By Michael J. Panzner
I provide this publication five stars for correctly predicting a couple of issues that experience come to cross because the booklet used to be released, and for nearly definitely appropriately forecasting a few issues which are but to be. I provide the e-book 1 celebrity for organizing the cloth in a manner that makes it effortless to spot all of the hazards and the mandatory responses. accordingly, on standard, three stars.
For instance, the writer properly forecasts the doom that's befalling Fannie Mae and Freddie Mac. He thoroughly forecast that the industry cave in may shake out a few crooks (eg Bernie Madoff). He effectively (in my opinion) forecasts the looming pension challenge, municipal and nation defaults, and different public monetary crises that lie forward. and masses extra. besides the fact that, the best way the writer breezily drifts from info in a single paragraph to gross generalizations within the subsequent makes it demanding to split a few of his key observations from normal conjecture.
The publication is prepared in 4 major headings (Threats, dangers, Fallout and Defenses) with 4 chapters below each one heading. that is nice. besides the fact that, each one bankruptcy is 10 to 30 pages of unbroken paragraphs overlaying a large number of issues below that bankruptcy heading. for instance, less than 'Defenses' are the 4 chapters making plans, Investments, Relationships and life. within the 14 pages less than 'Investments' is a sea of paragraphs protecting every little thing from the quest Brothers cornering of the silver industry within the 80's to municipal bond fund defense to the method of maintaining profit the deflationary interval to the method for getting commodities, meals and so on within the hyperinflation to persist with, with info issues bobbing in this sea of paragraphs like driftwood. it isn't tricky analyzing, yet it truly is tricky to extract a coherent photograph of the purpose the writer is attempting to make, or a cogent own plan of assault for addressing the matter. in my view this e-book is crying out for plenty of extra smaller, centred chapters.
An instance is his dialogue beginning with advice (U.S. Treasury Inflation safe Securities), which he rightly issues out aren't a hedge for hyper-inflation as the executive will easily redefine or blatantly distort the inflation numbers because it does at the moment with it really is 'hedonistic' alterations to these numbers. so that you might purchase 'inverse ETFs' that brief the guidelines, yet these might be afflicted by marketplace 'irregularities', so that you may perhaps visit money, yet hyperinflation will consume that, so contemplate gold, however the executive may confiscate that...all in a number of pages within the Investments bankruptcy. Whoa. interpreting this is often like interpreting a flowchart packed with if-else determination blocks with no the good beautiful symbols.
The key to this publication is one of the final forty pages, entitled 'References and Resources', that are not anything greater than hundreds and hundreds of directory of web content articles and references, such a lot from 2006, and possibly the first assets from which the writer accumulated his info and conclusions. regrettably the writer did not cross-reference those resources to his discussions within the textual content, so just like the remainder of the e-book they're difficult to sift via in any prepared model. Like many of the stuff at the 'net, the various hyperlinks could be taken flippantly (if at all), whereas others are in flip prognosticative, profound or downright frightening whilst tested 4 years later.
In precis, this e-book will make you think that difficult in regards to the 'bigger photo' of this financial system, however it does not make it effortless.
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Extra resources for Financial Armageddon: Protecting Your Future from Four Impending Catastrophes
8 billion in accounting errors stemming from its derivatives and hedging activities and noted that it didn’t expect to complete its 2004 annual report before the second half of 2006. Despite hearings, investigations, and resignations, as well as repeated calls for their portfolios to be downsized and their capital requirements to be raised, Fannie and Freddie remain active players in both the mortgage and derivatives markets. In many respects, the situation is not unlike what happened in the 1980s, when inaction and delay—what some refer to as “regulatory forbearance”—ultimately contributed to the much higher than expected $150 billion cost of the S&L crisis.
Because nonbank financial institutions play a largely hidden but otherwise substantial role in the financial system, they also represent a sizable risk for markets and for the federal government. These include the four AAA-rated—as of 2006—private insurers that back 80 percent of the $2 trillion municipal bond market, often with capital cushions of less than 2 percent. One firm, MBIA, guarantees nearly $900 billion of state and local government obligations. With municipal and corporate credit ratings under pressure and bankruptcies on the rise, one or more of the guarantors will almost certainly find their perceived financial strength being called into question, a development that will trigger shock waves across the fixed-income markets.
Derivatives tend to fall into two categories: exchange traded or over the counter (OTC). Listed contracts like S&P 500 futures normally have standardized terms and trade at established venues such as the Chicago Board of Trade. Typically, a central clearinghouse acts as the settlement counterparty on every deal to ensure that things run smoothly. indb 40 1/2/07 4:52:28 PM Derivatives 41 In contrast, OTC derivatives are ad hoc arrangements tailored to the needs of those directly involved in each transaction, though industry trade bodies like the International Securities Dealers Association (ISDA) frequently set standards for terminology and settlement practices.
Financial Armageddon: Protecting Your Future from Four Impending Catastrophes by Michael J. Panzner