RAPP Bubbles, Booms, and Busts

The Rise and Fall of Financial Assets
1. Auflage 2009
ISBN: 978-0-387-87630-6
Verlag: Springer
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, 274 Seiten

This book provides a thorough explanation of the nature and history of booms, bubbles and busts in financial markets. The first part of the book deals with financial booms and bubbles and how they emerge, develop and collapse. It describes the distribution of wealth, inflation, rationality of bankers, monetary and fiscal policy, the role of central banks, tax policies, social security, US federal, state, municipal and personal debt, and valuation of common stocks. The book describes historical boom/bust cycles including bubbles of the 1720s, the Florida land boom and the stock market in the 1920s, the depression of the 1930s, the S&L scandal of the 1980s, the great bull market of 1982-1995, the crash of 1987, the dot.com mania of 1995-2000, corporate swindles of the 1990s and 2000s, the sub-prime fiasco of the 2000s, and Japan in the late 20th century. Most of the recent wealth generation has derived from increased debt and appreciation of paper assets. The architects of the new economics were Ronald Reagan and Arthur Greenspan. Inevitably, the US Government's cure for excessive spending and inadequate revenues is to increase spending and cut revenues. American voters must choose between 'tax and spend' Democrats and 'spend and borrow' Republicans. The theme of American finance was uttered by VP Cheney: 'Deficits don't matter'.

This book provides a thorough explanation of the nature and history of booms, bubbles and busts in financial markets. The first part of the book deals with financial booms and bubbles and how they emerge, develop and collapse. It describes the distribution of wealth, inflation, rationality of bankers, monetary and fiscal policy, the role of central banks, tax policies, social security, US federal, state, municipal and personal debt, and valuation of common stocks. The book describes historical boom/bust cycles including bubbles of the 1720s, the Florida land boom and the stock market in the 1920s, the depression of the 1930s, the S&L scandal of the 1980s, the great bull market of 1982-1995, the crash of 1987, the dot.com mania of 1995-2000, corporate swindles of the 1990s and 2000s, the sub-prime fiasco of the 2000s, and Japan in the late 20th century. Most of the recent wealth generation has derived from increased debt and appreciation of paper assets. The architects of the new economics were Ronald Reagan and Arthur Greenspan. Inevitably, the US Government's cure for excessive spending and inadequate revenues is to increase spending and cut revenues. American voters must choose between 'tax and spend' Democrats and 'spend and borrow' Republicans. The theme of American finance was uttered by VP Cheney: 'Deficits don't matter.'

Autoren/Hrsg.

