The Big Picture

Subprime Mortgages: America's Latest Boom and Bust

Thursday, May 08, 2008 | 07:00 PM

Last year, Edward Gramlich published an economic takedown of the mortgage industry, titled Subprime Mortgages: America's Latest Boom and Bust.

Be sure to note the rooflines on the book cover -- they are not so subtle arrows, referencing the "boom and bust" of the book's subtitle.

In addition to his substantial knowledge of subprime and predatory lending, Gramlich was the sort of academic who was able to see through much of the nonsense within the lending industry.

That Greenspan ignored his warnings of predatory lending and the coming subprime mess says as much about Easy Al's tenure as FOMC chair as it does about Gramlich 's prescience.

The NYT recently noted: "For more than a decade, even before he was named a governor of the Federal Reserve Board in 1997, Mr. Gramlich was warning of dangers in the housing market, a stance that has made him a sought-after expert in the current crisis.

As chairman of the Neighborhood Reinvestment Corporation, he urged legislators to better protect consumers against predatory lenders, and toughen regulation of mortgage lenders and banks. Nonetheless, his efforts met resistance within the Fed and on Capitol Hill, and even he admits he could have pushed earlier for reform."

~~~

Last year, despite his advancing illness, Gramlich spoke at length about potential solutions during a televised panel sponsored by the Urban Institute, where he was a senior fellow.

You can listen to his lecture here.

~~~

Fed Governor Edward M. Gramlich
Patricia Sullivan
Washington Post, September 6, 2007; Page B07
http://www.washingtonpost.com/wp-dyn/content/article/2007/09/05/AR2007090502503.html

Being Right Is Bittersweet for a Critic of Lenders
MICHELINE MAYNARD
NYT, August 18, 2007
http://www.nytimes.com/2007/08/18/business/18gramlich.html

Greenspan Quote of the Day

Wednesday, May 07, 2008 | 02:30 PM

in Books | Federal Reserve

In Barbara Walters new memoir "Audition - A Memoir,'' she discusses dating Alan Greenspan.

We also learn that Greenspan, whom she recalls was a “nice dancer,'' gave Walters bad real-estate advice in 1977, counseling her not to buy a four-bedroom, Fifth Avenue co-op for $250,000 during New York's fiscal crisis. "So I didn't buy it. Today that apartment is worth at least $30 million,'' she writes.

At least he has been consistent throughout his career.

>

Source:
Walters Dates Greenspan, Rides With Castro, Courts Lewinsky
Robin D. Schatz
Bloomberg, May 6 2008
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=apj13ihKOpsw

Book Review: The Bush Boom

Tuesday, April 15, 2008 | 07:30 PM

in Books | Politics

I nearly fell off my seat laughing when I saw this review at Amazon:

The Bush Boom

53 of 67 people found the following review helpful:

Through the Looking Glass, October 24, 2003

By	Alice (Wonderland) See all my reviews

Finally! A book that proves the existence of an alternate universe. Obviously, a rip in the space/time continuum between this universe and the other universe where Bush is presiding over a 'boom economy' opened up and this book fell through. Can there be ANY other explanation?

permalink

Best of all, its only 1 cent at Amazon.

This book is of great interest to Theoristical Physicists, especially those that studty string theory...

Real Price of Everything

Monday, April 14, 2008 | 07:59 PM

in Books | Economy

Over the weekend, I was browsing in the Huntington Book Revue. I stumbled across a book that Michael Lewis had edited, called The Real Price of Everything: Rediscovering the Six Classics of Economics.

Since Lewis has written 3 of my favorite finance/market related books -- Liar’s Poker, The New New Thing, and Moneyball -- I though it was worth perusing.

The idea is simple: these (I count five) classics of economic literature all gathered in one place. One minor quibble is that I am not sure I understand what the 6th classic is.

The big five here are:

1776: The Wealth of Nations by Adam Smith

1798: An Essay on the Principle of Population by Thomas Malthus

1817: Principles of Political Economy and Taxation by David Ricardo

1899: The Theory of the Leisure Class: An Economic Study of Institutions by Thorstein Veblen

1936: The General Theory of Employment, Interest, and Money by John Maynard Keynes

The Wealth of Nations is about half of the 1,472 pages here. My Amazon favorite review: "At the very least you will have a really big book on your shelf to impress your friends."

