When Markets Collide: Investment Strategies for the Age of Global Economic Change Reviews

• Timely Book on The Impact of Global Economic Change on Investing

  
  By A1W9J7I8O0UA7S on 2008-06-15
  If you find the present global economic situation to be confusing and filled with conflicting signals and noise, this excellent book by Mohamed El-Erian, the CEO of PIMCO and the former President of the Harvard Management Company where he managed Harvard's $35 billion endowment, should be on your reading list.
  
  El-Erian brings a unique perspective to the task of separating the signal from the noise in today's volatile global markets. Having spent 15 years at the International Monetary Fund and the rest of his career in the trenches in emerging market research and investment at leading investment banks, he has a deep understanding of both the public policy side and the realities of global investing.
  
  His premise could not be more timely: Global markets are undergoing profound changes and the present turmoil is neither the beginning nor the end of the transformation that is shaking up investors around the world. This bumpy process is nothing less than the collision of markets in which the markets of yesterday collide with those of tomorrow
  
  The book offers analytical anchors for identifying the key elements of what, for some, have become key drivers in an unusually fluid environment. In addition to offering targeted, well written, explanations of some of the key sources of confusion and dislocation (U.S. national debt, new sovereign wealth funds and emerging, developing countries now funding the debt of the developed nations), El-Erian also provides some invaluable advice for personal investors.
  
  Given his contention that most U.S. investors have not fully grasped the impact of the changes going on in global markets and the impact of higher commodity prices and shift to accelerating inflationary trends around the world, he provides a new sample asset allocation model for correcting some of the imbalances in most U.S. investors' portfolios.
  
  His asset allocation table on pg. 198 provides an illustrative neutral asset mix for long term investors that is well worth the cover price of this book and was featured recently in an excellent article and interview in Barron's in the June 2, 2008 issue.
  
  His writing style is fluid and command of the material impressive. Like most great authors and thinkers, he will have you challenging your present views and investment positions. This book is an outstanding companion to Unconventional Success: A Fundamental Approach to Personal Investment by David Swensen on the personal investment front and The Age of Turbulence: Adventures in a New World by Alan Greenspan on the public policy front.
  
  In addition to raising the big issues, El-Erian provides a clear action plan for both investors and policy makers, a truly outstanding achievement in a field where leaders are too often focused on selling investment products rather than educating the investment public on the changes in global economic conditions.
  
  

• My Worst Investment in a Long Time

  
  By AXG22IPD6C0LL on 2008-08-23
  This book was awful. Part of the problem is that the author couldn't decide who his audience was and, as such, probably bored the pants off finance people and left regular folk scratching their heads at his absurdly opaque writing "style".
  
  A couple quick points if you are considering buying this book:
  
  1. It you read the newspaper most days, are reasonably intelligent and realize there is a big world with lotsa money beyond America's shores, this book will give you no new information on "when markets collide".
  
  2. If you have some (I mean A MINIMAL AMOUNT) of investment knowledge, you will be painfully disappointed by the lame chapter on how to profit from future "collisions". Really, the author just lays out a pretty mundane asset allocation plan (which is available for free on any number of websites) and then fills a couple dozen pages with worthless blather. Seriously, that's it.
  
  3. The writing really sucks. Others have commented on this so, rather than gives examples, I'll just reinforce what others have noted: the writing sucks. Whatever happened to editors?
  
  4. If you really want some ideas about investing internationally, try The World is Your Oyster by Jeff Opdyke (2008). Heaven forbid, he writes in plain ole' English and gives a lot of worthwhile advice. If you really want to understand where the world is headed, read Billions of Entrepreneurs, How China and India are Reshaping Their Futures and Yours, by Tarun Khanna (2008).
  
  5. If you really want some ideas about investing in general Peter Lynch's classics are still every bit as instructive (and humorous...and nicely written) and the biography of Warren Buffett, "Buffett", is incredibly instructive. Jeremy Siegel's "Stocks for the Long Run" is also pretty handy, although el-Erian makes some snide comments about it...but never quite gets around to justifying them...hmmm...some petty Harvard - Wharton rivalry?
  
  6. el-Erian's shout-outs to colleagues here and there get more tedious as the book goes on, particularly as he never seems to articulate how the work of these experts is relevant to creating an investment portfolio. Gee, thanks.
  
