Bloomberg Reviews When Giants Fall

Bloomberg's James "Jim" Pressley has reviewed my new book, When Giants Fall.

Although his assessment, entitled "Trader Panzner Foresees Wealth Destruction, Rising Crime, Guns," is reasonably fair as far as it goes, it reminds me of the reaction I got when Financial Armageddon was first published at the peak off euphoria in March 2007.

Back then, most people -- including the highly-paid experts on Wall Street -- dismissed the notion that the world was on the cusp of the worst financial crisis this century and a devastating global economic meltdown.

Still, I suppose the optimists could be correct this time, right?

Abandon hope, all ye who open this book. Michael J. Panzner, author of “Financial Armageddon,” is back with a new jeremiad on our cracked and out-of-joint times.

His outlook is grim. We stand on the cusp of what hedge- fund manager Barton Biggs would call “an episode of great wealth destruction,” Panzner writes in “When Giants Fall: An Economic Roadmap for the End of the American Era.” Things are already bad for Americans and they are going to get worse.

Working hours will rise and pay will fall, forcing many people to take two or even three jobs, he asserts. We’ll be traveling on foot -- or by bicycle or boat. More and more of us will live in extended-family households, three generations under one roof. We’ll recycle rainwater, draw heat from the sun and eat food grown in our own gardens.

Tax revenue will slump, unraveling safety nets like Social Security and Medicare. Hospitals will shut. Police budgets will be slashed, crime will surge, more people will pack guns. The dollar and modern payment mechanisms may give way to “barter arrangements, alternative financial instruments and collective support networks,” he says.

“Like the other great spasms in our history, the one that now seems to be unfolding is unlikely to be narrow in scope, shallow in depth, or short-lived in duration,” he writes.

And so this book goes, with page after dystopian page outlining the decline of the U.S. and the splintering of the planet into brutish nation states fighting over dwindling stores of commodities, energy and water.

Bleak Collage

Panzner, a veteran trader who has worked for banks including HSBC Holdings Plc and JPMorgan Chase & Co., has read widely. The text bristles with references to historians such as Paul Kennedy and Niall Ferguson. He quotes Chalmers Johnson here, Richard Haass there. Pat Buchanan and Naomi Klein pop up in between.

The result is a bleak collage of quotations describing a U.S. adrift in a dangerous world: Americans have overspent, lost their prestige and gone soft. Oil production may be peaking, poor populations are exploding, and the planet is being befouled. China’s foreign reserves have surged to $1.95 trillion.

Sound familiar? It should.

The spectrum of books on America’s shifting place in the world is now wide. At the bright end of the scale, Fareed Zakaria’s “The Post-American World” stresses “the rise of the rest,” not the decline of the U.S. George Friedman’s new book, “The Next 100 Years,” goes further. Far from fading, he says, the U.S. has “just begun its ascent.”

Sensible Primers

Toward the middle of the doom-and-gloom gradation, we have sensible primers such as Charles R. Morris’s “The Trillion Dollar Meltdown”; Robert J. Shiller’s “The Subprime Solution”; and Mohamed El-Erian’s “When Markets Collide.”

And then there are books like Panzner’s. They argue that we’re plunging into a new Dark Age.

Now, I’m not one to ignore a wake-up call. I listened when Shiller began measuring the girth of the U.S. housing bubble. I paid heed when Morris predicted the bust would result in at least $1 trillion in bank write downs.

What disturbs me about Panzner is his hectoring tone and the depth of his gloom. Even the Statue of Liberty is upside down on the cover, an image sure to make Osama bin Laden smirk.

Click here to read the rest.

Comments

[Demetrius]

In my lifetime I have had one Dictator refer to the Mediterranean as The Italian Lake, and another founding a Thousand Year Reich, and was born into the British Empire. When my father and mother were born there was the Imperial Russian Empire, The Austro-Hungarian Empire (aka Holy Roman Empire), the Ottoman Empire, Imperial Germany and Imperial China. Who says Empires can't fall? One way is serious over stretch, another is too many wars, yet another is the economic basis disintegrating with these and other factors perhaps operating in combination.

[Marion Shaw]

Demetrius has made some interesting historical points.
There is another I would like to add: Take the case
of South Korea which was decimated by the Korean War
shortly after liberation from Japan which bled the
country dry for 40 years. South Korea began to climb
from the economic abyss with capital that flowed in
from her participation in the Vietnam War. She climbed
fast and furiously to one of the wealthiest nations in
the world. She nearly went bust in 1997. I believe that
what saved her system is the little advertised fact that
her citizens stepped forward and donated millions of
dollars gleaned from personally owned gold pieces
and jewelry. This enabled the government to save the
economy in combination with other hard choices: such
as raising interest rates demanded by the IMF. What
would happen if Americans donated all of their gold
pieces and jewelry to save our economy? Would it
work and help significantly reduce the debt now
being acquired to save a system drowning in debt?

[LVGal]

You are right on the mark with your daily articles and your book. Mr. Pressley will be wailing with the rest of the unbelievers when the catastrophe hits. Obama will be a disaster. Today he visits Ottawa, and you'd think that God Himself was stopping by for a visit. All Obama has done so far is spend-spend-spend, money that the US government doesn't have. Wait till people realize they've been duped. Thank you for your warnings about how dire this situation is; unfortunately, the warnings will become reality all too soon and it will be too late for most people.

[Darkcloud]

Michael,

As a Zen master always says, "We'll see."

But if I were to predict, I concur with LVGal...and you, Sir.