Greenspan 'Reputation Tarnishment' Tour Continues

Tuesday, April 08, 2008 | 06:49 AM

Alan Greenspan seems to be hellbent on destroying what little reputation he has left.

Over the past few years, the man formerly known as The Maestro has been slowly revealed as the grand architect of a Fed era which will forever be known for easy money and non regulation.

Thus, the inflationary spiral we are presently enjoying, with $100+ Oil and $5 milk, is only the first half of his legacy. The second part is the enormous credit crisis/housing debacle directily attributable to his malfeasance. Greenspan's ideological refusal to allow the Fed to fulfill its role of Banking System Regulator is what is directly the root cause of many of the conflagrations we are dealing with today -- from housing to credit to derivatives to the demise of Bear Stearns.

Here comes the fun part: The man that helped bring about the Housing crisis is now saying its almost over. Never mind the historic inventory overhang, accelerating foreclosures, and all of the price metrics that reveal Houses remain way too expensive. According to Easy Al, the end of the problem will soon be here:

"Former Federal Reserve Chairman Alan Greenspan said the drop in U.S. home prices will probably end "well before'' early next year as the number of houses on the market diminishes, aiding an economic rebound.

"It will not be until early 2009 that we will get close to having eliminated most of this'' home inventory, Greenspan told a conference in Tokyo today sponsored by Deutsche Bank AG and co-hosted by Bloomberg LP. "But it is very likely that home prices will stabilize well before that.''

Greenspan added that the extent of damage stemming from the collapse of the subprime-mortgage market won't be known for months. He described the credit crisis as the worst in 50 years, echoing the assessment of International Monetary Fund economists."

That's kinda like Mrs. O'Leary's cow telling you that the fire is almost over. If he is proven to be wrong about this also -- and I think he will be -- that should be the final nail in the coffin of his reputation.

UPDATE: April 8, 2008 9:14am

When I wrote this up early this morning, I had not yet seen the front page of the WSJ:

His Legacy Tarnished, Greenspan Goes on Defensive http://online.wsj.com/article/SB120760341392296107.html

Video after the jump.

Previously:
Free Lunch: Myths of the Greenspan Era (January 2006) http://bigpicture.typepad.com/comments/2006/01/free_lunch_myth.html

Source:
Greenspan Says U.S. Home Prices May Stabilize in 2008
Scott Lanman and Lily Nonomiya
Bloomberg, April 8 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=aK6fhJY95tPg&

Continue reading "Greenspan 'Reputation Tarnishment' Tour Continues"

Quote of the Day: Spending like Drunken Sailors

Wednesday, March 26, 2008 | 03:00 PM

in Books | Credit | Derivatives | Psychology/Sentiment

From the London Review of Books, comes this brilliant slice of analysis:
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"My friend Tony, however, is sanguine. 'Sorting out who's in the shit is going to be a nightmare, but when it all shakes out, all it'll mean is that credit is a little bit more expensive. That's a good thing. It had got crazy. It was cheaper for companies to borrow money from other companies than it was for governments. That's nuts. These things are cyclical, it had all just gone too far and we needed a correction.'

'So we'll have to stop running around spending money like drunken sailors,' I said.

'Well, drunk sailors tend to be spending their own money,' Tony said. 'By contemporary standards they're quite prudent.'

- John Lanchester, writing about the sub-prime mortgage crisis in the London Review of Books.

I guess I owe an apology to drunken sailors, a metaphor I have used repeatedly.

This take on that phrase may very well become the classic line that sums up the era from 2003 - 2008: Drunken sailors: By contemporary standards, they're quite prudent.

Classic.

via New Economist

Anatomy of the Bear

Wednesday, March 19, 2008 | 09:18 PM

in Books | Markets

Time to brush up on what happens during a Bear Market, via Anatomy of the Bear.

"How does one spot the bottom of a bear market? What brings a bear to its end? Financial market history is a guide to understanding the future."

Looking at the four occasions when US equities were particularly cheap - 1921, 1932, 1949 and 1982, Russell Napier sets to answers these questions by analysing every article (70,000!) in the Wall Street Journal of either side of the market bottom.

