Friday, October 24, 2008

The world is curved

Just wanted to put in a word for a brilliant new book called The World is Curved, by David Smick, which predicted the financial crisis we are now in. It came out Sept 4th. The title is a swipe at Tom Friedman's modern classic about supply chain in the age of globalism called The World is Flat, which describes a miraculous new age of cooperation, free trade and global prosperity. Ahem ... except for when things like subprime happen! ;)

In the words of Publisher's Weekly

With this illuminating book, [David] Smick revisits Thomas Friedman’s description of the “flat” world produced by globalization, arguing instead that the uncertainty produced by globalized financial markets has created a world that is curved, where events and their consequences are unpredictable. Smick begins with a puzzle: why did the subprime mortgage crisis, an event that directly impacted a relatively small piece of the global market, have such a catastrophic impact on the world market as a whole? From there, the author turns to topics as complex and varied as the potential 21st century Chinese financial bubble and the policy dilemmas currently facing the Fed. Throughout the book, the author returns to the argument that political trends are increasingly at odds with the forces driving the globalized world economy. Smick brings expertise and lucidity to many difficult subjects, and while his book’s appeal will likely be limited to those with some background in the field, it will undoubtedly stir interest and debate amongst investors, policymakers and strategists alike.

Basically the lack of transparency, bad trade agreements and monetary policies are all a part of it as are lax regulatory enforcement.

Should be on the gift list for the holidays (or my birthday, if I can wait that long ... on second thought think I'll be picking it up over the weekend ;).

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