Showing posts with label finance. Show all posts
Showing posts with label finance. Show all posts

The Great Financial Crisis: Causes and Consequences Review

The Great Financial Crisis: Causes and Consequences
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The Great Financial Crisis: Causes and Consequences ReviewI've been teaching the financialization of the US economy for some years now. It's not been easy to find a clear, thorough and convincing analysis of the tendency of the economy to shift from industrial production to financial speculation and other forms of debt as a source of business profits. The onset of the current financial crisis makes it more urgent to have available to both students and the general public a lucid and detailed explanation of what's happening and why. In my opinion, this book fits the bill. There's nothing else quite like it.
Foster and Magdoff's book makes the economic and political issues crystal clear without undue simplification. So, for those who suffer from "economics anxiety" this book is an oasis in a desert of dry, incomprehensible and often ideologically obfuscating economicspeak. The authors discuss the financialization of what was previously an industrial economy, the explosion of debt and speculation which followed the deindustrialization of America, the household debt bubble and how all this came to a head in the present meltdown.
The book is helpfully divided into two parts, the first discussing the causes of the meltdown, and the second describing and analyzing the consequences. Key terms such as securitization and derivatives are defined, the views of major economists from Milton Friedman to J.M. Keynes and Hyman Minsky are explained and, perhaps most importantly, there is an extensive analysis of the relation between the financial and the real, i.e. tangible-goods-and-services-producing, economies.
The authors demonstrate that the real economy is afflicted with a built-in tendency toward mounting underutilization of its technological and human resources, so that the gap between actual and potential production tends to get wider and wider. This manifests itself as growing unused productive capacity (what economists call "capacity overhang"), unemployment and wasteful production. As this problem grew in severity and profitable industrial investment opportunities withered, investment-seeking capital moved toward financial means of generating "profits." The scare quotes indicate that what this process of financialization produces is phantom, spurious "wealth," which must eventually dissipate in popped bubbles, recession or depression and the liquidation of real wealth as the widget-producing economy disintegrates in escalating unemployment and widespread business failures.
A brief review cannot do justice to this very helpful and insightful book. I have come across no better analysis of what will probably turn out to be the most severe crisis to beset modern capitalism, bar none, including the Great Depression.
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Investments (6th Edition) Review

Investments (6th Edition)
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Investments (6th Edition) ReviewI've read a lot of popular books about investing. Some of them were helpful in introducing me to investing in general. I decided, however, that I wanted a more thorough knowledge of the subject. I bought "The Portable MBA in Investment" by Peter Bernstein and found it utterly incomprehensible. If I wanted to be well-grounded in investing, this was unacceptable.
I borrowed Sharpe's text from the library and have been blasting through it for the past few days. It isn't an easy text; anyone who wants to tackle the subject should have some background in math and statistics. And I would suggest that people be at least somewhat familiar with investing. Otherwise, they may be turned off completely by the stuff. Once you're ready to go, though, make sure you read Sharpe's book first.
I've sampled other texts, and Sharpe's is the clearest and most relevant. Nothing is omitted. Everything from factor models to reading stock tables is included. The book is extremely well-written. Most of the material is presented simply. For example, the formulas are illustrated with examples that make understanding infinitely easier. And each chapter has a sidebar called "Institutional Issues" which puts a real-world spin on the chapter's subject matter. An invaluable book for the serious investor.
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The Social Meaning of Money: Pin Money, Paychecks, Poor Relief, and Other Currencies Review

