I recently read "Panic: The Story of Modern Financial Insanity" edited by Michael Lewis. This book caught my eye at the library because of the name "Michael Lewis". I liked his books "Liar's Poker" and "Moneyball" a lot. Unfortunately as the small print explains this book was just edited by Michael Lewis.
It is a collection of many short articles written at the time about 4 recent market panics, the 1987 Wall Street stock market crash, the emerging market currency runs in the late nineties, the internet bubble and the housing bubble. A few of the articles and some introductory material are by Lewis but most of the content was written by other people.
I found the content uneven and generally mediocre. I found the book reasonably easy to finish as the format meant I could read it in small chunks. However the articles were of variable interest and quality and generally pretty superficial.
The articles also often seemed a bit dated. While contemporary accounts of events are interesting as records of what people were thinking at the time they suffer from not knowing how events played out. For example one of the articles in the book was a March 20, 2000 Barron's article, "Burning Up" by Jack Willoughby which calculated how long it would take various internet stocks to run out of their available cash given their burn rates. Apparently this article made a stir at the time and is historically important. However rereading it in 2009 one is naturally curious about the fate of the companies listed. An update would have been nice.
One of the better articles (which however is marred by a terrible misprint "able" has been changed to "unable" in one spot) in the book is an account derived from this blog posting of how during the California bubble years it was possible to buy a million dollar house while putting $270 down, pull out more than $300000 in cash over the next three years by refinancing and then just walk away sticking the banks involved (one which was Washington Mutual now defunct) with a massive loss. Which is why I am not all that sympathetic towards people being foreclosed on, a lot of them haven't really lost anything.
In summary if you like reading about markets behaving badly this book can provide some light entertainment. If you want a more serious exploration of the subject you should look elsewhere.
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