  7. Let me say it one more time: When Markets Collide is a worthless read.
  
  

• Much like reading the Financial Times

  
  By AVOF0GE7E6KW9 on 2008-07-04
  When Markets Collide reads much like a newspaper. Interesting, but nothing you would read a second time. I generally agree with Mohamed El-Erian's thinking, but there was not a book's worth of ideas here.
  
  

• Volitile, yes. Immeasurable, no.

  
  By A2NIXEYJ57Q77 on 2008-07-01
  I would highly recommend this book as a single source for a variety of key trends that, until El-Erian, no author seemed to be able to put together. However, the broad forecasts of this book should be combined with practical measurement and forecasting methods such as those described in How to Measure Anything: Finding the Value of "Intangibles" in Business by Douglas Hubbard.
  
  El-Erian takes a Modern Portfolio Theory approach to virtually any investment portfolio and he gives specific proposals for how to balance your investments given the inevitable trends he sees. Hubbard's quantitative methods applied to El-Erian's vision of the future should make a powerful forecasting tool.
  
  When Markets Collide is more focused and clear than books like Megatrends 2010: The Rise of Conscious Capitalism, provides more practical instructions for the investor, and seems to lack some of the more embarrasing technical errors. I also like that the dynamics El-Erian sees are more persistent and will not be as quickly dated as many of the books that depend entirely on predictions for the next few years.
  
  

• Not for your average investor

  
  By A2JCPSY4RF0WSN on 2008-07-09
  This book presents some interesting ideas regarding the changing global marketplace. The author emphasizes the importance of emerging markets, currency alterations and commodities. However, it is a slog to get through. It seems written for someone with a finance degree. There is very little here for your average investor.
  
  
• Good analysis for students
  By A3SDEQCEKNED4O on 2008-07-19
  The style is very similar to El Erian's monthly articles, but there is nothing really new or original. If you are familiar with Bretton Woods II, have some training in economics and/or have worked in structured finance you will find this book slow at times, but if you are new to the structured finance world or you are trying to find out what went wrong with the financial system this should be an excellent overview. I agree with the other reviewers it reads like a newspaper article, but it is a good overall review of the most recent economic cycle.
  
  
• Not worth reading
  By A298L1QVAA72R1 on 2008-08-05
  I do not believe that this book is worth buying or reading
  because of three factors:
  
  1. It contains minimal advice for investors wishing to
  change their investment strategies.
  
  2. It is written for an audience for professional economists
  with advanced degrees.
  
  3. The editing of the text is very poor. Each chapter contained
  multiple references to something "that I will deal with in
  the next chapter" or "that I covered in previous chapter."
  A few of these references is understandable, but the text
  is so poorly written and edited that these references quickly
  became a distraction and a nuisance.
  
  I would strongly advise prospective readers to avoid this book.
  
  
• Not for the average investor
  By A29IMZAQRH5L9X on 2008-08-04
  Mr. El-Erian's book reflects his high-level knowledge and understanding of economic issues. It is perhaps suitable for people at his level, policy makers etc. However for individual investors it is not worth the money, nor the time reading it. His writing style is exasperating as it sounds much like some Harvard publications. His long, complex sentences are time-consuming to understand. He loves to use all the most recent jargon to impress his readers. His ultimate recommendation for investing for the future is banal, buy a bit of everything! After finally finishing the reading of this book (it was painfully boring) I was left with the feeling that I didn't learn anything worthwile for my purposes.
  
  
• Not what I expected.
  By A1L4ET0EAPYSKS on 2008-07-10
  This book was very disappointing. It is one thing to explain current events with an insiders perspective, but quite another to interpret that information into specific investment direction, conclusions, and advice. It is interesting to know how the Harvard endowment operates, but that does not help me as an individual investor on any level and is not worth the price of a book.
  D. Miller
  
  
• Probably false back cover reviews
  By A21044KC4RF4K2 on 2008-08-13
  This book got my attention after I saw Alan Greenspan had commented on it on the back cover. Surprised at first as he rarely recommends books publicly, I decided to check into it. Sadly, the book was terrible. It is very convoluted and difficult to understand and didn't not present any non-elementary insight. Mohamed's book reminds me of a prof I had in college who would love to use big words but say absolutely nothing. Nothing is new here.
  
