Book Bits | 6.14.14

The Secret Club That Runs the World: Inside the Fraternity of Commodity Traders
By Kate Kelly
Summary via publisher, Penguin
Nestled deep in the towers of banking and finance are the commodities traders who spend their days gambling with oil, gold, and corn contracts. They’re highly educated world travelers with a penchant for risk, and they’re here to bet big on the future of the raw materials that make our economies hum. They’re wealthy, barely regulated, and can be a force for tremendous good – or ill. Now Kate Kelly, the bestselling author of Street Fighters, shines light not just on the commodities market, but also on some of its key figures. Her characters include Pierre Andurand, a hedge-fund manager who generated the winningest annual performance ever for an oil trader in 2008, and Ivan Glasenberg, whose secretive Swiss commodities giant, Glencore, has been thrown into the spotlight. Kelly paints a dramatic narrative of immense power in the hands of a few, and the so-far hapless efforts by the Obama Administration to rein in the cowboys.

The Pillars of Finance: The Misalignment of Finance Theory and Investment Practice
By Guy Fraser-Sampson
Summary via publisher, Palgrave
In The Pillars of Finance, author and finance expert Guy Fraser-Sampson challenges the fundamental conventions of modern finance. He asserts that, at its core, finance is not the highly scientific, modern discipline that most would claim, but has in fact stood still for the past 50 years. Central to the book are the main pillars of the financial markets – risk, return, and value – pillars of financial practice that are not properly understood by the industry, as began to become clear in 2007. Instead, the industry is blinded by a quantitative maze, obsessed with mathematical solutions, stochastic models, and normal distributions, which, although they have a place, should not provide the bedrock of the global marketplace. The author also looks at the industry’s overreliance on past performance. Historical data is the foundation of financial forecasting and derivatives pricing, and while much can be gleaned from the past, it cannot and should not be seen as a mirror of the future. Finally, the author provides solutions to these issues, which include the need for the industry to undergo a transformation similar to that which occurred in the Modernist movement in other fields.

Trading Economics: A Guide to Economic Statistics for Practitioners and Students
By Trevor Williams and Victoria Turton
Summary via publisher, Wiley
The recent global financial crisis stressed the need for economists who understand how key economic and market statistics drive financial market trends and how to mitigate the risks for businesses that those trends affect. Trading Economics provides guidance for navigating key market figures in a convenient and practical format. Emphasizing the link between economic data and market movements, this book analyzes surveys, economic growth statistics, inflation, labor markets, international trade, monetary and fiscal indicators, and their relevance in financial markets. It bypasses complex terminology to offer a hands-on, accessible introduction to financial statistics and how to profit from them.

The Fourth Revolution: The Global Race to Reinvent the State
By John Micklethwait and Adrian Wooldridge
Review via The Seattle Times
Micklethwait and Wooldridge reject the left’s argument that government will make better decisions if it listens a lot more to the people, especially left-wing people. Government has listened plenty, they say; the problem is that it has undertaken to do all sorts of things it is not good at. The more government undertakes to do, they write, “the worse it performs and the angrier people get.”

The Trouble with Europe: Why the EU Isn’t Working – How it Can Be Reformed – What Could Take Its Place
By Roger Bootle
Summary via publisher, Nicholas Brealey Publishing
Designed by its founders to pursue ever closer union the EU has reached fundamental decision point. While its elites still press for greater integration, support for the project among its citizenry is dwindling fast. A noble dream born in the shadow of a terrible war, conceived in a world of powerful blocs dominated by the United States and the USSR, the European Union has become hopelessly ill equipped for an era of globalisation and emerging markets. In its current form it is nothing less than the greatest obstacle between Europe and success. What’s more, if nothing changes, its share of world GDP will drop sharply and its influence will be greatly diminished. This book is written especially for all fair-minded people across Europe who have previously been presented only with a choice of extremist ravings or wads of impenetrable Euro-speak. To all those who may be called upon to contribute to a decision about Europe’s future, or their country’s part in it, Roger Bootle offers a fluent, readable and even-handed analysis of the options of how Europe could better serve its people.

What Have We Learned?: Macroeconomic Policy after the Crisis
Edited by George Akerlof, Olivier Blanchard, David Romer and Joseph Stiglitz
Summary via publisher, MIT Press
Since 2008, economic policymakers and researchers have occupied a brave new economic world. Previous consensuses have been upended, former assumptions have been cast into doubt, and new approaches have yet to stand the test of time. Policymakers have been forced to improvise and researchers to rethink basic theory. George Akerlof, Nobel Laureate and one of this volume’s editors, compares the crisis to a cat stuck in a tree, afraid to move. In April 2013, the International Monetary Fund brought together leading economists and economic policymakers to discuss the slowly emerging contours of the macroeconomic future.

The New Geography of Capitalism: Firms, Finance, and Society
By Adam D. Dixon
Summary via publisher, Oxford University Press
Reviewing a range of debates and theories across the contemporary social sciences – varieties of capitalism, financialization, global production networks – the book shows how the insights of economic geography can be usefully brought to bear in understanding current trends, and the changing relationships between global financial markets, multinational firms, and contemporary welfare states.

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