Understanding the Financial Crisis

Confused by the bailout? Not sure at whom to aim your righteous indignation? (Or if you should even be indignant?) Wondering how "securitization" may have led to less financial security? The books in this list introduce the basics of modern capital markets and provide historical and theoretical perspectives on finance and financial crises.

The Origin of Financial Crises: Central Banks, Credit Bubbles, and the Efficient Market Fallacy

The Origin of Financial Crises: Central Banks, Credit Bubbles, and the Efficient Market Fallacy

by George Cooper

The Economist says it's a "must-read on the origins of the crisis." You'll say: it's a finance guy with a sense of humor! George Cooper in The Origin of Financial Crises gives a clear overview — and strong critique — of central banking policy (in plainer terms: what the Federal Reserve did and should do). He also explains some reasons why perfectly rational actors can encourage a credit bubble.

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The Essays of Warren Buffett: Lessons for Corporate America, Second Edition

The Essays of Warren Buffett: Lessons for Corporate America, Second Edition

by Warren E. Buffett, edited by Lawrence A. Cunningham

Here's a new edition of Warren Buffett's classic collection of essays on corporate governance and financial markets. The essays are quite accessible — and, more important, they address topics Cooper doesn't dwell on, including credit default swaps and other "derivatives" (you know, the things that Buffett famously referred to as "weapons of financial mass destruction").

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Standard and Poor's Guide to Money and Investing

Standard and Poor's Guide to Money and Investing

by Kenneth Morris, Virginia Morris

If either of the above feels a little over your head, you might pick up this handy reference. It includes easy-to-read and clearly illustrated (yet surprisingly sophisticated) overviews of modern capital markets. Heck, it might even get you some investment insight. You know, for when you have money to invest again.

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Manias, Panics, and Crashes: A History of Financial Crises

Manias, Panics, and Crashes: A History of Financial Crises

by Robert Solow, Robert Aliber, Charles P. Kindleberger

Get some perspective! Crises and recessions and depressions have befallen humanity before. And we survived. This authoritative historical work even comes recommended by the New York Times' business editor.

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The Return of Depression Economics and the Crisis of 2008

The Return of Depression Economics and the Crisis of 2008

by Paul Krugman

Paul Krugman, Nobel Prize in Economics winner and New York Times columnist, is a popular economist who probably isn't overrated. This recent update to his 1999 book is easy to read and includes some important conceptual insights. Krugman also offers some theories on human behavior as an economic force ("behavioral economics"), something Cooper avoids.

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Barbarians at the Gate: The Fall of RJR Nabisco

Barbarians at the Gate: The Fall of RJR Nabisco

by John Helyar, Bryan Burrough

Maybe there really is nothing new under the sun. (Re-)read the classic 1980s story of the leveraged buyout of RJR Nabisco and you might find yourself wondering if the "go-go 80s" ever really ended. Replace "leveraged buyout firm" with "private equity" and "junk bond" with "asset-backed securities" and you might just think you're reading about the much more recent past. (In fact, many of the same players are still important movers-and-shakers today.) The biggest difference: this time around, there are far more zeros in the dollar figures.

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When Genius Failed: The Rise and Fall of Long-Term Capital Management

When Genius Failed: The Rise and Fall of Long-Term Capital Management

by Roger Lowenstein

In the same vein, you might remember when the major hedge fund Long-Term Capital Management failed a few years ago and received a government-orchestrated bailout. This well-written book sheds light on how, even with our brilliant quantitative models and lightning-fast information gathering abilities, we still can go very wrong.

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House of Cards: A Tale of Hubris and Wretched Excess on Wall Street

House of Cards: A Tale of Hubris and Wretched Excess on Wall Street

by William D. Cohan

The Bear Stearns collapse, for many, was the first clarion call that something was greatly amiss. Try this book, the first major journalistic history of the present crisis. (You can read a free excerpt here.)

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Conde Nast Portfolio

Now that you're up to speed, stay that way with subscriptions to Conde Nast's glossy Portfolio magazine...

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The Economist

The Economist

...and influential British stalwart The Economist.

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The Grapes of Wrath

The Grapes of Wrath

by John Steinbeck

Finally, don't forget that economic and social discontent can also inspire literary greatness. Curl up with this classic, about (and written during) the Great Depression.

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