I have long been a fan of Nouriel Roubini, a highly regarded economist more commonly known as “Dr. Doom”, for having predicted The Great Recession back in 2006. He has teamed up Stephen Mihm to author the new “Crisis Economics”, which I just completed.

It is not a book for the casual reader, nor the typical investor, nor the serious economist. However, it is a book for serious students of geo-economic policy.

There is a long, very readable history of what caused the last crisis. A large part of the blame was laid at the feet of Alan Greenspan for lowering interest rates too low and keeping them low for too long. Additional blame is laid at the feet of economists who believed in the “Great Moderation”, believing the inherent market efficiency from minimal laissez-faire regulation and never-ending financial innovation (think derivatives), would preclude any future crisis. They argue we are entering the “Great Instability” and are now in the eye of a financial hurricane.

Yet, the authors make the point that a financial crisis is normal, similar to Minsky’s argument that credit bubbles expand until they implode, that there is never a good outcome to bubbles. Keeping interest rates too low for too long creates bubbles.

The authors also talk about the problem of democracy, citing India as the example, being too slow and cumbersome to address structural reform on a timely basis. Who would have ever suspected democracy could be a problem?

Certainly, vigilance never sleeps, and financial advisors must keep on eye open for the next hurricane.