Business-cycle

Is this merely a post-ponement? Perhaps the year 2010 should be inserted into the title?

Put 3 economists in a room and you'll get six answers, if your lucky. A good idea is to read books put forth by economists 10 years and longer in the past. You'll see how often most of them are not only misguided and incorrect, but also out on planet Mars. However, some offer good insights into cyclical trends and patterns juxtaposed with current political, technological, and societal evolution. Now, you can keep this in mind when you are reading the current books, newsletters, and magazines from economists, investment gurus, analysts, etc.

Dr. Batra covers many facts of the 1980s such as the Tax Reform Act of 1986, banking conditions, and the exportation of American labor and manufacturing jobs to LDCs among other conditions.
Covering dozens of areas in investing, here is one example of advice. He specifically advised people to liquidate tax-deferred savings such as KEOGHS and IRAs. page 178 states: "Premature withdrawal of funds in Keoghs and IRA plans may then be the safest bet in spite of various penalties, especially if they are entrusted to non-banking institutions. The next question is: what should you do with the money? Can you trust the banks at all?" ---end quote. Batra then promotes the danger of putting money in banks. Real estate is also getting ready to crumble. He did state several times, that he hoped his forecasting would turn out to be incorrect, and he (as all economists seem to do), provide the solutions via tax restructuring, monetary policy, and budget allocation.

Interesting, is that these forecasts were obviously made before the exponential growth and explosion of the Internet, which greatly transformed the economy, and markets. So....what would the economy have been like had it not been for the dot.com explosion? And, now in 2003, after that bubble has burst, will there be wage growth and middle-class job creation in the years to come....?

His "Law of Cycles" has eruditic roots. Batra, an avid reader and self-studied student of world history, international trade, politics, and humanities, noted several areas of the world and the-then present conditions that brought him to his conclusions. He did have the courage to write his beliefs (which he profited from tremendously), and write them in a very easy-to-read way for the masses, or laymen population. (Marketing?) In sum, reading economic books of the past, whether theory, or in historical factual disciplines, helps us make better decisions today, in our attempt to gauge the future.

Whether you agree with Ravi Batra's theories or not, his advice on preparing for and dealing with severe economic downturns is golden. Having read this book in the 1980's, and kept the possibility of a second great depression in mind, we are successfully (emotionally and financially) dealing with a stretch of my professional husband's unemployment lasting over a year. I would recommend this book, and especially the worst-case worksheets, for anyone at risk for layoffs.

I purchased this book sometime in 1989 and recently reread it after reading Conquer the Crash by Robert Prechter. Although Batra misses his prediction by 13 years, in many ways he just predicted the upcoming event too early. In some ways, his theory of social cyles reminds me of Prechter's Elliot Waves in the sense the both suggest a sort of determinism that revolves around the affairs of men. That's one reason that I wanted to reread Batra.

Much of what Batra offers is quite sober and gives some food for thought. I find the discussion of speculative bubbles particularly appropriate given recent events which he could not have known about 13 years ago. Back in 1989, several things were occurring (i.e. S & L debacle, recession, real estate crash) that could have resulted in a very significant downturn. According to Batra, he didn't anticipate the influx of Japanese investment in US assets in response to the Japanese central bank forcing interest rates to zero. He suggests that this increase in foreign investment averted the financial collaspe he predicted. He is correct on this point as our current account deficit up to recently has been reinvested by foreigners in US financial assets. Now with the dollar faltering against major currencies combined with near zero interest rates here, these flows have now begun to reverse. A severe economic contraction is now within the realm of possibility.

Perfect antidote to "what will the market do." According to this book, over the last 200 years, long ups and have been followed by long downs. Makes sense. EPS needs time to "catch up" to over pricing (overheating or whatever).

So, if 200 year trends come to fruition, NASDAQ and the DOW will hit their 2000 peaks in about 2016 to 2018. However, remember, the long term trend is still up. It just got ahead of itself a bit (800% growth from 1983 to 2000 was too much). Hang on and the market shows this.

