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Book Review - The Fearful Rise of Markets: A Short View of Global Bubbles and Synchronised Meltdowns

Thursday 10 June 2010 - by Ben Collins

Published by Financial Times/Prentice Hall in May 2010

In the current debate over the financial crisis and future reforms to the global financial markets, two of the most important questions to consider are how this crisis came about and what can be done to regulate the financial markets to prevent a recurrence of the events of 2008.

John Authers’ new book, The Fearful Rise of Markets: A Short View of Global Bubbles and Synchronised Meltdowns, offers cogent and considered answers to both of these important questions.

John Authers is currently the global editor of the Financial Times’ Lex column and was previously the investment editor and principal commentator on markets and investments for the paper.

Authers therefore brings a wealth of experience and insight into this guide of how the global financial markets work and how they became so synchronised. He explores the underlying causes of the current financial crisis, examining crucial factors such as herd behaviour, the formation and deflation of bubbles, the increased correlation of different financial markets, the financialisation of key asset classes, and the failure of academic theory and government policy to address endemic problems in the financial sector.



He offers the reader an accessible and comprehensive picture of how financial markets evolved over the past 50 years and how risk built up over time within these markets. He includes detailed analysis and comment on subjects such as the rise of emerging markets and the role of governments in the financial markets and proposes sensible and realistic solutions for the avoidance of future financial collapses.

This book is a must read for investors and for anyone who is interested in the causes of the financial crisis and in how future crises can be avoided. Authers has delivered a highly readable and informative work which goes a long way to explaining the institutionalisation of investment and how the rise and spread of financial markets over the past century have inflated and synchronised bubbles and led to many of the trends which caused the current financial crisis.


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