Product Details

• Amazon Sales Rank: #318058 in Books
• Published on: 2007-10-26
• Original language: English
• Number of items: 1
• Binding: Paperback
• 96 pages

Customer Reviews

The problem explained
Words from Jim Walker, economist and strategist in Hong Kong, formerly with Credit Lyonnais:

It is rare indeed that a book comes out concurrently with the crisis that it is predicting. David Roche's timing has been impeccable. New Monetarism brings together under one cover all of the associated ideas that David has been developing on the back of the simple, but not obvious, insight that `money' constitutes much more nowadays than the old monetarist notions of M1, M2 and M3.

I would argue that the concepts they have developed, including the notions of reefs in the economic system and the self-reinforcing nature of risk taking behaviour, are much more akin to Austrian analysis. But it would be churlish indeed to say that Austrian Theory has anticipated their approach and conclusions. It hasn't. David brings to monetary theory the eyes of a practitioner in the markets rather than the logic of academics in ivory towers. That is why this book is a must read for every fund manager today, whether in developed or developing markets.

There will be plenty in it that investors can disagree with or question but the beauty of New Monetarism is that it lays out exactly what has happened to the global financial system over the last two decades. It describes the growth in arcane financial products, how interest rate swaps were used to lock in low rates and build tremendous leverage just at the wrong time, how currency derivatives have accelerated the process of risk taking, how these shaky derivatives will now contribute to an accelerated implosion and how plentiful liquidity - when it is available - makes assets look cheap even when they aren't.

Buy the book before Christmas and read it over the holidays. In my view it is definitely to be read for the first time with a stiff drink in hand.

And here is the best news of all. It is only 80 pages long and there are lots of charts and tables. It is an object lesson in `never mind the width, feel the quality'. Like us, the authors see the demise of New Monetarism's liquidity pyramid resulting in a deflation of all equity prices and the bursting of the Chinese investment bubble. But we will let you read for yourself the real-world logic behind that conclusion. One thing is for sure, there goes that butterfly and its unintended consequences again!

It's only a Lady Godiva!!!
This little pup of a book illustrates why the Credit Crunch is upon us.

Independent Strategy have been calling the CC with alacrity - obviously the lads at Peloton did not invest a fiver and study this book.