Voting Rules:
· Everyone gets 6 votes
· You must use all 6 votes – you can allocate the votes to as many books (or only 1 book if you want)
· You can’t vote for your own book
Book Choices:
The First World War
Author: Gerard J. De Groot
Length: 240 pages
The origins of the First World War, both diplomatic and social, are discussed thoroughly examined. The reader is then taken through the major battles on the Eastern and Western fronts, and is given insight into the eventual Allied victory. The war at sea, on the home front, and in distant theaters is carefully examined. The war as it was experienced by the men in the trenches is also explored.
A Bubble That Broke the World
Author: Garet Garrett
Length: 192 pages
The names of the players are different, but these cautionary essays about massive national debt-written in the long wake of World War I and as the Great Depression was starting to make its horrible power fully known-are still fully applicable today. A powerful libertarian voice of the early 20th century, Garet Garrett, writing originally in the Saturday Evening Post, warned about the extension of American credit to a Europe staggering under a massive debt leftover from the financing of World War I… a situation echoed, if reversed, today as the overextended United States continues her rampant borrowing. Collected in book form, Garrett’s writings are a cry for a retreat from financial insanity, a clear-eyed look at a complicated and little understood era of financial history, and perhaps an ominous warning for today. American journalist GARET GARRETT (1878-1954) also wrote The American Omen (1928), Rise of Empire (1941), and Garet Garrett’s: The People’s Pottage (later retitled Ex America) (1951)
The Invention of Air: A Story Of Science, Faith, Revolution, And The Birth Of America
Author: Steven Johnson
Length: 304 pages
The author of Everything Bad Is Good for You provides an entertaining account of the eighteenth-century scientist and radical Joseph Priestley’s monumental discovery that plants restore “something fundamental”—what we now know as oxygen—to the air. Johnson also offers a clear-sighted and intelligent exploration of the conditions that are propitious to scientific innovation, such as the availability of coffee and the unfettered circulation of information through social networks. The members of the networks that Priestley belonged to, including Benjamin Franklin and Thomas Jefferson, provide Johnson with some of his strongest material. But he sometimes overstates the relationship between politics and science, particularly when he strains to make the case that Priestley, after fleeing England in 1794, became a pivotal figure in the formation of the American republic.
Where Good Ideas Come From: The Natural History of Innovation
Author: Steven Johnson
Length: 336 pages
With Where Good Ideas Come From, Steven Johnson pairs the insight of his bestselling Everything Bad Is Good for You and the dazzling erudition of The Ghost Map and The Invention of Air to address an urgent and universal question: What sparks the flash of brilliance? How does groundbreaking innovation happen? Answering in his infectious, culturally omnivorous style, using his fluency in fields from neurobiology to popular culture, Johnson provides the complete, exciting, and encouraging story of how we generate the ideas that push our careers, our lives, our society, and our culture forward.
Beginning with Charles Darwin’s first encounter with the teeming ecosystem of the coral reef and drawing connections to the intellectual hyperproductivity of modern megacities and to the instant success of YouTube, Johnson shows us that the question we need to ask is, What kind of environment fosters the development of good ideas? His answers are never less than revelatory, convincing, and inspiring as Johnson identifies the seven key principles to the genesis of such ideas, and traces them across time and disciplines.
Most exhilarating is Johnson’s conclusion that with today’s tools and environment, radical innovation is extraordinarily accessible to those who know how to cultivate it. Where Good Ideas Come From is essential reading for anyone who wants to know how to come up with tomorrow’s great ideas.
