Category Archives: Uncategorized

Why Iceland? (2009)

 Why Iceland?: How One of the World’s Smallest Countries became the Meltdown’s Biggest Casualty (2009) is a book by Asgeir Jonsson, head of research and chief economist at Kaupthing Bank in Iceland. As the title suggests, the book deals with the collapse of Iceland in the face of the latest economic crisis. Accordimng to Jonsson, the impact of the crisis on Iceland has led to a “quiet transformation” of the society- a “Scandinavian-model economy” has replaced “free-wheeling Anglo Saxonian capitalism”, a “state-owned banking system” has been installed, and “capital controls” have been reinstated. Socially, “the consumption of Icelandic food is up, the birthrate is up, the sale of books has skyrocketed, theater tickets are selling in record numbers, and so on”. Iceland’s relationship with foreign countries has also changed, with Britain invoking terrorist laws against Icelandic banks, US not helping Iceland in the way some expected, and the (potential) role of the European Union being questioned within the country. (Click here to read a Business Week story about “the stunning collapse of Iceland“).
How did Iceland get into such a mess in the first place? After all, even until the 1980s, “Iceland’s economy revolved around little else than a semi-robust cod-fishing industry”. In the 1990s, however, Iceland turned its attention “from fish to finance”, adopted “Thatcherite, free-market reforms of Britain”, and became a “banking country”. By the time the global financial crisis started, Iceland’s banking system was more than 10 times its GDP. Then, as Jonsson describes it, “Iceland’s banks were taken down by a systemwide bank run that was touched off when the financial system lost the confidence of foreign creditors and analysts”, the central bank “could not serve a lender of last resort”, and “the state’s taxing power was also insufficient to provide bank support by recapitalizing the banks or guaranteeing their deposits abroad.” The result was that “a developed country…utterly collapse[d]”. [Click here to watch a video about “why Iceland is going broke” made in 2007 before the country actually collapsed!]

Jonsson’s book provides an in-depth analysis of how things in Iceland went from okay to boom to bust. His position at the Kaupthing Bank provided him an insider perspective of events and incidents. The fact that Jonsson is a native Icelander writing about his own country provides refreshingly different  insights into why and how things happened. Though it is tough to keep up with Icelandic names (!), I thoroughly enjoyed reading the book and recommend it to those interested in better understanding the dynamics and impact of the financial crisis.  As Jonsson warns us, “Iceland is not the anomaly that many would like it to be” and many countries that are “small” in size, with “large, internationally exposed banking sectors”, a currency “that is not a global reserve”, and “limited fiscal capacity” (think, Britain and Switzerland) may be vulnerable to “the twin menance of a currency and banking crisis, and the subsequent loss of confidence”.


Filed under Books, Uncategorized

The Asian Insider (2006)

asiabook1 The Asian Insider: Unconventional wisdom for Asian business (2006) is a book related to doing business in Asia by Michael Backman. Instead of defining Asia narrowly as most books on this topic do, Michael discusses many countries, including Thailand, Malaysia, Indonesia, Singapore, China (+Tibet), Japan, India, and Korea. The book is organized sometimes by topic (e.g. corporate governance, corruption) and at other times by country. The book is filled with interesting and spicy tidbits, anecdotes, and news from all over Asia. The book also includes a section on Islam in Asia, and takes a more positive and unbiased view of Islam than most Western journalists and media.

Despite its strengths, it needs to be acknowledged that the title of the book is misleading as it is not really a book about doing business there. Most of the book is written as an entry-level introduction to Asia for a westerner who is just beginning to learn about that part of the world. It is critical, perhaps unnecessarily, of all Asian countries, whether it is Indonesia, Japan, China, or India. For example, Indonesia is argued to have no right to existence as an independent nation, while Japan is written off as the “land of the setting sun”. China has come under criticism for its practices in Tibet and elsewhere, while India is “too democratic” to make sense as an emerging power.

I encourage people to read this book, not so much for its insights into doing business in Asia, but for learning a little more about countries that they may not know much about. Anyone who is interested in learning about other countries, whether it is Belgium and Australia or Thailand and India, needs to be ready to be confronted with a vast array of information, some of which will inevitably be confusing and conflicting. Michael’s book about “unconventional wisdom” may be a good starting point for its interesting writing style and wide range of coverage.

Leave a comment

Filed under Uncategorized

Doing Business in India (2005)

 Doing Business in India (2005) is a book by Professor Rajesh Kumar of Aarhus School of Business (Denmark) and Anand Kumar Sethi of Applied Technology Services Pvt. Ltd. The book discusses the emergence of India as “a major economic superpower” where American and European companies are doing business in increasing numbers. It places the growth of India in a historic context, arguing that it was “the very first globalized economy in the history of the world”. It discusses the fight among European countries over the imperialism of India and explains how the 250 years of colonial slavery continues to affect Indian attitudes towards global business even in the 21st century. It discusses how Indian culture and offers suggestions for companies interested in conducting business in India.

