Boombustology : spotting financial bubbles before they burst / Vikram Mansharamani, PhD.

Format:

Book

Author/Creator:

Mansharamani, Vikram, author.

Language:

English

Subjects (All):

Business cycles.

Financial crises.

Business forecasting.

Physical Description:

1 online resource (387 pages)

Edition:

2nd edition

Place of Publication:

Hoboken, New Jersey : Wiley, [2019]

System Details:

text file

Summary:

The new, fully-updated edition of the respected guide to understanding financial extremes, evaluating investment opportunities, and identifying future bubbles Now in its second edition, Boombustology is an authoritative, up-to-date guide on the history of booms, busts, and financial cycles. Engaging and accessible, this popular book helps investors, policymakers, and analysts navigate the radical uncertainty that plagues today’s uncertain investing and economic environment. Author Vikram Mansharamani, an experienced global equity investor and prominent Harvard University lecturer, presents his multi-disciplinary framework for identifying financial bubbles before they burst. Moving beyond the typical view of booms and busts as primarily economic occurrences, this innovative book offers a multidisciplinary approach that utilizes microeconomic, macroeconomic, psychological, political, and biological lenses to spot unsustainable dynamics. It gives the reader insights into the dynamics that cause soaring financial markets to crash. Cases studies range from the 17th Century Dutch tulip mania to the more recent US housing collapse. The numerous cross-currents driving today’s markets—trade wars, inverted yield curves, currency wars, economic slowdowns, dangerous debt dynamics, populism, nationalism, as well as the general uncertainties in the global economy—demand that investors, policymakers, and analysts be on the lookout for a forthcoming recession, market correction, or worse. An essential resource for anyone interested in financial markets, the second edition of Boombustology: Adopts multiple lenses to understand the dynamics of booms, busts, bubbles, manias, crashes Utilizes the common characteristics of past bubbles to assist in identifying future financial extremes Presents a set of practical indicators that point to a financial bubble, enabling readers to gauge the likelihood of an unsustainable boom Offers two new chapters that analyze the long-term prospects for Indian markets and the distortions being caused by the passive investing boom Includes a new foreword by James Grant, legendary editor of Grant's Interest Rate Observer A comprehensive exploration of how bubbles form and why they burst, Boombustology, 2nd Edition is packed with a wealth of new and updated information for individual and institutional investors, academics, students, policymakers, risk-managers, and corporate managers alike.

Contents:

Cover

Title Page

Copyright

Contents

Foreword

Preface Is There A Bubble In Boom-Bust Books?

Acknowledgments

Introduction The Study of Financial Extremes: One-Armed Analysts, Secrets, and Mysteries

Secrets vs. Mysteries

Different Problems Necessitate Different Approaches

Uncovering a Mystery

Part I Five Lenses

Chapter 1 Microeconomic Perspectives: To Equilibrium or Not?

"Random Walks" and Accurate Prices: The Efficient Market Hypothesis

Unstable and Inefficient: The Theory of Reflexivity

Consolidating Two Factors of Detection

Chapter 2 Macroeconomic Perspectives: The Impact of Debt, Deflation, and Mispriced Money on Asset Markets

The Magnifying Power of Leverage

Collateral Rates and Debt Dynamics

Hyman Minsky's Financial Instability Hypothesis

Debt Deflation and Asset Prices

Quantitative Easing

The Austrian Business Cycle Theory

Integrating the Macro Lenses

Chapter 3 The Psychology Lens: Homo Economicus Meets Homo Sapiens

The Study of Irrationality Is Born

Heuristics Gone Wild: How Rules of Thumb Lead Us Astray

Our Flawed Brains: Other Cognitive Issues

The Certainty of Uncertainty

Chapter 4 Political Foundations: Evaluating Property Rights, Price Mechanisms, and Political Distortions

Can Anyone Own Anything?

Venezuelan and Soviet Nationalization: Communism at Work

Prices: To Guide or Be Guided?

Political Distortions of Property and Price

Tariffs and Trade Wars

Chapter 5 Biological Frameworks: Epidemiology and Emergence

Revealing the Maturity of an Unsustainable Boom

How Micro Simplicity Drives Macro Complexity

Emergent Behavior in Human Swarms

The Blind Leading the Blind

Part II Historical Case Studies

Chapter 6 Tulipomania: A Bubble in Seventeenth-Century Holland

The Uniqueness of Tulips

Fertile Soil for Bubble Formation.

The Boombustology of Tulipomania

The Multilens Look

Chapter 7 The Great Depression: From Roaring Twenties to Yawning Thirties

Castles in the Sand

From Booming Twenties to Busted Thirties

The Boombustology of the Great Depression

Chapter 8 The Japanese Boom and Bust: A Credit-Fueled Bubble Economy

Japan(ese) as Different

An Overview of the Bubble Economy

The Boombustology of the Japanese Boom and Bust

Chapter 9 The Asian Financial Crisis: The Mirage of a Miracle

Boom Times in East Asia

Thailand Catches the Flu

The Boombustology of the Asian Financial Crisis

Chapter 10 The U.S. Housing Boom and Bust: The Homeowner's Society Creates the People's Panic

"Safe as Houses"

The Music Stops

The Boombustology of the U.S. Housing Boom and Bust

Chapter 11 China's Credit-Fueled Investment Boom

Tendencies toward Equilibrium

Leverage, Cheap Money, and Potential Deflation

Conspicuous Consumption and Overconfidence

Rights, Moral Hazard, and Political Distortion

Consensus, Silent Leadership, and Epidemics

The Unsustainable Chinese Story

The Boombustology of China's Credit-Fueled Investment Boom and Bust

Part III Looking Ahead

Chapter 12 Spotting Bubbles Before They Burst: A Method for Identifying Unsustainable Booms

Reflexivity and Self-Fulfilling Dynamics

Leverage, Financial Innovation, and Cheap Money

Overconfidence

Policy-Driven Distortions

Epidemics and Emergence

Conclusions

Chapter 13 Boombustology in Action: Is India Next?

Distinguishing Potential and Reality

Capital Markets Considerations

Population, Debt, and Investment

India's Versailles

Culture, Vocation, and Underdevelopment

Automation: Why It's Too Late for India.

"Make in India": The Wrong Playbook for Development

India's Elusive Middle Class: Disappointment Ahead?

Conclusion Hedgehogs, Foxes, and the Dangers of Making Predictions

Blinded by Focus

Addendum A Passive Investing Bubble?

Feedback Loops and Reflexivity

Distortion of the Market

Oversimplification as Overconfidence

Investment and Interest Rates

Herd Mentality and Silent Leadership

Too Much of a Good Thing

About the Author

Index

EULA.

Notes:

Description based on print version record.

ISBN:

9781119575627

1119575621

9781119575597

1119575591

OCLC:

1099975527