The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means

The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means | George Soros | Leverage, Complex Products, Massive Deception

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The New Paradigm f...

	The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means George Soros PublicAffairs, 2008 - 208 pages average customer review:based on 50 reviews view larger image
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In the midst of the most serious financial upheaval since the Great Depression, legendary financier George Soros explores the origins of the crisis and its implications for the future. Soros, whose breadth of experience in financial markets is unrivaled, places the current crisis in the context of decades of study of how individuals and institutions handle the boom and bust cycles that now dominate global economic activity. ?This is the worst financial crisis since the 1930s,? writes Soros in characterizing the scale of financial distress spreading across Wall Street and other financial centers around the world. In a concise essay that combines practical insight with philosophical depth, Soros makes an invaluable contribution to our understanding of the great credit crisis and its implications for our nation and the world.

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briliant

I agree with Sosors predictions on market crisis...i particularly enjoyed the second half of the book which focussed more on the market and his theory on how the crisis would unfold...if u r not interested in philosophy or mathematics, just open the book in the middle and read the rest to the end! Soros is still a market genius.

Leverage, Complex Products, Massive Deception

Legendary investor George Soros explains a wide variety of market upheavals over several decades. Although this book was published in May, he identified the problems that would cause a liquidity crunch and capital shortfalls for Wall Street's former investment banks, now part of the banking system. He identifies too much leverage contributing to the housing bubble and lack of regulation as key problems. I am a quant trader and also recommend Janet Tavakoli's new book, "Structured Finance," (for market professionals) which covers the flawed evolution and lack of regulation of leveraged products including asset backed (home equity) CDO's, SIVs, and credit derivatives. Short hedge funds made billions. The securities were overvalued partly due to market euphoria, as Soros theorizes (reflexivity), but also due to some dealing from the bottom of the deck by investment banks putting together packages of assets, which led to lack of trust about the asset values. Soros could have made a stronger case for more effective regulation, but he makes his strongest case for government intervention. It has been done in the past, and it seems much more is needed this time due to the massive scale of the problem.

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Philosophy and Finance

This is very much like Soros's other books: a mix of (his own) Philosophy in PART I, and its possible applicability to the Finance markets of the time in PART II.

If you like Taleb's mix of Philosophy and Finance in Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets and The Black Swan: The Impact of the Highly Improbable then you'll Soros's approach.

If you're looking to emulate Soros's success, this book doesn't tell you how to do this in concrete steps. The theory of reflexivity explains the nature of financial markets (the problem) but doesn't give a solution.

Tony Loton, author --
DON'T LOSE MONEY! (in the Stock Markets)
Financial Trading Patterns

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