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Crashes and Crises: Lessons from a History of Financial Disasters

Learn the lessons of history's greatest financial scams and disasters. An award-winning economist shows that forewarned is forearmed.
Crashes and Crises: Lessons from a History of Financial Disasters is rated 4.6 out of 5 by 67.
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Rated 5 out of 5 by from Solid course - lived up to it's title Economics is not my background (healthcare is my wheelhouse) which is one of the reasons I chose this course. Some of it was pretty deep but that's ok. I enjoyed his teaching style & learned things I'd never even heard of - no idea there was a financial disaster around the tulip trade centuries ago.
Date published: 2024-01-25
Rated 5 out of 5 by from Fascinating Case Histories This course really held my interest, I looked forward to each lecture, and rationed them accordingly. A great mix of financial history and Sherlock Holmes kind of analyses. I've taken some of Dr. Fullenkamp's courses and had enjoyed them and increased my financial knowledge but think this is his best course to date. I was disappointed when I finished, and will probably revisit some of these lectures down the road. I do agree that some previous financial knowledge was prerequisite to understanding. I give this course 5 stars, which I reserve for only a very few courses.
Date published: 2024-01-19
Rated 5 out of 5 by from Informative and entertaining This course is the reason I subscribed and it didn't disappoint. It was fascinating to learn about the various financial crises, both in the US and some abroad. I look forward to seeing if there are additional sessions added for 2010 forward.
Date published: 2022-04-03
Rated 5 out of 5 by from Fascinating. My wife and I thought this course was an excellent survey of financial catastrophe. Prof. Fullencamp has a gift for lucid explanations of arbitrage trading, credit default swaps, repurchase agreements (repos), collateralized debt obligations (CDOs), subprime mortgage-backed securities (MBSs), structured investment vehicles (SIVs), Chinese wealth management products (WMPs), value at risk (VaR) metrics, etc. The complexity is mind-boggling. Lecture #19 on rogue traders (Nick Leeson causing the1995 collapse of Barings Bank and Jérôme Kerviel hitting Société Générale for a massive trading loss in 2008) was of particular interest; we were SocGen stockholders at the time when Kerviel went rogue. Fullencamp’s observation that all rogue traders have backroom experience was interesting. More than half of the lectures, #12 to #24, covered financial debacles during the post-WWII years. And a sobering thought: there will be more to come. Absorbing Prof. Fullencamp’s course was time well spent. HWF & ISF, Mesa AZ.
Date published: 2021-12-18
Rated 5 out of 5 by from Learn Via Negativa! I learn better from other's mistakes than from their shining examples. This course is about WHAT YOU SHOULD NOT DO. This is probably the most important finance course on TGC because it's easy for people to lose their shirts but it's harder for them to gain money. There are stories everyday of people falling for Ponzi schemes with charismatic leaders (the worst is Bernie Madoff but he's not in this course), bubbles (tulipc, dotcom, housing Bitcoin) and financial instruments they don't understand. Dumb and smart guys or novices and experts alike have fallen into these mistakes and they lose everything. It is crucial to remember these lessons as you go on in the financial world. One note: if you are a novice and don't know what a stock or bond is, it's best to go through his "Financial Literacy" before this course.
Date published: 2021-04-19
Rated 5 out of 5 by from Interesting & well-explained survey This course is an excellent non-technical (but NOT "dumbed-down"!) introduction to dynamics of "financial fragility". It's illustrated by accurate descriptions of historically-significant financial crises, with each such event clearly explained in terms of the prevailing economic conditions & the specific market mechanics that lead to the crisis itself. Of interest to anyone interested in history viewed from an economic perspective, but perhaps especially to investors seeking a better understanding of financial market risk.
Date published: 2021-04-10
Rated 5 out of 5 by from Pathophysiology of finance Great look at the worlds bubbles, blunders and cons. This course is an excellent introduction or refresher regarding basic finance by studying what happens when things go wrong. The instructor at times uses basic equations to explain the concepts which is welcome and reinforces the course element of this series, but those who are turned off by that may find more suitable courses elsewhere. It is especially timely given the world of cryptocurrency, GameStop, electronic vehicles, and changing views of value. Those who are interested in understanding why these phenomenons occur and what it means for them would gain much by watching.
Date published: 2021-02-19
Rated 5 out of 5 by from Very Informative!!! I have completed all 24 lectures!! Dr. Fullenkamp did an excellent job of presenting the material. It is interesting to see how greed repeats itself through the generations and how regulations cannot take the place of individual honesty and fair dealing with others. I learned a lot - much to avoid - if it sounds too good to be true, avoid it unless you are willing to spend the time to vigorously investigate it. Am interested in other courses taught by Dr. Fullenkamp.
Date published: 2021-01-14
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Overview

