Slapped by the Invisible Hand

At the heart of the current panic is the "shadow banking system," the nexus of financial markets and instruments unknown to most people. It is a real banking system, providing a way for institutional investors and firms to deposit money. But it was vulnerable to a banking panic. This system, which insider Gary Gorton attempts to unfurl in Slapped by the Invisible Hand, lies at the heart of today's financial crisis. Building upon his highly-acclaimed paper for the the Federal Reserve Bank of Kansas City's August 2008 Jackson Hole Conference, Gorton presents new research and the information relevant to understanding the complexity of exactly what went wrong in the financial sphere.