Contagion: The Financial Epidemic That is Sweeping the Global Economy... and How to Protect Yourself from It

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Tough times are ahead and Talbott argues that the coming recession will be on a global scale, affecting economies across the world. We have had no real growth in GDP for the last ten years if purchases with government and personal debt are excluded. In effect, government borrowing and spending on the war and healthcare and Social Security and corporate give-aways combined with dramatic increases in personal spending funded by credit card and mortgage debt have funded unsustainable levels of personal and government consumption. The world's banks are threatened with insolvency due to bad mortgage loans and will not be making new loans for any purposes for a very long time. Consumption, by definition, has to decline. Our financial markets worldwide are in chaos with the inability of any financial house or big hedge fund going bankrupt without pulling down the whole $400 trillion derivatives market and the global financial markets at the same time. With this as a backdrop, Talbott offers practical suggestions as to how homeowners and investors can best weather the coming storm with specific advice on where to invest by type of investment and geographic location. Stocks, bonds, TIPS, commodities, real estate, housing and currencies will all be examined.

Customer Reviews:

  • John Talbott connects the dots to our global dilemma.
    Contagion: The Financial Epidemic That is Sweeping the Global Economy... and How to Protect Yourself from It This is a must read that supplies a very astute perspective on what's happening, why it is happening, how to prevent its repetition, and how to maintain equilbrium during these testing times. The author pulls no punches whilst at the same time preserving his common touch - laced with a thread of humor throughout. This book is readable - something you cannot put down because you know he is answering the mail - now - directly - and he points the way forward. ...more info
  • Gutsy interpretation of the current "Den of Whores" behind our economic collapse
    Talbott cannot be bought! He is civic minded financial genius offering a solid analysis without the sugar.

    He argues that this economic meltdown was completely predictable and Talbott has been documenting that since 2003 in his first book the Coming Crash. Given his track record of predictions, he is turning into a jazzed up version of Nostradamus!

    He suggests that the downturn began with housing but it will spread to virtually all markets local, national and global. Coincidentally, FNMA, FREDDIE MAC, and the National Association of Realtors paid the most in political contributions.

    In his Clarion Call Chapter (my favorite) he offers the following solutions:

    1.Restore a functional system of government where contracts matter and cannot be renegotiated.
    2.Become actively engaged in preventing politicians from being on big corporations payroll
    3.Return to the times when our signature had consequences.

    As he clearly demonstrates material development without ethical development has serious side effects. The moral of the story is you might just discover that doing things that make the world more sane and harmonious will bring you exponentially more happiness than being possessed by your possessions.

    ...more info
  • Brilliantly Written/Researched, A Must-Read Book
    Contagion is a must-read book for anyone who wants to have a clear understanding of the ongoing economic and financial crisis. John Talbott's logic is direct, simple, and easy to understand, and he bears down on the fundamental cause of the current economic and financial turmoil: the downturn of housing prices in the United States. Taking technical terms and figures which are often very complicated and difficult to understand in the world of real estate and finance, Talbott makes it all easy to understand and comprehend, and his resulting conclusions on the prospects for the United States real estate market are persuasive and compelling. The directness and conciseness of his thinking is probably the reason why he has been so accurate over the past few years. As such, the concepts underlying his new book are brilliant as he narrows his thinking and pinpoints some of the most difficult problems the United States currently faces.

    Talbott concludes that the United States is in for very difficult times ahead. The real estate downturn still has a long way to go, and the ensuing future government bailouts will only further mire the country in greater amounts of debt and liabilities. A rapidly aging society, with the first baby boomers now reaching retirement age, will make the next few years, if not decades, the most challenging ever faced by the United States.

    Talbott's book focuses on some of the key and most pressing problems currently facing the United States. Even if you do not agree with him, his logic and thinking will help further advance thinking and debate not only on the potential solutions to the nation's current economic and financial problems, but also on the myriad social and political challenges facing the country today.

