In 2002, David Einhorn, the fresh 32 year old President of Greenlight Capital – a New York based hedge fund and research company – gave a speech at a charity investment conference to benefit a children’s cancer hospital. He was asked to share his best investment idea. Subsequently, he described his reasons why his firm had sold short the shares of Allied Capital, a publicly traded leader in the private finance business. Greenlight bet that the stock would decline because the company’s business was in trouble and its accounting was corrupt despite duplicitous efforts of the firm’s management “spin” a positive story to investors. Einhorn’s speech was so compelling that the next day, when the New York Stock Exchange opened for trading, Allied’s shares remained closed. So many investors wanted to sell or short the stock that the NYSE could not balance all the sell orders to open Allied’s trading in an orderly fashion.
What followed was a firestorm of controversy. Allied responded with a Washington-style spin job – attacking Einhorn, and disseminating half-truths and outright lies. Rather than protect investors by reviewing Einhorn’s well-documented case against Allied, the SEC — at the behest of the politically connected Allied — instead investigated Einhorn for stock manipulation. Over the ensuing six years, the SEC allowed Allied to make the problem bigger by approving more than a dozen additional stock offerings that raised over $1 billion from new investors.
Fooling Some of the People All of the Timeis the gripping chronicle of that revealing saga. Page by page, it delves deep inside Wall Street, showing how the $6 billion hedge fund Greenlight Capital conducts its investment research and detailing the maneuvers of an unscrupulous company. Along the way, you’ll witness feckless regulators, compromised politicians, and the barricades our financial markets have erected against exposing misconduct on Wall Street. This is an important read because the book gives you an excellent “insider’s” perspective of where the Markets were in the years immediately preceding the collapse of Bear Stearns – the event in March 2008 that precipitated the financial crisis. You will also discover the immense difficulties that prevent the government from sanctioning politically connected companies — making future Enrons inevitable. Further still, this book is important because Einhorn and the research methods that his firm uses to uncover accounting scams and other balance sheet tricks publicly traded companies employ to hide financial weakness was among the first to start shorting Lehman Brothers stock in April 2008 after their overly confident quarterly report.
This revealing book shows the failings of Wall Street: its investment banks, analysts, journalists, and especially our industry regulators.At its most basic level, Fooling Some of the People All of the Time is an important call for stronger regulatory enforcement, more effective regulatory reforms, and fair play in the financial markets.
Andrew Ross Sorkin is the New York Times’ chief M&A reporter and business columnist. Sorkin is also the editor of DealBook, the NYT’s online daily financial report he started in 2001. In addition, Sorkin is an assistant editor of business and finance news, helping guide and shape the paper’s coverage. Sorkin also frequently appears on NBC’s “Today” show, on “Charlie Rose” on PBS, and is a frequent guest on the business channel, CNBC.
The book was just released, and frankly, I haven’t finished reading it just yet, but what I have read is gripping! If you’ve ever wanted to be a ‘fly-on-the-wall’ in the clubby, heavily wood-paneled board rooms or the glass-encased corner offices of chief executives when the deal is being negotiated, this is it.
The book is interesting, detailed and crammed with an ‘insider’s’ perspective as the drama that precipitated the ‘Great Recession’ unfolded. Sorkin provides a lot of inside information about what was going on inside the Federal Reserve, the U.S. Treasury, the big Wall Street firms and in the Bush White House as the dominoes started falling. You’ll enjoy learning why the original TARP document was only eleven pages long; what made John Mack at Mogan Stanley angry, what Lehman Brothers’ Richard Fuld was doing to try to keep the ship from sinking and what was going on in mind of Hank Paulson and his secret meeting with the Board of Goldman prior to the crash. This is truly a ‘must read’!