Great book. No axes to grind.

I first read Ken Fisher's book in 1987, unfortunately for me, after the stock market crash. Had I read it before the crash of 1987 I think I would have sold out.

His book clearly gave the warning signals about the high valuations of stocks in that era. I love this book for its simplicity and powerful demonstrations of market history that I have recommended it to many people who want to learn more about markets.

I have this book prominently displayed in my collection of books about the markets.

Mr. Fisher does a very good job of expounding on financial markets, measurements, and traditional wisdom, often iconoclastically. Many excellecnt long term charts, and references to little known economists whose ideas have been over-looked by mainstream academics.

A very interesting book on two subjects: Astro and Geometry, applied to the markets. Although, the planetary dissertation is not appropriate for the beginner due to the complexity of the content, the Geometric part of the book is easy enough to follow.

This book helped me finding a 'secret within' on the Geometric side of the book. Since it is a 'secret' i'll not reveal it here and now. It has helped make a lot of money, trading! I must recommend it for the Gann students alike since they will find easy examples on astro aspects and geometric angles, illustrated and explained in an easy way.

If you're into 'traditional' trading styles à lá Dow Theory, you won't like this one...

Me, well, I read it twice with increasing interest.

This work is based on the techniques of W.D. Gann, Bayer and other authors of an earlier time but its relevance in today's world is quite valuable and meaningful.

Mr. Jensen provides important insight into the squaring of price and time based on Gann's supposedly 'master time factor' which is the closest that one can get to the so called 'holy grail' of trading.

The geometrical angles shown in this book provides a helpful addition to that learned from other sources especially the works of W.D. Gann and could provide real arsenal for a serious commodities trader.

Lars Tvede has managed to give his readers what most students of economics never get during their studies: a highly readable and entertaining overview about the way economic knowledge has progressed through time, and the way historic events (yes, wars, bubbles, etc.) have shaped the development of economics. The book is well researched and written in a very enjoyable style. If you are tired with short-term GDP forecasts and would like to have a look at the "big picture", this book is definitely for you.

The only reason this book doesn't get five stars are the last chapters about chaos theory, which are a bit "sticky", but nevertheless provide some interesting insights into some of the most recent developements of modern economic theory. Enjoy your reading

Well written, clear, conise and informative. The first book on economic history that actually encouraged me to turn the page. The theory is explained clearly, but not simply, and the backgroud is interesting and readable. Even if you have no interest in economics this book is well worth the read, it will give you a fuller understanding of how things work, and why.

Many of our clients are struggling with life at internet speeds. If you haven't read this classic on speeding up your organizations product and service life cycle, now may be a good time to do so. Praise for this book, as listed on the back of the dust jacket, come from Ford Motor Company, Quantum Corporation and others with Ed McCraken, CEO of Silicon Graphics Computer Systems stating that this is; "A must read for executive who seek speed and competitiveness."

Mr. Meyer utilizes an "ongoing case study" to make his points concerning FCT processes. This approach lends credence to his positions and gives the book a solid feel of practicality. In addition, frequent use of diagrams helps the reader visualize the organizations, processes, information flow, and cross functional activities of organizations. The layout of the book is logical and provides for continuity as Meyer builds on each preceding chapter.

The book is filled with excellent observations and pithy sayings: "The responsibility for strategic alignment rests with senior management." "Any organization leader who seeks to 'empower' people should first create a clear strategic context that enables others to use the power with which they were born." "Research demonstrates there is a negative correlation between economic growth rate and the number of Nobel prizes won." "A sustainable FCT capability can be achieved only by learning faster, not by working faster."

This book provides a compelling blend of theory and practical advice on how to move quickly. I found many things that used combined Balanced Score Card techniques focused on cycle time with the author's real world experience - which is considerable.

The book is aimed at managing the culture and mindset of the organization, not a particular project. A worthwhile read if time-based-competition applies to your business.