  Basically Mohamed El-Erian is a Oxford graduate turned PhD who late in his career entered the Investment Management game(he freely admits that). He managed the Harvard University's endowment fund and then recently quit and moved to the bonds management company PIMCO as a Co-CEO (seriously, who still thinks Co-CEO is a good idea). I suspect all of those people on the Back Cover who reviewed his book are his buddies from Harvard or PIMCO and probably everywhere else he works, knows, or pays. Even Alan Greenspan who now consults for PIMCO. I am willing to wager Mr Greenspan never even read his book but got paid a lot of money for "consulting" with PIMCO and now recommends the book of they guy who is paying his salary. Boy, Alan was a good economist. His book was excellent...
  
  This book should really be titled "When I wrote a book to impress my Harvard colleagues: Nothing new but noone will know because noone can understand it, sucka"
  
  
• Good Read. Looks at How Changes in Money Supply Effect returns and volatility in markets.
  By A34IG1ZYPLXK6B on 2008-07-10
  Watch Video Here: http://www.amazon.com/review/R2EOOI374G4HBV
  
  
• Does not mention the real issues
  By A1LAJXFU0D69Y3 on 2008-07-19
  I used some new software to have this book read to me via TAL, while I lifted weights in my basement. All this technology is disscused in Don't Like to Read, Then Don't, Listen!: How to Turn Any Type of Text Into Audio Files That Can Be Read to You!.
  Little to no emphasis is place on the role of the fiat money system, changes in money supply on inflation and investments. Look at the DOW in Gold, this does my talking for me. This author thinks he is an elitetist. He must really think his audience is foolish. If you are holding US dollars or equities, you have been getting destroyed. It is not a random walk, look at the charts is there a trend?
  
  
• With this book, I give up my remaining trust in cover blurbs.
  By A1D5ZIDSC3IGQ on 2008-11-09
  I bought this book because it won the Financial Times Book of the Year Award (not a top ten winner or something, #1 mind you). Historically, a reliable guide (e.g., the masterpiece China Shakes the World, and theoretically dubious but highly provocative Friedman's World is Flat). It has dawned on me belatedly that advance praisers probably don't read their books. All these absolutely glowing endorsements by serious people...for a book that *clearly* isn't top notch.
  
  T. Bojko's review may seem harsh, but it's spot-on. I can live with the ponderous writing style. I initially thought the big words concealed some new or profound thinking...but not at all.
  
  The problems are: 1. there's almost nothing new or inspired about the "markets of tomorrow," and 2. there is nary a sliver of new, actionable advice about investing. The whole thing is a compendium of the superficial. Seeking to cut a swath a mile wide, it is everywhere one inch deep.
  
  In regard to the first, the following are superficially summarized: global trade/capital flows (rightly footnoted to Martin Wolf, but Wolf's own columns are better on this); a cocktail of snippets on behavioral finance - called a "cocktail" - just read Shiller straightaway; some stuff on global trade and commodities, see latest Economist; a paraphrase of Taleb's colorful insights (just read Taleb directly); a woefully weak primer-not-really on securitization; a brief primer on asset classes that repeats everything I've got in a dozen other finance books; and too much material on IMF (e.g., not a single mention of Basel). I agree the topics per se are important, but most of them here are superficially derivative of other, better works.
  
  Here are the four insights from Chapter 2: we are coming from a period of aberrations, many puzzles; too many dismissed them as noise; the inability to distinguish signal from noise is a bad thing; the adjustment caught people off guard. I'm not kidding. The blinding insight is: take care to distinguish signal from noise! Noise bad, signal good....
  
  Strangest of all, in my opinion, is that the author appears to have nothing to add to the field of risk management, which stuns me given his unique vantage point. Risk management is reduced to a few catchphrases: tail risk, moral hazard, principal-agent. Say it ain't so...
  
  Finally, T. Bojko is right about the mundane asset allocation plan: "the author just lays out a pretty mundane asset allocation plan (which is available for free on any number of websites) and then fills a couple dozen pages with worthless blather. Seriously, that's it." That's exactly right.
  
  The book boils down to: big "structural" change is coming, try to sort signal from noise, here's pointers to a bunch of good reading material, I worked at the IMF, start with this generic plan.
  
  I saved you a few bucks. More to the point, I wasted my time reading this book so you don't have to. Since that time is lost to me forever, the least you can do is vote my review "helpful."
  