The political dilemma of public outrage: Guns vs. Band-aids
Health care on first blush may not seem like a topic natural to a Global Markets and Foreign Policy blog.But to the extent that it is an issue of comparative political economy; and to the extent that it is an issue that accounts for approximately 17% of the U.S. GDP and growing rapidly, well, then it seems quite natural, actually. My first admission, however, is this: I am perplexed. No, not on the topic of healthcare reform, in and of itself.On the one hand, Americans resist government efforts to repair a Healthcare system that everyone acknowledges is broken; but on the other hand willingly tolerate the “Free-market” pilferage of consumers by the private sector Health Insurance industry in a system that severely hinders the global competitiveness of our nation. President Obama said as much in a recent radio interview, noting:
‘Passing a big bill like this is always messy. FDR was called a socialist when he passed Social Security. JFK and Lyndon Johnson, they were both accused of a government takeover of health care, when they passed Medicare. This is the process we go through because the American people have a long tradition of being suspicious of government, until the government actually does something that helps them, and then they don’t want anybody messing with [it] afterwards.’– Pres. Obama
Even more, I’m also perplexed, as Rachel Maddow pointed out recently, that the people most likely to benefit from healthcare reforms have been ginned up into populist rage to oppose it by fear-mongers using vile partisan antics. It’s ironic isn’t it, that the states, largely in the South and the West, that have been most skeptical of President Obama’s agenda for health care reform also have the highest levels of uninsured people in the nation..??Precisely the population that’s most causing the rest of the nation’s healthcare system to buckle under its cost.Take this one fringe Conservative extremist, Kenneth Gladney for example, who allegedly got himself beat-up trying to hi-jack a Town Hall meeting in St. Louis, MO. It turns out Gladney had just gotten laid-off from his job, and had to end up begging for donations to pay his medical bill from the melee. President Obama’s health reform proposal would protect people in precisely such a situation. When in doubt, lie and obfuscate the issue, then resort to a falsetto’s brand of “patriotism.”Standard GOP play book.Where is the compassion among the “compassionate conservatives”..??
After all, the cost of providing health care to 48 million uninsured Americans is economically and practically, unsustainable. Medical costs are soaring at twice the rate of inflation. Even if you don’t pay the bills directly, you see the medical inflation rate in higher insurance premiums, deductibles and co-pays. And just what are we getting for the money..??A system that already limits our choice of doctors & hospitals; often doesn’t cover necessary services; forces patients to satisfy a complex labryinth of procedures and paperwork just to get reimbursed; keeps us tethered to a job we might not enjoy for fear of losing health benefits, and strands us without affordable protection if you lose coverage after experiencing health problems – sometimes even minor ones.
Even Fidel Castro raised an interesting point on the Healthcare debate. It is admittedly difficult to take seriously much of anything Castro has to say.But on this one point, it seems he has a prescient point.Castro criticized the U.S. recently for being willing to spend billions on our high-tech military – sometimes even for toys we don’t need – but finding it difficult to approve healthcare reform that would protect the poorest among us. He wrote in a commentary published on a state-run Internet site that huge military budgets are approved easily by the U.S. Congress, but noted that President Obama is struggling to convince federal lawmakers to pass a bill that would “deliver health services to 50 million Americans that don’t have [healthcare protection].”
He is right. We spend over $1 Trillion per year on our military-industrial infrastructure – about one half of the annual Federal budget, excluding debt service on military spending – but only about $200 Bn on government-sponsored healthcare to our populations most in need of it – the poor, working-class and middle-class Americans. Yet many Americans, as recent Town Hall meetings indicate, seem grudging, parochial and petty in their consideration of this most pressing of social issues – especially considering that the majority of uninsured are the nation’s most vulnerable women and children.
‘Huge military budgets are approved easily by the U.S. Congress, but President Obama is struggling to convince federal lawmakers to pass a bill that would “deliver health services to 50 million Americans that don’t have healthcare protection.”‘ — Fidel Castro
The main stumbling block against providing health insurance for all Americans is the question of how to pay for it. Of the President’s $1 Trillion proposed plan, $800 Bn is already accounted for through the existing group of federal health plans – Medicare, Medicaid, Children and Veterans Healthcare, and the Prescription drug plan – passed by the previous Bush administration, but never funded. To fund the prescription plan, the White House negotiated $80 Bn concession from the Private health insurance industry and approximately $20 Bn concession from the Pharmaceutical industry. The government will need to find a way to plug the remaining $100 Bn revenue hole to subsidize those not getting it through workplace or unable to pay otherwise — about $100 billion. That’s what all the wrangling going on in Congress is about.
