finance

Confronting capitalism

Confronting capitalism: Real solutions for a troubled economic system / Philip Kotler
New York: Amacom, 2015. 248 p.

With the fall of the Berlin Wall, one economic model emerged triumphant. Capitalism—spanning a spectrum from laissez faire to authoritarian—shapes the market economies of all the wealthiest and fastest-growing nations.

But trouble is cracking its shiny veneer. In the U.S., Europe, and Japan, economic growth has slowed down. Wealth is concentrated in the hands of a few; natural resources are exploited for short-term profit; and good jobs are hard to find.

With piercing clarity, Philip Kotler explains 14 major problems undermining capitalism, including persistent poverty, job creation in the face of automation, high debt burdens, the disproportionate influence of the wealthy on public policy, steep environmental costs, boom-bust economic cycles, and more.

Amidst its dire assessment of what's ailing us, Confronting Capitalism delivers a heartening message: We can turn things around. Movements toward shared prosperity and a higher purpose are reinvigorating companies large and small, while proposals abound on government policies that offer protections without stagnation. Kotler identifies the best ideas, linking private and public initiatives into a force for positive change.

Combining economic history, expert insight, business lessons, and recent data, this landmark book elucidates today's critical dilemmas and suggests solutions for returning to a healthier, more sustainable Capitalism - that works for all.

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finance

Flash boys: A Wall Street revolt

The economic socialisation of young people

Flash boys: A Wall Street revolt / Michael Lewis

New York: Norton, 2014. 274 p.

 

Flash Boys is about a small group of Wall Street guys who figure out that the U.S. stock market has been rigged for the benefit of insiders and that, post–financial crisis, the markets have become not more free but less, and more controlled by the big Wall Street banks. Working at different firms, they come to this realization separately; but after they discover one another, the flash boys band together and set out to reform the financial markets. This they do by creating an exchange in which high-frequency trading—source of the most intractable problems—will have no advantage whatsoever.
The characters in Flash Boys are fabulous, each completely different from what you think of when you think “Wall Street guy.” Several have walked away from jobs in the financial sector that paid them millions of dollars a year. From their new vantage point they investigate the big banks, the world’s stock exchanges, and high-frequency trading firms as they have never been investigated, and expose the many strange new ways that Wall Street generates profits.
The light that Lewis shines into the darkest corners of the financial world may not be good for your blood pressure, because if you have any contact with the market, even a retirement account, this story is happening to you. But in the end, Flash Boys is an uplifting read. Here are people who have somehow preserved a moral sense in an environment where you don’t get paid for that; they have perceived an institutionalized injustice and are willing to go to war to fix it.

 

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finance

Financial innovation: Too much or too little?

The economic socialisation of young peopleFinancial innovation: Too much or too little? / ed. by Michael Haliassos
Cambridge, US.: MIT Press, 2013. 252 p.

In assigning blame for the recent economic crisis, many have pointed to the proliferation of new, complex financial products--mortgage securitization in particular--as being at the heart of the meltdown. The prominent economists from academia, policy institutions, and financial practice who contribute to this book, however, take a more nuanced view of financial innovation. They argue that it was not too much innovation but too little innovation--and the lack of balance between debt-related products and asset-related products--that lies behind the crisis. Prevention of future financial crises, then, will be aided by a regulatory and legal framework that fosters the informed use of financial innovation and its positive effects on the economy rather than quashing it entirely. The book, which includes two contributions from Robert Shiller as well as a discussion of Shiller's "MacroMarkets" tool, considers the key ingredients of financial innovation from both academia and industry; the positive potential but also the risks of financial innovation and the influence of producers on consumers; rationality- and behavioral-based viewpoints on the causes of the recent crisis; the link between the cycle of financial innovation and financial crisis; and how future innovation-linked crises might be avoided.

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finance

Project Finance in Theory and Practice

The economic socialisation of young peopleProject Finance in Theory and Practice: Desinging, structuring and financing private and public project / Gatti, Stefani
Amsterdam, NL: Elsevier, 2012. 464 p.


This book presents comprehensive coverage of project finance in Europe and North America.  The Second Edition features two new case studies, all new pedagogical supplements including end-of-chapter questions and answers, and insights into the recent market downturn.  The author provides a complete description of the ways a project finance deal can be organized-from industrial, legal, and financial standpoints-and the alternatives available for funding it.  After reviewing recent advances in project finance theory, he provides illustrations and case studies. At key points Gatti brings in other project finance experts who share their specialized knowledge on the legal issues and the role of advisors in project finance deals.
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finance

Capital in the twenty-first century

The economic socialisation of young peopleCapital in the twenty-first century / Thomas Piketty
Cambridge, US: Belknap Press of Harvard Univ. Press, 2014. 685 p.


