Book Bits | 10.05.13

The Fall of the Euro: Reinventing the Eurozone and the Future of Global Investing
By Jens Nordvig
Summary via publisher, McGraw-Hill
The euro started out with great promise, but it has seen major problems in the last few years. What will happen if Germany decides to drop the euro? Greece? Italy? Spain? How will your investments be affected? The financial crisis of 2007-2008 may have had its epicenter in the United States, but it exposed fault lines inherent in the euro. Some have given way, resulting in crises in Greece, Spain, Ireland, Cyprus, and other European nations. But if action isn’t taken soon, the whole European financial system might give way to a crisis the likes of which the world has never seen. Jens Nordvig describes the potential outcome as “financial anarchy.” The Fall of the Euro is a detailed exploration of this precarious situation. As Nomura’s global head of currency strategy, Jens Nordvig is among the world’s top experts on the euro, and he provides the information, insight, and authoritative analysis you need to make the wisest investment decisions possible.

David and Goliath: Underdogs, Misfits, and the Art of Battling Giants
By Malcolm Gladwell
Review via The Christian Science Monitor
Goliath had it coming. But why did the big guy take the big fall that’s inspired countless generations of underdogs to aim high? Malcolm Gladwell, America’s patron saint of human behavior, offers an unexpected answer in his new book and uses it to puncture our assumptions about winners, losers and power itself. David and Goliath: Underdogs, Misfits and the Art of Battling Giants is enlightening and entertaining, even if Gladwell’s grand theory wobbles a bit. It’s not just a rock that slays Goliath, it turns out, and David is more than a man with a slingshot. As Gladwell explains, being a hulk of a guy – or, as the behemoth’s mother might have put it, just big-boned – gives Goliath advantages and disadvantages.
Avoiding the Fall: China’s Economic Restructuring
By Michael Pettis
Excerpt via Bloomberg
If we accept the argument that China must, and will, rebalance its economy by reducing its reliance on investment, what happens if it proves politically impossible to cut investment rates sharply? Gross domestic product growth rates would remain very high, but debt levels would also grow unsustainably. At some point, China will reach its debt capacity limits and no longer be able to fund investment.
At this point, the country would fall into the self-reinforcing process of chaotic adjustment that characterized the U.S. in the early 1930s or Brazil in the mid-1980s. As investment falls and GDP growth grinds to a halt, rising financial distress causes businesses to fire workers. Unemployment causes consumption growth to drop, and GDP growth falls even further, resulting in more distress.
What Happened to Goldman Sachs: An Insider’s Story of Organizational Drift and Its Unintended Consequences
By Steven G. Mandis
Summary via publisher, Harvard Business Press
This is the story of the slow evolution of Goldman Sachs–addressing why and how the firm changed from an ethical standard to a legal one as it grew to be a leading global corporation. In “What Happened to Goldman Sachs,” Steven G. Mandis uncovers the forces behind what he calls Goldman’s “organizational drift.” Drawing from his firsthand experience; sociological research; analysis of SEC, congressional, and other filings; and a wide array of interviews with former clients, detractors, and current and former partners, Mandis uncovers the pressures that forced Goldman to slowly drift away from the very principles on which its reputation was built. Mandis evaluates what made Goldman Sachs so successful in the first place, how it responded to pressures to grow, why it moved away from the values and partnership culture that sustained it for so many years, what forces accelerated this drift, and why insiders can’t–or won’t–recognize this crucial change.
Exodus: How Migration is Changing Our World
By Paul Collier
Summary via publisher, Oxford University Press
In Exodus, Paul Collier, the world-renowned economist and bestselling author of The Bottom Billion, clearly and concisely lays out the effects of encouraging or restricting migration. Drawing on original research and case studies, he explores this volatile issue from three perspectives: that of the migrants themselves, that of the people they leave behind, and that of the host societies where they relocate. As Collier shows, emigrants from the poorest countries of the world tend to be the best educated and most ambitious. And while these people often benefit economically by leaving their home countries, they also drain these countries of the skills they so desperately need. In the absence of controls, emigration would accelerate: the poorest countries would face nothing less than a mass exodus. Ultimately the danger is that both host and countries of origin may lose their national identities — an outcome that would be disastrous, Collier argues, as national identity remains a powerful force for good. Migration must be restricted to ensure that it benefits both those countries left behind and those opening their doors.
Greed Can Be Good: Towards a New Paradigm for Investment Banking in the Twenty-First Century
By David Charters
Summary by author via publisher, Elliott & Thompson
Do we need a new code of ethics? A different approach to the way we do business? Or should we just repackage the old one and carry on? There are no definitive answers and clearly no easy ones for an industry used to getting its own way. All I can offer is the insight of an insider and my reflections for the future. Plus my assurance that whatever happens, bankers will still come out on top. We always do.