Praise for Panic, Redleaf and Vigilante

“’Sometime in the next 12 to 18 months, there is going to be a panic in credit markets,’ Andy Redleaf, a 50-year-old hedge fund manager, wrote to investors in December [2006]. ‘The driver in the credit market panic of 2007 or 2008 will be a sudden…loss of faith in the alchemy of [mortgage] finance as it is currently practiced'….Whitebox Advisors, Mr. Redleaf’s family of hedge funds, was not the only one to bet against subprime. But it did so with searing and amusing insight, a trademark of the founder and the firm.” – from "A Hedge Fund That Saw What Was Coming" in the New York Times

“Has the makings of a classic.” – Robert Shiller, Arthur M. Okun Professor of Economics, Yale University, and author of Irrational Exuberance

“The number of true contrarians is very small, and Andy is absolutely one of them.” – Michael Harron, managing partner for TMF Capital Management

“Panic vividly traces the causes of our current economic woes. The authors take you on a tour of pinhead intellectuals, politically protected bankers, and calamitous government policymakers. Panic is vital to understanding how we got here, and how we might get out.” – Gil Weinreich, editor, Research Magazine

Understanding the crash

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Your banker still believes . . .

The Ideas That Made the Market Crash

The Crash of ’08 was not caused by reckless bankers or sleepy regulators.

It was caused by bankers, regulators, and money managers doing exactly what they had been taught to do in business school.

And they are still doing it. With your money.

Andrew Redleaf, founder and CEO of a multibillion-dollar hedge fund and credited by the New York Times with predicting the crisis in surprising detail, and Richard Vigilante, reveal the Crash of 2008 as the “predictable outcome of an ideology that has dominated the American financial establishment for upwards of forty years.”

This “ideology of modern finance” replaced the capitalist’s appreciation for free markets as a context for human creativity with the worship of efficient markets as substitutes for that creativity. The capitalist understands free markets as an arena for the contending judgments of free men. The ideologues of modern finance dreamed of efficient markets as a replacement for that judgment and almost a replacement for the men.

Under the influence of contemporary financial theory, bankers and regulators abandoned basic tools of financial analysis and judgment for elaborate, statistically based insurance schemes and a blind faith in the efficiency of modern securities markets.

The result: it became impossible for either executives or regulators to fully understand the financial condition of any great modern bank. Believing that financial systems could transcend the need for human judgment the bankers and regulators combined to create financial institutions with balance sheets no one could judge.

Redleaf and Vigilante guide the reader through the history of the crash with wisdom and wit, presenting a refreshingly commonsense approach to understanding how markets actually work. Panic makes sense of a nonsensical moment in market history and reveals why booms and busts have become so common in recent decades, and what we can do about it.

In book stores this March, but order here now.

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About the authors

Andrew Redleaf is the founder and CEO of Whitebox Advisors. Celebrated by the New York Times and others for predicting the mortgage crisis long before the event, Redleaf’s monthly client letter is avidly read and quoted not only on “the Street” but in the financial press.

Richard Vigilante is the communications director of Whitebox Advisors and also the publisher of Richard Vigilante Books. He has served as editorial director of Regnery Publishing and as an editor of National Review.