  
• Needs a good edit
  By AFVFSFJ37QVY5 on 2008-09-11
  El-Erian's publisher McGraw-Hill badly let down the author, and his readers, with a poor to nonexistent copy-edit. The book is full of jargon and poorly written paragraphs--to illustrate, here is a rather typical one-sentence paragraph: "The challenge of how to deal with consequential and volatile endogenous liquidity relates to another policy issue that I will discuss in Chapter 7: how to refine the traditional instruments of monetary control and ensure more meaningful and sophisticated supervision on a range of activities, with volatile leverage, that have been enabled by the ongoing structural transformations and yet are outside meaningful oversight."
  
  This is technocratic obfuscation at its worst, and El-Erian, who is no lightweight, could have better been served by a heavier edit.
  
  Perhaps the worst feature of the book is its attempt to reach three entirely different audiences--individual investors, policy-makers, and institutional investors. If you are an individual investor, realize that 75% of the book is written for others.
  
  If you find your way through the jargon and infelicitous structure, some solid, thought-provoking ideas gleam in the darkness. Be prepared to dig, though, and bring your headlamp!
  
  
• Brilliant insights...essential reading
  By AG94X8HZUU2UJ on 2008-07-09
  There is no better authority on the modern world of investing than Mohamed El-Erian. El-Erian shares his learned perspective drawn from a career at premier firms including the Harvard Management Company and PIMCO. If you read one book this year on investing, read this one.
  
  
• Expected more
  By A44XI5ORJHTN9 on 2008-09-03
  I purchased this book at an airport while waiting for a flight. It was prominently displayed in the business section of the bookstore (perhaps that should have been a warning). The book includes endorsements from such august figures as Alan Greenspan, Seth Klarman and Michael Spence, yet I doubt if any of them actually read the book in its entirety. Moreover, Mr. Greenspan works as a consultant for PIMCO (also the employer of the author).
  
  The book makes some decent macro-orientied observations but none of them are really new or unique. Moreover, the writing style is ponderous and prolix. The typical, individual investor can skip the first five chapters and go directly to chapter six, where you will find a recommended portfolio. However, there is nothing especially enlightening about the portfolio he recommends. (He also fails to mention the tax issues surrounding TIPS).
  
  I was surprised at how he rather cavalierly addressed index funds vs. actively managed funds when discussing equity allocations. I understand that he didn't want to get into the active vs. passive debate, but I was expecting more from someone with his background and expertise. For example, he suggests that retail investors use Lipper and Morningstar (bottom of page 203) to gain "insights" into this process. However, he doesn't say how using these services will lead one to pick a superior actively managed fund.
  
  In addition, although the book was published in 2008, it would have greatly benefited the reader if it had included more discussion and insight into the events and implications surrounding Bear Stearns, Fannie and Freddie. At times (and I realize that this is not directly the author's fault) the book sounded outdated. While hindsight is 20-20, both the author and the reader might have been better served if the book was released later to allow Mr. El-Erian to include more of his candor and insight on these important developments.
  
  
• disappointed
  By A1FUEN6104FSKT on 2008-09-22
  When you read a book like this, you are hoping to learn about the back story about an issue, the inside scoop. The only useful insights I received from this book are that the influence of the IMF and the Fed are dipping due to globlization. Other than that, the author spends a lot of time trying to convince us that the balance of power in the financal system is shifting from the US and Europe to the "expanding economy."
  
  Many years ago when I was a McKinsey consultant, Paul Volcker gave a talk to the staff about how the accumulation of dollars in the middle eastern countries would lead them to unprecedented power over our economy, and possibly our ruin. They would be able to manipulate our financial system. They have more of our money today than ever and it is still not true today. The author seems to be stuck on this page as well.
  
  What he could have covered was how the IRAQ war was designed, in part, to revive our financial system, much as the second world war was partially designed to get us out of the depression. Or he could have explained that globalization hasn't yet worked for the US since nobody "over there" is using the dollars we sent them to buy our products. They buy our financial products that are soon without value due to shenanigans such as the sub prime mortgage mess or the dot com collapse, etc.
  
  Well, I'm not going to rewrite his book for him. But if I did, I would eliminate the stilted academic language that conveys little meaning.
  