The Social Meaning of Money: Pin Money, Paychecks, Poor Relief, and Other Currencies
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The Social Meaning of Money: Pin Money, Paychecks, Poor Relief, and Other Currencies ReviewThis book is an academically rich history of the role of money in society - particularly US society since the late 1800s. It begins, somewhat vehemently in establishing its credentials as an alternative way of looking at money. Cash isn't just a neutral medium of exchange; a medium that renders all human effort and interactions in mere dollar terms. Today this argument doesn't need to be made so forcefully, though I wonder if the author had a point to prove. She wrote this over several years in which Friedman economics was at its callous height. Today there is a richer body of work about the psychology of money - for example the studies on 'mental acounting' of Kahneman and the late Amos Tversky. But those authors are theoreticians. What Zelizer demonstrates through a startling degree of social research is that humans being humans, we have an extraordinary facility of earmarking money with specific social meanings. In your home you may well have a petty change dish for the parking meter money, a secret stash of emergency money and a piggy bank for the kids' savings. And because we attach different meanings to these different stashes, we treat them differently also. We operate each stash by different rules. Zelizer shows how household money (once the domain only of the husband - she cites a New York judge who find a woman guilty of theft for "stealing loose change" from her husband's trouser pockets) has changed, and how the rules have slowly though not easily altered also, as society has become more consumerist, and as gender roles have changed also. I found equally fascinating the description of the little white lies that husbands and wives tell, in order to keep a little extra "me money" outside of the household budget. This book totally gels with the findings I've seen in focus groups that I've run where I've found big ticket purchases have been less about the actual cost than about how husbands and wives (or partners) get what they want while trying not to rock the relationship boat. Zelizer's social history is fascinating to read. It is well footnoted (the references are copious): a book that makes pertinent points about the rich social dimension of cash. This is very interesting material and heartily recommend for researchers, for those in the finance sector and for anyone who wants to better understand the financial dynamic of their own relationships. It is a rewarding portrait of our society and the way we attempt to reconcile our rational and emotional selves.
Zelizer's follow-up volume is also well worth investigating: The Purchase of IntimacyThe Social Meaning of Money: Pin Money, Paychecks, Poor Relief, and Other Currencies Overview

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Money and the Meaning of Life Review

Money and the Meaning of Life
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Money and the Meaning of Life ReviewThere are good ideas, interesting asides, and new philosophical propositions to spare in Money and the Secret of Life. The basic premise--that money is a technology invented, not to accumulate wealth, but to realize human potential--is certainly worth our attention. Needleman is best describing money as the great tool of capitalism and capitalism as a great metaphysical system. The problem with Money and the Meaning of Life is that Jacob Needleman set out to write an inquiry into the spiritual potential of money, then sketched out a history of Western religious thought, and ended up writing a first person narrative full of punch lines thinly disguised as surprise philosophical discoveries. Mixing Max Weber, Guradjieff, Maimonodes, King Solomon, and an anonymous businessman (who really DOES know the meaning of life) could have been a rollercoaster ride full of unexpected connections and insights; what it actually ends up being is long-winded, self-conscious, and pretentious. In terms of the capitalist object, a good product, but, word for word, not exactly a terrific value.Money and the Meaning of Life Overview

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Management (Available Titles Coursemate) Review

Management (Available Titles Coursemate)
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Management (Available Titles Coursemate) ReviewThis is one of the worst textbooks I've ever come across. It was recommended to me by my professor, but I would certainly not recommended it to anyone. The language is hard to understand, repetitive, and boring. The topics covered seem to be out of touch with reality. The subjects are dealt with abstractly, and are not easily translated to real-life. I honestly don't think this book will teach or help me manage a real company.
The only reason I gave it two stars instead of one is because it "covers" a wide range of topics.Management (Available Titles Coursemate) Overview

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Hedge Funds For Dummies Review

