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Review
"A must-read" --The Economist
"a well-written book" --Financial Times
"Awesomely lucid." --Dominic Lawson, The Independent
"a well-written book" --Financial Times
"Awesomely lucid." --Dominic Lawson, The Independent
Product Description
The Origin of Financial Crises provides a compelling analysis of the forces behind today's economic crisis. In a series of disarmingly simple arguments George Cooper challenges the core principles of today's economic orthodoxy, explaining why financial markets do not obey the efficient market principles described in today's economic textbooks but are instead inherently unstable and habitually crisis prone.
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Most Helpful Customer Reviews
29 of 29 people found the following review helpful
Format:Hardcover
I completely agree with the positive recommendations of The Economist Magazine and the reviewer. George Cooper combines a strong technical and practical investment background to produce a modern study of the best management of our complex economy. I feel Cooper opens this subject up to every thoughtful investor {regardless their background) by writing in down-to-earth English. He uses everyday examples, like a baker making and selling bread. His clear understandings of the material and deep sympathy for the reader motivate his use of these everyday examples to eliminate the need for mathematical equations. He still maintains the needed precision.
I was persuaded that economic crises are inevitable, and enjoyed his ideas on how we might deal with them. I would like to recommend Cooper's clear, cogent presentation to every investor and student who is curious about how to improve our economy.
I was persuaded that economic crises are inevitable, and enjoyed his ideas on how we might deal with them. I would like to recommend Cooper's clear, cogent presentation to every investor and student who is curious about how to improve our economy.
22 of 22 people found the following review helpful
Format:Hardcover
This book asserts that whilst efficient market theory does fit trade in goods and services generally, the evidence does not support its fitting assets such as land, and shares. It argues that as a result of what the author sees as a state of denial by most economists, economic policy targets inflation or aims to maintain continuous economic growth. The author suggests, with arguments that are said to be based on the thoughts of Keynes and Minsky and seem compelling to a non-economist, that central banks should rather target asset/land price inflation.
The author is a control engineer and a financial analyst, and his arguments resonate with this reviewer who is also an engineer by origin. What would be interesting is to have reasoned comments from an open minded professonal economist.
That said the book is a good read and for the curious a very different analysis of the financial turmoil of 2008.
The author is a control engineer and a financial analyst, and his arguments resonate with this reviewer who is also an engineer by origin. What would be interesting is to have reasoned comments from an open minded professonal economist.
That said the book is a good read and for the curious a very different analysis of the financial turmoil of 2008.
14 of 14 people found the following review helpful
Format:Hardcover
This book is one of the better things I have read about the financial crisis. It's a nicely-written and clearly argued case against the efficent markets hypothesis (EMH) and the argument that left to their own financial markets will tend towards equilibrium. In fact a large part of the author's motivation for writing the book seems to be to drive a stake through the heart of the efficent markets hypothesis, which he sees as fundamentally wrong (no argument here!).
As such the book is broadly pro-Keynes, and very pro-Minsky. It takes as a given Minsky's view that markets are inherently unstable and will inevitably swing between boom and bust, and that the busts can be very bad indeed if no action is taken. The suggestion is that Minksy's financial instability hypothesis should replace the EMH as our bedrock understanding of how financial markets work.
Notably this leads him query what central banks are trying to do. He is particularly scathing of Fed, which he suggests tries to combine a belief in the EMH with intervention, when logically they should preclude each other. He argues central banks should refocus their attention on credit expansion and asset price bubbles, rather than consumer price inflation. Notably he therefore believes that bubbles both exist (this might seem obvious, but it's actually an important point) and that central banks can do something about them, though in practice it's credit creation that he thinks should be monitored.
That's the headline argument, but there are lots of nicely structured points building up to it along the way. There's a great section on why even 'fundamental' company analysis on its own can fail to spot the distorting effects of bubbles.
Anyway, definely worth a read, and given that it's both very clearly-written and one of these double-spaced books you can get through it in no time.
As such the book is broadly pro-Keynes, and very pro-Minsky. It takes as a given Minsky's view that markets are inherently unstable and will inevitably swing between boom and bust, and that the busts can be very bad indeed if no action is taken. The suggestion is that Minksy's financial instability hypothesis should replace the EMH as our bedrock understanding of how financial markets work.
Notably this leads him query what central banks are trying to do. He is particularly scathing of Fed, which he suggests tries to combine a belief in the EMH with intervention, when logically they should preclude each other. He argues central banks should refocus their attention on credit expansion and asset price bubbles, rather than consumer price inflation. Notably he therefore believes that bubbles both exist (this might seem obvious, but it's actually an important point) and that central banks can do something about them, though in practice it's credit creation that he thinks should be monitored.
That's the headline argument, but there are lots of nicely structured points building up to it along the way. There's a great section on why even 'fundamental' company analysis on its own can fail to spot the distorting effects of bubbles.
Anyway, definely worth a read, and given that it's both very clearly-written and one of these double-spaced books you can get through it in no time.
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Most Recent Customer Reviews
Absorbing
Fascinating book. Many anologies with the real world make this book easy to read and to gain an understanding into the more complex issues of finance and the cyclic effects of... Read more
Published 6 months ago by Mac
A Few More Nails For The Coffin
Uncompromisingly lucid. Cooper's description of what central banks do should be required procedure in the classroom. Read more
Published 11 months ago by demola
A pity he doesn't understand the theory
The great strength of this book is that it encompasses almost all of the common mistakes in analysing the recent financial fiasco in a reasonably compact and very well written form... Read more
Published on 23 May 2010 by Finance Phil
For once the Cliché `Essential Reading' really is justified
`Regulatory and supervisory policies, rather than monetary policies, would have been more effective means of addressing the run-up in house prices. Read more
Published on 21 Feb 2010 by Jasper Tamespeke
this book is worth reading whether you agree with the author's views...
I have always believed that to teach a technical subject to a non-technical audience; requires a teacher with an extremely good grasp of the subject. Read more
Published on 9 Jun 2009 by Mr. J. Hudson
Critical examination of the "efficient market" theory
Analyst George Cooper's book seems to prioritize passionate (although informed and understandable) advocacy over a strictly reportorial explanation of economic ideas. Read more
Published on 8 Jun 2009 by Rolf Dobelli
A book for Life
George Cooper book "The Origin of Financial Crises" will become a classic reference to be read by present and future generations. Read more
Published on 22 Mar 2009 by Nabil Kobeissi
Fine study of capitalism's failure
George Cooper, who has worked as a fund manager for Goldman Sachs and is now a principal of Alignment Investors, shows why capitalism's financial system does not work. Read more
Published on 17 Feb 2009 by William Podmore
What a great reading (who spoke about the dismal science?)
What a pleasure to read this small book that combines clarity, wit and depth in explainig the roots of financial crises like the one we have been experiencing since the summer of... Read more
Published on 27 Dec 2008 by R. Cartaxo
Excellent insight into the conditions that created the current...
172 page analysis of the origin of the current financial crisis. Author argues that the widely accepted Efficient Markets theory has dominated economic thinking of the management... Read more
Published on 30 Sep 2008 by Wheelbarrow
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