also Greenspan's admission of errors in the models.

Lessons for traders

• central bank policy is the most important force in markets
• even the Fed chairman didn't foresee the crisis (the illusion of knowledge, Atlas of biases #18)
• the same period can be told as completely different stories (the narrative fallacy, Atlas of biases #26)

What to watch out for

Some of the authors are commentators with strong views. Their crisis predictions have a mixed record.

Discussion

The discussion takes place in Hetman Capital Club (in Polish). Join the discussion in the Club →

Navigation

← #092 Energy and Commodities: Yergin and Pitron · Library index · #094 The Austrian School: Money, Credit and Cycles →

Educational content, not investment advice. The book description is my own summary and assessment, not quotations. Edition details were checked in catalogues and bookshops, and where there was doubt I said so plainly.