Hedge Funds For Dummies
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Hedge Funds For Dummies ReviewI hate to admit but this book is actually pretty good. Being a financial professional as well as marginally positively biased towards the hedge fund industry, the publication of this book initially caused laughter as well as sadness in the industry. The title alone is cause for laughter: Hedge Funds for Dummies. Hilarious. It is also sad: The industry becoming mainstream so fast is somewhat sad in a sense that it loses some of its exclusivity.
The target audience is not, as the title rhetorically suggests, idiots but reasonably educated and curious people (essentially people who buy books for the purpose of acquiring knowledge and insight rather than public display). The reason for this book getting five stars is the following: Most books on hedge funds are written either by academics or practitioners. The books written by academics are quite often perceived as hoax by the investment profession because the content is abstract and dogmatic, i.e., a desperate attempt to fit the hedge fund phenomena into the corset of old paradigms such as "relative return investing" and EMH and CAPM whereas it too often transpires that the authors never have come even close to visiting or experiencing the dynamics of a trading floor in the real world. Books by practitioners on the hand often lack rigor and occasionally lack a sense for understanding the other side, i.e., the investors and their needs, requirements and constraints. Hedge Fund for Dummies finds an attractive balance. A balance between explaining or highlighting the theory including where the theory breaks down or is a poor description of investment reality on one hand and having the investor in mind on the other.
In addition, we all would seriously be better off if this book were required reading for US Congress.
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Beyond the Keynesian Endpoint: Crushed by Credit and Deceived by Debt — How to Revive the Global Economy Review

Beyond the Keynesian Endpoint: Crushed by Credit and Deceived by Debt — How to Revive the Global Economy
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Beyond the Keynesian Endpoint: Crushed by Credit and Deceived by Debt — How to Revive the Global Economy ReviewThis is a well written book. It begins by telling us laypeople just what the Keynesian Endpoint is and then how we (or any nation) reached this point in our economic history. Then he tells us the ramifications of having reached this KEP and finally some ways individuals can protect themselves from the position in which we have found ourselves. The author seems to be writing from an Austrian school viewpoint and insightfully lays out the causes of our present economic problems and goes further to address some ways out.
Keynes argued essentially that in times of economic downturn that government spending money obtained by borrowing would cause a multiplier effect on the economy thus pulling it out of recession.
Crescenzi sets forth to show us what has happened to our economy and why the Keynes theories won't/ can't work in the future. First he shows how we reach the KEP where there is no longer money on our balance sheets to borrow and spend.
Chapters 2-8 tell us how we have gotten ourselves into this mess at the KEP through such things as Consumption Binging, Public Employee Unions with their profligate demands and excess power, Political dishonesty, Ponzi Schemes like QE I and QEII, and finally Age Warfare and as he calls it Gerontocracy.
Chapter 8 attempts to tell why with all of us having much more disposable income than our parents we all feel like we don't have enough and thus the necessity for govt. to hide the costs of inter-generational debts.
The last 2 chapters give us some pointers on how to deal with our present situation before the worst things like 1979 interest rates or post WWi German inflation happen.
Anyone reading this book can see how Europe is ahead of us in having reached the KEP in Portugal, Ireland, Italy, Greece, and Spain(PIIGS). Their Sovereign Debts are overwhelming them today. There is not enough money for the safer economies like France and Germany to bail all of them out. With our Credit Rating having been lowered and further lowering threatened we are fast on the way to fiscal disaster.
I am not an economist, but Crescenzi lays out his arguments in detailed and concise language without mathematical terminology so that anyone can tell where we are and where we are heading economically if we do not act fast , which will cause some pain for all in places.
This is a must read book. I'm already looking at some of his other books and such books as /Where Keynes Went Wrong/ by H Lewis.Beyond the Keynesian Endpoint: Crushed by Credit and Deceived by Debt — How to Revive the Global Economy Overview

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Wall Street Lingo: Thousands of Investment Terms Explained Simply Review

