Bloomberg's best business books of 2011

A lot of interesting books here…

http://www.bloomberg.com/news/print/2011-10-28/jobs-belittles-bozos-quant-models-fail-in-top-business-books.html

·         “Adapt” by Tim Harford (Farrar, Straus & Giroux/Little, Brown). The Undercover Economist explains why “success always starts with failure.”

·         “Beyond Mechanical Markets” by Roman Frydman and Michael D. Goldberg (Princeton). A groundbreaking look at how to tame asset booms and busts.

·         “Boomerang” by Michael Lewis (Allen Lane/Norton). The author of “Liar’s Poker” and “The Big Short” returns with a collection of writings on his journeys through “the New Third World,” from Iceland and Ireland to California.

·         “Civilization” by Niall Ferguson (Allen Lane). The prolific Harvard historian explains how the West came to dominate the globe.

·         “Confidence Men” by Ron Suskind (Harper). An inside look at how Barack Obama came under the spell of Timothy Geithner and Lawrence Summers, “two men whose actions had contributed to the very financial disaster they were hired to solve.”

·         “Exorbitant Privilege” by Barry Eichengreen (Oxford). A brisk primer on the dollar’s role as the dominant international currency.

·         “Extreme Money” by Satyajit Das (FT Press). An idiosyncratic yet withering analysis of how 30 years of financial alchemy and excessive credit plunged us into the Great Recession.

·         “Fatal Risk” by Roddy Boyd (Wiley). An engaging reconstruction of how AIG came unstuck.

·         “The Futures” by Emily Lambert (Basic). A bouncy jaunt through the history of Chicago’s trading pits.

·         “Grand Pursuit” by Sylvia Nasar (Fourth Estate/Simon & Schuster). An absorbing narrative history of economists -- from Beatrice Webb to John Maynard Keynes -- who pursued the idea that mankind could control its destiny.

·         “Greece’s ‘Odious’ Debt” by Jason Manolopoulos (Anthem Press). A hedge-fund manager explains how his Greek compatriots gambled away their future -- and how German and French bankers egged them on. Who’s bailing out whom?

·         “Guaranteed to Fail” by Viral V. Acharya, Matthew Richardson, Stijn Van Nieuwerburgh and Lawrence J. White (Princeton). Four professors at New York University’s Stern School of Business explain how Fannie Mae and Freddie Mac got so big and why we must fix them.

·         “The Hare With Amber Eyes” by Edmund de Waal (Chatto & Windus/Farrar, Straus & Giroux): This meditative history of the once mighty Ephrussi trading and banking family defies literary pigeonholes. Though not a business book per se, it holds deep lessons about the creation and destruction of wealth.

·         “The Haves and the Have-Nots” by Branko Milanovic (Basic). The World Bank economist presents “a brief and idiosyncratic history” of inequality, from ancient Rome to contemporary London.

·         “How the West Was Lost” by Dambisa Moyo (Allen Lane/ Farrar, Straus & Giroux). A reasoned look at how the world’s most-advanced nations are squandering their economic lead.

·         “Idea Man” by Paul Allen (Portfolio/Penguin). This memoir by Microsoft’s co-founder offers a fascinating look at what it took to build the software behemoth.

·         “Love and Capital” by Mary Gabriel (Little, Brown). An exemplary biography of Karl and Jenny Marx and their children.

·         “Models.Behaving.Badly” by Emanuel Derman (Free Press/ Wiley-Blackwell). The former head of quantitative finance at Goldman Sachs Group Inc. (GS) explores why models failed during the mortgage meltdown and why modelers must use them more wisely.

·         “Money and Power” by William D. Cohan (Doubleday). The sometimes “schizophrenic” behavior of Goldman Sachs comes into focus in this history by the author of “House of Cards” and “The Last Tycoons.”

·         “The New Lombard Street” by Perry Mehrling (Princeton). A cogent analysis of how the financial crisis turned the Federal Reserve into America’s “dealer of last resort.”

·         “Oil’s Endless Bid” by Dan Dicker (Wiley). Petroleum prices have gone crazy, and a large share of the blame belongs to Goldman Sachs, Morgan Stanley and other banks, argues this Nymex trader.

·         “The Price of Everything” by Eduardo Porter (Portfolio/ Heinemann). An energetic tour of how prices work, from cheap sperm to $4,731 printer ink.

·         “Punching Out” by Paul Clemens (Doubleday). A blackly comic journal of what happens after a U.S. factory shuts down.

·         “The Quest” by Daniel Yergin (Allen Lane/Penguin Press). The energy economist who brought us “The Prize” sets out to debunk peak oil theory.

