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This well written and highly accessible book should be compulsory reading for anyone interested in politics, economics, finance, or anyone who is just trying to achieve or maintain a modicum of prosperity in an uncertain future.
The author's main point is that positive feedback mechanisms can lead to bubbles and instability in the economy just as easily as negative feedback can cause (localized and temporary!) stability and equilibrium, and that future financial crises are therefore just as "natural" as future rain storms. The author makes this point very cogently, and indeed it's really somewhat obvious if you think about it enough, but the author also clearly shows that far too many of the people in charge in politics and finance have a complete blind spot when it comes to that simple truth, and due to their blind faith in self correcting markets make stupid and massively expensive mistakes. (Yes, Gordon Brown, we are talking about you here, among many others.)
The criticism of the "efficient market hypothesis" in this book is particularly clear and penetrating, and I would love to hear the author's reaction to the fact that last year's economics Nobel prize went to the inventors of the efficient market myth. If the Swedish academy can get it so wrong, I guess that just underscores why this book is so important.
One of the most important books I've read in years, and to top it all off it's even quite enjoyable, as the book's narrative is nicely illustrated with well researched and fascinating glimpses into the mathematics of earth quakes, the workings of stock markets, or state of the art forecasting methods in meterology and in finance.
3 of 3 people found this review helpful
The book started off really great, but then gets very repetitive and you listen to the exact same stories over and over again.
It is also lacking details on feedback models, which are praised through the book but only scratching the surface.