Title: Handbook of Hedge Funds / Edition 1
Author: Francois-Serge Lhabitant, Frangois-Serge Lhabitant, Franç Ois-Serge Lhabitant
“Do you find yourself wondering: How did we get here? How didthe United States of America get into such a predicament whereby inone year, 2008, the financial system nearly vaporized, the stockmarket crashed, real estate tanked, and major corporations werebeing bailed out. . . .How did our great country, a bastion ofcapitalism, devolve into a Bailout Nation where the gains wereprivatized, but the losses were socialized?” —From the Foreword by Bill Fleckenstein In Bailout Nation, Barry Ritholtz, author of the popularfinance blog www.ritholtz.com/blog/, deftly mixes financial historywith an insider’s knowledge of modern finance to reveal how we’vearrived at one of the worst economic crises ever. Engaging andinformative, this book clearly shows how years of trying to controlthe economy with easy money has finally caught up with the UnitedStates and how the government’s practice of repeatedly rescuingWall Street—as well as other industries andorganizations—has come back to bite them. Divided into five compelling parts, this timely guide opens witha brief history of bailouts, detailing their particular patternsand unintended consequences. From here, it quickly moves on toreveal the events, individuals, and institutions that have shapedour current situation. You’ll see how various governmentinterventions—in individual companies such as Lockheed duringthe 1970s, in specific sectors such as banking in the early 1990s,and eventually, entire markets with the rescue of stocks in2000—opened up a Pandora’s Box. You’ll also discover how themisguided philosophies of many players, from Fed Chairmen andPresidents to Senators and Treasury Secretaries, promoted themassive meltdown that has engulfed our global economy. Ritholtz leaves no stone unturned, as he breaks down how theFederal Reserve’s interest-rate targeting policies as well as acondition known as moral hazard—the belief that you won’tbear the full consequences of your actions—perpetuated thereckless financial risk taking that has pushed us to the brink.Ritholtz also takes some of the biggest Wall Streetfirms—along with their enablers, the ratingsagencies—to task. Page by page, you’ll learn how the repealof certain regulations allowed banks to merge into unruly financialbehemoths, while unproven investment vehicles, includingcollateralized debt obligations (CDOs) and credit default swaps(CDSs), wreaked havoc on both the credit and housing markets. The United States has abandoned its capitalist roots and becomea Bailout Nation. The implications of this are significant andfar-reaching. If you intend on navigating today’s treacherousterrain, it would be wise to understand how we got here and whatyou need to get ahead. Scathing, but fair, Bailout Nationputs this financial debacle in perspective—throughdiscussions of past miscues and an exploration of solutions beingproposed-and offers a voice of reason during these uncertaineconomic times.