Can this method help one to understand the features which indicate that a great buying opportunity is emerging?

By looking at how markets really did work in these bear-market bottoms, rather than theorising how they should work, the author offers a how to guide.

Source:
Anatomy of the Bear: Lessons From Wall Street's Four Great Bottoms
Russell Napier
December 5, 2005
http://www.amazon.com/exec/obidos/ASIN/9628606794/thebigpictu09-20

So Long, and Thanks For All the Fish!

Wednesday, March 12, 2008 | 12:11 PM

in Books | Legal | Politics

Spitzer has officially resigned.

I was trying to come up with a clever headline for his resignation, but the best I could come up with was the title of Douglas Adams Hitchhiker's Guide to the Galaxy title.

Can anyone come up with anything better?

Sources:
Spitzer Resigns, Citing Personal Failings
DANNY HAKIM and ANAHAD O’CONNOR
NYT, March 12, 2008
http://www.nytimes.com/2008/03/12/nyregion/12cnd-resign.html

Eliot Spitzer Resigns as Governor;
Lt. Gov. Paterson to Succeed Him
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
March 12, 2008 12:08 p.m.
http://online.wsj.com/article/SB120532420627930015.html

Indexed

Wednesday, February 27, 2008 | 08:24 PM

in Books | Data Analysis

I have been totally loving this little book by Jessica Hagy called Indexed:

With a few deft lines, she manages to communicate a whole lot more information then you would imagine possible, in quite an amusing and witty way.

Some of her stuff comes dangerously close to chart porn.

I posted a few more examples after the jump.

Golden parachutes make for wild rides. Card1128

Payback
Card1272

Great stuff . . .

Continue reading "Indexed"

Born Standing Up

Monday, February 18, 2008 | 06:00 PM

in Books

Quite regularly, this blog references many of the books we enjoy. Since our focus here is markets based economic discussion, we tend to stick to equity, economic, and psychology -related works.

But every now and then, we find a book unrelated to our professional pursuits that's quite worthy of discussion. Steve Martin's Born Standing Up: A Comic's Life is just such a work.

I started reading it after thoroughly enjoying a long excerpt posted online. That led me to buy the actual hard coverbook.

This weekend, I've been very pleasantly surprised by it. And not just because I plowed through the first half of it so quickly.

If you know Steve Martin, you know he is (obviously) funny. That sensibility is clearly reflected in the book. What I found so impressive was how beautifully the book was written. The prose is clean, and at times quite lovely. He's a playwright who's written serious works. I simply had no idea what a careful and creative author he is.

If you are looking for an enjoyable airplane/beach/hammock read, I highly recommend this.

Note: That extensive excerpt can be found in the February 2008 edition of Smithsonian Magazine; it will give you a flavor of his style and content.

Book Reviews

"Absolutely magnificent. One of the best books about comedy and being a comedian ever written." --Jerry Seinfeld, GQ

"The writing is evocative, unflinching and cool. When Martin takes a scalpel to his life, what you feel is the precision of the surgeon more than the primal scream of the unanaesthetized patient...Born Standing Up is neither fanfare nor confession. It gives off a vibe of rigorous honesty. With lots of laughs." --Richard Corliss, Time Magazine

"A spare, unexpectedly resonant remembrance of things past…Martin's one true subject is the evolution of his comedy--the transcendent moments...A smart, gentlemanly, modest book…winning." --Jeff Giles, Entertainment Weekly, EW Pick: A