Marginal tax rates can and should be raised on high-earners as one source – for example, income earners making over $500,000 a year. But another very viable funding source, albeit never mentioned, can come from a 10% reallocation in military spending, which now is running amok at over $600 billion annually – that figure does not include (1) veterans benefits, (2) the 80% of interest costs on the national debt which comes from bonds issued for military operating and capital expenditures, and (3) the secret budget of our nation’s intelligence agencies. Most knowledgeable intelligence analystestimate the total U.S. military budget at approximately $1.2 Tn of the federal governments $2.5 Tn annual budget. The Pentagon’s spending rate is now higher than it was at the height of the Cold War, and is about one-half of the entire world’s military spending, and we spend six times more than the next largest military spending nation, China, although they have 20% of the world’s population, while we have only about five percent of the world’s population.
It seems clear the military budget in the U.S. is a sacred cow and, according to Republicans, a matter of “patriotism” while attending to the health and wellness of our citizens is not. We are Sparta, it appears, rather than enlighten Athens.
It has been reasonably well known for some time that the U.S. spend more per capita on health care than any other country – developed, or not. What may be less well known is that the U.S. has the highest medical inflation rate in the world.That is, it has the highest growth rates in per capita health care spending since 1980 among high income countries. In fact, the medical inflation rate in the U.S. is rising faster than the nation’s economic growth, and three times faster than real wages – which in recent years is actually declining. In simplest terms, that means if we do nothing the problem only gets bigger, faster.
So what drives health care spending..??In the U.S., chronic, but preventable diseases — obesity, diabetes, cardiovascular disease and cancer — accounts for fully 75 percent of health care spending.It has been reasonably well known for some time that the U.S. spend more per capita on health care than any other country – developed, or not. What may be less well known is that the U.S. has the highest medical inflation rate in the world.That is, it has the highest growth rates in per capita health care spending since 1980 among high income countries. In fact, the medical inflation rate in the U.S. is rising faster than the nation’s economic growth, and three times faster than real wages – which in recent years is actually declining. In simplest terms, that means if we do nothing the problem only gets bigger, faster.
In the clearest terms, the National Coalition on Health Care(NCHC) – a rigorously non-partisan, non-profit public interest organization – has a website outlining the gravity of the issue with a compelling set of empirical data that frames the issue, and what it means to us. Among other things, here’s a concise list showing how this extraordinary escalation in health care costs and insurance premiums affects several segments of our economy:
1.Surging health care costs slow the rate of job growth by making it more expensive for companies to add new workers. They also suppress wage increases for current workers by driving up total compensation costs.
2.As health care costs rise, corporate operating margins are cut, which reduces the capacity of firms to grow by investing in research, plant and equipment.
3.High and escalating out-of-pocket costs are forcing families to delay mortgage payments or sell their homes, cut back on normal household expenses such as for food and utilities, and take on onerous medical debt.
4.High medical costs can require retired families to spend hundreds of thousands of dollars out of their savings for out-of-pocket health care expenses.
5.High insurance costs are eroding the ability of firms to fund current levels of pension and health benefits.
6.They put American firms at a steep disadvantage in world markets, where they have to compete against companies with much lower health care costs in the nations where they operate.
7.Rapidly escalating costs are producing severe long-term budgetary problems in the public sector affecting the solvency of federal and state health insurance programs, such as Medicare and Medicaid.