  
• Analysis of the Current State of Financial Markets in 2008
  By A2YX62863M0HO7 on 2008-10-13
  When Markets Collide, by Mohamed El-Erian, describes the ongoing evolution of the world's financial markets in terms of both the current path and likely destination. His approach is very much in the "Big Picture" style; don't look for specific investment recommendations or specific predictions of market behavior. That said, Dr. El-Erian provides a very good overview of the current state of the financial markets as of early 2008 and overall direction in the future.
  
  Dr. El-Erian's background includes a doctorate in economics from Oxford, long service on the IMF, followed by a transition to the private sector, first at Salomon Smith Barney, then as CEO for the Harvard University endowment, and currently as CEO at PIMCO. The major themes he sees in the current financial situation include the following.
  
  The Mortgage Mess
  
  Over the last decades, mortgage originators (primarily banks and S&Ls) have moved away from issuing mortgages for their own long-term investment portfolio. Instead, they have written mortgages to capture the loan origination fees and then sold the mortgages for inclusion in packages that were marketed to other investors. The logic of this "securitization" process was that by pooling many mortgages in a single package, the risk of any one mortgage holder defaulting on a loan would be greatly reduced. In the process, the mortgage originators shifted their focus from the borrowers' long-term credit worthiness to the short-term.
  
  In tandem with the shift in focus to the short term, the extensive use of derivatives, especially credit swaps, designed to mitigate the risk of default, tended to obfuscate the true risk in a securitized package of mortgages. The result was that many investors were lulled into the belief that their mortgage investments were low in risk when they really had no clear idea of how to evaluate the risk in a pool of mortgages and the associated derivatives.
  
  These patterns lead me, a non-specialist, to suspect that any effective resolution of the mortgage mess must include either a shift back toward mortgage writers holding the loans for their own long-term investment or some other means of increasing the long-term financial responsibility of the originators for the loans they have approved.
  
  Emerging Markets
  
  As recently as 1998 financial crisis, the emerging markets as a group were subject to dramatic inflows and outflows of capital that dwarfed their domestic savings and investments. Their overall economic performance was also highly dependent on exports, dwarfing domestic demand and consumption. This situation has changed. Many of the emerging markets have emerged in several respects. The largest and most advanced (Brazil, Russia, India, China, Mexico, South Africa) are characterized by significant domestic demand and consumption that are able to at least partially sustain their economies even when the developed world's demand for their exports decreases. They generate significant domestic savings and investment, both private and public, the latter often in the form of Sovereign Wealth Funds (see below).
  
  Many of these newly emerged markets (Russia and China may be the exceptions) are also less burdened by the demographics of an aging work force, suggesting that they may be better positioned to continue their growth over the coming decades than many of the industrialized nations.
  
  Sovereign Wealth Funds
  
  Sovereign Wealth Funds (SWFs) originated in the oil producing states (Kuwait, Abu Dhabi, Norway, Alaska) and some of the early developers in Southeast Asia (Singapore). The SWFs hold oil royalties or earnings from foreign trade in long-term investment funds to spread the benefits of the cash inflows into future years for future generations. To date, they have tended to be very conservative investors, placing most of their capital in short- to medium-term debt instruments of the governments of the industrialized world, especially the US.
  
  In a way, this situation presents a potential role reversal between the emerging markets and industrialized nations. The industrial nations may now be subject to significant capital inflows and outflows controlled by the SWFs. As Dr El-Erian observes, the response of the industrialized nations to this role reversal should not be to institute controls on capital flows or other protectionist measures. These approaches would be self-defeating, hurting the industrialized nations more than the uncontrolled capital flows. Rather, the best prescription is the same one that the West advocated to the emerging markets in the past: Sound monetary and fiscal policies.
  
  In the coming years, as the SWFs managers gain experience, expertise, and confidence, we can expect to see them change their focus from conservative short-term debt instruments to investments that offer higher long-term returns. This switch is likely to decrease the overall demand for government debt, increasing the interest rate on these instruments, and increase the demand for equities, driving up share prices.
  
  Monetary Policy
  
  Monetary policy has become harder to implement over the last 30 years. The money supply, once defined as currency in circulation plus demand deposits, has become almost impossible to define, let alone control. Once, only commercial banks could "create" money, concerting a dollar in deposits into several dollars by means of the reserve requirement ratio. Now, all manner of "shadow banks", hedge funds, private equity funds, investment banks, some domestic, some foreign, can use small amounts of equity capital to raise large amounts of debt capital, mimicking the prior role of the commercial banks. The difference is that these entities are not subject to the same regulations, such as reserve requirements, as commercial banks. We seem to be in the midst of a major evolution of the financial regulatory system in the US. The roles of the Fed, FDIC, Treasury, and other agencies will undoubtedly change. Let's hope that the changes are intelligence and for the better.
  