·         “Reckless Endangerment” by Gretchen Morgenson and Joshua Rosner (Times Books). A thoughtful contribution to the debate on whether Fannie Mae really was “ground zero” in the subprime- mortgage explosion, as some critics argue.

·         “Red Capitalism” by Carl E. Walter and Fraser J.T. Howie (Wiley). An eye-opening look at how Communist Party bosses control China’s economy.

·         “Spousonomics” by Paula Szuchman and Jenny Anderson (Random House/Bantam). A geeky guide to finding marital bliss through economics.

·         “Steve Jobs” by Walter Isaacson (Simon & Schuster). A memorable biography of the brilliant and maddening man who revolutionized the way we work and play.

·         “Street Freak” by Jared Dillian (Touchstone). A former trader at Lehman Brothers Holdings Inc. (LEHMQ) describes his battle to survive and thrive in a business that drove him over the edge.

·         “Ugly Beauty” by Ruth Brandon (Harper). An incisive history of cosmetics tycoon Helena Rubinstein and Eugene Schueller, the founder ofL’Oreal SA. (OR)

Wilbur Ross interview on attractive valuations in Japan

"Forty-five percent of all the listed companies in Japan have more cash than they have debt ... There’s no other market in the whole world that’s as liquid in terms of the individual companies as Japan."

Jim Chanos on Bloomberg (10.28.2011)

Chanos remains skeptical about the situation in Europe. The current European solution is a "band-aid at best." He is still a huge China bear saying that the country remains on a treadmill to hell except they are going even faster. He doesn't believe the numbers coming out of Chinese banks. Moreover, real estate transactions are down 40-60% YoY.

Ken Rogoff on Bloomberg (10.28.2011)

Rogoff wrote "This Time is Different" with Carmen Reinhart. The book examines economic crises spanning 800 years and so far has provided a framework for understanding the deleveraging process and explaining why this "recovery" has been so slow.
Rogoff discusses the trajectory of debt and the situation in Europe with Tom Keene and with Bloomberg anchors.

"The biggest risk to the US economy is Europe"

Russell Napier on The Long View (FT)

Russell Napier of CLSA is a respected economic historian and this is an excellent interview with the Financial Times on his latest piece The Long View.

Also, here's a link to another interview with Napier. This interview has been receiving a significant number of hits on this blog.

Yet another interview with Hugh Hendry

Normal is boring - so here's Hugh Hendry

Hugh Hendry interview at LSE

A Halloween treat! The must-read ZeroHedge blog just published this gem of an interview with the quirky Hugh Hendry. The interview is a little dated but supremely entertaining nonetheless.

Stephen Roach Interview

"The idea that we can run zero interest rates in perpetuity and penalize savers is absurd."

John Mauldin: The End Game meets the Millenium Waver

I subscribe to Mauldin's free newsletters. High quality and always a great read.

Some manager news today

·         David Tepper’s Appaloosa Said to Fuel Trading in CMBS by offering to buy and sell bonds with a face value of at least $8 billion after Wall Street firms pulled back from making markets in the debt. The $15 billion investment firm is providing bids and offers on at least 49 bonds issued in 2006 and 2007 with prices from 22 cents to 61 cents on the dollar

·         Bill Gross tweet on the EU summit today: “This is no summit. It’s a coffee klatch filled with petit fours and empty promises.”

·         Marc Faber told CNBC that stocks will be a better investment than bonds for the next 10 years. "When you print money everything goes up at different times, different asset classes … I think that stocks may still continue to go up, and I would rather own equities than government bonds for the next 10 years."

·         Whitney Tilson: 5 money moves one Buffett disciple is making now. 1. Buy US Banks (GS, JPM, C) 2. Buy Tech (Dell, Apple, Microsoft) 3. Own Berkshire Hathaway 4. Look at management’s track record (Howard Hughes Corp and Anheuser Busch) 5. Piggyback on activist shareholders (Bill Ackman and JC Penney) 

Mark Dow interview on Yahoo

Mark Dow is a portfolio manager at Pharo.

Notes from Ray Dalio's interview with Charlie Rose

Here's a link to the Ray Dalio interview on Charlie Roses's website. ZeroHedge has the complete transcript of the interview.


Big picture

1.       We’re going through deleveraging since we have reached our debt limits

2.       Problem with monetary and fiscal policies being out of ammunition  

3.       Everybody is at each other’s throats and there is a lack of quality conversation about dealing with these issues.

Debt and Deleveraging

·         Can divide the world in two parts:

o   Debtor developed world that has reached its debt limits

o   Creditor emerging world

·         There’s a subcategory of countries that can print money and not print money

·         There is a big imbalance between these worlds which is the problem of debt

·         The deleveraging process will take at least 10 years. It’s important to spread it out and make sure it is orderly.