We have reached the point where the public’s main domestic concerns — the economy, jobs, and health care — are really one and the same issue. Unless the health care cost crisis is addressed, we cannot assure robust economic growth, strong job creation, or financial security for American families as we struggle as a nation to recover from the global economic crisis. Healthcare reform is necessary to anyone who studies or understands the topic. The real issue it seems is what will ‘Healthcare reform” look like..??
On that score, the arguments about the comparative political economies of healthcare between developed industrial nations are familiar. Simply stated, it is the comparative measures of empirical outcomes between healthcare delivery systems in similar democratic-capitalist nations – for instance, between those of say the U.S., Britain, Canada, Japan, Australia, Germany and France. The evidence in most objective comparisons show that the U.S., while being the wealthiest nation, is also the only industrialized country in the world that does not have universal health care coverage for its citizens.
single payer system. On one end of the continuum, a few Scandinavian countries have the government own the entire care system and directly employ the care providers. Most others use a mixed model of government care and private care. Some European countries completely exclude the government from the entire process. Those countries use only private caregivers and they provide all coverage to their people exclusively through competing private, completely nongovernment health insurers — with no government coverage at all. The only thing we can conclude from looking at each of the many countries that have achieved universal coverage is that no two countries have chosen the same model.The models vary from one country to another. But what doesn’t vary is that every Industrial competitor, and even some emerging nations have managed to cover all of their citizens—even in destitute Cuba. And we have not.(Excerpts from Healthcare Will Not Reform Itself, by George C. Halverson.)
The Heretics of Finance provides extraordinary insight into both the empirical nature of technical analysis, and the character of its successful practitioners. Distinguished MIT professor Andrew W. Lo and private sector Research Analyst Jasmina Hasahodzic interviewed thirteen highly successful, award-winning market professionals who credit their investment acumen and success to technical analysis. The result is the story of technical analysis in the words of the people who know it best — the lively and candid interviews with these gurus of technical analysis.
The first half of the book focuses on the Technical Analysts’ careers: –How and why they learned technical analysis –What market conditions increase their chances of making mistakes –What their average workday is like –To what extent trading controls their lives –Whether they work on their own or with a team –How their style of technical analysis is unique
The second half concentrates on technical analysis and addresses questions such as: –Did the lack of validation by academics ever cause you to doubt technical analysis? –Can technical analysis be applied to other disciplines? –How do you prove the validity of the method? –How has computer software influenced the craft? –What is the role of luck in technical analysis? –Are there laws that underlie market action? –What traits characterize a highly successful trader? –How do you test patterns before you start using them with real money?
Interviewees include: Ralph J. Acampora, Laszlo Birinyi, Walter Deemer, Paul Desmond, Gail Dudack, Robert J. Farrell, Ian McAvity, John Murphy, Robert Prechter, Linda Raschke, Alan R. Shaw, Anthony Tabell, Stan Weinstein
Barbara Ehrenreich, the bestselling author of ‘Nickel and Dimed,’ goes back undercover — this time in a white collar Corporate gig — to expose to America’s ailing middle and upper-class the ephemeral realities and often predatory nature of achieving the ‘American Dream.’As Ehrenreich uncovers through her qualitative as well as quantitative research, America’s middle class is now the most vulnerable and in-crisis sector of the U.S. economy. The problem with this is that this group has historically been the engine — the economic driver — of the American economy.And with the advent of the current financial and global economic crises, the vulnerability of this foundation of, and centrality to, the economy is crumbling. . . And the damage is accelerating. Bait and Switch is ultimately about the crumbling of the ‘American Dream’ where the promise and pursuit of upward socio-economic mobility and financial security has given way to the harsh, violent realityof unchecked competition and capitalism with little social support for newly disposable workers — and their families — and no assurances about the future for those who are fortunate enough to still have a ‘good paying’ corporate career.
