I can’t go through “Crashes and Crises: Lessons from a History of Financial Disasters” without thinking what I would do if I were involved in any of the disasters listed here. One can do nothing but cry, though tears sound so futile in face of crises like these. This may sound very naive and laughable–my question is: is any of these disasters reversible? Most of the financial transactions are on paper only, right? So it is possible that contracts can be renegotiated, money returned, lost compensated, isn’t it? For example, the two Ponzi schemes are theoretically reversible, right? If the money is not spent, it can be returned to the rightful owner, not one cent lost. Also in the case of Orange County Bankruptcy, Robert Citron was greedy and reckless, but all his manipulations are on paper only, right? Not a cent was being thrown away. Couldn’t everybody involved, every party implicated, came together to negotiate a deal to reduce the damage?
Several years ago I read about a news concerning a complaint from Malaysian government that currency traders do serious damage to the stability of the Ringgit. Smaller countries are easy targets and their financial markets could collapse because of rogue traders. I didn’t understand how and why this happened, but now these lectures try to explain the underlying stories. I don’t comprehend the whole thing, which reminds me that I probably want to read the Wikipedia page of the case of George Soros taking on Bank of England.