Patrick Sisson - Writer, Journalist, Cultural Documentarian, Music Lover

Panic: The Story of Modern Financial Insanity

Book Review
March 2009


Author: Michael Lewis
Publisher: W.W. Norton & Co.
Number of Pages: 352 Pages
Cover Type: Hard Cover

Populist anger may be boiling over against Wall Street and its recently chastised traders. But when they’re inflating our own nest eggs and driving up our own investment returns, we don’t mind a few Gordon Geckos at the helm. It’s a cycle of love and hate, of boom and bust, and naked self-interest that mirrors the market gyrations profiled in writer Michael Lewis’ new compilation Panic, a collection of articles about the last two decades’ worth of financial downturns. “The same herd instinct that fueled the boom fueled the bust,” Lewis writes about the Internet bubble. That statement can apply to any of the crises Panic covers—from Black Monday in 1987 to the current sub-prime mortgage collapse.

Financial journalism, like the increasingly complex subject it covers, can often be specialized and mystifying. But the working details of and personalities behind the system are fleshed out in the broad range of articles, insider accounts and post-mortems supplied by the book’s contributors. There are plenty of nostalgic details in articles from the 1980s; traders, beaming at the Dow’s then record high of just over 2500, receive stock quotes via handheld radios. But as the book progresses through pieces profiling damage wrought by the Asian financial crisis and the manic, misplaced faith in Internet stocks, the story arcs of each crash seem eerily similar. And the small details—commodities brokers flocking to a pawn shop near the Chicago Board of Trade, heads of now-defunct online companies waxing poetic about wasteful Super Bowl ad buys—make these pieces about much more than numbers and balance sheets.

Lewis’ own journalistic work also appears in each section. His wry and knowing voice, recognizable from books like Liar’s Poker and a recent string of insightful articles about our current economic funk, is enjoyable—like that of an omniscient narrator relishing the cast of characters and their foibles. One of the main points Lewis makes in his introduction is that misplaced faith in complex financial instruments has led to people underestimating risk and undertaking risky behavior. Hubris, one might say. Lewis has gathered writing that, above all, never forgets the human element behind the market’s tumbles.

  1. Thank God! Someone with brains spekas!

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