Bubbles Booms and Busts - The Rise and Fall of Financial Assets

Cover......Page 1
BUBBLES, BOOMS, AND BUSTS......Page 2
Preface......Page 5
Contents......Page 10
Introduction: The Holland TulipMania of 1636–1637......Page 13
INTRODUCTION......Page 16
THE HUMAN ELEMENT......Page 19
THE RISE OF MANIAS AND BUBBLES......Page 24
FUELING THE BOOM......Page 29
ASSET GROWTH VS. WEALTH: CAUSE AND EFFECT?......Page 30
INFLATION......Page 32
SPECULATIONS, BOOTSTRAPS AND SWINDLES......Page 38
THE RATIONALITY OF INVESTORS?......Page 39
RATIONALITY OF BANKERS?......Page 42
RATIONALITY OF EXPERTS?......Page 48
MONETARY POLICY AND THE FEDERAL RESERVE SYSTEM......Page 54
INCOME TAX......Page 62
ESTATE TAX......Page 66
THE ALTERNATIVE MINIMUM TAX......Page 69
INCOME TAX BRACKETS AND BUDGET DEFICITS......Page 71
CAPITAL GAINS......Page 74
SOCIAL SECURITY AND MEDICARE......Page 77
WHY INEQUALITY PERSISTS AND EXPANDS......Page 80
INEQUALITY OF WEALTH IN THE UNITED STATES......Page 83
DEBT......Page 86
US FEDERAL DEBT......Page 87
STATE AND MUNICIPAL DEBT......Page 92
HOUSEHOLD AND MORTGAGE DEBT......Page 93
THE DOLLAR......Page 98
BANKRUPTCIES......Page 100
WORLD DEBT......Page 102
DEPOSIT INSURANCE......Page 103
REGULATION, DEREGULATION AND NO REGULATION......Page 106
DEFINED BENEFIT PLANS......Page 109
DEFINED CONTRIBUTION PLANS......Page 111
THE PUBLIC SECTOR......Page 114
THE VALUATION OF COMMON STOCKS......Page 116
INTERNAL FEEDBACK AND ENDOGENOUS RISK......Page 122
WHEN THE BUBBLE POPS......Page 124
NOTES......Page 126
A SHORT HISTORY OF BOOMS, BUBBLES, AND BUSTS......Page 132
SOUTH SEAS BUBBLE......Page 133
JOHN LAW’S MISSISSIPPI COMPANY......Page 135
THE RISE......Page 136
THE FALL......Page 137
UNDERLYING CAUSES......Page 138
THE REAL ECONOMIC BOOM OF THE 1920S......Page 139
THE STOCK MARKET OF THE 1920S......Page 142
THE CRASH OF 1929......Page 145
THE GREAT DEPRESSION OF THE 1930S......Page 146
THE ORIGINAL PROBLEM......Page 151
DEREGULATION AND NO REGULATION......Page 156
HOW MR. REAGAN MADE A BAD PROBLEM WORSE......Page 158
THE FALSE SPRING OF 1983......Page 161
THE ‘‘GO–GO’’ PERIOD......Page 164
FRAUD AND MISCONDUCT......Page 166
THE AFTERMATH......Page 174
THE BULL MARKET OF 1982–1995......Page 176
THE CRASH OF 1987......Page 184
BOOM AND EUPHORIA......Page 190
GREENSPAN AND THE ROLE OF THE FEDERAL RESERVE......Page 192
BURSTING OF THE BUBBLE......Page 198
MERRILL-LYNCH IS BULLISH ON AMERICA......Page 199
OTHER BUBBLES AND SWINDLES OF THE LATE 1990S AND 2000S......Page 201
ADELPHIA......Page 202
BARINGS BANK......Page 203
SOCIETE GENERALE......Page 204
ENRON......Page 205
LONG-TERM CAPITAL MANAGEMENT......Page 210
ALBANIA’S PONZI SCHEMES......Page 219
CORPORATE AND ACCOUNTING SCANDALS......Page 221
ORIGIN OF THE BOOM......Page 235
EXPANSION OF THE BOOM......Page 237
RESIDENCES AS ATMS......Page 240
THE PUNCTURED BUBBLE......Page 244
MORTGAGE-BACKED SECURITIES......Page 248
GOVERNMENT RESPONSE TO THE PUNCTURED BUBBLE......Page 252
INTERNATIONAL MORTGAGE DEBT......Page 253
THE HIDDEN TIME BOMB......Page 255
BACKGROUND......Page 256
THE JAPANESE BOOM AND BUBBLE......Page 257
COLLAPSE OF THE JAPANESE BUBBLE......Page 261
EAST ASIA......Page 262
THE OIL BUBBLE......Page 265
THE NEXT BUBBLE......Page 271
NOTES......Page 275
Abbreviations......Page 283
Index......Page 285