The book highlights the people who’ve done everything “right” — college degrees, often ivy-educated, developed marketable skills, with impressive track-records — yet, they’ve become repeatedly vulnerable to the seemingly never-ending string of Wall Street scandals, economic “crises,” eviscerating mergers & acquisitions, and your basic business cycle. Further, today’s globally competitive corporations take pride in shedding their “surplus” employees (i.e., downsizing) or by increasing corporate profit margins by shipping technology and call center jobs overseas into lower labor cost markets like India or the Philippines where they don’t have to pay for healthcare, retirement or vacation benefits for workers.Inevitably, this plunges white collar employees into months or even years at a stretch into the twilight zone of white-collar unemployment where a job search itself becomes a full-time occupation.
In her earlier book, a New York Times bestseller, Nickel and Dimed, Ehrenreich explored the lives of the working poor and other low-waged workers.Now, in Bait and Switch, she enters another hidden realm of the American labor market: the shadowy world of America’s white-collar unemployed.Armed with a new identity and a plausible curriculum vitae of a professional in transition, she attempts to land a good paying middle-class gig.In the process she undergoes “outplacement” counseling, executive career coaching and personality testing — measures all too common in the upper echelon of corporate job placement process — then trawling a series of “career fairs,” corporate boot camps, networking events and evangelical job-search ministries — popular with the large established churches in / around Wall Street and in the midtown business district She gets an image makeover to prepare for the corporate world and works to project the winning attitude recommended for a successful job search.She is proselytized, scammed by executive “head hunters,” lectured, but rejected over and over.
This article by Niall Ferguson a noted British economic histrian is an interesting read from the Sunday New York Times magazine. He places the global economic crisis in the historical context of the law of dinishing returns. In not so many words, what he is saying in succinct context is that as the size, complexity and factors of the ‘boom & bust’ cycle of an economic system expands, then contracts over time that the expected rate of returns of the ‘boom’ diminishes each time, and the negative shock of the ‘bust’ gets greater each time. By parallel, this also results in declining investor confidence in the global markets over time as the complexity and reasonsing for the explanation of ‘why it happend’ expands or becomes more creative (some — myself included – would say in denial) by bankers, traders and Wall Street insiders. Interesting stuff. . .
By NIALL FERGUSON (NYT, Published: May 15, 2009)
If financial crises were distributed along a bell curve — like traffic accidents or people’s heights — really big ones wouldn’t happen very often. When the hedge fund Long-Term Capital Management lost 44 percent of its value in August 1998, its managers were flabbergasted. According to their value-at-risk models, a loss of this magnitude in a single month was so unlikely that it ought never to have happened in the entire life of the universe. Just over a decade later, many more of us now know what it’s like to lose 44 percent of our money. Even after the recent stock-market rally, that’s about how much the Standard & Poor’s 500 index is down compared with October 2007.
Financial crises will happen. In the 1340s, a sovereign-debt crisis wiped out the leading Florentine banks of Bardi, Peruzzi and Acciaiuoli. Between December 1719 and December 1720, the price of shares in John Law’s Mississippi Company fell 90 percent. Such crashes can also happen to real estate: in Japan, property prices fell by more than 60 percent during the ’90s.
For reasons to do with human psychology and the failure of most educational institutions to teach financial history, we are always more amazed when such things happen than we should be. As a result, 9 times out of 10 we overreact. The usual response is to introduce a raft of new laws and regulations designed to prevent the crisis from repeating itself. In the months ahead, the world will reverberate to the sound of stable doors being shut long after the horses have bolted, and history suggests that many of the new measures will do more harm than good. The classic example is the legislation passed during the British South-Sea Bubble to restrict the formation of joint-stock companies. The so-called Bubble Act of 1720 remained a needless handicap on the British economy for more than a century.
Human beings are as good at devising ex post facto explanations for big disasters as they are bad at anticipating those disasters. It is indeed impressive how rapidly the economists who failed to predict this crisis — or predicted the wrong crisis (a dollar crash) — have been able to produce such a satisfying story about its origins. Read more here.