Wall Street Lingo: Thousands of Investment Terms Explained Simply
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Wall Street Lingo: Thousands of Investment Terms Explained Simply ReviewI found the title of this book deceiving in the best way possible. Wall Street Lingo is more a guided tour of Wall Street and its inner workings than a simple glossary of investment terms and lingo. Any novice to intermediate investor will benefit from Peterson's backstage pass to one of the world's most lucrative investment forums.
Peterson keeps an otherwise dry and heavy read manageable with her extremely user-friendly format; on top of dividing the over 1000 defined investment terms into logical chapters, a full index at the back of the book makes for quick referencing. At first glance, the sheer number of topics covered seems intimidating to the financially untrained eye. However, the step-by-step approach demystifies every aspect of investment, from the basics of exchange operations to interpreting financial statements to paying the tax man. Charts, tables and explanations of key strategies interspersed throughout the definitions in each chapter help to drive home important points. Those in need of extra investment help will find plenty of additional resources tucked into the back of the book, with lists of acronym definitions, investor resources and relevant publications.
Wall Street Lingo delivered all that it promised and more. The up to date instruction and information is sure to benefit any potential or practicing investor wise enough to develop their investment knowledge before hitting the market. The way the information is presented is the icing on the cake, as even a beginner can navigate the guide and come out confident in their financial prowess in the end.
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Integrity: The Courage to Meet the Demands of Reality Review

Integrity: The Courage to Meet the Demands of Reality
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Integrity: The Courage to Meet the Demands of Reality ReviewThe Collins imprint of HarperCollins Publishers continues to pour out a very impressive stream of books that address ethical issues in business. Dr. Henry Cloud's book, "Integrity," published just a few weeks ago, is the latest offering in this genre. I found it to be a very encouraging, challenging and ultimately uplifting work. Henry Cloud, despite his background as a psychologist, manages to avoid the "psychobabble" one often encounters in reading clinicians who opine on business ethics. He anchors his thoughts in the real world of clients he has consulted with in helping them to address very real and concrete business issues that have deep roots in issues of ethics and integrity.
Dr. Cloud makes it clear that "integrity," as he uses the term, is much more than mere "honesty." Throughout the book he parses and elucidates six essential qualities and character traits that lead to success in the business world. He describes the kind of character that . . .
1) Creates and maintains trust
2) Is able to see and face reality
3) Works in a way that brings results
4) Embraces negative realities and solves them
5) Causes growth and increase
6) Achieves transcendence and meaning in life
"You will see how these character traits supercede gifts, talents and ability, and how the ones who have them succeed and the ones who don't, ultimately fail." (Page xii)
In this review, I will offer more quotations than I typically do in writing about a book. The reasons for this proliferation of quotes are that I want to share a fair sample of Dr. Cloud's nuggets, and he states the case very well in his own words. I could not improve upon them through more extensive commentary.
In talking with a wealthy businessman who is a personal friend, Dr. Cloud heard his friend comment on how he chooses to invest his money in businesses.
"I did not invest in those businesses. I invested in the people. I never invest in businesses I don't know anything about, but I will invest in a person. If I know their character, their history, how they operate, what kind of judgment they have, what kinds of risks are acceptable to them, how they execute, and things like that, and I know them well, I will invest. But I don't buy businesses I don't know anything about." (Pages 29-30)
Early in this book, Dr. Cloud gives us his expanded definition of integrity as it applies to the business world:
"And, the origins of the word we can see in the French and Latin meanings of intact, integrate, integral and entirety. The concept means that the `whole thing is working well, undivided, integrated, intact and uncorrupted.' When we are talking about integrity, we are talking about being a whole person, an integrated person, with all of our different parts working well and delivering the functions that they were designed to deliver. It is about wholeness and effectiveness as people. It truly is `running on all cylinders.'" (Page 31)
The author offers a very clear and helpful metaphor for the type of impact that this kind of person of integrity has on the lives of those with whom she or he interacts. Dr. Cloud posits that each of us, as we move through the waters of life, leave behind a wake, like that left by ships as they pass through the ocean. There are two aspects to the "wake" that we leave behind - the tasks we have performed and the relationships we have built.
