With the housing markets unravelling daily and distress signals flying throughout the rest of the economy, there is little doubt that we are facing a fierce recession. In crisp, gripping prose, Charles R. Morris shows how get got into this mess.
He explains the arcane financial instruments, the chicanery, the policy mis-judgments, the dogmas, and the delusions that created the greatest credit bubble in world history. Paul Volcker slew the inflation dragon in the early 1980s, and set the stage for the high performance economy of the 1980s and 1990s. But Wall Street's prosperity soon tilted into gross excess.
The astronomical leverage at major banks and their hedge fund and private equity clients led to massive disruption in global markets.A quarter century of free-market zealotry that extolled asset stripping, abusive lending, and hedge fund secrecy will go down in flames with it. Continued denial and concealment could cause the crisis to stretch out for years, but financial and government leaders are still downplaying the problem. The required restructuring will be at least as painful as the very difficult period of 1979-1983.
"The Two Trillion-Dollar Meltdown", updated to include the latest financial developments, is indispensable to understanding how the world economy has been put on the brink.