The Bottom Line
The Credit Crisis of 2008 and What It Means: The New Paradigm for Financial Markets by George Soros. 162 pages.
Worth getting if only for the summary of how the economy got into the credit crisis. However, it doesn't give an indication of how the financial markets may change as a result.
Pros
- Good explanation of how the credit crisis occurred.
- Explains how financial markets are swayed by emotion.
- Financial markets are not driven by traders knowledge only.
- Discusses why this latest market bust will take years to recover from.
- Easy to read.
Cons
- Repetitive.
- Doesn't really explain how the new paradigm in the title will affect future markets.
Description
- Chapter 1. Perspective.
- Chapter 2. Autobiography of a Failed Philosopher.
- Chapter 3. The Theory of Reflexivity.
- Chapter 4. Reflexivity in Financial Markets.
- Chapter 5. The Super-Bubble Hypothesis.
- Chapter 6. Autobiography of a Successful Speculator.
- Chapter 7. My Outlook for 2008.
- Chapter 8. Some Policy Recommendations.
Guide Review - Book Review: Credit Crisis of 2008
I was hoping that George Soros' would share his successful experience in the financial markets to clearly describe what new paradigm we could expect in the years to come. Instead, he described his philosophy of reflexivity, which states that financial markets don't behave rationally because those that watch the markets introduce their own biases and emotions. This is a great and useful philosophy, but I was waiting for Mr. Soros to explain what this means going forward for the changed direction of financial markets after the crisis.
However, the book does give an excellent summary of what led to the crisis. It also warns that this was a bubble that was developing for decades, and that it will take years for the economy to resort itself.
I recommend this book for anyone who would like to learn more about the credit crisis and how financial markets function.