  Reviewer's Comments
  
  I found Dr. El-Erian's book both interesting and insightful and recommend it to readers looking for a broad overview of the current state of financial markets and their likely evolution in the future. Don't expect concrete investment advice; that wasn't his intent. (I suspect he saves such advice for his PIMCO clients.) My only criticism is that the style of writing is typical of many academic economists, somewhat convoluted and obtuse. The more complicated the concepts become, the simpler the sentences must be to convey them clearly. Still, I found the style a minor price to pay for what I think I gained.
  
  
  
• insightful advice for investors
  By A26HBM4O1DX9OS on 2008-07-03
  El Erian pulls together information from several other sources, such as The World Is Flat, and gives suggestions as to how both individual and institutional investors need to react to our rapidly changing world.
  Written in a relatively easy to read style.
  
  
• An important weakness
  By A32QLNENA8JS51 on 2008-07-26
  El-Erian's strength is in identifying and explaining the "major fundamental transformation" that is going on. After discussing the transformation and emphasizing the investment needs for internationalization, foreign currencies, and inflation hedges, he discusses asset allocatrion. His asset allocation table and discussion are fine, except for one glaring ommission. He never mentions managed futures.
  
  In an investment environment that appears to be negative for both debt instruments and equities, managed futures could be the most appropriate investment.
  
  
• Finance bio from philosophical perspective
  By A343XL7NX0MPZK on 2008-07-21
  George Soros is a very interesting thinker.
  It is true (as he more or less admits in his book)
  that his philosophical ideas are somewhat "inexact"
  by the analytic standards of that profession,
  but the insights are real. He gives market equilibrium
  theorists a run for their money.
  
  
  
• Terrible
  By A1VZWW5Z2LEB8Q on 2008-11-01
  Wow, what a disappointment. The book is poorly written and turns simple ideas into convoluted muck. For example, everyone knows that you can sometimes get a bargain in a pool of assets that are generally considered "lemons" such as the used car market. In this book, the "market for lemons" becomes "MFL" and allegedly was originated in 1970 with George Akerlof, a professor and winner of the 2001 Nobel Prize in economics. Huh? Another staggering glimpse of the obvious: people have trouble absorbing the reality of a sudden, unexpected event (e.g., 9/11, Kennedy assasination (my examples which, incidentally, are better than his)). Wow! and let's cite Nassim Nicholas Taleb and his insights about Black Swans for that astounding revelation! Jeez. I'm not going to bore you with examples of the dense and turgid writing. Also, if you are not a fan of "impact" used as a verb, avoid this book, it occurs in almost every paragraph. If you want clear, crisp writing and good analysis about the economy, skip this leaden tract and read The Economist or The Financial Times.
  
  
• El-Erian's 'When Markets Collde'
  By A1YTBYKGSTKUX7 on 2008-07-12
  A very interesting read with great references that send you off to other geat reads.
  
  
• Thoughtful and forward-looking
  By A1DW7SL8N3IEUS on 2008-08-27
  I think this is an excellent book that makes you think. Mr. El-Erian certainly has a very deep understanding of the current economic and financial environment and is able to convey much of this understanding to his readers. I enjoyed the book very much.
  
  
• When Markets Collide
  By A2EEKDH5UBYCVT on 2008-08-31
  Great perspective on the big picture of current global markets.
  
  Insights into possible future direction of global economies.
  
  Easy to read for someone without an economics background.
  
  
• Excellent 5- to 10-year Outlook
  By A1LVRBAMSCB02B on 2008-09-01
  It's hard to imagine someone having more cred's than Mohamed El-Erian or having a better understanding of trends in the global economy, and as articulate. For those reasons alone, it's hard for investors, large or small, to justify NOT spending a little with with Mr. El-Erain. This book is a global financial compass, not a recommendation on specific companies to invest in or run from. When Markets Collide gives the reader a frank overview of the forces behind macro global financial trends (i.e, reality check), where those financial trends are almost certainly taking us in the next 5 to 10 years, and what those trends mean for investors that are in the market for the long-term.
  