"The archetypical story of the underdog's rise and a particularly American story...beautifully written, honest, engaging, and quietly brave." --Frederic Tuten, Bomb Magazine

~~~

Related:

Born Standing Up: A Comic's Life
Steve Martin
Scribner (November 20, 2007)
http://www.amazon.com/exec/obidos/ASIN/1416553649/thebigpictu09-20

Steve Martin Home page
http://www.stevemartin.com/

The Man in Front of the Curtain
http://www.nytimes.com/2005/01/25/opinion/25martin.html
(Steve Martin's Johnny Carson Letter)

Being Funny
How the pathbreaking comedian got his act together
Steve Martin
Smithsonian magazine, February 2008
http://www.smithsonianmag.com/arts-culture/funny-martin-200802.html?c=y&page=1

Dude: Settle the F%$# Down

Wednesday, January 30, 2008 | 07:16 AM

in Books | Markets | Psychology/Sentiment

My reputation over the past few years -- fairly or unfairly -- has been that of a Bear.

However, even I want to tell Barton Biggs to settle the f#$% down. Dude, spark up a fatty, and chill out. You are scaring the natives.

What's this about?

Biggs recently published another book, and it sounds a bit like the typical paranoic survivalist tomes:

"Barton Biggs has some offbeat advice for the rich: Insure yourself against war and disaster by buying a remote farm or ranch and stocking it with "seed, fertilizer, canned food, wine, medicine, clothes, etc.''

The "etc.'' must mean guns.

"A few rounds over the approaching brigands' heads would probably be a compelling persuader that there are easier farms to pillage,'' he writes in his new book, "Wealth, War and Wisdom.''

We hardly get to cite Biggs here at the TBP -- an alliterative mention in 2004 (Barton Biggs Better Begin Browsing Blogs . . .), when he disasterously shorted Crude Oil in the high $40s (good times), and a mention of his last book is most of our Biggs coverage.

As to Hedgehogging, I must admit to being I was underwhelmed by it. It was marginally interesting in a gossipy kinda way, but I lost interest about half way through.

I haven't seen this book yet, but I admit I am fascinated by the subject. I am not a big believer in either the efficient market hypothesis nor the Wisdom of Crowds -- future discounting mechanism yes, but wisdom? Hardly -- but I do find the subjects intriguing and worthy of further discussion.

War, markets, contrary indicators -- "Buy at the sound of cannons, sell at the sound of trumpets" kinda thing is right up my alley. I may have to check this one out . . .

Source:
Biggs's Tips for Rich: Expect War, Study Blitz, Mind Markets
James Pressley
Bloomberg, Jan. 30 2008
http://www.bloomberg.com/apps/news?pid=20601088&sid=aImBVle3OMyo&

What Big Picture Visitors are Reading/Buying

Saturday, January 05, 2008 | 05:15 PM

in Books

Speaking of Trust: If you clicked through to AMZN from here, and bought something, there's a record of it that both Amazon and I have access to.

I don't know who bought what, I only know what was bought. (Capiche?)

Here are the books the readers of The Big Picture bought from Amazon (AMZN) in December:
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Starting from the 1 o'clock position, and going clockwise:

Inside the Investor's Brain 12.1%
Spy Wars 6.4%
30,000 Years of Art 5.7%
Super Crunchers: 5.7%
A Demon of Our Own Design 5.1%
The Black Swan 4.4%
Forces for Good:    4%
World Atlas of Wine 4%
Number Sense 4%
The Daring Book for Girls 3.7%
A Bull in China       3.4%
Big History 3.4%
The Panic of 1907:    3.4%
All the Money in the World       3%
Four Hour Work Week       3%
Complete TurtleTrader    3%
The Dangerous Book for Boys 3%
Florilegium Imperiale       2.7%
Musicophilia: 2.4%
Contours of the World Economy 1-2030 AD 2.4%
Wikinomics 2.4%
Behavioural Investing 2.0%
Financial Armageddon 2.0%
Military Power 2.0%
More Than You Know 1.7%
Stock Market Wizards 1.7%
NYT Almanac 2008 1.7%
The Stuff of Thought 1.7%
Your Money and Your Brain 1.7%

Latest Lereah Book

Friday, January 04, 2008 | 01:15 PM

in Books | Economy | Real Estate

We've had plenty of well deserved criticism for former NAR Chief Economist David Lereah.

So you can imagine how much it tickled our funny bone to see, via Irvine Housing Blog, this updated new book from Lereah:

Old versions:

Latest Version:

Source: Irvine Housing Blog
>

That's our Friday funny. Actually, here is the most recent (no joke) book from Lereah:

Well, at least the title isn't a readily disprovable forecast...

What Big Picture Visitors are Reading

Thursday, December 20, 2007 | 08:27 PM

in Books

Here are what readers of The Big Picture bought from Amazon in December:

~~~

Starting from the 1 o'clock position, and going clockwise:

Inside the Investor's Brain 14%

Spy Wars 10%

30,000 Years of Art 9%

Super Crunchers: 8%

A Demon of Our Own Design 7%

Forces for Good:    7%

The Black Swan: The Impact of the Highly Improbable 7%

The Panic of 1907:    5%

A Bull in China       4%

Florilegium Imperiale       4%

Musicophilia: Tales of Music and the Brain: 4%

Four Hour Work Week by       4%

Number Sense: How the Mind Creates Mathematics    4%

Complete TurtleTrader    3%

Wikinomics:    3%

All the Money in the World       3%

Financial Armageddon       3%

Holiday Book Shopping IV

Wednesday, December 19, 2007 | 10:03 PM

in Books

This is our fourth (and final) in a series of gift ideas for the holidays (parts one and two and three are here)

As previously mentioned, I am a terrible book junkie, with many more books than I could ever possibly read in a given lifetime, or strew casually about upon coffee tables and other horizontal surfaces.

These are interesting if wholly unrelated titles that most book lovers you know would be delighted to receive as a gift . . .
>

~~~

• Overtreated: Why Too Much Medicine Is Making Us Sicker and Poorer

This book was NYT business reporter David Leonhardt's choice for the economics book of the year.

Americans spend between one-fifth and one-third of health-care dollars on unnecessary treatments, medications, devices, and tests. What's worse, there are an estimated 30,000 deaths per annum caused by this unnecessary care.

The reason for what amounts to a national delusion that more care is better care is rooted, she says, in a build-it-and-they-will-come paradigm that rewards doctors and hospitals for how much care they deliver rather than how effective it is.

~~~

• Big History: From the Big Bang to the Present:

I find the conceit of this book intriguing: Beginning with the origin of the universe, the author attempts to show that history is more than the written records of the gadfly species Homo sapiens. Covering Earth's history from the big bang through the development of life and the growth of civilization.

I also love the odd little details: The gold in the ring on your finger has to be more than 4.5 billion years old.

The interweaving of historical knowledge and science -- a synthesis of physics, biology, anthropology, and narrative history -- looks to make a very intriguing read.

~~~

• Muscle Car Confidential:

A tell-all from the man who tested the best of the muscle cars -- Joe Oldham was "up to his eyeballs" in the muscle of the era. The cars he vetted for some of the top car magazines range from the 1964 GTO to the 1976 Trans Am 455 HO -- twenty-four in all.

A behind-the-scenes look at how these cars earned their performance numbers, this book gives a firsthand sense of what it was like to live in the muscle car era, and to help create the myth that lives on today.

Ahhh, ahhh AArrgghh uhhh! . . . More power!~

~~~

• Contours of the World Economy 1-2030 AD: Essays in Macro-Economic History

This is our wonk selection of the evening: The book seeks to "identify the forces which explain how and why some parts of the world have grown rich and others have lagged behind."

Encompassing 2000 years of history, part 1 begins with the Roman Empire and explores the key factors that have influenced economic development in Africa, Asia, the Americas and Europe. Part 2 covers the development of macroeconomic tools of analysis from the 17th century to the present. Part 3 looks to the future and considers what the shape of the world economy might be in 2030.

Combining both the close quantitative analysis with a more qualitative approach that takes into account the complexity of the forces at work, this book looks to be a fascinating overview of world economic history.

~~~

• Sinatra: Frank and Friendly, A Unique Photographic Memoir of a Legend

If you are a Sinatra fan (like me), this one looks to be a no brainer: A massive collection of Frank in his hey day by famed photographer Terry O'Neill.

He was photographing 'The Beatles and the Rolling Stones' while they were still boys; O'Neill has a gift for earning the trust and the friendship of the famous and the infamous. His photography made him an intimate of many icons, and they invited him "inside", behind the limelight of their celebrity."

O'Neill's discerning eye and unlimited access captures a relationship that spanned three decades, and takes us behind the scenes of Sinatra's career -- on the road, at home and backstage,In the age of paparazzi, doorstep photography, and on big-budget publicity shoots.