El Señor Benesko tiene una gran vision y experiencia en el desarrollo Proyectos intercorporativos y en su libro nos da una vision amplia de los diferentes elemetos que se pueden tomar encuuenta al desarrollar un proyecto de este tipo. Espero que edite un nuevo libro en que profundice màs sobre cada uno de los criterios que esgrime en el libro y nos ilustr màs con si gran expericia en el medio .. Buen Libro

What can we say... once in a blue moon, there is a star writer and Gary fit this profile perfectly. We compare this book as fascinating as a good sexy novel that keep you coming back all the time. " XPC The bottom liners"

Berry examines the factors associated with the long wave (Kondratiev Wave) and its sub-wave cousin the Kuznets Cycle as they affect the growth of city-building and overall economic growth and decline in the U.S. since the beginning of the republic.

According to Berry, the "stagflation peak" of 1981 will eventually give way to a recession/depression trough sometime between 2006-12. Contrary to the otherworldly optimism and manic expectations of Wall Street and the American public at large, Berry expects a deflationary cycle to begin at any time (March 1998), resulting in mass restructuring and dislocation that will require most of the next decade to resolve.

Following the trough around 2010, however, Berry expects the K-Wave and Kuznets cycles to resume their growth period, which is expected to rise into the growth period peak in the early 2030s.

In the context of A. Gary Shilling's "Deflation...", one would be wise to seriously consider reallocating his or her investment portfolio to perpare for a severe decline in stock prices (50% or more by 2002), in order to avoid the serious losses associated with the Kuznets deceleration wave and the collapse portion of the K-Wave. Bonds will be an attractive alternative to stocks following the panic and collapse phase, as interest rates will dramatically fall as will consumer prices throughout the next decade.

The topic of this book is the economic cycle called the long wave or Kondratiev cycle. The Russian economist Kondratiev did not discover these cycles, but he was the first to study them in detail. Long waves may be responsible for various long term trends: the slow down in productivity growth and wages after 1973, the "Reagan revolution", Toynbee's cycles of War and Peace, stock cycles (my focus) and others. This is the reason why people study them. The idea that long waves are major factors in these trends (or that they are even relevant at all) is controversial. Berry's book represents a modern day treatment of this topic.

I bought this book when I was researching the Kondratiev cycle as a possible explanation for stock market cycles (see my book Stock Cycles for more information). Berry presents an excellent overview of the longwaves literature in a single moderately-priced volume, and it is an excellent place to start a serious study of long waves. What I really liked about the book was the strongly empirical flavor where historical inflation and GDP data were smoothed and plotted in various ways that really "bring the cycles out". The focus is on letting the data "tell their own story", which was most refreshing in my opinion.

The reviewer ahead of me convered almost everything as to why this guy is horrible. He basically promotes big government----which fail every time------never forget that Bill Clinton did nothing but cause massive massive infaltion by raising taxes to historic levels. Look at home prices vs real income. Every "economist" that reccomends raising taxes is simply not an economist. Economics clearly reccomends lowering taxes to extreme lower elvels as well as the other hidden taxes such as regulation compliance, laws enforcing unions, and publci services from a to z such as tax paid educaiton which is failing and no one can "opt out of".

The Perilous Rebirth of JM Keynes, June 23, 1999

Reviewer: A reader
For one reason or another, John Maynard Keynes is still revered as the economist par excellance of the twentieth century, even though his policies of interventionism have been thoroughly discredited. Krugman nevertheless carries Keynes's interventionist torch (a bad metaphor, I know) and advocates a rational economic order. When will clearly smart people realize -- not the least of which Krugman -- that a centrally planned economy can only work during wartime? The benefits of spontaneous market economies, as espoused by Hayek and Von Mises (two of the most obscenely overlooked and underrated minds of the 20th century), have been empirically proven again and again. Krugman makes me believe that we are again, sadly, on the Road to Serfdom. --This text refers to the Hardcover edition

Economic scholar Paul R. Krugman investigates the forces that drive economic growth and recession, and makes sense of several complicated issues. His ability to maintain the essence of a topic while simplifying complex economics with examples and analogies is a hallmark of his work. Despite the gloomy title, the book is not depressing because, Krugman concludes, another Great Depression is not looming in our future. Capitalism has, overall, provided the foundation for prosperity in advanced and developing economies alike. Indeed, the information age has introduced entrepreneurs who have generated wealth while becoming romantic heroes for succeeding in spite of giant corporations. However, Krugman stays alert for dark forces, warning us against panic attacks in the international financial markets, where multiplying negative feedback can overwhelm the effects of monetary policy. We from getAbstract recommend Krugman's in-depth analysis to anyone with an interest in world economics and financial markets.