  
• A Must Buy Book For The Chaos Ahead..
  By A2FRIASHSM1NLN on 2008-10-13
  This new world order of financial chaos scares me to death. It is certainly not about me personally but rather my family and what I will leave behind for them.
  
  I bought Mohamed El-Erian's book around the same time I bought Crash Proof: How to Profit From the Coming Economic Collapse (Lynn Sonberg Books). I found both of them to contain very valuable (and timely) advice, which helped, calm some of my fears and anxiety. With that said, I would have to rank Mr. El-Erian's book a little higher than Crash Proof.
  
  Mr. El-Erian has written a very important book. Very few people understand markets as Mohamed El-Erian. He is able to analyze and develop strategies for the continuing credit crisis. His background in economics, government policy and investment banker help him to mold this chaos into a manageable entity. His insights are worth the price of the book. Believe me.
  
  I hope you found this review helpful.
  
  Michael L. Gooch, SPHR - Wingtips with Spurs: Cowboy Wisdom for Today's Business Leaders.
  
  
  
• Good
  By A17Q8IZOD68ET6 on 2008-08-08
  This booke seemed to be a mosthy a discussion of emerging China and its interaction with the ecomonies in the developed countries. I believe that the book has increased my understanding on this subject a lot.
  
  
• Overhyped
  By A6GVRQ7CLDFBM on 2008-10-21
  The book is an ordinary piece of work that does not deserve the prominence it is getting in the media. While I would not term it as a Sub-Prime CDO masquearading as a AAA credit, at best it is an Alt-A. We need better.
  
  
• 4.5 stars-Needs to clearly differentiate risk from uncertainty
  By A1UI9T8WKJPZN5 on 2008-09-21
  The author of this book is clearly quite knowledgeable about the standard approach to risk management.He knows that it is badly flawed under conditions of herd behavior.Herd behavior occurs under conditions of Keynesian uncertainty(The decision maker DOES NOT know enough or have enough data that is reliable and non-conflicting to specify a unique distribution.The decision maker works with a set of different distributions and/or intervals.Keynesian or Ellsbergian revision can lead to a change in the underlying probability distribution being used as a best estimate of the data.This is completely different from the subjectivist Bayesian view upon which all risk management courses are based on) and/or Ellsbergian ambiguity.The standard risk (The decision maker DOES KNOW the particular probability distribution's population parameters and/or the sample statistics under conditions of risk.Bayesian updating/revision simply means that you continually revise/update the estimates of the mean and standard deviation of the SAME initially specified distribution through time)
  management techniques, taught universally in all undergraduate and graduate classes in economics,econometrics,finance,business,and actuarial " science " worldwide, are completely unable to prepare the student for what can happen under uncertainty.For example,the author appears to correctly realize that herd behavior and cascades results from decision making patterns which are completely rational for the individual decision maker operating under conditions of uncertainty but make no sense whatsoever if operating under conditions of risk.Such behavior patterns appear to some authors in the socalled " new " field of behavioral finance to be the result of " irrational exuberance " .Keynes and Ellsberg knew better.Extensive discussions of risk and risk management are made throughout the book but no clearcut distinction appears anywhere in the book that clearly differentiates risk from uncertainty.
  Another important analyst's perspective is missing .The missing analyst is Benoit Mandelbrot's distiction between the wild risk of the Cauchy distribution and the mild risk of the normal distribution.The mild risk of the Normal distribution is what risk managers mean by controlling/managing risk.Risk managers are completely helpless when faced with behavior patterns that generate the wild risk of the Cauchy distribution.The recently proposed 1-1.5 Trillion dollar bailout of Wall Street by President Bush,Ben Bernanke,and Treasury Secretary Paulson demonstates the complete and total intellectual bankruptcy of the standard approach to risk management
  I recommend that the book be purchased because the author does make it clear that present analytic techniques for evaluating and choosing stock portfolios is flawed.It would have helped if he had been more specific about the nature of the flaws and how the work of Keynes,Ellsberg,and Mandelbrot,if implemented ,would have prevented this type of catastrophe from occurring or reoccurring in the future.
  
  

• The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means
• Fooling Some of the People All of the Time: A Long Short Story
• The Snowball: Warren Buffett and the Business of Life
• The Post-American World
• The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash