After putting the kids to bed Patty and I sat in the living room and read. I can't think of the last time we both did that. I finished up Manias, Panics, and Crashes: A History of Financial Crises by Charles Kindleberger. This book wasn't nearly as good as I hoped it would be. It really focused on the idea of the need for a "Lender of Last Resort" in financial crises.
Kindleberger clearly knows his stuff, but this book is written almost as a book by an economist for economists. It expects that you have a clear understanding of events like Tulipomania, the British Government debt crisis of 1763 in Amsterdam, the South Sea Company bubble, Banque Royale, etc. While I am familiar with some of these things I found myself often confused as I read this book.
It is also interesting to read this book post-2008, as the US government, IMF and central banks all around the world worked to stop last year's financial meltdown from becoming a full-on worldwide economic collapse leading to a long depression. I'd venture that most of the economists who were making those decisions have read this book.
As a lay person though, this is a difficult read. I started it on Sunday and wasn't able to finish it, which is unusual for me right now.
After this I read A Short History of Financial Euphoria. I've read this book before, but I found myself wanting to read it again after reading Manias, Panics and Crashes. This book is an excellent introduction to why this stuff happens in the first place. I really like this book, it's a quick read and it gives you a good picture of how these things happen and what factors lead to their development.
What this book does so well is analyze the psychology involved as well:
"Although only a few observers have noted the vested interest in error that accompanies speculative euphoria, it is, nonetheless, an extremely plausible phenomenon. Those involved with the speculation are experiencing an increase in wealth—getting rich or being further enriched. No one wishes to believe that this is fortuitous or undeserved; all wish to think that it is the result of their own superior insight or intuition. The very increase in values thus captures the thoughts and minds of those being rewarded. Speculation buys up, in a very practical way, the intelligence of those involved."
Galbraith predicted the crash of the stock market in 1987 a few months earlier. He was widely vilified for this pronouncement. But as it turned out, he was very right. He has a good understanding of the speculative cycle and its impact on world markets. If you have any interest in why things happen the way they do, this is the book to read. Highly recommended.
As for music, we only listened to one CD: Yes No by a Japanese group called "The Square" at the time, and now known as T-Square. My friend Keiichi Yano turned me on to this a long, long time ago. I still like it.