Professor Connel Fullenkamp of Duke University guides you through four centuries of economic disasters-from tulip mania in the 1600s to the Great Recession of 2007√2009. Each of his 24 lectures covers a notable incident of financial misfortune or folly. He explains basic economic concepts and inoculates you against the gullibility, overconfidence, and herd mentality that have lured many to financial ruin.

About

Connel Fullenkamp

I love that the The Great Courses gives me a chance I wouldn't otherwise have to teach people who love to learn. I really enjoy the challenge of putting together courses that are engaging and useful!

INSTITUTION

Duke University

Connel Fullenkamp is a Professor of the Practice of Economics at Duke University. He received his PhD in Economics from Harvard University. He has won multiple teaching awards during his career, including Duke’s highest honor for undergraduate teaching. He also does consulting work for the International Monetary Fund Institute for Capacity Development, training government officials around the world. He has published more than 20 articles in academic journals, and his op-eds have appeared in Newsweek and The New York Times.

By This Professor

The Economics of Uncertainty
854
Understanding Investments
854
Financial Literacy: Finding Your Way in the Financial Markets
854
Crashes and Crises: Lessons from a History of Financial Disasters
854
Crashes and Crises: Lessons from a History of Financial Disasters

Trailer

Fintech, Crypto, and the Future of Disaster

01: Fintech, Crypto, and the Future of Disaster

Professor Fullenkamp begins the course with the enormous influence of technology on today’s investing, which brings with it a frightening potential for crashes and crises. Cover the Flash Crash of 2010—a dip in the market that was hugely amplified by programmed trading. Then, delve into the phenomenon of cryptocurrencies such as Bitcoin, which rely on an innovation called blockchain technology.

29 min
The Con Men Charles Ponzi and Ivar Kreuger

02: The Con Men Charles Ponzi and Ivar Kreuger

Investigate two of the most notorious con men who ever lived: Charles Ponzi, after whom the Ponzi scheme is named, and “Match King” Ivar Kreuger, who employed an elaborate variant of Ponzi’s swindle. Analyze the three ingredients that most Ponzi schemes share. Above all, learn to identify and be wary of investments that are too good to be true.

29 min
A Boom in Busts

03: A Boom in Busts

Contrast the freewheeling financial market of today with the staid system of the immediate post-World War II era. Were financial markets more stable in the past than they are now? How did the present system evolve? What type of market is normal: the steady and predictable kind or the chaotic and sometimes destructive one? In answering these questions, discover why we live in an era of busts.

29 min
The Tulip Bubble

04: The Tulip Bubble

The 17th-century tulip bubble is a classic case of futures trading run amok. But how much did tulip mania resemble today’s speculative markets, as opposed to ordinary gambling? Learn the truth behind this notorious financial bubble, while reflecting on the problem of deciding a fair price for an asset, such as tulip bulbs. Also, consider how bubbles start and end.

28 min
The South Sea Bubble

05: The South Sea Bubble

Relive the “Wild West” days of the British stock market in the early 18th century, when a financially-strapped government and a public craze for investing created ideal conditions for one of history’s most brazen stock manipulators. Trace John Blunt’s use of the South Sea Company—and bribery—to generate a stock-buying frenzy, making him fabulously rich—until the bubble inevitably burst.

