Book Review: The Cash Nexus by Niall Ferguson

This time I am only going to talk about Chap 10 where Ferguson
reviews the current and past bubbles of the stock market.

These bubbles seem to have some common features, such as
1. new means of production, either internal combustion engine,
electricityor the internet/computer

2. flow of money from new investers, serving as the cannon
fodder of the existing investors who benefit.

3. flow of money supply from the debt (bond) market to the
stock market

4. flow of money supply from foreign sources

5. loose credit from the central banking authority

These symptoms appears again and again. The book was written
around sep 2000, at that time the Dow Jones index is around
10,000, in sep 02,it dipped to around 7500, but now it revert
back to around 10,5000 fueled by the growing defense demand
and recovering global economy.

It is interesting that the book talked about famous people
investing in the stock market. Newton lost big time and Marx
made a killing, bragging it to his confident, Engels. But the
description of the South Sea and Law bubble seem to be mundane
and not very exciting or maybe I just heard too much about it.
A financial history of bubbles and bust should be more lively
in an educational fashion.