Best regards and thanks. - - Darkcloud

[Phil Garringer]

I say "Bring it on!"

The West has gotten weak and decadent. A few generations of a new "Dark Ages" might straighten us out a bit.

[Leon W. Fainstadt]

Michael Panzer - Brilliant Book - This time the giant is not falling in the woods and everyone hears it. Mr. Panzer is ahead of the game. Read the book. You will be the better for it. When Giants Fall - Knowing is like insider trading.
Read both books : Financial Armageddon and When Giants Fall.

[Lee]

Dude, you have a major typo in your first sentence. "peak OFF euphoria" Didn't you mean peak OF euphoria? Normally, it wouldn't be that big a deal, but you might want to change this before the Art Bell show tonite, when there will be many viewers perusing this site.

[Susan]

Every problem has a gift in its hands. Can you imagine what this nation and planet would look like if somehow we COULD continue this orgy of lazy TV lobotomized consumption for another 100 years? It would be a cartoon of a cartoon of itself.

We need a hard kick in the a** to hopefully get people back into community, being more self reliant, rediscovering their families, books, taking walks, hard work, real food and more.

But the transition is going to be a b*tch! The most important thing is going to be trying to extend helping hands towards each other, rather than guns and knives. If Americans turn on each other in fear, hunger and anger . . . then this may well be the biggest bloodbath in human history.

I have kids. Lets try to not let that happen!

[DocG]

I completely agree that the whole system is about to collapse, totally and completely. Except, I see this as a potentially good thing -- because it could lead to a much needed revolution in the way we (and by we I mean the whole world) think and behave. As far as the oligarchs are concerned:

"The complete self-destruction of our monetary and financial systems would be a lot like the process by which cancer is usually treated through chemotherapy. The power of the oligarchs who have ruled us, both covertly and overtly, for so many years will, like the cancer cells, be destroyed. As with chemotherapy, which attacks both malignant and healthy cells alike, a great many innocent people will also be damaged in the same process. But, as with an effective cancer treatment, what is good for the organism as a whole can be nourished back to health -- but only after what is harmful has been completely eliminated. . ."
from Mole in the Ground. For more, see: http://amoleintheground.blogspot.com/2009/02/shape-of-things-to-come-part-8.html

[mike]

After studying the economies of the petro countries, namely Russia,
Iran, Venezuela and Mexico, I have come to the conclusion that the unfolding
economic collapse will foment worsening civil unrest which could lead to
a major conflict in the Middle East. These countries economies depend
in large part on oil to fund their government and social programs.
Weakened economies worldwide simply won't support higher oil prices.
With the collapse of energy prices and consuming nations going bankrupt,
major geopolitical instabilty, including war, seems quite likely. Indeed
the new director of national intelligence told Congress last week that
"global economic turmoil and the instability it could ignite"
had outpaced terrorism as the most urgent threat facing the United States.
Possible scenarios include Israel attacking Iran's uranium enrichment
sites when covert action prove insufficient or Pakistan's nukes falling
into the hands of fanatical terrorists. Just recently the Pakistan
government essentially gave up control by concededing to Taliban demands
for Sharia law to be enforced in Swat Valley after months of fighting
in which 12,000 Pakistan army troops were unable to subdue 3,000 Taliban
militants in that area. Looking to our southern neighbor Mexico, we see
a narco state on the verge of collapse. Last week it was reported that
Phoenix, AZ is now the kidnapping capital of America and the #2 city in
the world. 40% of Mexico's government budget, including funds to combat
their drug cartels, is from oil revenue. 92% of Venezuela's export
revenues are from oil. Russia has burned through nearly a third of its
$650 billion in foreign assets defending the ruble over the past couple
of months.
What will be the spark?

[Mike Cane]

I haven't read the book yet, so excuse me for being dense and nonetheless asking a question about it.

Too much of the punditry I've been seeing -- and it was in at least one comment above -- takes a sort of sick glee in the vision of the US becoming a long-term basket case. That somehow the brutality we are destined to face (because Obama's FAIL Force is just more the same Box) will be ennobling and we'll learn our lesson and so holds hands, have community square dances every Friday night and barn raisings on Saturday afternoons.

I can't think of a single *sane* person who does not want to live in the 21st century with the modern conveniences -- and health care/scientific expertise -- that we enjoy.

Do you really think the Man in the Street will put with that? I'll tell you right now: I won't.

Is that the kind of future your book portrays?

[H Spencer]

I read your book twice. Anyone can write doom and gloom, but you used common sense and carefully chosen cautions. It is no suprize that these things are comming on us on a daily basis. You write of ways we should have always have been living and write of things that have always been comming. We just shifted into high gear now with the McMansion sprees. That brought it on at light speed. You are correct in your book---VERY CORRECT. Granite countertops and stainless steel destroyed America. (also Hummers)!!

[dave]

Two thing SELL: SEX & FEAR! What is this guy's QUALIFICATIONS? If all this is TRUE, why waste what's left of your life selling books for worthless (soon to be worthless?) money? Seems like a great example of hypocrisy to me! It's the END OF THE WORLD! So stop wasting your time/money on this useless twaddle and GO GET LAID!!! The world was gonna end 1/1/2001... remember???

[dave]

"Apocalypse", "Armageddon", "end of days", blah... blah... blah! With words like these in your title: You are GUARANTEED sales to "I wanna get outta here and go see Jesus" Christians! Look at the LeHay "Left Behind" series of books! He made a fortune and sent his 9 offspring to college on sci-fi books! SEX SELLS, so does FEAR! This kinda Christianity is BAD for ya! Ciao