From the July/August 1999 issue of FOREIGN AFFAIRS: A sober -- and sobering -- appraisal of the past two years of financial history. The book covers the unstable dynamics of financial crises, highly leveraged hedge funds, Japan's deflation and liquidity trap, and other economic pathologies. Krugman argues that deficient demand, which has not appeared on such a global scale since the 1930s, is again a potential problem. When appropriate, countries should pursue an expansionary monetary and fiscal policy -- to revive the "Keynesian compact," whereby they maintain free markets but provide government-assured adequate aggregate demand. Krugman also usefully reminds us that economics is a set of analytical tools applicable to diverse situations, not a rigid set of universal principles. He concludes that the Japanese government should generate inflationary expectations so that the real interest rate can decline further -- an unorthodox conclusion carefully derived from straightforward economic analysis. He tells his story in clear prose, without the diagrams economists love. Masterful at presenting complex ideas in simple and sometimes whimsical parables and analogies, Krugman makes serious analysis fun to read.

The book focuses on the efficient market theory. Whether or not you agree with the theory, this book provides a great deal of background on overall investing. Particularly interesting were the sections on investing fads and follies and how the perils of certain types of analysis. I wouldn't recommend working with an investement professional before you have read and digested this book.

As a financial consultant in a global financial services firm, I wholeheartedly recommend this book to anyone in the markets. Burton Malkiel's central concepts still hold up in this seventh edition. He updates with stories of the latest investment follies, and uses them to back up his central assertion: investing in the capital markets requires a long-term time horizon, an understanding of the risks involved, a resistance to rushing into the latest hot trend without researching it, and some kind of investment strategy. (Those investors who trade, trade, trade on broker advice should always remember: Brokers make money on every trade in commissions-- they don't care if *you* lose all of your money.) Burton's continued support of index funds as an important part of any diversified asset strategy is backed up by good, rigorous research. Even the best active managers get burned-- Warren Buffett's hot streak finally ran out in the first half of this year, didn't it? Mean reversion does finally win out in the long run. Investors who play the stock market like the Lotto always lose out to the long-term strategists. "A Random Walk down Wall Street" is, and will always be, an immensely valuable work.

Burton Malkiel's "A Random Walk Down Wall Street" is, has been, and will remain a classic for the simple reason that the advice this book contains makes sense. He shows why and how investors should hold a broadly diversified portfolio. He promises no gimmicks but merely some wise advice on what to do with your money. His writing style is clear, and he peppers his advice with a touch of humor that--at the very minimum--makes this book an interesting read.

Most controversial has been Malkiel's support of the efficient market theory, which leads him to believe that "Investors would be far better off buying and holding an index fund than attempting to buy and sell individual securities or actively managed mutual funds." In the thirty years since its first edition, Malkiel's assertion has been supported by an ever-growing mountain of evidence that shows how, over the long run, an index fund outperforms the average actively managed fund. Few believe this advice, and prefer to show how smart they are through active trading, seeing their gains eaten away by brokrage commissions, management fees, short-term capital gains taxes, etc. Even Warren Buffet and Peter Lynch--the most successful traders in history--have admitted that most investors would be better off holding an index fund. Malkiel DOES NOT argue that you should not trade individual stocks or not buy options. He just explains why holding stocks instead of engaging in rapid fire trading will yield hefty returns over the long run. He also shows how options could be a great hedge against uncertainty--if you know what you are doing.