The book’s most controversial claim is perhaps the repeated assertion that India should be considered culturally western. For example, on page 38 the authors state “Indians are closer to Europeans/Americans than they are to Asians”. This claim is repeated multiple times in the paper, with the authors arguing that the Indian culture should be considered western, not eastern. Interestingly, this claim is attributed to the now-discredited Aryan Migration/Invasion Theory (AMT/AIT). It is not clear what the authors believe can be gained if it is to be believed that the Indian culture is “more similar to the Westerners than it was to the East Asians”, but it is apparent that the authors passionately subscribe to this belief.

The book is certainly worth reading for practitioners, academics, and students. However, it does have certain weaknesses that reduce its credibility. Though the book has a 14-15 page bibliography, at a number of places it makes claims without attributing them to any reliable sources. Consider this:

During a recent extremely crucial match between India and Pakistan, with the Indian side close to a historic first-ever series win over their arch rivals on Pakistani turf, all the security guards, immigration and customs officer at Delhi’s Indira Gandhi International Airport were seen huddled around TV sets showing the game live without a thought about opportunities for terrorists, smugglers, or illegal immigrants.    (p. 82).

Clearly, a very strong claim is being made, however, no evidence is presented to support it. Nevertheless, I recommend the book for those interested in better understanding a country which is expected to be one of the world’s three largest economies in the next two decades.


Filed under Uncategorized

The Pretender (2002)

 The Pretendor: How Martin Frankel fooled the financial world and led the feds on one of the most publicized manhunts in history is a book about Martin Frankel, a self-taught U.S. stock-broker, by Ellen Joan Pollock. The book describes the rise of Martin Frankel from an unemployed nerd who lived in his parent’s basement to a global businessman who hobnobbed with celebrities and politicians in US and Europe. It describes how Frankel, who did not like to leave his Greenwich (Connecticut) mansion, cheated investors of more than $200 million all over the country. It vividly describes the sex life of a perverted man who ‘obtained’ women from all over the US and many other countries of the world to build himself a modern-day harem. It discusses the financial decline of Martin Frankel and his eventual arrest in Germany when one his girl friends betrayed him to the feds.

Martin believed he was a genius at identifying stocks which could give better returns than what Warren Buffet was able to have. Unfortunately, Martin was never able to make the decision to invest (or divest) stocks. He believed he had ‘trader’s block’, a psychological barrier that prevented him from making trading decisions. Despite his alleged brilliance in identifying high-growth stocks, martin Frankel obtained his fortune from his acquisition of financially-troubled insurance companies which sold insurance policies to senior citizens through family-owned funeral homes in southern states such as Tennessee and Mississippi.

In the book, Martin Frankel is repeatedly described as a modern-day Howard Hughes (they were both eccentric millionaires and shared a common obsessive fear of germs). Martin Frankel was sentenced to a 17 year prison sentence after his arrest and continues to live in infamy as an admitted perpetrator of one of the largest insurance scams in American history.    

The book is worth reading, especially if you can overlook the somewhat unnecessary description of Martin Frankel’s sexual adventures.

Leave a comment

Filed under Uncategorized

Greenspan’s Fraud

 Greenspan’s Fraud: How two decades of his policies have undermined the global economy is an ambitious and bold book by Dr. Ravi Batra, professor of economics at Southern Methodist University in Dallas (Texas). This book is a direct, harsh, and explicit critique of Greenspan and his policies during the years he was the Fed Chief. Professor Batra blames Greenspan for most of the economic failures during his time at the Feds and later. The most interesting and provocative characterestic of the book is not only that Greenspan is held responsible for many economic problems, these problems are clearly attributed at times to stupidity and naivity and at other times to deception and fraud. Professor Batra discusses Greenomics- Greenspan’s economics- and finds that it was based on what Wall Street wanted, rather than on sound economic theory. The book’s conclusion (and assumption) is that Greenspan committed an intellectual and financial fraud on the American people, which resulted in substantial negative impact on the economy of the U.S. and the world.

Alan Greenspan was revered around the world for his leadership of the U.S. Federal Reserve. As Professor Batra acknowledges in his book, Greenspan was decorated by the Legion of Honor by France and knighthood (Knight of the British Empire) by England. However, this global reputation of Alan Greenspan has suffered seriously in the aftermath of the 2008 housing crisis. CNN has included him in its Hall of Shame of 10 people most responsible for the crisis in the economy. Italy’s foreign minister is believed to have said that Greenspan ranks only after Bin Laden in hurting America. Greenspan himself accepts that the (2008) economic situation is worse than it has ever been in his life. (An interview with Alan Greenspan about how he could have missed that such a crisis was coming can be found here. For those who prefer humor, here’s Alan Greenspan explaining what his role as Fed Chair was). 

It is obvious that Alan Greenspan’s reputation has suffered, perhaps irrepairably, due to the economic crisis that has occured so soon after his leadership at the Federal Reserve. Professor Batra’s book presents an unflattering picture of Alan Greenspan that most people usually do not get to hear about. If the reader is willing to overlook Professor Batra’s obvious dislike of Alan Greenspan and his policies, the book can be helpful in learning about things that have been relatively less recognized and discussed in the media and in policy circles.


Filed under Books, Uncategorized