Global Meltdown for Dummies: A reading list
It struck me very strongly while listening to the "debates" on the Fiscal Treaty in Ireland that many people not only just don't understand the mechanics of what has happened over the last 10 years, they are also a year or two out of date. This is being readily exploited by political groups and other lobbies who are attempting to manipulate public concern for their own ends. The rise of Sinn Fein IRA is a particularly dangerous manifestation of this, and for this reason, I think people need to make a better effort to inform themselves.
Sadly, much of the Irish commentary has been as exploitative as the politicans: once excellent commentators such as Shane Ross, David McWilliams and Eddie Hobbs are not as transparent as they once were. Hobbs remains the most pragmatic of the 3, he is upfront about his own fee based practice, although I would treat his investment advice with a pinch of salt. (Not that he is wrong, but don't treat it as gospel). I lost respect for McWilliams after this http://www.herald.ie/news/mcwilliams-drops-book-signing-as-miriam-row-rages-1933229.html, however its interesting that he doesn't say much about his last analytical role, which was into emerging markets (my main investment focus is on emerging markets, so I suck up everything I can on the subject). Ross has been a huge disappointment in the Dail, his pact with the ULA is so shamelessly self-serving (since he is massively diametrically opposed to the whole ultra left spend spend spend mantra of the group).
What to Avoid or be cautious of
Wasters by Shane Ross and Nick Webb (27 Sep 2010) - while it is correct, and the political gravy trains especially, some of the criticisms are unfair, particularly the energy semi states, which are commercial organisations. Not sure this was a good way of tackling the problem.
Ship of Fools: How Stupidity and Corruption Sank the Celtic Tiger by Fintan O Toole - again, factually correct, but O Toole is a great friend of the same leaky bucket model backers that lobby heavily against cutbacks to their salaries in the form of grants.
The Builders: How a Small Group of Property Developers Fuelled the Building Boom and Transformed Ireland by
Frank McDonald, Kathy Sheridan - again, yeah, but fuels anger without really suggesting solutions.
Anglo Republic: Inside the bank that broke Ireland by Simon Carswell - a better read than the others, but again, the full Anglo story is yet to be told, and will be done so in the courts, where I suspect there many be many surprises
The Best Is Yet to Come by Marc Coleman (26 Nov 2007) - Coleman was an acquaintance at TCD, and even then regarded as a tool. It took me 15 years to see it, but this book is notable, not least because it largely misses the implosion of the economy, and wrongly assumes that demographics alone will influence growth. Marc ought to re-read "Limits to Growth", below. Coleman has back pedalled a lot since, hosts a late night Newstalk programme, and was ejected from FG for repeatedly taking pot shots at the gay community. In fairness they've called him every name under the sun so its no love lost. He's not stupid though, so I wouldn't rule out a future burst of brilliance.
What to Read
David McWilliams The Generation Game (2007) - I think McWilliams best work to date. This is where he unpicks the winners and losers of the 10 year money fest, and looks at their circumstances and positions in the future. He is spot on correct on most, and very accurately garners the impact of excessive borrowing on those who did so. His writings in the early 2000s focused heavily, like Hobbs, on personal indebtedness, and I think he understood back then that there was a time bomb ready to go off. Another UK centric one on the same subject is Jilted Generation: How Britain Has Bankrupted Its Youth by Ed Howker and Shiv Malik (2 Sep 2010)
Michael Lewis, The Big Short: Inside the Doomsday Machine (Penguin, 2011) - good analysis of the development of secondary markets and securitisation of debt which led to todays crisis
Boomerang: The Meltdown Tour by Michael Lewis (6 Oct 2011) - good collection of Vanity Fair articles on countries impacted by the meltdown
Meadows Donella, Meadows Dennis and Randers, Jogen, Limits to Growth (2004 edition - new one due this year) Donella Meadows & Diana Wright, Thinking in Systems: A Primer (2012 ed) - classic study by the Club of Rome funded study into models of global sytems over a 100 year period. Uses Dynamic systems methods to model a computer based model of the world and comes up with 3 alternate possibilities based on varfious variables. Classic model for understanding population growth and modelling of resource depletion and impact
John Mauldin & J Tepper, Endgame: The End of the Debt Supercycle, (2011) - very astute analysis of the unwinding of global debt cycles in the 1st world, Mauldin's book is very accurate in his predictions
K Rogoff and CM Reinhardy, This Time is Different: Eight Centuries of Financial Folly (2009) - excellent analysis of state financial failures from the 13th century on - has many relevant lessons for today
Barabara Rockerfeller, Technical Analysis for Dummies (2011) - good primer on understanding the analysis of securities on various markets, trading practice and portfolio management. Don't bleat "burn the bondholders" without understanding what bonds are and who and what bondholders actually are!!