This is a great book that every investor should read.

Having read "When Genius Failed", I looked forward to this book. What this book does a great job of is a summation of the market from the 70s forward. It could be a great additional reading book in a college finance class as you will learn quite of what to do and not do.

But where the book may have missed its mark is there is no new ground covered. "When Genius Failed" covered a very intricate subject and went in to great depth to explain. The multitude of subjects did not give Lowenstein that option for this book so it reads similar to long newspaper exposes with some additional commentary.

Overall I enjoyed this book and recommend it. But please make sure it matches what you are looking for. A good history summation is what you have.

There are only two emotions that motivate the stock market: fear and greed.

In his latest market history, Roger Lowenstein explores how the theme of creating shareholder value morphed into unbridled greed and led to the latest stock market crash.
Delving back to the 1970s and 1980s, Lowenstein spins a compelling narrative, of heavy hitters -- Jack Grubman, Sandy Weill, Frank Quattrone, Henry Blodget, Mary Meeker, Abby Cohen, Bernie Ebbers, Frank Lay, Jeffrey Skilling, Gary Winnick -- who checked their moral scruples, fiduciary responsibility and better judgment at the door in the pursuit of personal wealth. Along the path, they co-opted the system's traditional restraints: full disclosure, public accounts and corporate attorneys.

I was disappointed Lowenstein failed to include the Richard Grasso incident. As the head of the New York Stock Exchange and regulator of virtually every individual mentioned in the book, his pursuit of personal wealth at the expense of those he was charged with regulating would have served as the icing and cherry on top of this tale of greed.

Regardless, this well-researched and powerfully written portrait of the rise and fall of the bull market of the 1990s will studied by market historians for decades to come.

In Origins of the Crash, Roger Lowenstein has written a fascinating account of the late 90's stock market bubble and subsequent collapse. The overriding theme of the book is that the culture of "shareholder value" was twisted from creating true long-term value into an obsession with the daily ups and downs of the companies' stock prices. It's an interesting way to view things and should prove thought provoking to many. Lowenstein makes a compelling case that the scandals of the past several years are not the work of just a few bad actors, but rather were symptomatic of widespread failures throughout all levels of business, government and the public. The cast of villains is extensive including the now common ones like Ken Lay (along with Skilling and Fastow), Jack Grubman, Bernie Ebbers (and Scott Sullivan) and Henry Blodget, but also includes the complicity of weak boards (and overall lax corporate governance), conflicted accountants and lawyers and an investing public (both individual and professional) that was too busy making money to worry about any of it.

I am not sure how much new reporting there is in this book... much of it is pulling together various stories that have been widely reported on. But it is put together artfully into a compelling narrative. It was fascinating to watch Michael Jensen, who was one of the earliest advocates of the use of stock options, eventually turn on his own creation. The section on Enron, while obviously not as extensive as some of the works devoted to the subject, is one of the best condensed accounts I have seen.

I do have a few quibbles with the book though. First, it winds up being something of a polemic. Reading Mr. Lowenstein's book, you get the distinct impression that there was not a single positive thing that happened at any time during the 90's. I found myself wondering if any companies managed to get it right... and if so, how and why? Second, in highlighting the abuses of options at the executive level, I think Mr. Lowenstein gives short shrift to the positive effects they can have on the lower levels of an organization. In the same way, he glosses over that there are some justifiable reasons for not expensing options. Finally, I question some of his comments about deregulation. He argues that the deregulation of telecom went to far or was perhaps even a bad thing. And yet, the purpose of regulation is not to protect the value of companies, it is to ensure access at the most reasonable costs possible. By that standard, deregulation of telecom should be seen as a success. Sure, lots of capital was destroyed and many companies failed, but it is not the government's job to prevent that.

But those issues aside, the book will stand as one of the more definitive accounts of the excesses of the 90's and Mr. Lowenstein's case against the culture of shareholder value will hopefully inspire some new thinking amongst executives, boards and investors. In short, I would highly recommend this book to anyone interested in recent market/business history.