Rapp, Donald

Inhaltsverzeichnis

1;Preface;5
2;Contents;10
3;Introduction: The Holland TulipMania of 1636–1637;13
4;THE NATURE OF MANIAS, BUBBLES, AND CRASHES;16
4.1;INTRODUCTION;16
4.2;THE HUMAN ELEMENT;19
4.3;THE RISE OF MANIAS AND BUBBLES;24
4.4;FUELING THE BOOM;29
4.5;WEALTH AND INFLATION;30
4.5.1;ASSET GROWTH VS. WEALTH: CAUSE AND EFFECT?;30
4.5.2;INFLATION;32
4.6;SPECULATIONS, BOOTSTRAPS AND SWINDLES;38
4.7;THE RATIONALITY OF INVESTORS?;39
4.8;THE RATIONALITY OF BANKERS AND EXPERTS?;42
4.8.1;RATIONALITY OF BANKERS?;42
4.8.2;RATIONALITY OF EXPERTS?;48
4.9;MONETARY POLICY AND THE FEDERAL RESERVE SYSTEM;54
4.10;FISCAL POLICY AND TAXES;62
4.10.1;TAX POLICIES;62
4.10.1.1;INCOME TAX;62
4.10.1.2;ESTATE TAX;66
4.10.1.3;THE ALTERNATIVE MINIMUM TAX;69
4.10.2;INCOME TAX BRACKETS AND BUDGET DEFICITS;71
4.10.3;CAPITAL GAINS;74
4.10.3.1;SOCIAL SECURITY AND MEDICARE;77
4.11;INEQUALITY;80
4.11.1;WHY INEQUALITY PERSISTS AND EXPANDS;80
4.11.2;INEQUALITY OF WEALTH IN THE UNITED STATES;83
4.12;DEBT;86
4.12.1;US FEDERAL DEBT;87
4.12.2;STATE AND MUNICIPAL DEBT;92
4.12.3;HOUSEHOLD AND MORTGAGE DEBT;93
4.12.4;THE DOLLAR;98
4.12.5;BANKRUPTCIES;100
4.12.6;WORLD DEBT;102
4.13;DEPOSIT INSURANCE;103
4.14;REGULATION, DEREGULATION AND NO REGULATION;106
4.15;PENSION PLANS;109
4.15.1;CORPORATE PENSIONS;109
4.15.1.1;DEFINED BENEFIT PLANS;109
4.15.1.2;DEFINED CONTRIBUTION PLANS;111
4.15.2;THE PUBLIC SECTOR;114
4.16;THE VALUATION OF COMMON STOCKS;116
4.17;INTERNAL FEEDBACK AND ENDOGENOUS RISK;122
4.18;WHEN THE BUBBLE POPS;124
4.19;NOTES;126
5;A SHORT HISTORY OF BOOMS, BUBBLES, AND BUSTS;132
5.1;THE NEW WORLD;133
5.1.1;SOUTH SEAS BUBBLE;133
5.1.2;JOHN LAW’S MISSISSIPPI COMPANY;135
5.2;FLORIDA LAND BOOM OF THE 1920S;136
5.2.1;THE RISE;136
5.2.2;THE FALL;137
5.2.3;UNDERLYING CAUSES;138
5.3;THE ROARING 20S STOCK MARKET;139
5.3.1;THE REAL ECONOMIC BOOM OF THE 1920S;139
5.3.2;THE STOCK MARKET OF THE 1920S;142
5.3.3;THE CRASH OF 1929;145
5.4;THE GREAT DEPRESSION OF THE 1930S;146
5.5;THE SAVINGS AND LOAN SCANDAL OF THE 1980S;151
5.5.1;THE ORIGINAL PROBLEM;151
5.5.2;DEREGULATION AND NO REGULATION;156
5.5.3;HOW MR. REAGAN MADE A BAD PROBLEM WORSE;158
5.5.4;THE FALSE SPRING OF 1983;161
5.5.5;THE ‘‘GO–GO’’ PERIOD;164
5.5.6;FRAUD AND MISCONDUCT;166
5.5.7;THE AFTERMATH;174
5.6;THE BULL MARKET OF 1982–1995;176
5.7;THE CRASH OF 1987;184
5.8;THE DOT.COM MANIA;190
5.8.1;BOOM AND EUPHORIA;190
5.8.2;GREENSPAN AND THE ROLE OF THE FEDERAL RESERVE;192
5.8.3;BURSTING OF THE BUBBLE;198
5.8.4;MERRILL-LYNCH IS BULLISH ON AMERICA;199
5.9;OTHER BUBBLES AND SWINDLES OF THE LATE 1990S AND 2000S;201
5.9.1;ADELPHIA;202
5.9.2;ROGUE TRADERS AT BANKS;203
5.9.2.1;BARINGS BANK;203
5.9.2.2;ALLIED IRI SH BANKS;204
5.9.2.3;SOCIETE GENERALE;204
5.9.3;ENRON;205
5.9.4;LONG-TERM CAPITAL MANAGEMENT;210
5.9.5;ALBANIA’S PONZI SCHEMES;219
5.9.6;CORPORATE AND ACCOUNTING SCANDALS;221
5.10;THE SUB-PRIME REAL ESTATE BOOM 2001–2007;235
5.10.1;ORIGIN OF THE BOOM;235
5.10.2;EXPANSION OF THE BOOM;237
5.10.3;RESIDENCES AS ATMS;240
5.10.4;THE PUNCTURED BUBBLE;244
5.10.5;MORTGAGE-BACKED SECURITIES;248
5.10.6;GOVERNMENT RESPONSE TO THE PUNCTURED BUBBLE;252
5.10.7;INTERNATIONAL MORTGAGE DEBT;253
5.10.8;THE HIDDEN TIME BOMB;255
5.11;JAPAN AND EAST ASIA;256
5.11.1;JAPAN 1970–2007;256
5.11.1.1;BACKGROUND;256
5.11.1.2;THE JAPANESE BOOM AND BUBBLE;257
5.11.1.3;COLLAPSE OF THE JAPANESE BUBBLE;261
5.11.2;EAST ASIA;262
5.12;THE OIL BUBBLE;265
5.13;THE NEXT BUBBLE;271
5.14;NOTES;275
6;Abbreviations;283
7;Index;285