Reading List: Financial Reckoning Day (Fourmilog: None Dare Call It Reason)

Saturday, November 27, 2004

Bonner, William with Addison Wiggin. Financial Reckoning Day. Hoboken, NJ: John Wiley & Sons, 2003. ISBN 0-471-44973-3.: William Bonner's Daily Reckoning newsletter was, along with a few others like Downside, a voice of sanity in the bubble markets of the turn of millennium. I've always found that the best investment analysis looks well beyond the markets to the historical, social, political, moral, technological, and demographic trends which market action ultimately reflects. Bonner and Wiggin provide a global, multi-century tour d'horizon here, and make a convincing case that the boom, bust, and decade-plus "soft depression" which Japan suffered from the 1990s to the present is the prototype of what's in store for the U.S. as the inevitable de-leveraging of the mountain of corporate and consumer debt on which the recent boom was built occurs, with the difference that Japan has the advantage of a high savings rate and large trade surplus, while the U.S. saves nothing and runs enormous trade deficits. The analysis of how Alan Greenspan's evolution from supreme goldbug in Ayn Rand's inner circle to maestro of paper money is completely consistent with his youthful belief in Objectivism is simply delightful. The authors readily admit that markets can do anything, but believe that in the long run, markets generally do what they "ought to", and suggest an investment strategy for the next decade on that basis.

Posted at November 27, 2004 15:10