For all its flaws, I believe that this book is an important one and one that almost every reader can benefit from. The ideas, though all repackaged frFor all its flaws, I believe that this book is an important one and one that almost every reader can benefit from. The ideas, though all repackaged from earlier thinkers (and duly credited), are good ones that bear repeating and are given added weight (in my view) because they come from someone who actually has to make money on his ideas. Thus, it is worthy of a read.
That said, his prose is long-winded and could have been cut down considerably, the ideas are not as tight and polished as they could be. Many reviewers complain about some of the contradictions in Taleb's ideas (e.g., he decries narratives within his own narrative), but I think this misses his point about needing to know what the stakes are. I don't find so many contradictions because, as he says, in this context the stakes are low and there is little possibility that his narrative may lead us to make poor decisions.
Despite the book's problems, the ideas are of sufficient quality that I can still recommend it....more
"Breathtaking" is the best word I have that does justice to the scale and scope of what author Liaquat Ahamed has done with this book. I've not read a"Breathtaking" is the best word I have that does justice to the scale and scope of what author Liaquat Ahamed has done with this book. I've not read a more thorough treatment of the topic or the times; however, I believe this book stacks up well against any non-fiction, history or economics book written. I would strongly recommend to anyone with an interest in economics and history.
p139 In March 1922, he wrote to Strong in that elliptical way of his, “Only lately have the countries of the world started to clear up after the war, two years having been wasted in building castles in the air and pulling them down again. Such is the way of democracies it seems, though a ‘few aristocrats’ in all countries realized from the start what must be the inevitable result of hastily conceived remedies for such serious ills.” He obviously thought that the “few aristocrats” were bankers like himself.
p146 Britain was therefore the only major country that truly faced the choice between devaluation and deflation. To a modern observer, less wedded to the principle that currency rates are sacrosanct, some measure of devaluation would have made sense. After all, Britain was finding it harder to compete in the postwar world economy and, having liquidated vast amounts of its holdings abroad, could only draw upon a much reduced foreign income to cushion the blow. Its exchange rate should have been allowed to fall as a means of making its goods cheaper on world markets. However, Norman and his generation lived in a different mental world. They saw devaluation not as an adjustment to a new reality but as something more, a symptom of financial indiscipline that might precipitate a collective loss of confidence in all currencies. When people talked of the City of London as banker to the world, this was no mere figure of speech—the City operated literally like a gigantic bank, taking deposits from one part of the world and lending to another. While gold was the international currency par excellence, the pound sterling was viewed as its closest substitute, and most trading nations—the United States, Russia, Japan, India, Argentina—even kept part of their cash reserves in sterling deposits in London. The pound had a special status in the gold standard constellation and its devaluation would have rocked the financial world.
pp150-151 And he began making his fortune as a currency speculator. In 1919, it was a novel way of making money. Before 1914, currencies had been fixed, and opportunities to profit from the instability of exchange rates had been almost nonexistent. In the aftermath of the war, as exchange rates of the major currencies lurched up and down, it became possible to make large returns—and also lose equally large amounts—by betting on the direction of such moves. In the latter half of 1919, convinced that the inflationary consequences of the war would undermine the currencies of the main belligerents, Keynes went short on the French franc, the German Reichsmark, and the Italian lira, buying the currencies of countries that had sat out most of the war: the Norwegian and the Danish kroner, the U.S. dollar, and interestingly enough, the Indian rupee. He made $30,000 in the first few months. In early 1920, he set up a syndicate, with his brother, some of the Bloomsbury circle, and a financier friend from the City of London. By the end of April 1920, they had made a further $80,000. Then suddenly, in the space of four weeks, a spasm of optimism about Germany briefly drove the declining European currencies back up, wiping out their entire capital. Keynes found himself on the verge of bankruptcy and had to be bailed out by his tolerant father. Nevertheless, propped up by his indulgent family and by a loan from the coolly acute financier Sir Ernest Cassel, he persevered in his speculations—built for the most part around the view that the German and Central European currencies
p171 And so, when the new currency was introduced on November 15, 1923, Germany found itself in the curious position of having two official currencies—the old Reichsmark and the new Rentenmark—circulating side by side, issued by two uniquely parallel central banks.
