Extreme Money – The Masters of Universe and the Cult of Risk

“Extreme Money – The Masters of Universe and the Cult of Risk “ by Satyajit Das is a book on the present day bankers. After reading this book, you would feel tempted to withdraw all your savings from the bank, or plan to be as mischievous as possible  with your bank and be a part of the robbery that  is possibly going on even now.

 Though mostly focused on US and European Banks, I think, some Indian Bankers are also waiting in the wings for such an opportunity  to emerge. The Salary of the top level of executives in many Indian banks are also sky-rocketing and it is only possible that they are just waiting to catch up with their friends abroad, who are simply mastermind burglars.

I have attended the class of Mr. Das, when he was in India as a part of Euromoney Traning’s training program on  derivatives. His understanding on the subject and mastery over financial modeling was very appreciated by his enlightened class. But this book, shows much  more than his mastery over the subject, it shows his understanding of the entire world of rogue banking. Most of the rogue bankers got scot free, except a  few in the periphery.

“The analysis shows the dizziness of spiral debt. Borrowing by US Government, corporations and individuals have reached around 350% of what America produces in a year, its GDP. Consumers borrowing at a record level, every man woman and child in the USA ( a supposedly rich country), has borrowed around Rs 4000 dollar each from their Chinese counterparts ( who are supposedly less well off ). Complex, incomprehensible, untested financial products have accumulated unnoticed, outside regulatory perview. Banks are lending money to people, who will never be able to pay them back. “

In every line and every page of the book there is insight of an insider, who reveals the real truth of high end banking, particularly investment banking.

 While reading the book you will discover what pleases these bankers, their habits and wealth, who toil hard to make their own money and not for their customers and investors. They always believed that they are so complex that no one will understand them, no regulatory mechanism can touch them and  they will go on creating this unending web of risk management theories and draw every one into their greed lock.

Sample this :

" Crime without Punishment : In 2008 hedge fund returns averaged negative 20% Even marque funds took large losses. Hedge Funds investments fell by around $ 600 billion. Over 3500 hedge funds out of 8000 ceased operation. Devaney a hedge fund manager and bon vivant with a taste for high living, lost $100 million, and was forced to sell prized personal assets, properties in Aspen, Colorado and Miami, his helicopter, a Gulfstream jet and his cherished 142 foot yatch 'Positive Carry'. "

" The brave new economy was built  on debt. Individuals borrowed to buy houses, cars, gadgets or take holidays.  They borrowed to get education, and to get healthcare. They even borrowed to save, using debt-financed investments. Companies borrowed to invest and to buy each other. They borrowed to pay dividend, repurchase their own stock. ...America borrowed in good times, because it could and borrowed n bad times because it needed to. Vice President Dick Cheney stated " Reagan proved deficits don't matter".

The sheer magnitude of neglect revealed in this book, will make you boil inside you and  you will feel like doing something about these white collar robbers.  This is also an eye opener for you, why should you keep your money in gold and other real assets, and not in bank accounts totally , however, allured you are. The housing bubble has also to be watched against, although India probably has not reached that stage as yet.

The domino effect of this rogue banking is what we are seeing everywhere, particularly Europe, who have been half-heartedly drawn into this circus.

This book is worth reading from cover to cover and should find a permanent place in your almanac.

The Pregnant King : by Devdutt Pattanaik

Yuvanashva  was a childless king, who accidentally drank a magic potion meant to make his queen pregnant  and gave birth to a son. The novel is based on his story. It also has stories about Somavat, who surrendered his masculinity to become a wife, about Shikhandi, a daughter brought up as a son, about Arjuna, who was forced to masquerade as a woman, after being cursed by a nymph, about Ileshwara, a god on full-moon days and a goddess on a full-moon night, and about Adi-natha, the teacher of teachers, who is worshipped as a hermit by some and as an enchantress by some others.