The Gnostic Gospels
Author: Elaine Pagels
Length: 224 pages
A clear, cogent, and very effective introduction to the subject of Gnosticism, a different form of Christianity that was declared heretical and virtually stamped out by the orthodox church by the start of the second century after Christ. Most of what we knew of the Gnostic belief system came from the religious authors who worked so hard to destroy the movement, but that changed drastically with the still relatively recent discovery of a number of lost Gnostic writings near Nag Hammadi in Upper Egypt (like Dead Sea scrolls)
The Alchemy of Air: A Jewish Genius, a Doomed Tycoon, and the Scientific Discovery That Fed the World but Fueled the Rise of Hitler
Author: Thomas Hager
Length: 281 pages
Fixed nitrogen (which is immediately usable to plants) is essential in agriculture. Its rarity dramatically shaped the world and its politics. But by 1905, as Hager details, German chemist Fritz Haber discovered a process for transforming abundant air-borne nitrogen into ammonia, and Carl Bosch’s ingenious engineering scaled Haber’s benchtop chemistry into industrial processes to make fertilizer. But Hager’s story is not only one of triumph, of how Haber and Bosch invented a way to turn air into bread, earning a Nobel Prize and saving millions from starvation. This is also a story of irony and tragedy. First, life-saving nitrogen is also the main ingredient in explosives, and Hager cogently summarizes the Haber-Bosch process’s critical role in both world wars. In addition, Hager illustrates Haber’s extreme German patriotism and desperate wish to assimilate; shattered by the rise of Hitler, he became an outcast, abandoned even by his onetime colleague Bosch.
The Best and Brightest
Author: David Halberstam
Length: 700 pages
The Vietnam War has seemed more shadowy and cinematic to me than anything else for most of my life. I was born during the Watergate Hearings. My generation was touched by the war in Vietnam, but only in the sense that our parents were part of it—whether they marched for peace or served in the military or fell somewhere in between. But unlike the Baby Boomers, we are not defined by the war—it, literally and figuratively, did not make us. So, as a consequence, when I think of the Vietnam War it is the images that the generations before me created that come to mind—Apocalypse Now, Full Metal Jacket, Platoon…
When I read The Best and the Brightest, that all changed. For the first time, I understood. No matter what your position may have been or may be, this book fully and expertly explores the American foreign policy decisions and actions that led to this war and its execution and paints a clear picture of its catalytic role in the shaping of today’s America.
1. World War I - Gerald DeGroot
Barnesy has mentioned this topic and this appears to be the best, compact WWI summary available. It’s expensive new (because it’s awesome) so I would prob go with a “pre-owned”. pp 240
http://www.amazon.com/First-World-War-Twentieth-Century-Wars/dp/0333745353
2. The Gnostic Gospels, Elaine Pagels
A clear, cogent, and very effective introduction to the subject of Gnosticism, a different form of Christianity that was declared heretical and virtually stamped out by the orthodox church by the start of the second century after Christ. Most of what we knew of the Gnostic belief system came from the religious authors who worked so hard to destroy the movement, but that changed drastically with the still relatively recent discovery of a number of lost Gnostic writings near Nag Hammadi in Upper Egypt (like Dead Sea scrolls). pp 224
http://www.amazon.com/Gnostic-Gospels-Elaine-Pagels/dp/0394502787/ref=cm_srch_res_rpli_1
3. God and Man at Yale - William F. Buckley
Classic - though I’m sure I’ll have my doubts… pp 300
http://www.amazon.com/God-Man-At-Yale-Anniversary/dp/089526692X/ref=sr_1_1?s=books&ie=UTF8&qid=1283167327&sr=1-1
4.The Best and Brightest - David Halberstam
This would prob be my #1 choice - though it is 700 pages, so understand if we want to eliminate it. Quite a description here and largely considered the best book on the background to and decisions during the Vietnam War
http://www.amazon.com/Best-Brightest-David-Halberstam/dp/0449908704/ref=cm_srch_res_rpli_1
Here are a couple high level questions and then some specific ones based on references to the book. For some I’ve just included a quote – we can just see what people’s reactions are.
1. Who takes the most blame for the subprime crisis? Break out some percentages.
a. Investment banks
b. Mortgage originators
c. Ratings agencies
d. Government regulators
e. Politicians & legislators
f. The Fed
2. Who is/are the most impressive of the characters portrayed here?
a. Burry
b. Eisman
c. Lippmann
d. Cornwall
3. What could have been done to prevent this problem?
a. Should we have?
b. Were the bailouts necessary or should we have let our financial system burn to the ground?
4. This book hinges on the psychology of the market, the herd mentality, and how being a “contrarian” is the only way to really beat it. When Michael Burry had executed perfect CDS trades, but they were working against him (in the short-term b/c market was frothy) his investors completely lost confidence in him and acted somewhat irrationally by demanding their money back.
a. Does this clearly show how markets are NOT efficient, at least in the short-medium term? Even great investors like Greenblatt got scared and couldn’t understand that his manager was making exceptionally great trades.
b. “All of them were almost by definition, odd (p 107) Is being normal or thinking normally a weakness when it comes to markets?