p192 When the war ended, Morgans became the natural conduit of American money into Europe. Its status as one of the great powers to be reckoned with was confirmed in July 1920, when a group of anarchists, instead of targeting a head of state or government as it might have done before the war, chose to place a bomb outside the offices of J. P. Morgan & Co. at 23 Wall Street.25 The partners were unscathed, but thirty-eight bystanders were killed and another four hundred injured
p389 On March 12, 1932, the world learned that Ivar Kreuger, the Swedish match king, who had bailed out so many penniless European countries, had shot himself in his apartment on the Avenue Victor Emmanuel III in Paris. At first it was assumed that he was just another victim of the times—he had recently suffered a nervous breakdown and his physician had warned him about the constant strain of his lifestyle on his heart. Within three weeks it became apparent that his whole enterprise had been a sham. His accounts were riddled with inflated valuations and bogus assets, including $142 million of forged Italian government bonds. When the losses to investors were eventually tallied, they amounted to $400 million....more
This is a good elementary text in investments, suitable for a beginning finance/economics student. I'd say that anyone who's taken a first college couThis is a good elementary text in investments, suitable for a beginning finance/economics student. I'd say that anyone who's taken a first college course in economics could successfully use this text to become more literate in investments. That said, if you've taken more than that, you'll probably find this text much too basic. It's light on the math, and that's really a bad thing most times, since you can usually say things so much simpler in math. The book is also rather inadequate once you start to move into derivatives and MBS. It also doesn't have any coverage of the kinds of products that have been in the news so much lately....more
Despite the salesman's schlock and the painfully frequent repetition of ideas, Roberts' argument is pretty compelling and he satisfactorily backs it uDespite the salesman's schlock and the painfully frequent repetition of ideas, Roberts' argument is pretty compelling and he satisfactorily backs it up with data.
Roberts could have condensed this book into about 25 pages if he'd bothered. I would gladly have paid the same price ($30 retail) if only he'd promise to stop wasting my time.
While possibly good for finance white belts, everybody else should just skip to chapter 7....more
A pretty good little story of the before and middle of the financial crises told through the eyes of a bunch of Wall Street outsiders who profited byA pretty good little story of the before and middle of the financial crises told through the eyes of a bunch of Wall Street outsiders who profited by "shorting" it (i.e., betting against it). Odd-ball characters. Under-dogs. Nobodies who get rich quick betting on something everyone else bet against. Despite the collapse, Lewis says we're all still screwed. Ultimately you'll wonder if the "The Big Short" refers not to the betting on the housing collapse and subsequent financial panic, but on how the common person is short-changed, no matter how badly financiers muck things up. Nothing profound, but still, it's interesting....more
Liar's Poker is my first exposure to Michael Lewis and also my first exposure to memoir books about finance, the career path that, by revealed prefereLiar's Poker is my first exposure to Michael Lewis and also my first exposure to memoir books about finance, the career path that, by revealed preference, I seem to have chosen to follow. As Lewis tells it, unlike most financial memoirs, this is one of the only ones to talk about the bond market, rather than the stock market, which also happens to be the area in which I have the most experience, so it was only natural that I was enthralled reading this book.
The book follows Lewis' experiences working as a bond salesman for a, now defunct, large financial firm that had specialized in bonds, securities that are less well-known to the average consumer but are actually a far more common way for firms to finance their activities than stocks. The colorful characters and language that ensue actually helped me to come to better understand some of the more prickly characters I've met in the first few years of my career. Ultimately, it is a story of Lewis' incredulity and scorn for the financial industry at large. The work turned out to be prophetic and anyone who wants to understand a little more about the way the financial world works would do well to read it and Lewis' other terrific book, The Big Short: Inside the Doomsday Machine.
In his epilogue, Lewis talks about the chagrin he felt receiving letters from interested college students who wanted to work for a firm like Salomon Brothers. He felt it was a cautionary tale. I hope you'll read it and see it as such....more
Hi, do you like boring and safe methods of investing? Great! It's the only way to fly, as far as I'm concerned. This is the grand-daddy, the fountainhHi, do you like boring and safe methods of investing? Great! It's the only way to fly, as far as I'm concerned. This is the grand-daddy, the fountainhead of all things index investing. Quite frankly, for most people it's the best investment book ever written; you'll likely not need any others. So why only three stars?
Well, frankly, because I've already heard this message a million times throughout my life. This is the seminal wisdom that investment professionals always seem to hand out about investing: Passive strategies beat active strategies. Not that it's not true, just that I find the point to be horribly belabored, in this book and in the world beyond.
So, while it's a great book for anyone starting out in their investment planning, you've likely seen everything contained within before numerous times. A great first book, but not so much if it's your umpteenth....more