Eric Berne, Games People Play: The Psychology of Human Relationships - classic study on game theory, actually q quite an entertaining read
Avinash Dixit, Thinking Strategically: Competitive Edge in Business, Politics and Everyday Life - good descriptive pracgmatic guide to game theory on a practical level
Peter Elkind and Bethany McLean, The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron (2004) - excellent analysis of both corporate meltdown and impact of mark to mark accounting on profit collapse
The Competitive Advantage of Nations by Michael E. Porter (1 May 1990) - classic study on market forces on a global scale by Porter, who brought us the 5 forces theory
Accounting: An Introduction by Eddie McLaney and Dr Peter Atrill (24 May 2012) - the chapters on management accounting are the ones to read - you really need to understand current practices in management accounting, cost value analysis and how profits are recorded - there are multiple methods, and mark to mark profit taking is something you need to understand
Articles & Blogs
ESRI - http://www.esri.ie/ - acdemic but accurate, Tony Fahey's articles on the private rented sector from 10 years ago are a vital read to understanding the dynamics of property investment and ownership now.
Michael Lewis's pieces for Vanity Fair show a lot of insight, especially this
John Mauldin writes a weekly blog on economic and investment issues, its worth subscribing too, just for the terseness of his "insights" newsletter - he really has a grasp of the financial market and its interdepence on global economic issues - you can read more here http://www.johnmauldin.com/
Financial Times Alphaville - realtime blog which is very strong on accuracy - http://ftalphaville.ft.com/
"Stimulus Surprise: Companies Retrench When Government Spends" http://hbswk.hbs.edu/item/6420.html - why a "stimulus" actually only perpetuates the problems of an economy
What Else to take with a pinch of salt:
ANYTHING written by political self interests in Ireland, especially Sinn Fein, Workers Solidarity, the Trade Unions, Irish Newspapers, "reports" sponsored by astute but ultimately manipulative organisations such as daft.ie and myhome.ie. The very worst are "think tanks" and "research" sponsored by NGOs, most of which are basically leaky bucket charity modelled and ultimately lobbying for continuing state funding - these are sometimes difficult to spot as they diffusely change name and conceal themselves but include CORI (now called Social Jusitce Ireland), Combat Poverty (actually a state agency!!), anything funded by a CES scheme, REHAB (notorious for its enormous salaries at executive level), Amnesty, the Equality Authority (again a state agency), the list goes on, but the worst are "collective" groups pretending to be new movements, "Get up stand up", "better fairer way" (these groups often have multiple names and campaigns), "Claiming Our Future", etc.
Some exceptions are the Migrant Rights Centre, Eurostat, ERSI (a state run research agency), Citizens Information, MABS and the National Youth Council. These are less likely to encourage perpetuating dependence on the grounds of "impoverishment" and are good at encouraging people to stand up for themselves.
An excellent source of reliable information is Suzy Byrne's blog at http://www.mamanpoulet.com/
Suzy advocates for a more empowered model of support for disabled people that would help end the current model where they basically get drip fed whatever support organisations and state agencies decide what is best for them. Suzy's work in this field is monumental and worth reading to stay up to date.
Note: Don't get me wrong, a lot of NGOs and Third Sector organisations in Ireland do fabulous work: the problem is that during the boom they accepted massive "sweeties" from the state which made them largely state dependent, much of which went into inflated salaries and created enormous vested interests and gravy train careers in that sector. As a result, their positions need to be measured and assessed in light of that self-interest. The leaky bucket model of charities is rife in Ireland, almost all of these organisations perpetuate disempowerment and disenfranchisement by continuing dependence on handouts, a scenario which is basically likely to be chucked straight out of the window by the ongoing restructuring of Ireland, Inc. They fight it to the teeth of course, because their own fat cat salaries require handouts. This is a very good place to start researching alternatives and realistic programmes to help people to become independent and self sufficient - http://kazurihomes.blogspot.co.uk/
A few of the better, though not always perfect sources in Ireland include:
NAMAwinelake - good source of info on NAMA/NTMA
Dr. Constantin Gurdgiev - TCD economist, very much to the right, but accurate and insightful
Ronan Lyons - http://www.ronanlyons.com/ - some of his stuff is great, some is really just wrong - he is good for opening a debate, but there can be a lot of assumptions in his work that need unpicking. That said, he is good for a debate and has been improving a lot over the last few years and comes up with a lot of new ideas worth exploring.