A History of the United States in Five Crashes: Stock Market Meltdowns That Defined a Nation - Paperback

by Scott Nations (Author)

"Excellent." -- Wall Street Journal

"My hands-down financial book of the year. . . . An incredibly rich mine of market history. . . . Enlightening. . . . Meticulous. . . . Definitive. . . . Absolutely first class." -- Financial Advisor Magazine

Clearly and compellingly illustrates the connections between major financial collapses, and examines the solid, clear-cut lessons they offer for preventing the next one

The stories behind the biggest stock market crashes in US history are rife with drama, human folly, and heroic rescues. Taken together, the pendulum swings between the larger story of a nation reaching enormous heights of financial power while experiencing precipitous dips that devastate a market where millions of Americans invest their savings, and on which they depend for their retirement, children's education, and long-term financial well-being. CNBC contributor, longtime stock trader, and financial engineer Scott Nations vividly shows how each of these major crashes played a role in America's political and cultural fabric, each providing painful lessons that have strengthened us and helped us to build the nation we know today.

The Big Five financial crises covered:

The Panic of 1907: When the Knickerbocker Trust Company failed, after a brazen attempt to manipulate the stock market led to a disastrous run on the banks, the Dow lost nearly half its value in weeks. Only billionaire J.P. Morgan was able to save the stock market.

Black Tuesday (1929): As the newly created Federal Reserve System repeatedly adjusted interest rates in all the wrong ways, investment trusts, the darlings of that decade, became the catalyst that caused the bubble to burst, and the Dow fell dramatically, leading swiftly to the Great Depression.

Black Monday (1987): When "portfolio insurance," a new tool meant to protect investments, instead led to increased losses, and corporate raiders drove stock prices above their real values, the Dow dropped an astonishing 22.6 percent in one day.

The Great Recession (2008): As homeowners began defaulting on mortgages, investment portfolios that contained them collapsed, bringing the nation's largest banks, much of the economy, and the stock market down with them.

The Flash Crash (2010): When one investment manager, using a runaway computer algorithm that was dangerously unstable and poorly understood, reacted to the economic turmoil in Greece, the stock market took an unprecedentedly sudden plunge, with the Dow shedding 998.5 points (roughly a trillion dollars in valuation) in just minutes.

Front Jacket

In this compelling, smart, and accessible blend of economic and cultural history, Scott Nations, a longtime trader, financial engineer, and CNBC contributor, takes us on a journey through the five significant stock market crashes of the last century and how they defined today's America.

The names have entered into lore: The Panic of 1907. Black Tuesday and Black Monday. The Great Recession. The Flash Crash. In this perceptive book, Nations reveals the common threads that have underpinned these economic crises. Many were the unintended consequence of a new financial contraption, such as "portfolio insurance" in 1987 or those infamous mortgage-backed securities in 2008. Sometimes a well-intentioned government intervention, like the newly created Federal Reserve's meddling with interest rates in 1929, backfired spectacularly. And then, often, disaster was triggered by an event no one could have foreseen, like the San Francisco earthquake or the Greek riots of 2010. Nations expertly interprets the winding road to each failure and charts the paths toward recovery, from J. P. Morgan's near-single-handed rescue of American stocks in 1907 to the $700 billion bailout that was required to stabilize the economy in 2008.

A captivating read for both veteran investors and those just looking to better understand our financial system, A History of the United States in Five Crashes shows what we have learned from a century of economic history--and how we can use these lessons to prevent the next crash.

Back Jacket

In this compelling, smart, and accessible blend of economic and cultural history, Scott Nations, a longtime trader, financial engineer, and CNBC contributor, takes us on a journey through the five significant stock market crashes of the last century and how they defined today's America.

The names have entered into lore: The Panic of 1907. Black Tuesday and Black Monday. The Great Recession. The Flash Crash. In this perceptive book, Nations reveals the common threads that have underpinned these economic crises. Many were the unintended consequence of a new financial contraption, such as "portfolio insurance" in 1987 or those infamous mortgage-backed securities in 2008. Sometimes a well-intentioned government intervention, like the newly created Federal Reserve's meddling with interest rates in 1929, backfired spectacularly. And then, often, disaster was triggered by an event no one could have foreseen, like the San Francisco earthquake or the Greek riots of 2010. Nations expertly interprets the winding road to each failure and charts the paths toward recovery, from J. P. Morgan's near-single-handed rescue of American stocks in 1907 to the $700 billion bailout that was required to stabilize the economy in 2008.

A captivating read for both veteran investors and those just looking to better understand our financial system, A History of the United States in Five Crashes shows what we have learned from a century of economic history--and how we can use these lessons to prevent the next crash.