Contrary to the popular view of Africa in constant crisis perpetuated by foreign aid workers — whose reason d’etra hinge on Africa’s dependence – along with the western media, Africa is on the move (See latest World Bank Development indicators here). That is the essential message of Richard Dowden’s compelling new book, but with an umm… interesting jacket photograph quite contrary to the books larger message. There is a new view of Africa emerging in the popular psyche: one of a ‘New Africa,’ on the cusp between its painful history and an increasigly hopeful future. There are three primary drivers of this change, argues one new book (see below): Chinese foreign direct investment (FDI); expanding wireless internet & mobile telecom infrastructure; and the emergence of a new middle class fueled by governing technocrats educated in the West, and an imaginative small or micro business entrepreuneur class. I would add another: with the inflation of commodity pices in recent years, the continent’s plentiful natural resources have helped to fuel investments (e.g., by China) and project development in resource-rich nations. And although African markets and aggregate growth have contracted somewhat in the advance of the global economic crisis, adverse economic impacts, so far, have been relatively mild. Generally speaking, it is also worth noting that Emerging Markets like Brazil and China, among others, have outperformed Developed Markets in the midst of this economic crisis.
Charting Africa's future
Yet, from an investor’s perspective, this spells opportunity. And that’s the reason so-called ‘Frontier Markets‘ (e.g., Botswana, Nigeria, Kenya, et al) stocks, exchange traded funds (ETFs) and ’Frontier Investing’ — the biggest driver of FDI — by private equity, venture or hedge funds – are one of the fastest growing asset class allocation on the Global Markets. Think, if you had invested $10k ten years ago in the top 25 Chinese companies, what would it be worth today..?? Now multiply that by at least a factor of two: Africa is tomorrow’s China, today — the next great, and final investment frontier. Even the vaunted global firm, Morgan Stanley, publishes the asset class’ tracking index, called the MSCI Frontier Markets Indices, widely tracked by portfolio and hedge fund managers.
If that isnt enough, measured by aggregate GDP growth, Africa has been the fastest growing region in the world for the last five years — growing at an average rate of 5.6% per anum. And there’s more. You can read about below in today’s NY Times Book Review of Richard Dowden’s “Africa: Altered States, Ordinary Miracles Listen to NPR Audio clip here.
3 May 2009, By Nicholas Kristof (for the NYT)
Mention Africa in polite company, and those around you may grimace, shake their heads sadly and profess sympathy. Oh, all those wars! Those diseases! Those dictators!
Naturally, that sympathy infuriates Africans themselves, for the conventional view of Africa as a genocide inside a failed state inside a dictatorship is, in fact, wrong. In the last few years, Africa over all has enjoyed economic growth rates of approximately 5 percent, better than in the United States (although population growth is also higher). Africa has even produced some “tiger cub” economies, like Botswana and Rwanda, that show what the continent is capable of. (A new Web site, See Africa Differently, specifically aims to present a more positive image of the continent.)
The bane of Africa is war, but the number of conflicts tearing apart the
ForEx
continent has dwindled. The murderous old buffoons like Idi Amin are gone, and we’re steadily seeing the rise of highly skilled technocrats, who accept checks on their power and don’t regard the treasury as their private piggy bank. The Rwandan cabinet room is far more high-tech than the White House cabinet room, and when you talk to new leaders like Ellen Johnson Sirleaf of Liberia you can’t help wondering about investing your 401(k) in Liberian stocks.
Dowden’s book aims in part to correct the negative stereotypes. Dowden, a veteran British journalist who now heads the Royal African Society, has been bouncing around the continent since 1971 and covers a great deal of ground. Much of the text is travelogue that I found a yawn. But Dowden is at his best when looking at grand themes — like the degree to which Africa is more promising than journalists or aid workers often acknowledge. “The media’s problem is that, by covering only disasters and wars, it gives us only that image of the continent,” Dowden writes — and 90 percent of the Africans reading this are now nodding at that line. “Persistent images of starving children and men with guns have accumulated into our narrative of the continent.”
