The Sucker




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Downside® book recommendations

"If you've been in the game for half an hour, and you don't know who the sucker is, you're the sucker."
The Origin of Financial Crises
The Origin of Financial Crises

An analysis of market stability, and what central banks should be doing about it. He starts by pointing out the asymmetry in Fed policy in recent years. The Fed hasn't been taking away the punch bowl when the party gets going, but it's been injecting liquidity at the slightest sign of a downturn. Now, too late, this one-sided policy is seen as a horrible mistake.

Cooper takes a look at basic control theory as applied to markets. He even puts Maxwell's classic paper on steam engine governors, the beginning of linear control theory, in an appendix.

The Return of Depression Economics
The Origin of Financial Crises

Krugman's book on the Japanese bubble of the 1980s and its two-decade aftermath, updated to reflect the US crash in 2008. An easy, fun read.

Essays on the Great Depression
The Origin of Financial Crises

The Secretary of the Treasury writes about the Great Depression. Much of the analysis revolves around the gold standard, and how it prevented the expansion of the money supply needed to promote demand. Worth reading to get a sens of the thinking at the helm of Treasury during the Bush years.

Beyond Oil - The view from Hubbert's Peak

A petroleum geologist reviews the oil supply situation. Unlike other recent books about oil, this one is by someone who worked for a a major oil company for thirty years looking for it.

Deffeyes says we hit peak oil production this year. 2005. And he has the numbers to back it up.

How Companies Lie: Why Enron Is Just the Tip of the Iceberg

The story of modern corporate deception and its consequences. A bitter little book about accounting, corporate public relations, and management irresponsibility. It's striking, and painful, to see the full panoply of corporate deception tools described in one place. An easy read, but not a happy one.

Published in 2002, after the Enron collapse but before WorldCom.

Anatomy of Greed: The Unshredded Truth from an Enron Insider

A mid-level Enron trader's view of the collapse. Gives some insight into Enron's deals-at-any-price corporate culture. The author went to work for Enron thinking it was a real company, and gradually came to the realization that it was a Ponzi scheme.

DownTime - A Guide to Federal Incarceration

A guide to Club Fed, by a former executive of a failed company.

Send copies to CEOs under suspicion. Perhaps they'll take the hint.

Extraordinary Popular Delusions and the Madness of Crowds
A classic from 1841.The first time around for the classic ways to lose money, from Ponzi's original scheme to the South Sea Bubble. Read it or fall for the same scams.
One Market Under God
Since Marxism went bust, extreme capitalism has achieved total ideological victory. Maybe we've gone too far. This populist critique is a light book, but a useful one. A deeper critique is needed.
Dumb Money
From early 2000. Notes on the psychology of day trading. We all know day trading is for suckers, but this book lets you understand how the suckers, and the people who exploit them, think and operate.
The Internet Bubble
From late 1999. Contains a big list of stocks you should have sold months ago. Basic point: many Internet companies would have to be more successful than the most successful companies of the past to justify their inflated stock prices.
The Internet Depression
The next phase, by someone who saw it coming by early 2000. An important read in late 2001, when it's clear that something has gone wrong, but exactly what is little-understood. The author expects a long, deep depression until the Next Big Thing comes along. He doesn't see a Next Big Thing on the immediate horizon.
The electrical manufacturers, 1875-1900

Passer, Harold Clarence. Cambridge, Harvard University Press, 1953.
LC Number 52010754
Back in print, after decades of obscurity.

A new technology becomes available, and hundreds of startups prepare to cash in. It's happened before, with electricity. This old Harvard Business School case study is worth a read if you can find it. Read Edison's original business plan for the electric light. The similarity of this period to the "Internet age" is striking. Harvard's Baker Library has a copy.

Securities Analysis

Boring old Graham and Dodd, the original 1934 edition. A look from the depths of the depression might be just what we need right now. Remember, those guys came out of the Great Depression rich.

The Intelligent Investor

Benj. Graham's final work. More readable than Graham and Dodd, but the same philosophy. Updates Securities Analysis through the early 1970s, covering the go-go markets of the 1960s. Relevant to today's market. Preface by Warren Buffet.

When you ride ALONE, you ride with bin Laden

A critique of the War on Terrorism. Bill Mahler strips away the jingoism with a set of biting posters and commentary. A much-needed dose of realism in an era when the level of public discourse is low.