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The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means

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Author: George Soros
Publisher: PublicAffairs,U.S.
Category: Book

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Rating: 3.0 out of 5 stars

4 reviews
Sales Rank: 138

Media: Hardcover
Number Of Items: 1
Pages: 208
Shipping Weight (lbs): 0.7
Dimensions (in): 7.7 x 5.2 x 0.8

ISBN: 1586486837
Dewey Decimal Number: 332.0973
EAN: 9781586486839
ASIN: 1586486837

Publication Date: May 15, 2008
Availability: Usually dispatched within 1-2 business days
Condition: Guaranteed Brand New. Available for immediate despatch from UK by First Class Post.

Also Available In:

•	Paperback - The New Paradigm for Financial Markets: The Credit Crash of 2008 and What It Means

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Customer Reviews:

3 out of 5 stars

Rushed, and not much new June 29, 2008
6 out of 6 found this review helpful

As a previous reviewer states, this book seems as if it has been rushed into print. In addition to the poor quality of the graphs (they look like they have been photocopied) the short section where Soros provides a chronology of his recent trading decisions just read like a few pages of his diary have been added to the book to fill it out.

In addition, if you have read any of Soros' other books prepare to go over some familiar ground. As he fairly explicitly acknowledges a large motivation for him to write is to promote his conception of relexivity. If you are expecting and wanting to read this and discover trading tips, or very specific economic predictions you might as well save your money. Almost by its nature the concept of reflexivity does not lend itself to precision.

Having said that, the concept itself is an interesting one and can be applied widely, not just in markets, if only as a way to understand how views can affect the reality they seek to explain. One could argue for example that the War on Terror legitimised and reinforced the very thing it sought to oppose, and then in turn in doing so gave more strength to the argument that terrorism needed to be fought. On this point there is an excellent quote included in the book (can't remember if it is from Rummy or Rove) arguing that the US administration creates its own reality, which its critics are constantly struggling to catch up with an understand.

So personally I enjoyed the book more as a sort of scrapbook of what Soros is thinking right now, built around his concept of relexivity, rather than as anything particularly specific to the credit crisis.

3 out of 5 stars

An Insightful Analysis of Financial Markets and the Current Crisis June 27, 2008
12 out of 14 found this review helpful

This slim volume of 160 pages and small format was written and published in haste something the author readily acknowledges and attributes to his desire to release the book during the current crisis in order to make an impact. It shows: the book lacks not only bibliography but also an index and contains only footnotes, headings in charts are barely legible, there are lose statements, his prose is dyspeptic while the coined and key word in the book namely reflexivity is awkward.

On the other hand the author presents concisely significant insights on the nature of financial markets, the causes of boom and bust cycles and the causes and nature of the present crisis which he characterizes as super-bubble, the most serious since the great depression and discusses its likely consequences.

The core postulates of the author are:our understanding of the world in general and of financial markets in particular is inherently imperfect because we are part of the system we seek to understand. People with imperfect understanding interact with reality in two ways. On the one hand they seek to understand the financial markets which he calls the cognitive function. On the other, they seek to make an impact and change the situation to to their advantage which he calls the manipulative function. The interaction of the two functions which compounds the uncertainty and indeterminacy, the author calls reflexivity (uncertainty relates to the participants' thinking, indeterminacy to the course of events).

The author contents that the prevailing paradigm that financial markets are self-correcting and tend towards equilibrium is fallacious.

Financial markets under ordinary conditions seemingly are in equilibrium with small random variations. But on rare occasions because of misconceptions which initially are self-reinforcing financial markets lead to boom but ultimately they are self-defeating and lead to bust.

The present crisis, the author characterizes as super-bubble and the worst since the great depression. And this because it does not relate to a specific sector of the Economy i.e the subprime mortgages but permeates the whole Economy.

The current crisis which the author believes that it has evolved over the last 25 years attributes to the following factors:the long-term and ever increasing credit expansion, globalisation, the accelerating pace of financial innovations and the progressive removal of financial regulations.

Finally the author contents that the present crisis marks the end of a long period of relative stability based on the United States as the dominant power and the dollar as the main international reserve currency. He foresees a long period of political and financial instability hopefully followed by the emergence of a new world order.

4 out of 5 stars

Intellectually engaging June 19, 2008
18 out of 20 found this review helpful

Not sure what the previous reviewer was looking for.
George Soros brings an interesting and quite realistic perspective to how financial markets work and why the current financial downturn has come about. His writing style does not lend itself to light reading and can be heavy going at times. And reading this book requires a degree of inmersion into elements of philosophy as well as financial markets. This does not in itself disqualify the subject matter in it. Soros offers an interesting and timely analysis which I have found worth understanding.

1 out of 5 stars

Waste of money and time June 16, 2008
3 out of 39 found this review helpful

Nothing of interest in this book. Just old boring stuff and platitudes.
A waste of money and time.