28 min
The Mississippi Bubble

06: The Mississippi Bubble

Delve into the details of the Mississippi bubble, an early 18th-century financial crisis sparked by speculation in the anticipated wealth of French Louisiana. Learn how the bubble’s instigator, John Law, a Scottish gambler and convicted murderer, gained control of the French economy and pushed ideas that were ahead of their time—so far ahead that they plunged France into economic collapse.

27 min
Holes in the Ground: Mining Stock Frauds

07: Holes in the Ground: Mining Stock Frauds

Mining companies were the internet start-ups of the 19th and early 20th centuries, offering a chance to strike it rich—or, more likely, go broke. Focus on the swindling strategy of George Graham Rice, who earned a fortune (and several prison terms) by manipulating mining stock. Discover that Mark Twain and future president Herbert Hoover both had close brushes with shady mining ventures.

29 min
The Panic of 1907

08: The Panic of 1907

Until 1920, panics were a recurring feature of economic life in the United States. What caused them and how were they cured? Investigate the Panic of 1907 and the part played by legendary banker J. P. Morgan in stemming a threatened wave of bank failures. The gold standard was an obstacle to managing panics, and the Federal Reserve System, established in 1913, proved to be a powerful antidote.

29 min
Hyperinflation in Germany and Zimbabwe

09: Hyperinflation in Germany and Zimbabwe

Plunge into the economic nightmare of hyperinflation, learning how it happens, when it ends, and the policies that put nations at risk. The classic case of hyperinflation is post-World War I Germany, which faced a multitude of demands on a financial system already crippled by the war. Also, analyze the mistakes that sparked hyperinflation in Zimbabwe in the early 2000s.

31 min
The Crash of 1929

10: The Crash of 1929

Dissect the notorious Wall Street crash of 1929, starting with the economic conditions that led to a feverish speculative boom during the “Roaring ’20s.” Survey investment practices of the day, some of which are now outlawed. Trace the rise in stock prices into the fall of 1929, when a normal market correction seemed underway. Probe explanations for why it suddenly turned into a crash.

30 min
The Great Contraction of 1931–1933

11: The Great Contraction of 1931–1933

In a financial disaster called the Great Contraction, one-third of all banks in the United States failed between 1931 and early 1933. Examine the causes of this collapse in confidence, which also affected building and loan associations, made famous in the movie It’s a Wonderful Life. Appraise government attempts to stem the crisis, which led to legislation including the Glass-Steagall Act of 1933.

30 min
The Savings and Loan Crisis

12: The Savings and Loan Crisis

Wade into the quagmire that trapped savings and loan institutions in the 1980s and ’90s. Once a thriving, low-profit source of home mortgages, the industry fell victim to a combination of high interest rates, well-intentioned government deregulation, and a wave of predatory, unscrupulous managers. The ensuing debacle left the American taxpayer with a bill of $160 billion in 1995 dollars.

30 min
The Crash of 1987

13: The Crash of 1987

Meet a modern-day Frankenstein’s monster, a human creation on the loose— in this case, computerized trading. Discover how the rage for portfolio insurance controlled by computer algorithms, combined with a rapidly rising market and skittish investors, sparked the Black Monday crash of October 19, 1987, during which the Dow Jones index lost 23 percent of its value.

30 min
Japan’s Lost Decade

14: Japan’s Lost Decade

In the 1980s, the Japanese economy seemed unstoppable. Then, it came to a screeching halt, miring the nation in more than two decades of economic stagnation. What went wrong? Analyze Japan’s postwar brand of capitalism, focusing on how its regulatory, political, and banking systems created a “bubble economy”—until the global economy and regulatory climate abruptly changed and the bubble burst.

