Panic: The Story of Modern Financial Insanity
Ed by Michael Lewis
Penguin Books, Rs 250
A timely tale of financial follies

Timing is everything in finance. As that legendary investor Kenny Rogers once said, you have to know when to hold ’em, and know when to fold ’em. And, these days, you also have to know when to walk away — and, when criminal prosecutions are being discussed — know when to run. Michael Lewis stopped being a starry-eyed finance-type many years ago, but he still has excellent timing. Panic, the new volume of pieces discussing financial crises that he has edited, comes out just in time, when people are struggling to understand: if Wall Street is so wrong about so much, how come nobody noticed it before?

Lewis has been good with timing before. Shortly after a stock-market crash in 1987, he wrote the definitive trader’s eye view of it. “Liar’s Poker” is one of the many texts that is extracted or reprinted in full in Panic: in its description of the slow spreading shock on the Salomon Brothers trading floor as the stock market “fell, paused, then fell some more”, it remains a peerless testament of its time.

And not just of that time, Lewis hopes, but of ours. The idea behind this collection is that previous crashes — the 1987 crash, in which Wall Street suffered the largest single-day percentage fall of its history; the 1997 Southeast Asian crisis, which then spread to Russia and other emerging economies; and the burst of the dotcom bubble in March 2000, which some on these shores still remember with a wince — have something to tell us about the troubled times in which we find ourselves, if only that we’re incapable of learning. Lewis is not an unbiased observer — as he will happily admit, “he is a historian of financial folly” — but he has tried to be fair in this selection.

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