The book plays in the twilight zone between masculinity and femininity and inter-sexuality. In those days and age whether all the knowledge of X and Y Chromosome was known or not, is not clear. But definitely the concepts existed, and the characters in our epics are reflection of an eternal reality, although may be in a little dramatic or exaggerated manner.  Intersexuality as a term was adopted by medicine during the 20th century, and applied to human beings whose biological sex cannot be classified as clearly male or female. Some people (whether physically intersex or not) do not identify themselves as either exclusively female or exclusively male. Androgyny is sometimes used to refer to those without gender-specific physical sexual characteristics or sexual orientation or gender identity, or some combination of these; such people can be physically and psychologically anywhere between the two sexes. Among humans, some men have two Xs and a Y ("XXY",  Klinefelter's syndrome), or one X and two Ys (XYY syndrome), and some women have three Xs or a single X instead of a double X ("X0", Turner syndrome). There are other exceptions in which SRY is damaged (leading to an XY female), or copied to the X (leading to an XX male).

To bring all the above characters together, the author has created some deliberate distortions in the story and also back-dated or front-dated some of the narratives. But it contains lot of wisdom, eternal wisdom retold along with the myth. In the words of the author “ The book is full of hymns, chants, rituals, sells, speculations, philosophies and ancient codes of conduct. These must not be taken as authentic as my intention is not to recreate reality, but to represent the thought process,

“ You have to see a man’s eye through a woman’s body. Then you will see a different truth. A truth that a few men are prepared to acknowledge. Take away dharma and the man is a beast.”

“Was is so terrible to be a woman?”

“No, it is terrible to appear as a woman and still have a man’s heart."

“ Liberating actually. I could get away with anything, I could cry dance and sing as I pleased. I had to answer no woman or man. I was no one’s husband or wife. But still Kama did not leave me in peace.”

“ I loved the little girl and could have made her my wife,but she looked upon me as a teacher, mother, friend, protector and parent. My year as an enunch had made me actually aware of the dark thoughts of men. I refused to marry her, I made her my daughter-in-law.”

“ Krishna then became a woman. A perfect woman, Mohini, the enchantress. She approached him bearing the sixteen love-charms of marriage. …… the axe swang, the head rolled, Mohini wept as a widow should.”

“ And this scar? Do you want to deny the truth of this scar?” Asked Yuvanashva, parting his dhoti, revealing the gash of child-birth on his left inner thigh. “Everybody knows what that is” said Simantini “ A hunting accident, where you were gored by a great boar’s tusks.” Outside the crows cheered. What a brilliant lie! Order has been restored. The family tree was on full bloom. Its honour intact. 

“Even Ila lost control of his senses. When moon waxed and his body turned masculine, he discovered he continued to harbor a woman’s thought. .. and when the moon waned, and his body turned feminine, he could not stop feeling like a man, and he yearned the company of his wives.”

These are some of the paragraphs from the book I have coined to entice you to read the book. It would be a mythological experience of a different kind.

Freakonomics by Levitt and Dubner

The cover of “Freakonomics” introduces the writers Steven D Levitt  as “ a rogue economist  exploring the hidden side of everything. This is not a book on economics in in the classical sense, not even macro economics. But it is an interesting  reading  mostly summarizing the outcome of various papers written by Steven D Levitt .  Co-author is  Stephen J Dubner, an award winning author and journalist.

In Levitt’s view economics is a science with excellent tools for gaining answers but with a serious shortage of interesting questions. To look for such questions he has worked on the borders of economics with psychology, criminology, sociology etc.

Sample the following questions :
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1. If drug peddlers make so much money, why do they still take shelter with their mothers?
   
2. Which house is more dangerous for a neighbors' child, the one where the keeper has a gun or the one which has a swimming pool?
3. What did really cause the crime rates in the USA to plunge during the last decades? Is it good policing, gun laws or mothers’ right to abortion given by the courts twenty years ago?
4. Do the real estate agents have the best interest of their clients at heart?
5. Why do black parents give their children names that may hurt their career prospects?
6. Is Sumo wrestling corrupt?
7. Do the school teachers cheat to meet high-stakes  testing standards?
8. Do more police translate into less crimes?
9. Do money really wins election?

To find answer he move upon piles to data, analyze them and then takes to some convincing and logical conclusion. Many cases, the answer is not the obvious and he has provided sound data based logic for the same.|

“ Through forceful storytelling and wry insight, they show that economics is, at root, the study of incentives, how people get what they want or need, especially when the other people want or need the same thing”

It is all about incentives !