Crisis Economics: A Crash Course in the Future of Finance

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Penguin, May 11, 2010 - Business & Economics - 368 pages
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This myth shattering book reveals the methods Nouriel Roubini used to foretell the current crisis before other economists saw it coming and shows how those methods can help us make sense of the present and prepare for the future.

Renowned economist Nouriel Roubini electrified his profession and the larger financial community by predicting the current crisis well in advance of anyone else. Unlike most in his profession who treat economic disasters as freakish once-in-a-lifetime events without clear cause, Roubini, after decades of careful research around the world, realized that they were both probable and predictable. Armed with an unconventional blend of historical analysis and global economics, Roubini has forced politicians, policy makers, investors, and market watchers to face a long-neglected truth: financial systems are inherently fragile and prone to collapse.

Drawing on the parallels from many countries and centuries, Nouriel Roubini and Stephen Mihm, a professor of economic history and a New York Times Magazine writer, show that financial cataclysms are as old and as ubiquitous as capitalism itself. The last two decades alone have witnessed comparable crises in countries as diverse as Mexico, Thailand, Brazil, Pakistan, and Argentina. All of these crises-not to mention the more sweeping cataclysms such as the Great Depression-have much in common with the current downturn. Bringing lessons of earlier episodes to bear on our present predicament, Roubini and Mihm show how we can recognize and grapple with the inherent instability of the global financial system, understand its pressure points, learn from previous episodes of "irrational exuberance," pinpoint the course of global contagion, and plan for our immediate future. Perhaps most important, the authors-considering theories, statistics, and mathematical models with the skepticism that recent history warrants—explain how the world's economy can get out of the mess we're in, and stay out.

In Roubini's shadow, economists and investors are increasingly realizing that they can no longer afford to consider crises the black swans of financial history. A vital and timeless book, Crisis Economics proves calamities to be not only predictable but also preventable and, with the right medicine, curable.

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Nouriel Roubini is the rare economist who, in the midst of a speculative bubble, accurately warned that the financial crisis of 2008 was coming. His bona fides established – and his “Dr. Doom” nickname well earned – Roubini and economics professor Stephen Mihm offer an insightful, entertaining look at the history and future of crashes. Get ready, Roubini warns: After a period of relative calm after the 1930s Great Depression, financial markets are in for a wild ride. He expects financial crashes to continue and offers advice for mitigating the damage, such as restructuring Wall Street bonuses and reining in big banks, although you may suspect that his recommendations will go unheeded. getAbstract recommends this book to investors and business leaders seeking a deeper understanding of the markets’ gyrations.
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Gives a bird's eye view on the current credit crisis in the united states. Government fiscal Policies are failing and will continue to fail due to credit bubbles and government intervention. Fundamental economics will always trump credit card economics. Banks will not be forced to lend without any collateral, easy credit environment created the crisis. On top of that instead of going back to fundamentals the US government intervening on a grand scale by increasing more debt. A great read to understand how the credit bubbles came to be, and a good historical read so that one may be able to recognize patterns of credit bubbles. 


Creatures of Habit
The Dark Ages
The NotSoGreat Moderation
Crisis Redux
When Markets Behave Badly
The Cradle of Crisis Economics
The Long Shadow of John Maynard Keynes
To Austria and Back
Dealing with Derivatives
Basel and Beyond
The Coming Crisis
Avoiding Arbitrage
Enforcement and Coordination
Quis Custodiet Ipsos Custodes?
Breaking Up Is Hard to Do
GlassSteagall on Steroids

The Uses of History
Financial Innovation
Moral Hazard
Government and Its Discontents
The Shadow Banks
A World Awash in Cash
The Lure of Leverage
The Minsky Moment
The Unraveling
Fear of the Unknown
Illiquid and Insolvent
The Eye of the Storm
The Reckoning
The Center Cannot Hold
Mere Anarchy Is Loosed upon the World
Financing a Pandemic
Disease Vectors
Shared Excesses
Emerging Economies Existing Problems
The Death of Decoupling
Deflation and Its Discontents
The Liquidity Trap
Last Lender Standing
Nuclear Options
Conventional Fiscal Policy
Let the Bailouts Begin
A Capital Idea?
Toxic Waste
The Aftermath
Curing Compensation
Making Better Sausage
Reforming Ratings
Banishing Bubbles
Accounting for the Current Account
Lessons from EmergingMarket Crises
Dangers and Dilemmas
The Decline of the Dollar
The Almighty Renminbi?
Global Governance
The Road Ahead
Tragedy and Farce
The Road to Redemption
V U or W?
Europe on the Edge
Whither Japan?
A New Bubble?
Defaulting on Debt
All That Glitters
Inflation or Deflation?
Globalization and Its Discontents
The White Swan
Crisis Economists
Plate Tectonics
Things Fall Apart
Global Pandemics
The Last Resort
Spend More Tax Less?
First Steps
Radical Remedies
Fault Lines

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About the author (2010)

Nouriel Roubini is a professor of economics at New York University’s Stern School of Business. He has extensive senior policy experience in the federal government, having served from1998 to 2000 in the White House and the U.S. Treasury. He is the founder and chairman of Roubini Global Economics, an economic and financial consulting firm, regularly attends and presents his views at the World Economic Forum at Davos, Switzerland, and other international forums, and is an adviser to central bankers around the world.
Stephen Mihm writes on economic and historical topics for The New York Times Magazine, The Boston Globe, and other publications. The recipient of numerous fellowships, he was the Newcomen Postdoctoral Fellow in Business at Harvard Business School from 2003 to 2004. He is currently an associate professor of history at the University of Georgia, where he teaches courses on American political, cultural, and economic history.

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