5. “Someone asked him if he believed in the free checking model. And he said turn off your tape recorders.” He explained that free checking was a tax on poor people - in the form of fines for overdrafting. Banks that used it did it to rip off poor people even more than they could if they charged them for checks. (p 20)
a. Is this a fair criticism? Should people know their own limitations? Is this a deceptive form of usury?
6. “At worst: if you bought CDS on $100MM subprime, you might shell out premium for 6 years - call it $12MM. At best: Losses on the loans rose from 4% to 8%, and you made $100MM. The bookies were offering you odds of somewhere between 6:1 amd 10:1 when the odds of it working out felt more like 2:1. (p 66)
a. Why didn’t more people see this/understand this seemingly obvious arbitrage?
7. “The long answer was that there were huge sums of $ to be made if you could somehow get them re-rated as triple-A. This is what GS had cleverly done. They persuaded the agencies that 100 ground floors of subprime (all triple-B) that they were a diversified portfolio of assets!” (p 73)
a. Is this borderline deception? Should the agencies have done their homework?
b. Discuss the poor incentive structure for the ratings agencies
8. “In Bakersfield CA a Mexican strawberry picker with income of $14K and no English was lent every penny he needed to buy a house for $724K? (p 97) Discuss.
9. “There weren’t enough Americans with shit#y credit taking out loans to satisfy investor demand for the end product”. So they had to make synthetic CDOs – bets on the underlying assets. (p 143)
a. Should this be allowed in a market, especially one that does not monitor counterparty risk?
b. Is too dangerous to have exist in the system?
10. Ratings agencies - “Their model for home prices had no ability to accept a negative number.” (p 171)
11. Probably my favorite quote by Eisman, “We have a simple thesis. There is going to be a calamity, and whenever there is a calamity Merrill is there”. (p 174)
12. Howie Hubler – “Morgan Stanley would sell $6Bn of his $16Bn in triple-A CDOs. It was a decision that wound up costing MS nearly $6Bn.” (p 210)
a. How much of a problem is it for shareholders and bondholders alike to know that a single mid-level trader can have this kind of impact on an entire firm?
b. These CEOs market believers say deserve $20M or more b/c of supply demand dynamics. But nearly all if not all of them had NO CLUE what was happening inside their firms. And now they are being paid MMs again now that the firms have recovered. What do we think of this model?
c. And Hubler was able to keep tens of $MMs
13. Eisman again (p 229) – “I think Alan Greenspan will go down as the worst Fed chairman in history. He kept interest rates too low for too long is the least of it. I’m convinced he knew what was happening in subprime, and he ignored it because the consumer getting screwed was not his problem. I sort of feel sorry for him because he’s a guy who is really smart who was basically wrong about everything”.
14. Did you like the book? Why?
So - I’m about 2/3 of the way through ‘Big Short’ and am finding it highly enjoyable. Lewis is fantastic.
This bill has some definite positives, but I find myself wondering how much it does to help avoid systemic risk? (Wasn’t that the purpose?) And in reading the book I kept thinking - something really needs to change with rspect to the Rating Agencies (S&P, Moodys, etc.) - but this bill doesn’t seem to address the poor incentive structure that continues to exist there. In the words of Tenacious D, “The Government Totally Sucks”.
Came out with this last week - even funnier are the Wall St oaths he comes up with, like this one (so on point):
The Morgan Stanley Oath:
We pledge to stop trying to do whatever Goldman Sachs is doing.
We, too (like GS), pledge to create Wall Street’s best-in-class oath.
Touches on the battle between reason and its limitations. And a little more from Thomas Paine on that generational sovereignty concept…
Gentlemen,
Greetings on this beautiful Sunday afternoon. Below find some questions that we can tackle regarding our most elusive President. There are a bunch here, so we will touch upon several, and see where you all want to take the conversation. I have attempted to bring in some links to our previous reading (Fick and Keane, I’m sure you’ll be able to jump in), and I’ve identified page numbers where there is a quote or statement relating to the questions.