Offers massive evidence that today's stock market is overvalued and is subjecting investors to the highest financial risk in history. Shows that extreme values of q preceded every major market top of the 20th century, and tells how to prepare investment portfolios against catastrophic losses, as well as how to track q to determine when to get back into the stock market. Smithers is founder of a company that provides asset allocation advice to fund management companies, and he is also a newspaper columnist. Wright spent several years with the Bank of England and now teaches and conducts research at Cambridge University. Annotation c. Book News, Inc., Portland, OR (booknews.com)

Valuing Wall Street: Protecting Wealth in Turbulent Markets

Business & Money

Smithers, Andrew

Wright, Stephen

Economics

McGraw=Hill

"A splendid book . . . could easily be the best investment they'll [investors] make this year."Barron's

Valuing Wall Street : Protecting Wealth in Turbulent Markets

The current consensus economic model, the neoclassical synthesis, depends on aprioristic assumptions that are shown to be invalid when tested against the data and fails to include finance. Economic policy based on this consensus has led to the financial crisis of 2008, the 'Great Recession' that followed, and the slow subsequent rate of growth. In The Economics of the Stock Market, Andrew Smithers proposes a model that is robust when tested, and by including the impact of the stock market on the economy, overcomes both these defects. The faults of the current consensus model are shown to result typically from an unscientific methodology in which assumptions are held to be valid despite their incompatibility with data evidence. Smithers demonstrates examples of these faults: the Miller/Modigliani Theorem (the assumption that leverage does not affect the value of produced capital assets); the assumption that short-term and long-term interest rates, and the cost of equity capital, 
are co-determined; and the assumption that the decisions of corporate managements aim to maximise the present value of corporate assets ('profit maximisation') rather than the value determined by the stock market. The Economics of the Stock Market proposes a model that includes and explains the stationarity of real returns on equity, based on the interaction of the differing utility preferences of the managers of companies and the owners of financial capital. These claims are highly controversial, and Smithers proposes that the relative merits of the neoclassical synthesis and this proposed alternative can only be properly considered through public debate.

The Economics of the Stock Market

Oxford University Press

Living standards in the UK and US are in danger of falling. A decline in growth due to poor productivity and an unfavourable change in demography has weakened the stand of liberal democracy, and voter dissatisfaction is encouraging populist policies that threaten even worse outcomes. Whilst living standards once grew faster than productivity they now grow more slowly, and the working population is no longer growing faster than the population as a whole. To avoid falling living standards the productivity problem must be addressed. Andrew Smithers argues that faster productivity does not depend, as many suggest, on technology; it also relies on investment. Current growth theory is based on a faulty model which has induced pessimism about our ability to encourage more growth. Productivity and the Bonus Culture sets out a revised model which demonstrates that weakness in productivity is the result of the bonus culture, and suggests ways to change this flawed system so that investment is encouraged and growth returns.

Productivity and the Bonus Culture

In 2000 one of the world’s foremost economists, Andrew Smithers, showed that the US stock market was widely over-priced at its peak and correctly advised investors to sell. He also argued that central bankers should adjust their policies not only in light of expected inflation but also if stock prices reach excessive levels. At the time, few economists agreed with him, today it is hard to find those who would disagree. 
In the past central bankers have denied that markets can be valued and that it did not matter if they fell. These two intellectual mistakes are the fundamentals cause of the current financial market crisis. In addition, a lack of understanding by investors as to how to value the market has also resulted in widespread losses. It is clearly of great importance to everyone that neither these losses nor the current financial chaos should be repeated and thus that the principle of asset valuation should be widely understood. In this timely and thought-provoking sequel to the hugely successful Valuing Wall Street Andrew Smithers puts forward a coherent and testable economic theory in order to influence investors, pension consultants and central bankers policy decisions so that thy may prevent history repeating itself. Backed by theory and substantial evidence Andrew shows that assets can be valued, as financial markets are neither perfectly efficient nor absurd casinos.

Wall Street Revalued: Imperfect Markets and Inept Central Bankers

Finance

wiley

Renowned economist Andrew Smithers offers prescriptive advice and economic theory on avoiding the next financial crisis In The Road to Recovery, Andrew Smithers―one of a handful of respected economists to have accurately predicted the most recent global financial crisis―argues that the neoclassical consensus governing global economic decision-making must be revised in order to avoid the next financial collapse. He argues that the current low interest rates and budget deficits have prevented the recession becoming a depression but that those policies cannot be continuously repeated and a new consensus for action must be found. He offers practical guidance on reducing government, household, and business debt; changing the economic incentives for the management class that currently inhibit long-term growth; and rebalancing national economies both internally and externally. Further, he explains how central bankers must broaden the economic theories that guide their decisions to include the major factors of debt and asset prices. <ul>
<li>Offers practical, real-world economic policies for restructuring and rebalancing the global economic system</li> <li>Presents a modern economic theory for preventing the next collapse</li> <li>Ideal for economists, investors, fund managers, and central bankers</li> <li>Written by an economist described by the legendary Barton Biggs as "one of the five best, most dispassionate, erudite analysts in the world"</li> </ul>
As the global economy continues the long climb out of recession, it's imperative that central bankers and other economic decision-makers not repeat the mistakes of the past. The Road to Recovery offers prescriptive guidance on redesigning an economic system that is healthy, stable, and beneficial to all.

The Road to Recovery: How and Why Economic Policy Must Change

John Wiley&Sons, Inc.

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