~~~

• Th e World Atlas of Wine:

(Completely Revised and Updated 2007)

Hailed by critics worldwide as “extraordinary” and “irreplaceable,” there are few volumes that have had as monumental an impact in their field as Hugh Johnson’s The World Atlas of Wine: sales have exceeded four million copies, and it is now published in thirteen languages.

The atlas is described as "gorgeous" - with lots of color illustrations, photos, and maps.

The perfect gift for that Oenophile whom you are always afraid to buy wine for -- now, you know what to get them.

~~~

• Absolute Dark Knight

On its publication in 1986, Frank Miller's THE DARK KNIGHT RETURNS changed the landscape of the graphic novel irrevocably.

With its dark vision of Batman's future and its stunning artwork, THE DARK KNIGHT RETURNS set the comic world on fire. 15 years later, Miller's sequel, THE DARK KNIGHT STRIKES AGAIN, further redefined the boundaries of the superhero genre.

Now, both of these are collected in one single edition. At $99, its the sort of thing that you might not get for yourself, but any graphic novel who is the lucky recipient of this weil be thrilled and delighted . . .

~~~

• Michael Palin Diaries 1969-1979: The Python Years

This looked interesting by author alone, until I saw the Washington Post's Book review:

Palin tells us up front that "I have kept a diary, more or less continuously, since April 1969," when he was 25 years old, married with a six-month-old son, and "had been writing comedy with Terry Jones since leaving university in 1965." He has continued the diary for "nothing more complicated" than "to keep a record of how I fill the days." A diary, he says, "is an antidote to hindsight," and continues:

"It seals the present moment and preserves it from the tidying process of context, perspective, analysis and balance. It becomes history, but quite unselfconsciously. What proves to be important over a long period is not always what a diarist will identify at the time...

Though the emergence of the Python show and the subsequent phenomenon is traced here in fits and starts, there is more than enough in these 600-plus pages about the show, its cast members, its ups and downs to satisfy all but the most ravenous Python addicts..."

~~~

• Murakami

Japan's answer to Andy Warhol: Takashi Murakami is one of contemporary art’s most innovative and important figures.

Drawing from a combination of street culture, high art, and traditional Japanese painting, Murakami takes the contemporary art trend of mixing high and low to an unprecedented level, producing original paintings and sculptures as well as mass-produced consumer objects such as toys, books, and most famously, a line of handbags for Louis Vuitton.

Whimsical, odd, fascinating, and fun.

~~~

Holiday Book Shopping III

Wednesday, December 12, 2007 | 06:30 PM

in Books

This is our third in a series of gift ideas for the holidays (parts one and two are here)

As previously mentioned, I am a terrible book junkie, with many more books than I could ever possibly read in a given lifetime, and/or leave lying casually strewn about upon coffee tables and other horizontal surfaces. Hence, the fascination with books that intrigue the mind and imagination.

These are interesting if wholly unrelated titles that most book lovers you know would be delighted to receive as a gift . . .

~~~

Florilegium Imperiale: Botanical Illustrations for Francis I of Austria

This is one of those books you lust after, but its so absurdly expensive, you don't dare buy one for yourself.

But whoever you do get this for will be forever grateful: The prints are utterly gorgeous, the overall look and feel of the book is a beautifully crafted delight.

Perfect for that special art student or gardener . . .

~~~

Spy Wars: Moles, Mysteries, and Deadly Games

Author Tennant Bagley oversaw the CIA's operations against the KGB in the 1960s and is uniquely qualified to take readers deep inside the cold war spy game.

Bagley doesn't pull any punches here, and readers expecting the usual KGB-as-villain, CIA-as-hero story are in for a whole lot of surprises: Bagley reveals that the good guys were just as duplicitous, traitorous, and nasty as the villains. The spy game has never seemed quite so dirty nor the CIA so villainous.

