This inquiry into the rise and fall of the great Wall Street boom of the 1990s, from bestselling author Roger Lowenstein, has all the hallmarks of a financial classic.
Roger Lowenstein, recognized as one of the best financial reporters of our time, turns his focus to the 1990s stock market and economic boom and bust in Origins of the Crash. With his singular gift for turning complex financial events into eminently readable stories, Lowenstein lays bare the labyrinthine events of the manic 1990s-including the collapse of Enron, the dot-com bubble, the accounting scandal at Andersen, and much more.
Drawing on his sense of history, Lowenstein inquires how a financial system that arose out of the wreckage of the Depression and that was intended to avert the miscues of that era could ultimately repeat the very same scenario of massive speculation and corruption leading to collapse. He discovers the roots of the recent crisis in the financial culture that cropped up in the 1970s and 1980s as America encouraged companies to hand out ever greater packages of stock options to their executives. In an enthralling narrative, Lowenstein ties together all of the characters of the great boom and bust: Alan Greenspan, Jack Grubman, Jack Welch, Abby Cohen, Henry Blodget, and a host of dot-com pioneers. But it is the collective rendering of such figures-the unique portrayal of the culture of the era-that truly distinguishes Origins of the Crash as the book that will frame our appreciation of the period.
Just as John Kenneth Galbraith's The Great Crash was the canonical text of 1929, Lowenstein's Origins of the Crash is destined to become the definitive account of the 1990s.
Lowenstein traces the origins of the trend that fueled the great stock market boom of the 1990s, which ultimately led to the dot-com bubble, the collapse of Enron and Worldcom, and the exposure of corruption that followed in its wake. Back in the 1970s, stocks were in such disfavor that one columnist was moved to write a piece called "The Death of Equities." At that time, no one expected history to repeat itself, but the dire conditions gave rise to the largest financial boom-and-bust cycle in history. The takeovers and leveraged buyouts of the 1980s played a role in the resurgence of the stock market, but the granting of stock options to CEOs as incentive for growth played a bigger part in what was to come. Finally, corporations wishing to transfer control of pensions to individual employees through 401(k) programs pegged the performance of millions of ordinary workers' investments to the stock market and created a cult of equities on a massive scale. Lowenstein creates intriguing portraits of the players in this larger-than-life culture.
Roger Lowenstein, author of the bestselling Buffett: The Making of an American Capitalist and When Genius Failed: The Rise and Fall of Long-term Capital Management, reported for the Wall Street Journal for more than a decade and wrote the Journal's stock market column "Heard on the Street" and also its "Intrinsic Value" column. He now contributes articles and reviews to the Journal and the New York Times Magazine and is a columnist for SmartMoney Magazine.