“The aid industry too has an interest in maintaining the image of Africans as hopeless victims of endless wars and persistent famines,” Dowden continues. “However well intentioned their motives may once have been, aid agencies have helped create the single, distressing image of Africa. They and journalists feed off each other.” In particular, Dowden lets loose at celebrities like Bob Geldof and politicians like Tony Blairwith their “messianic mission to save Africa.” As Dowden writes: “That set teeth on edge. It sounded like saving Africa from the Africans.” Read more here.
“It is my hope that some grasp of what the twenty-first century holds in store for capitalism may enable us to avoid at least some of the pain we might otherwise have to endure,” writes the eminent economist Robert Heilbroner in this important book on the world’s economic future.
Like some of the other tags on my ‘Bestseller’s List,’ this book goes back to the pre-millennia period. However in the context of the current global economic crisis, Heilbroner proves to be prescient in some of the questions he tackles and the assertions he makes in this book.In addressing these questions, Robert Heilbroner takes us to the liberal foundations of capitalism (e.g., Locke, Adam Smith, Sir Robert Keynes, et al). He views capitalism from a wide perspective as both an economic as well as a political system, showing the integral connection between the two sometimes missed by critics of capitalism. He also addresses the over-arching challenges ahead as we re-think the Global economic architecture, and whether America will lead, lag, or even cooperate.
Communism imploded on itself most notably in the former USSR. But almost everywhere else communism once existed – places as divergent as China and Cuba, among others – have turned, in some form, to a Market-driven economy.In other words: capitalism. Despite the triumph of free-market systems the world over; and even though we like to think our form of capitalism – the Anglo-American, or Laissez Faire, model – as the only model of capitalism and otherwise synonymous with baseball & apple pie. The reality is. . . it isn’t. There are different varieties of capitalism around the world: some work better than others. And this is the central point: how we play with other children in the sandbox matters if we’re going to play in the Global arena, as last week’s London G-20 summit laid bare. That’s why the issue of what form 21st-century capitalism will take is so central to the issue of U.S. foreign policy.
No single form of capitalism has emerged worldwide as the global standard for a free-market economic system. Which of the varieties of capitalism will be sufficiently fair, open (transparent), efficient and resilient enough to drive the Global economy in the 21st century..?? What is the appropriate role and behavior of responsible corporations in the Global community..?? Will the responsible multi or transitional corporations play fairly with labor and capital under global regulatory regimes; or will they seek tax and regulatory arbitrage loopholes – which will almost certainly be the case under the Basel II regulatory scheme – at the expense of human capital..?? What role will the government play, and what protections to its citizens will it guarantee in addressing the failures and inefficiencies of our free-market system..?? One shortcoming about this book, in my opinion, was that it didn’t adequately address– or perhaps just didn’t go far enough to explore the various forms and iterations that 21st century capitalism might take. That is a question, however, already joined.
Which Paradigm of Capitalism for the Global Economy..??
Very relevant to restructuring of the Global financial architecture and regulatory framework debate that will be driving the discussions at the upcoming G-20 Summit. I first read this back in the early 90’s but it has seen a revival in the context of current global economic crisis. It examines the two prevailing economic models of global capitalism — the Rhine model (think Germany/France & Japan) and the Laissez Faire, or ‘Anglo-Saxon’ model — and which framework is best suited for 21st century global market and economic realities.
For both the financial history enthusiast and the newcomer to the global financial markets alike, Prof. Niall Ferguson offers an excellent survey of the development of money in his latest of financially themed books. Ferguson, regarded as one of Britain’s most noted historians, is provocative as he weaves together a world of complex relationships and issues in a very palpable yet rich explanation of the evolution of money and its role in society. Smartly written, Ferguson’s book is rather poignant considering current world events and is written in such detail to paint a very informative accounting of events and world issues that have resulted in money becoming what he argues is the “essential backstory behind all history”.
Ferguson’s book has also been turned into a two-hour documentary, written and presented by Ferguson himself, that will air as a four-hour presentation by PBS later in 2009. For the more information regarding the broadcast, click here to view its webpage.
If financial crises