Frederick Kempe: "Pete Bagley''s Spy Wars is a gripping narrative capturing one of the most controversial espionage sagas of the Cold War. His lively, first-hand account as CIA''s former chief of Soviet counter-intelligence provides sobering insights into our dangerous tendency of self-deception."—Frederick Kempe, former Wall Street Journal editor and correspondent

~~~

Number Sense: How the Mind Creates Mathematics

According to mathematician and psychologist Stanislas Dehaene (research affiliate, Institut de la Sante et de la Recherche Medicale, Paris), mathematics is an inborn skill. The Number Sense makes a case for the human mind's innate grasp of mathematics. Value systems (such as the Arabic numeral system we use) arose independently in four separate civilizations--evidence of a universal sense of number. The relationship between language and numbers is also well covered.

Also explored: How the brain understands and manipulates numbers and other forms of mathematical information.

Also worth exploring: The Stuff of Thought: Language as a Window into Human Nature

~~~

Imperfect Knowledge Economics: Exchange Rates and Risk

John Kay of the Financial Times wrote: "A new book coins the phrase "imperfect knowledge economics" to describe this world of fundamental uncertainty."

Edmund S. Phelps (2006 economics Nobel Prize winner): "This marvelous book by Frydman and Goldberg documents invaluable insights of the 'early modern' theory of capitalism that were lost when the profession endorsed rational expectations equilibrium. . . . Happily for me and, I believe, for the profession of economics, this deeply original and important book gives signs of bringing us back on track--on a road toward an economics possessing a genuine microfoundation and at the same time a capacity to illuminate some of the many aspects of the modern economy that the rational expectations approach cannot by its nature explain."

Sounds good to me . . .

~~~

Conversations with Woody Allen: His Films, the Movies, and Moviemaking

I am a huge Woodman fan, so this was an automatic. If you love film and/or Woody, you probably are similarly inclined.

"Compiled over thirty-six years of interviews, conversations, and experiences one could only glean from gaining Allen’s confidence and respect, Conversations is essential reading for aspiring filmmakers and those who wish to eventually put finger to keyboard in hopes of telling a story, but it is no less intriguing for simple cinephiles.” -Los Angeles Times

“Remarkable . . . fresh with an immediacy often missing in a retrospective.” -The News & Observer

~~~

THE HOUSE THAT GEORGE BUILT: With a Little Help From Irving, Cole, and a Crew of About Fifty.

The composers of one of America's most popular popular eras in music -- 1920 to 1950 -- is not so much as a formal treatise but rather a fan's exuberant high- spirited riff.

English- born novelist, essayist Sheed shows great love for , and tremendous knowledge of American popular song. He writes with worshipful insight of the two greatest of the founding fathers of this particular American genre, George Gershwin and Irving Berlin. Sheed cares for the Music above all and gives preeminence to those who create it - the lyrics are significant but secondary. Sheed writes not only about the major figures, Kern, Berlin, Gershwin, Cole Porter but also about fifty others.

The reader reviews of this book are what makes me want to read it. They obviously had great pleasure in reading it . . .

~~~

30,000 Years of Art

Another spectacular coffee table book: The book is enormous, with an extraordinary collection of over 1000 high-quality color illustrations, showcasing the evolution of creative arts over diverse cultures from prehistoric to modern times.

Arranged chronologically, each piece is given its own page and a condensed summary of its provenance, key features and cultural context. Book-ended by a ritual ''lion man'' figurine from 28,000 B.C. found in a cave in southern Germany, and an as-yet-unfinished environmental sculpture by American artist James Turrell. The book has two time-lines, one covering major movements in the 13 cultures represented and another comprised of a 28 page horizontal index that sets each piece against major world events.

Another book junkies' delight . . .
~~~

The Elephant and the Dragon: The Rise of India and China and What It Means for All of Us

I have to admit to never having heard of this book until a reader pointed it out to me.

The author covers India and China for Forbes, and describes the global power shift occurring in India and in China as computers continue to change the way business is conducted. The book tries to "upend conventional wisdom" arguing that the U.S. shouldn't fear either of these countries. (The book does not much address the massive counterfeiting and patent / copyright violations in both nations.

Is China doing better than India -- and why? The author gives the nod to China, because they moved toward a market economy in 1978, while India began to liberalize in 1991. I find this perplexing, given that China remains a totalitarian communist nation, while India is a democracy.