·         Debt super-committee: Do not believe we will find a political solution – pessimistic about that.

·         Private sector is even more important than public sector debt. Individuals are overly indebted. If you resolve budget deficit and do not resolve private sector debt issue, the promised amount still cannot be paid.

·         Balance between austerity and stimulus: Have to make sure any investments that are made deliver a payback.

The government budget balance:

·         If you raise taxes by 3% and cut spending by 3%, they would eliminate half of $8.5T deficit over the next 10 years. Instead we have a division between republicans who don’t want to raise taxes and democrats don’t want to cut spending. 70% of taxes paid by top 10% earners.

Jobs

·         What’s depressing jobs is that the world’s demand and supply for labor has changed with India and China. Also technology has had an effect.

Europe

·          There is a debt problem. Can either transfer money from rich to poor countries, or you can print money, or you can write down the debts.

·         Thinks they will print money and do haircuts

China and EM

·         China can’t control credit growth through interest rates (because of their current policy) which is leading to credit bubble.

·         Lending is bypassing the credit system which is a dangerous thing and creates risk.

United States

·         Bank leveraged about 15 to 1, so there is a capital problem if assets go down by 1/15

·         Usually there bank crises every 10 years

·         Getting money in the hands of someone who will spend money is not easy for monetary policy, so it will not be very effective

·         We should be able to grow at a rate comparable to income growth (i.e. 1.5% to 2%) if deleveraging is orderly, but unemployment rate will stay the same or go higher which will lead to social tension and can lead to a Greek-like situation

On BW

·         The #1 principle at BW is that if something doesn’t make sense to you have the right and obligation to explore it.

·         Knowing what you don’t know if extremely value. We can be wrong and we should recognize it.

·         “The great fallacy is that people know more than they do” The process for learning is to say “I don’t know.”

·         People should be asking “I wonder” instead of “I think this”

·         BW is an unusual place and an usual culture

·         They are exactly the opposite of a cult since the top principle is to think for yourself and not believe anything. Speak up, don’t hide it, and don’t talk behind people’s backs

·         One of his favorite books is Einstein’s mistakes.

OWS

·         The biggest problem is the lack of quality dialogue

·         He doesn’t adequately know all the views behind it but he understands the frustration and discontent.

Overall

Rose: Are you optimistic or pessimistic?

“I am concerned… It’s a test of us and our society”

Ray Dalio on Charlie Rose Oct 20, 2011

The one and only Ray Dalio of the world's largest hedge fund, BridgeWater, was on Charlie Rose on Oct 20.

Here's a link to the Ray Dalio interview on Charlie Roses's website.

My notes on the interview.

ZeroHedge has the complete transcript of the interview.

I'll embed the video as soon as it is available!

Joel Greenblatt interview on hedge funds

Greenblatt runs Gotham Capital, and is the author of some very well received books, including You Can Be a Stock Market Genuis and The Little Book That (Still) Beats The Market.

Mario Gabelli on bank stocks and the economy

I've never been a big fan of Super Mario's. I think he's a much better asset gatherer than investor. His retail funds tend to charge higher fees than the competition without the corresponding excess returns. In any case, given his stature in the industry, probably worth listening to.

Rob Arnott: We are in a recession

Five minute interview with Rob Arnott on Marketwatch

A Conversation with Kyle Bass

AmeriCatalyst 2010: Confessions of a Dangerous Mind - A Conversation with Kyle Bass
Bass is one of the sharpest cookies out there. This video is an oldie but a goodie.

AmeriCatalyst 2010: Confessions of a Dangerous Mind - A Conversation with Kyle Bass from SYJackson on Vimeo.

Debt: The first 5000 years

David Graeber Lecture
(HT: ValueWalk)

S&P Sector Historical Weightings

An amazing graphic from the excellent Bespoke Investment Group

Mary Meeker's Presentation on Tech Trends

Mary Meeker's Presentation on Tech Trends
KPCB Internet Trends (2011)

Presentations at The Big Picture Conference

Presentations at The Big Picture Conference (organized by blogger Barry Ritholtz). Well worth checking out.

Stephen Jen's three favorite currencies

Stephen Jen runs the SLJ Macro Partners hedge fund, and is the former currency research head at Morgan Stanley.

"My three favorite currencies to buy? Dollar, dollar, dollar!" 

Jen expects more dollar strength vs. the euro, aussie, real and won. He’s also fairly bearish on developed markets, especially Europe.

