'a Call for Reform'

'Have we learned the lessons from the last financial crisis or are we planting the seeds of the next one?' from Amazon Q&A see link below.


"He was known as “Dr. Doom” — a perennial pessimist in the often sunny world that is the dismal science of economics. And in 2008 his predictions of disaster — delivered two years earlier — came stunningly, frighteningly true, as the entire global financial system teetered on the brink of the abyss. Cassandra had belatedly become a much-celebrated prophet...."

"Taking the reader on a fast guided tour of several centuries of capitalism, Mr. Roubini points out how the patterns of boom and bust are predictable, from the rise of asset bubbles to the spread of collapse to other countries that share similar types of excess. "Lack of transparency," he writes, "underestimation of risk, and cluelessness about how new financial products might behave when subjected to significant stress are recurrent problems in many crises, past and present."

[b]As Mr. Roubini observes, the calamities of 2008 were not caused by a bunch of bad subprime mortgages or by a simple housing bubble but by deeper, more tectonic pressures that had been building for years. Not only had the government failed to keep tabs on exotic new financial products like derivatives, but the sweeping away of banking regulations established in the wake of the Great Depression (along with Wall Street’s ability to evade remaining rules) had resulted in the development of “a vast shadow banking system” outside regulatory oversight.[/b] Meanwhile the bonus system adopted by many financial firms spurred the pursuit of short-term profits and excessive risk taking, even as the low interest, easy money policies of the Fed under Alan Greenspan encouraged the growth of leverage and debt...." Read article here.

See Amazon review of book here.



http://www.nytimes.com/2010/05/07/books/07book.html

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