Regardless, this looks like an intriguing topic for further exploration. . .

~~~

The Curiously Sinister Art of Jim Flora

This book goes beyond the first Flora book, The Mischievous Art of Jim Flora. It's wilder, and has a lot of bizarre fine art works by Flora that have not been shown in public. His album covers (featured in the first book) were fun but mild-mannered compared to the reckless abandon on display in The Curiously Sinister Art. It's hard to believe that Flora is the same guy who created so many cuddly children's books in the 1960s and 1970s. The Curiously Sinister book is definitely for ADULTS, or perhaps for overgrown children with a wicked sense of humor.

"Economics and Business" Books of the Year (Economist)

Monday, December 10, 2007 | 06:30 PM

in Books

These are Economist's editorial picks -- and not best sellers (as was previously complained about) -- in the category "Economics and business"

Note: The selection of books and authors is by The Economist; the order of books is mine; The books that have the cover image I have either read or browsed and want to read (and are my recommendations off of this list):

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The Last Tycoons: The Secret History of Lazard Frères & Co—A Tale of Unrestrained Ambition, Billion-Dollar Fortunes, Byzantine Power Struggles, and Hidden Scandal

By William D. Cohan. Doubleday; 742 pages; $29.95

How an investment bank concentrated on providing corporate advice to the rich and powerful—a business model that relied not on its balance sheet but on the brains and wiles of the men toiling away in its famously ratty offices. William Cohan used to work at Lazard's himself.

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Super Crunchers: Why Thinking-by-Numbers Is the New Way to Be Smart

By Ian Ayres. Bantam; 272 pages; $25. John Murray; £16.99

A lively and clear analysis of how the accumulation of large bodies of data is changing the way that businesses (and people) make decisions.

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The Black Swan: The Impact of the Highly Improbable
By Nassim Nicholas Taleb. Random House; 400 pages; $26.95. Allen Lane; £20

A Wall Street trader turned philosopher on the power of the unexpected.

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Wikinomics: How Mass Collaboration Changes Everything

By Don Tapscott and Anthony D. Williams. Portfolio; 320 pages; $25.95. Atlantic Books; £16.99

A believers' guide to how the emergence of community on the internet is fundamentally changing business.

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The Billionaire Who Wasn't: How Chuck Feeney Secretly Made and Gave Away a Fortune

By Conor O'Clery. PublicAffairs; 352 pages; $26.95 and £15.99

A rollicking story of how, by stealth, an Irish-American obsessed by secrecy built a business empire and revolutionised philanthropy.

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From Higher Aims to Hired Hands: The Social Transformation of American Business Schools and the Unfulfilled Promise of Management as a Profession

By Rakesh Khurana. Princeton University Press; 542 pages; $35 and £19

A Harvard Business School professor tells the fascinating tale of how management has lost its way.
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The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It

By Paul Collier. Oxford University Press; 224 pages; $28 and £16.99

Crammed with statistical nuggets and common sense, this book, by an economics professor at Oxford University, should be compulsory reading for anyone embroiled in the thankless business of trying to pull people out of the pit of poverty.
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Forces for Good: The Six Practices of High-Impact Nonprofits

By Leslie R. Crutchfield and Heather McLeod Grant. Jossey-Bass; 336 pages; $29.95 and £15.99

As the importance of non-profit organisations grows, so does the need for them to be well managed and effective. Cleverly chosen examples show how the best achieve their impact.

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The Age of Turbulence: Adventures in a New World

By Alan Greenspan. Penguin Press; 531 pages; $35 and £25

A memoir-cum-essay by the famously opaque former chairman of the Federal Reserve that provides few surprises, but is an unexpectedly enjoyable read.

What Big Picture Visitors are Reading

Thursday, December 06, 2007 | 07:30 PM

in Books | Finance

Here are what readers of The Big Picture bought from Amazon in November:

Starting from the 12 o'clock position above, if you work your way clockwise, :

Inside the Investor's Brain		21%
The Panic of 1907		16%
Stock Market Wizards		13%
Military Power		12%
A Demon of Our Own Design		9%
The Complete TurtleTrader		6%
More Than You Know		5%
The Black Swan		4%
Born Standing Up		3%
Financial Armageddon		3%
Money Game		3%
Musicophilia		3%

Thursday, December 06, 2007 | 07:30 PM | Permalink | Comments (8) |