“The developed West will struggle in the quarters and years ahead … European growth will likely disappoint … If we assume European banks, over the course of several years, reduce their LTD ratio toward that of the U.S., some $7 trillion in loans will need to be curtailed, assuming deposits don’t rise”

Rob Arnott of Research Affiliates on Consuelo Mack's WealthTrack

Rob Arnott of Research Affiliates on Consuelo Mack's WealthTrack
Arnott is one of the sharpest guys out there. He also is the creator of the catchy "3D Hurricane" moniker - Debt, Deficits, and Demographics.

Jim Rogers: Preparing your kids for success

Jim Rogers: Preparing your kids for success
Save money, learn Mandarin and go into farming.

SocGen's Martin on Global Stocks, Europe Crisis (Bloomberg)

SocGen's Todd Martin on Global Stocks, Europe Crisis, Volcker Rule

Mark Dow on Europe (Bloomberg)

Mark Dow, hedge fund manager, on the European Sovereign Debt Crisis

The Tyranny of Low Interest Rates

Kenneth Buckfire interview on CNBC

Jim Chanos on CNBC

Chanos continues to be skeptical of China's growth.

Macr Faber Interview (CNBC) 10/11/11

A cheery Marc Faber is interviewed by the sourpusses at CNBC. His "blond" joke falls flat, but he quickly gets down to business. Faber doesn't see how healthy long-term growth is possible without a deep "purge." He sees the possibility of social unrest. He likes a flat tax to reduce restrictive regulatory policies.
Some quotes:
"The lack of savings is the problem of the United States"
"Listen you lazy buggers...Now you have to tighten your belts"
"I don't see how the Western world including the US, Japan, and W. Europe can grow. They're going to stagnate."
"Nobody wants to work in the UK"
"Governments in the western world have grown like cancer and now they are trying to protect themselves"
"The protesters should occupy the Federal Reserve!"

Gary Shilling interview with Bloomberg

Gary has been spot on with his deflation thesis.

Jim Chanos on China (Bloomberg)

Jim Chanos talks to Bloomberg at the Global Alternative Investment Conference in New York

Chanos talks about China's SWF to buy shares in Chinese banks; He also sees the property market continuing to deteriorate. He remains short the European banks.

Some quotes:

• "Two months ago people thought there was nothing wrong with Chinese banks. This shows how quickly things have deteriorated"
• "The property market is in the first innings of a pullback"
• "Europe is following the same model as 2008 but without the capital raising"

Greg Zuckerman on John Paulson's portfolio

Greg Zuckerman on John Paulson's portfolio
I guess Zuckerman is the go-to-guy on John Paulson having profiled him in "The Greatest Trade Ever"

Russell Napier interview

Russell Napier is a respected analyst who works at CLSA and is always worth hearing out.

(HT Zerohedge)

Vitaliy Katsenelson interview on Yahoo

Vitaliy Katsenelson
Focus on China not Europe! The crash in copper prices signals a hard landing ahead for China

Michael Lewis interview (WSJ)

Michael Lewis has been hitting the media circuit hard, promoting his new book, Boomerang. Here's an 11 minute interview with the Wall Street Journal.

Bob Janjuah Interview CNBC

Bob The Bear Is Back

Michael Lewis interview with Tom Keena (Bloomberg)

Michael Lewis talks with Tom Keene (Bloomberg)
Lewis has been all over the circuit, promoting his new book Boomerang that was released on Oct 3. Unfortunately, the book appears to be just a rehash of his Vanity Fair articles on different European countries (Iceland, Greece, Ireland, Germany).

Kyle Bass Interview with CNBC: "Where is the value now?"

More from Kyle Bass's 2011 Barefoot Economic Summit at his huge ranch in Texas
"Where is the value now?"

Warren Buffett on Charlie Rose

Warren Buffett on Charlie Rose

Michael Lewis CNBC Interview on Europe

Michael Lewis discusses Europe, Kyle Bass on CNBC

Felix Zulauf interview

Felix Zulauf interview

Kyle Bass interview with CNBC

Kyle Bass interviewed by CBNC at his BEST 2011 Conference / Economic Summit at his ranch in Texas. Bass is one of my favorite hedge fund managers.

Bill Ackman interview with Bloomberg (September)

Bill Ackman Says HP `Looks Cheap' But He Won't Invest
Ackman says he would pass on HP because of its "return on invested brain damage." He thinks the brand has been permanently damaged and employees have low morale.
(Ackman spoke at the Harmonie Club in New York in a Bloomberg discussion moderated by Erik Schatzker)

Harry Dent talks about the Great Crash Ahead

Harry Dent talks about the Great Crash Ahead