TOWARD RATIONAL EXUBERANCE: The Evolution of the Modern Stock Market
While at first glance this seems a well-written but familiar history of the United States stock market, between the colorful characters and scandals Smith deftly details the practical and historical workings of the stock market from 1901—when it was "a primitive insider's game"—to the present downturn. Carefully charting how early market practices led to wider economic and political events, he demonstrates how public reaction reshaped the market over the decades. For example, a depression-era debacle, wherein Wall Street denizen Richard Whitney borrowed $27 million then declared bankruptcy, engendered the longstanding "New Deal regulatory regime." Fluid, lively prose reminiscent of John Kenneth Galbraith and Burton Malkiel renders this serious endeavor painless to read. Unlike popular histories that jump from the Crash of 1929 to the 1980s in a few pages, this measured narrative examines changes in quiet and dramatic decades alike. Also rare is the book's balanced treatment of the evolution of academic theory and professional practice. Even people in the know will learn much from Smith's simple and elegant presentation. Likewise, those who wish to learn more about the stock market will find it accessible and enjoyable. The book's sole flaw is its single perspective on controversial theories and events. While probably necessary to cover so many years in so few pages, the book lacks depth as a result. Still, it holds important insights for experts and remains a useful introduction for novices. (May)
Forecast:A welcome antidote to shrill predictions of looming prosperity or disaster, this is one of the best general works on a topic of broadening interest. If it receives the favorable review attention it deserves, it could rise to the status of a classic within a few years.
Release date: 05/01/2001