"We leave a wake of people behind us as we move though their lives and their organizations. . . So, we must ask ourselves, `What does that wake look like?' Are a lot of people out there water-skiing on the wake, smiling, having a great time for our having `moved through their lives'? Or are they are there bobbing for air, bleeding, and left wounded as shark bait?" (Page 18)
In the chapter on Building Trust Through Connections, Cloud offers this profound insight that helps us to understand the difference between those persons and companies that command loyalty and those that do not:
"The human heart will seek to be known, understood, and connected with above all else. If you do not connect, the ones you care about will find someone who will." (Page 70)
Applying this principle alone in most companies today would dramatically reduce the costs of employee theft, turnover, recruiting, retention and succession planning.
In the chapter on Trust Through Vulnerability, Cloud talks about an early childhood experience he had with his mother that caused him to trust her more deeply than he might otherwise have been able to do.
"I needed a model that was strong enough to depend on, but vulnerable enough to identify with. That combination is what made it work. In essence, it said, `Hey, she is like me, in that she is afraid sometimes and feels like she can't do it. But, she does it anyway. She pushes forward.'
Her vulnerability is what made her power available to me." (Page 92)
In sharing What People In Touch Look Like, Dr. Cloud recounts an incident that happened on a retreat for CEO's, when a young "superstar" was given an opportunity to receive feedback from a more senior CEO.
"One of the more experienced guys looked up and said, `Want some feedback?' He said it in a way that left you wondering whether he was going to give sage advice or rail at the young man for being out to lunch in some way. There was just no way to tell from his poker face. But I will never forget the young superstar's immediate response: `By all means. Give me a gift.' He saw the feedback, whatever it was, as a gift because it could give him some reality that he did not know. I remember thinking, `We will be watching this guy's accomplishments for a long time.'" (Page 116)
Cloud then ratchets up the significance of this insight by suggesting a challenging way for us to put this principle of inviting feedback to a practical test:
"If you want to know your comfort level in this matter, think of going to the people you work with or are in close personal relationships with and give them 100 percent permission to be totally honest with you in answering the question: `What is it like to be on the other end of me?'" (Pages 116-117)
I must draw to a close this review, lest I run the risk of conveying Cloud's whole book to you via this Blog! I want to encourage you to buy the book as an investment in yourself and in your growth and success. But, in closing, I will share a final excerpt that captures the essence of what this book is all about:
"I just returned from an international leadership summit in which the leaders discussed their personal orientations toward growth. One global leader said that about ten years ago, he was near burnout and collapse, as his organization had exploded in size. But, he himself was dying. So, with input from his board, he made a huge investment of both time and money. He decided that every summer he would take six weeks away to study, refresh, get input into his soul, and re-create. He put the number two person in charge with orders not to call him `unless the whole thing were burning down.'" (Pages 222-223)
Dr. Cloud chose to protect the anonymity of this global leader. I do not know if he was referring to Pastor Bill Hybels of WillowCreek Church, but I have heard with my own ears Pastor Hybels share a similar story of taking intentional steps to prevent burnout by making the difficult decision to get away from daily pressures in order to carve out some time to recharge the batteries and to reinvigorate the soul. That is the very heart of integrity.
Most business leaders I know will find something of value in this book that they can internalize and begin to apply immediately - for their own benefit and for the benefit of all those who are "surfing their wake."
Enjoy.
Al ChaseIntegrity: The Courage to Meet the Demands of Reality Overview

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Hedge Fund Operational Due Diligence: Understanding the Risks (Wiley Finance) Review

Hedge Fund Operational Due Diligence: Understanding the Risks (Wiley Finance)
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Hedge Fund Operational Due Diligence: Understanding the Risks (Wiley Finance) ReviewGood solid book. The author began this book by essentially stating that this is a subject that has been ignored for way too long. After reading this very instructive work I couldn't agree more - operational due diligence is a very important part of hedge fund investing, and this book was a great guide. I liked this book for several reasons, the biggest one being that it does not merely describe just a checklist or outline a due diligence questionnaire for hedge funds due diligence. The operational due diligence techniques described seemed to be practical and actually something people could implement. I also liked the historical perspective gave me a good context for everything I was reading too. I enjoyed the examples too. A lot of interesting points and was thought provoking for me.Hedge Fund Operational Due Diligence: Understanding the Risks (Wiley Finance) Overview

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