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ORIGINS OF THE CRASH: The Great Bubble and Its Undoing

Roger Lowenstein, Author
Roger Lowenstein, Author . Penguin Press $24.95 (270p) ISBN 978-1-59420-003-8
Paperback - 288 pages - 978-0-14-303467-4
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Well-known financial journalist Lowenstein (Buffett ; When Genius Failed ) sets out to explain the stock market crash of 2000 and the ensuing corporate scandals. The ingredients are familiar: executive overcompensation and stock options, irrationally exuberant shareholders, friendly auditors, short-term focus by financial professionals and overemphasis on shareholder value. The author puts his unique stamp on these factors by juxtaposing them so brilliantly that the 20-year history that inflated the bubble seems not just understandable, but inevitable. The story is traced from the doldrums of the 1970s through the raiders and junk bonds of the 1980s to the financial brave new world of the 1990s. In self-conscious parallel to John Kenneth Galbraith's The Great Crash , Lowenstein explains that it is the boom that needs to be explained; the crash is simply the natural consequence. Lowenstein's low-key ease with the most complex financial reporting makes this book both accurate and easy to read, just as his earlier Buffett revealed a fascinating character where other writers saw only dullness, and his Where Genius Failed was a very comprehensible account of the 1998 Long-Term Capital Management blowup. (Jan.)

Forecast: The author has two bestsellers to his credit on topics of much narrower interest. Unless the stock market jumps 20% before publication, this could be the top financial book of 2004.

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