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Mr. Market Miscalculates: The Bubble Years and Beyond
Author(s): James Grant (Author)
- Publisher: Axios Press
- Publication Date: November 7, 2008
- Edition: Illustrated
- Language: English
- Print length: 430 pages
- ISBN-10: 1604190086
- ISBN-13: 9781604190083
Book Description
Editorial Reviews
Review
Grant’s views on the markets are well-known and consistent. A strong critic of the decision to take the dollar off the gold standard in 1971, he has used Grant’s Interest Rate Observer, which he founded 25 years ago, to criticise the money-printing policies of the Federal Reserve. He has earned a steady and loyal following.
Grant … draws his title from Benjamin Graham, the investment theorist, who coined the term “Mr. Market” in the 1930s. Thanks to Mr. Market’s irrational behaviour, Graham said, it was possible for opportunistic investors to make money. Grant paraphrases Mr. Market’s attitude thus: “Price is never an object; he just wants in, or he wants out. You, the sane one, could get rich just by availing yourself of the opportunities served up by your unbalanced partner.”…The essays in the book show how easy the opportunities were to spot.
There are many other uncanny examples of prescience in [Grant’s] diagnosis of the conditions that led to the current crisis. His trademark clarity of thought and of expression are there throughout. So, thankfully in an analyst who is generally pessimistic, is a crackling sense of humour. –Financial Times
After having read the book twice during the past four days, I can say without equivocation that it is a must-read item. Grant lays out on the table almost all of the key pieces involved in the current credit crisis that is enveloping the world, even though the last essay was written late this spring. Fortunately, James Grant gives us most of the last pieces of the puzzle in his op-ed, The Confidence Game, which was published in the Wall Street Journal on October 18, 2008. It, too, must be read in its entirety to be fully appreciated….
You can read all about the folly [of recent years] in Mr. Market Miscalculates and you should probably weep while doing so. But James Grant writes too well, thinks too clearly and is just too darn funny to distract one from the narratives that make this book worth every penny it might cost you to purchase it.
After having read the book twice during the past four days, I can say without equivocation that it is a must-read item. Grant lays out on the table almost all of the key pieces involved in the current credit crisis that is enveloping the world, even though the last essay was written late this spring. Fortunately, James Grant gives us most of the last pieces of the puzzle in his op-ed, The Confidence Game, which was published in the Wall Street Journal on October 18, 2008. It, too, must be read in its entirety to be fully appreciated….
You can read all about the folly [of recent years] in Mr. Market Miscalculates and you should probably weep while doing so. But James Grant writes too well, thinks too clearly and is just too darn funny to distract one from the narratives that make this book worth every penny it might cost you to purchase it.- LEWROCKWELL.COM
Review
You can read all about the folly [of recent years] in Mr. Market Miscalculates and you should probably weep while doing so. But James Grant writes too well, thinks too clearly and is just too darn funny to distract one from the narratives that make this book worth every penny it might cost you to purchase it.
After having read the book twice during the past four days, I can say without equivocation that it is a must-read item. Grant lays out on the table almost all of the key pieces involved in the current credit crisis that is enveloping the world, even though the last essay was written late this spring. Fortunately, James Grant gives us most of the last pieces of the puzzle in his op-ed, The Confidence Game, which was published in the Wall Street Journal on October 18, 2008. It, too, must be read in its entirety to be fully appreciated….
You can read all about the folly [of recent years] in Mr. Market Miscalculates and you should probably weep while doing so. But James Grant writes too well, thinks too clearly and is just too darn funny to distract one from the narratives that make this book worth every penny it might cost you to purchase it.- LEWROCKWELL.COM
Review
James Grant, renowned for Grant’s Interest Rate Observer, demonstrates that although the credit bubble may have done more damage than the tech bubble of the 1990s, both stem from the same basic causes: a breakdown of rating standards and an abandonment of the principles of financial risk management.
This book treats a serious topic with humor, embodying investor confusion in the character of an imaginary investor, Mr. Market, who buys and sells shares with whimsical abandon. Financial scenarios are illustrated with catchy, on-point cartoons. – Financial Planning
Review
Mr. Grant often writes with an arched brow. Certainly he has long been at odds with Wall Street’s relentless optimism. His point is that market participants regularly fail to recognize market fundamentals and are thus led to economically irrational behavior, which he sums up bluntly as: “Buying high and selling low.” Nor is he particularly fond of central bankers who feed this behavior.
A piece published in May 2005 about the booming mortgage market warned of “the mispricing of credit risk” and declared that “nobody knows what the default and prepayment characteristics of the subprime, private-label mortgages may prove to be.” And an August 2001 dispatch shows him staking out a Greenspan short. Mr. Grant suggests that Mr. Greenspan irresponsibly fed market optimism, failed to acknowledge the risks that accompany the mispricing of capital and credit, and then “was slow to recognize a bust as a bust.” We are living with the consequences of a lot of bad judgment now — and not just Mr. Greenspan’s. Let’s not blame the geeks just yet.
“Mr. Market Miscalculates: The Bubble Years and Beyond”… A well-respected figure among the financial cognoscenti, Mr. Grant is the founder and editor of a Wall Street newsletter that bills itself as “the financial-information medium that least resembles CNBC.” He joins Mr. Ferguson in the small fraternity of financial commentators who are accessible and colorful stylists.
Mr. Grant often writes with an arched brow. Certainly he has long been at odds with Wall Street’s relentless optimism. His point is that market participants regularly fail to recognize market fundamentals and are thus led to economically irrational behavior, which he sums up bluntly as: “Buying high and selling low.” Nor is he particularly fond of central bankers who feed this behavior.
A piece published in May 2005 about the booming mortgage market warned of “the mispricing of credit risk” and declared that “nobody knows what the default and prepayment characteristics of the subprime, private-label mortgages may prove to be.” And an August 2001 dispatch shows him staking out a Greenspan short. Mr. Grant suggests that Mr. Greenspan irresponsibly fed market optimism, failed to acknowledge the risks that accompany the mispricing of capital and credit, and then “was slow to recognize a bust as a bust.” We are living with the consequences of a lot of bad judgment now — and not just Mr. Greenspan’s. Let’s not blame the geeks just yet. – Wall Street Journal
Book Description
…proofs of Grant’s foresight — the power of mind over mania — fill his new anthology, “Mr. Market Miscalculates,” a bracing tonic as U.S. equities suffer what may prove their worst year since 1931.
We’ve all met Mr. Market. He’s the manic-depressive business partner invented by value investor Benjamin Graham….Grant’s omnibus offers a blow-by-blow account of one man’s battle with this crank, from dot-com binge to mortgage meltdown.
Grant’s reputation precedes him. His newsletter has enriched, amused and irritated subscribers for 25 years. As founder, editor and rewrite man (as he puts it), Grant calls himself “a Grover Cleveland Democrat who favors free markets and traditional business attire.”
The chapters are arranged thematically, allowing you to jump around. My favorites are in the bits where Mr. Market buys a house and Grant dissects “mortgage science projects,” including some particularly toxic collateralized debt obligations.
There’s something of the thriller buried in here, as our detective follows the trail leading from Greenspan’s low Federal Funds rates (1 percent for almost a year) to the proliferation of interest-only mortgages and the subprime debacle.
Throughout, the reporting is detailed and precise. The tone is wise yet unpretentious, and Grant knows how to cut through financial fog and conjure up images straight out of a Dr. Seuss. – Bloomberg News
