Andrew WhiteA tad late, I know (it is July) but I am just catching up with noting the books I am reading/have read. So this is the “Book of the Mont” for May: When Markets Collide: Investment Strategies for the age of global economic change, Mohamed El-Erian, 2008, McGraw Hill. I follow El-Erian on CNBC as he is a frequent commentator on the bond markets – given the visibility of PIMCO, where he works as co-CEO and co-CIO. My father gave me the book for Christmas (thanks Dad) so this was a double pleasure to read. I am not a big ‘investor’ though like many, I fancy my chances. However, this book really is two books. The first – which I found eminently valuable – describes the recent turmoil in the economy; how it started, where, and what ongoing conditions persist. This was very helpful since this was more of a semi-economic view which I found to be quite at odds with the “in” political views espoused by the press. The second part of the book looked at how investors could (or should?) take advantage of the “new normal” emerging. The key highlights for me focused on “noise”, and how the inability of policy makers and market watchers to notice weak signals, that were present, even explained away (famously by Alan Greenspan) by economists, and as a consequence, no steps were taken to prepare for the pending systemic changes that started. As certain fundamentals began to change, the policy structure and prepared responses from economist, the banking sector, and policy makers, were found hugely wanting. Of course, it is easy to talk about this situation given that the horse has bolted, but El-Erian has been talking of these issues on CNBC for several years, so his creditability is well established. I enjoyed this book very much and if you are interested in understanding more about how we got into the mess we are in, and to understand more about how our so called leaders were blinded to the situation, try this book. 8 out of 10.
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