What are the grand dynamics that drive the accumulation and distribution of capital? Questions about the long-term evolution of inequality, the concentration of wealth, and the prospects for economic growth lie at the heart of political economy. But satisfactory answers have been hard to find for lack of adequate data and clear guiding theories. In Capital in the Twenty-First Century, Thomas Piketty analyzes a unique collection of data from twenty countries, ranging as far back as the eighteenth century, to uncover key economic and social patterns. His findings will transform debate and set the agenda for the next generation of thought about wealth and inequality.
Piketty shows that modern economic growth and the diffusion of knowledge have allowed us to avoid inequalities on the apocalyptic scale predicted by Karl Marx. But we have not modified the deep structures of capital and inequality as much as we thought in the optimistic decades following World War II. The main driver of inequality--the tendency of returns on capital to exceed the rate of economic growth--today threatens to generate extreme inequalities that stir discontent and undermine democratic values. But economic trends are not acts of God. Political action has curbed dangerous inequalities in the past, Piketty says, and may do so again.

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finance

Misunderstanding financial crisis

The economic socialisation of young peopleMisunderstanding financial crisis: Why we don't see them coming / Gary B. Gorton
New York: Oxford Univ. Press, 2012. 278 p.


Prior to the financial crisis of 2007-2008, economists thought that no such crisis could or would ever happen again in the United States, that financial events of such magnitude were a thing of the distant past. In fact, observers of that distant past—the period from the half century prior to the Civil War up to the passage of deposit insurance during the Great Depression, which was marked by repeated financial crises—note that while legislation immediately after crises reacted to their effects, economists and policymakers continually failed to grasp the true lessons to be learned.

Gary Gorton, considered by many to be the authority on the financial crisis of our time, holds that economists fundamentally misunderstand financial crises—what they are, why they occur, and why there were none in the U.S. between 1934 and 2007. In Misunderstanding Financial Crises, he illustrates that financial crises are inherent to the production of bank debt, which is used to conduct transactions, and that unless the government designs intelligent regulation, crises will continue. Economists, he writes, looked from a certain point of view and missed everything that was important: the evolution of capital markets and the banking system, the existence of new financial instruments, and the size of certain money markets like the sale and repurchase market. Delving into how such a massive intellectual failure could have happened, Gorton offers a back-to-basics elucidation of financial crises, and shows how they are not rare, idiosyncratic, unfortunate events caused by a coincidence of unconnected factors. By looking back to the "Quiet Period" from 1934 to 2007 when there were no systemic crises, and to the "Panic of 2007-2008," he brings together such issues as bank debt and liquidity, credit booms and manias, and moral hazard and too-big-too-fail, to illustrate the costs of bank failure and the true causes of financial crises. He argues that the successful regulation that prevented crises did not adequately keep pace with innovation in the financial sector, due in large part to economists' misunderstandings. He then looks forward to offer both a better way for economists to conceive of markets, as well as a description of the regulation necessary to address the historical threat of financial crises.

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finance

International harmonization of financial regulation?

The economic socialisation of young peopleInternational harmonization of financial regulation? The politics of global diffusion of the Basel Capital Accord / Chey, Hyoung-kyu
London, GB: Routledge, 2014. 212 p.


"There are very few detailed studies of how financial regulatory standards diffuse from the major centres of policy innovation to the rest of the world. Hyoung-kyu Chey’s contribution to our understanding of this process is considerable: in a detailed account of how Japan, Korea and Taiwan implemented Basel capital standards he shows how domestic politics and institutions reshaped and adapted these standards to fit local circumstances, often in ways at odds with the Basel Committee’s intent. This is a timely study of direct relevance to the current challenges of implementing Basel III and of reforming global economic governance more generally." — Andrew Walter, Professor of International Relations of School of Social and Political Sciences, University of Melbourne, Australia

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finance

No-hype options trading

The economic socialisation of young peopleNo-hype options trading: Myths, realities and strategies that really work / Given, Kerry W.
Hoboken: Wiley, 2011. 198 p.

In this guide to sound options-trading strategies, the author’s goal is to teach investors how to profit from the use of options while intelligently managing the risks involved. This book can serve as a reference for money managers with high-net-worth clients and investors seeking to generate income in their portfolios.
Perhaps the most important aspect of the book is Given’s emphasis on creating a plan for trading options and sticking to it. The key to Given’s plan is risk management. His risk management system consists of four parts: stop loss order, adjustment, profit stop, and time stop.

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finance