Crashes and Crises: Lessons From a History of Financial Disasters

The influence of technology on today's investing; the potential for crashes and crises; the Flash Crash of 2010; a dip in the market due to programmed trading; the phenomenon of cryptocurrencies such as Bitcoin, which rely on blockchain technology.

Investigating two of the most notorious con men; the Ponzi scheme is named after Charles Ponzi; Ivan Krueger uses an elaborate variant of Ponzi's swindle; the three ingredients that most Ponzi schemes share; how to identify scams.

The freewheeling financial market; the staid system of the post-World War Two era; the stability of financial markets; how the present system has evolved; the types of markets; why we live in an era of busts.

The 17th century tulip bubble is a classic case of futures trading run amok; how the tulip mania resembles today's speculative markets; the truth behind this financial bubble; the problem of deciding the fair price of an asset; how bubbles start.

The British stock market in the early 18th century; a financially-strapped government and a public craze for investing create ideal conditions for one of history's most brazen stock manipulators; John Blunt's use of the South Sea Company.

The Mississippi bubble is an early 18th century financial crisis; it is sparked by speculation; John Law is the bubble's instigator; he is a Scottish gambler; he gains control of the French economy; he plunges France into economic collapse.

Mining companies are like internet start-ups of the 19th and early 20th centuries; they offer a chance to strike it rich or go broke; the swindling strategy of George Graham Rice; he makes a fortune by manipulating mining stock.

Panics are a recurring feature of economic life in the United States; what cause them; how they are cured; the Panic of 1907; J. P. Morgan stems a wave of bank failures; the gold standard is an obstacle to managing panics; the Federal Reserve System.

The economic nightmare of hyperinflation; how it happens; the policies that put nations at risk; a classic case of hyperinflation is post-World War I Germany as it faces a multitude of demands on a financial system already crippled by the war.

The Wall Street crash of 1929; the boom during the 1920s; investment practices which are outlawed; tracing the rise in stock prices into the fall of 1929; a normal market correction is underway; why it suddenly turns into a crash.

The Great Contraction; one-third of all banks in the United States fail; the causes of this collapse in confidence; its impact on building and loan associations; government attempts to stem the crisis; the Glass-Steagall Act of 1933.

Savings and loan institutions in the 1980s and 1990s; they are a thriving source of home mortgages; the industry falls victim to a combination of high interest rates, well-intentioned government deregulation and a wave of unscrupulous managers.

Computerized trading; how the rage for portfolio insurance which is regulated by computer algorithms as well as a rapidly rising market and skittish investors spark the Black Monday crash; the Dow Jones index loses a lot of its value.

The Japanese economy in the 1980s; it comes to a halt; two decades of economic stagnation; Japan's postwar brand of capitalism; how its regulatory, political and banking systems created a bubble economy; the global economy causes a crash.

Interest rate swaps; they are a financial derivative; how a complex form of swaps in the early 1990s leads to losses for famous corporations and an ensuing round of bitter lawsuits; lessons for anyone investing in financial instruments.

The cause of currency crises; the 1997 collapse of the Thai baht; why such events can happen suddenly with little chance for a government to stop it; why the U.S. dollar is not immune; the role of currency speculators; George Soros.

Two financial instruments; how an elected official plunges the system into the largest municipal default in United States history; his strategy and downfall; the faults in his policies.

The rise of the internet in the 1990s spawns online companies; they have no profit or business plan; they generate enormous enthusiasm in their initial stock offerings; why the market crashes again; the role of intangible assets in the dot-com boom.

Studying Jerome Kerviel; he costs the French bank Societe Generale more than six billion dollars; Nick Leeson's errant trading bankrupts Baring Brothers; how trading firms are organized; the Achilles heel that allows both men to go rogue.

Long-Term Capital Management is a hedge fund; it has a good team and great investors; banks loan it millions of dollars; in 1998 a debacle threatens to take down Wall Street; LTCM and its banks ignore the basic rules of finance.

Value at risk is a risk management tool; it was developed in the 1990s; it estimates the largest loss that a given investment strategy can be expected to sustain under normal market conditions; the successes of this model; its failures.

The growth of the U.S. economy in the 1990s and the early 2000s; bad monetary policy; bad private-sector behavior; bad financial regulations; how self-interest and overconfidence blind investors, borrowers and regulators.

The ins and outs of subprime mortgages; collateralized debt obligations; structured investment vehicles; the unprecedented run on the international financial system in 2007 leads to the worst recession since the Great Depression.

China is unaffected by the 2007 global economic meltdown; China's shadow banking; the provision of banking services by non-bank institutions; the practice is subject to abuse; the widespread use of shadow banking courts trouble.