    As such, this book is a must-read and highly recommended for anyone who has an interest in the future direction of the United States....more info
  • I'd like to think Talbott's wrong, but my gut tells me he's uncomfortably close to the truth...
    So how did we get ourselves into this economic mess? Beyond the knee-jerk "it's the bankers fault", what really drove our system to the edge that we now balance on? John R. Talbott does a very good job in laying out the cause and effect in his book Contagion: The Financial Epidemic That is Sweeping the Global Economy... and How to Protect Yourself from It. It's tempting to want to believe that it will all work itself out as it always does, but after reading Talbott, it's hard to maintain much optimism over how this will all end up.

    Bamboozled, What Didn't Cause the U.S. Housing Boom and Bust; What Did Cause the U.S. Housing Boom and Bust; The Contagion Spreads from Subprime to Prime; How Low Will Hosing Prices Go in the U.S.?; The U.S. Economy Was Not in Great Shape to Begin With; The United States Enters a Long Recession; The Global Economy Catches the Contagion; Too Big to Fail - The $400 Trillion Derivatives Market; Local Governments Feel the Pinch; From Wall Street to Main Street; Demographics Magnify Contagion; Which Investments and Which Countries Will Weather the Storm the Best?; Stop the Bleeding; No Future without Reform; A Warning Shot Across the Bow; References; About the Author; Index

    I've heard most of the arguments that Talbott lays out in Contagion, but not all in one cohesive package, understandable to the general public. He starts out with the housing bubble, where prices appreciated far beyond what typical supply and demand would expect. As all parties became less "responsible" for their actions, the rules became less and less stringent. Banks were able to package their loans to third-parties who assumed the mortgages were AAA grade. Since borrowers had less at stake in the house, there were fewer ramifications if one wanted to "walk away" from the mortgage. In effect, they were playing with house money. Prices go up, you win. Prices go down, you leave it on the table. When loans started to go bad, the cascade effect started. Throw in the incredibly high level of risk that credit default swaps (CDS) carried, and the house of cards came crashing down. Meanwhile, we have a government bailing out the very people and industries that caused the problem, under the explanation that these institutions were too large to fail. Again, investors ended up with no liability for their risk-taking behavior and greed, and the taxpayer (and future generations) are left to pay the price down the road. Obviously, there are a number of other factors that play into everything going bad, and Talbott makes a convincing case as to why it happened, as well as the outcome. Basically, there's no solution that won't cause a large amount of pain. It's a matter of whether we own up to our failures and start to make things right, or do we instead pass it along and let others figure it out later (because I got my piece before it went bad).

    In terms of how best to weather the storm, he recommends cash, TIPS, gold, and investments in China (if you feel compelled to have money in equities). Whether you agree or not is obviously up to you, but he makes strong points as to why you should avoid certain stock market sectors, as well as most municipal bond offerings. I think the effect on local governments was the most eye-opening part of the book for me. When you consider that government budgets are being slashed, workers are being laid off (less taxable income), and property is losing 30% to 50% of its value (less property tax revenue), there's little hope that government spending will be a safe bet for many years to come.

    Well worth reading, even if you don't think you agree with the premise. There's less information on "protecting yourself" from the effects, but it may just be that there are no good answers. I would like to believe Talbott is wrong, but his math works better than the government's math does...
    ...more info
  • Riveting, Could Not Put It Down
    I am pretty well versed in current events and the real estate industry. This book actually put together all the aspects of what is creating this meltdown. Politics, deregulation, conflicts of interest, laws, consumer psychology, ... It's all wrapped up and a must-read. I read it in one day. Frankly, I had to put it down a couple times and walk away because I was so upset. The truth hurts. But, as a voter, investor, and consumer, I was really angry in many ways. Everyone that cares about their own future and the future of this country - must read this book. ...more info
  • Changed My Life
    The book Contagion has changed my life and views of the coming deep recession or light depression. A definitely must read!...more info
  • incredibly interesting
    this book is incredibly interesting and a great education for the lay person that is not an economist or finance person. the crisis we are in now will go down in the history books and Contagion gives you a better understanding of where we are, how we got here and what the outcome might be......more info


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