31 min
Bankers Trust Swaps

15: Bankers Trust Swaps

Learn the ropes for interest rate swaps, the most popular financial derivative in the world. Then, see how a complex form of swaps, brokered by Bankers Trust in the early 1990s, led to huge losses for some famous corporations and an ensuing round of bitter lawsuits. The case holds lessons for anyone investing in financial instruments that they don’t fully understand.

29 min
Asia, Greece, and Global Contagion

16: Asia, Greece, and Global Contagion

Analyze the cause of currency crises, using the 1997 collapse of the Thai baht as test case. Uncover why such events can happen suddenly with little chance for a government to stop the precipitous fall in its currency’s value, and also why the U.S. dollar is not immune. Consider the role of currency speculators, such as George Soros, who famously broke the Bank of England in 1992.

27 min
The Orange County, California, Bankruptcy

17: The Orange County, California, Bankruptcy

Discover how an elected official with a self-admitted seventh-grade proficiency in math earned fabulous returns as treasurer of Orange County, California, and then plunged the system into the largest municipal default in United States history up to that time. His strategy—and downfall—relied on two financial instruments: repurchase agreements and inverse floater bonds. Track down where he went wrong.

29 min
The Dotcom Bubble

18: The Dotcom Bubble

The rise of the internet in the 1990s spawned companies that existed only online; had never earned a profit; had no rational business plan; and, yet, generated enormous enthusiasm in their initial stock offerings. Learn why the market ignored time-tested standards and suffered the inevitable crash. Focus on the role of intangible assets in the dotcom boom and its aftermath.

29 min
Rogue Traders at SocGen and Barings

19: Rogue Traders at SocGen and Barings

Test Professor Fullenkamp’s theory that all rogue traders are the same by studying two infamous insiders: Jerome Kerviel, who cost the French bank Societe Generale more than $6 billion, and Nick Leeson, whose errant trading bankrupted Baring Brothers. Find out how trading firms are organized, and pinpoint the Achilles heel that allowed both men to go rogue.

29 min
Unhedged! Long-Term Capital Management

20: Unhedged! Long-Term Capital Management

Long-Term Capital Management was a hedge fund with everything going for it: well-heeled investors, a dream team of economists and managers, and banks willing to loan hundreds of millions of dollars with no questions asked. In 1998, it all went terribly wrong in a debacle that threatened to take down Wall Street. Spotlight the basic rules of finance that were ignored by LTCM and its banks.

27 min
The London Whale and Value at Risk

21: The London Whale and Value at Risk

Explore a risk-management tool called value at risk, or VaR. Developed by economists at J. P. Morgan in the 1990s, VaR estimates the largest loss that a given investment strategy can be expected to sustain under normal market conditions. Chart the successes of this model—and its spectacular failure in an incident involving a high-rolling trader nicknamed the “London Whale.”

29 min
The Goldilocks Economy and Three Bads

22: The Goldilocks Economy and Three Bads

In the 1990s and early 2000s, the U.S. economy was enjoying a long spell of economic growth that struck economists as just right. But that was before the “three bads” surfaced: bad monetary policy, bad private-sector behavior, and bad financial regulations. See how self-interest and overconfidence blinded investors, borrowers, and regulators to the financial crisis that exploded in 2007–2008.

29 min
Subprime Debt and the Run on Wall Street

23: Subprime Debt and the Run on Wall Street

Inspect the unprecedented run on the international financial system in 2007–2008, which led to the worst recession since the Great Depression. Learn the ins and outs of subprime mortgages, collateralized debt obligations, and structured investment vehicles, which fueled a U.S. housing-construction boom that involved most of the world’s major financial institutions.

28 min
China’s Shadow Banks

24: China’s Shadow Banks

China was largely unaffected by the 2007–2009 global economic meltdown. But that doesn’t mean it’s immune to crises. Focus on China’s shadow banking, which is the provision of banking services by non-bank institutions. The practice is not as sinister as it sounds, but it is subject to abuse. In China’s case, the widespread use of shadow banking courts trouble that could lead to financial disaster.

29 min