Rave Review for ECONNED

This is from the October issue of Choice, the library market’s largest publication:

Smith, Yves. ECONned: how unenlightened self interest undermined democracy and corrupted capitalism. Palgrave Macmillan, 2010. 362p bibl index afp ISBN 9780230620513, $30.00

ECONned is a remarkable book. The first part is a devastating criticism of the simplistic approach to finance standard economics takes. Many books offer similar appraisals, but this one integrates deep knowledge of the intricacies of modern finance with a good grasp of economic theory. Smith (author of the Naked Capitalism blog ) then reveals the way that this defective economic theory was sold to an unsuspecting public. The heart of the book is a detailed dissection of the workings of modern finance in the run-up to the 2007-08 meltdown. The author ends with an excellent overview of political systems’ inability to create workable oversight structures. The book is well written, and frequent allusions to subjects such as the structure of the German military command or the breakdown of the financial system in 1700 BCE enhance readability.

All libraries should own this book. Although some details will be difficult for advanced undergraduates, the writing allows readers to scan difficult sections without losing their train of thought. Specialists will benefit from Smith’s insights into the functioning of the financial system. Summing Up: Essential. Upper-division undergraduate through research collections. — M. Perelman, California State University, Chico

I’m also told that ECONNED is mentioned in a newly-filed Credit Agricole lawsuit over a Magnetar-sponsored CDO (ECONNED broke the story of Magnetar, including an extensive discussion of how the trade worked and its systemic impact). So the book is also having a real world effect, even if in a small way.

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41 comments

  1. GermanQR

    Yves,

    I’m reading your book right now (Chapter 9). It is simply fantastic. And believe me, I have read many financial books: I’m in the asset management industry, an economist by trade, and right now thinking of taking my thesis back up and finishing my doctorate in Economic History. You have done an excellent job of exposing the incredible amount of BS “economic experts” have gotten away with in the last few decades. Not to mention the excesses of the financial industry. I agree this book should be in every library. It should be in every bookshelf!

    Thank you for writing it and congratulations.

  2. Dan-in-PA

    “I’m also told that ECONNED is mentioned in a newly-filed Credit Agricole lawsuit over a Magnetar-sponsored CDO (ECONNED broke the story of Magnetar, including an extensive discussion of how the trade worked and its systemic impact). So the book is also having a real world effect, even if in a small way.”

    Thank you.

  3. Mark Hartzer

    Well done Yves. I read Econned last May and gave it a 5 star review in Amazon. It was a great read and I enjoyed it very much

  4. leroguetradeur

    To me its an excellent book and remarkable achievement, no question about it.

    But its not without flaws. It has two books in it, one of which is a brilliant clear piece of investigative journalism at a level which goes rather beyond that genre, the disentangling of the derivatives business and how it all worked is one of the finest pieces of exposition of a complex issue that one will ever come across.

    The earlier part, though, on economic theory, that struck me as both pedestrian, derivative, and knee-jerk political. And not really needed for the brilliant parts. Economics and economic history is rather more difficult and more complex than that, and oversimplification does not help the case.

    All the same, a fine piece of work, and nothing is perfect. When its good, its very very good indeed. Just, not perfect.

    1. liberal

      The earlier part, though, on economic theory, that struck me as both pedestrian, derivative, and knee-jerk political. [emphasis added]

      Sounds like you just don’t don’t have the stomach for someone pointing out that modern economics, which is a laughingstock for missing a multi-trillion dollar bubble, is a fraud, and most of its practitioners are whores for the rich and powerful.

    2. LJR

      Yes, yes, Yves. The economics part of it is just a bit too complicated for your simplistic brain. You should leave that to experts like me. But, boy oh boy, the salacious Michael Lewis stuff was terrific. Have you thought of making it into a movie?

  5. leroguetradeur

    “Although some details will be difficult for advanced undergraduates….”

    Oh dear. There is nothing in it that should be difficult for any advanced undergraduate. That’s exactly what’s good about it. Even the bits I don’t like, you can see the flaws for yourself quite readily.

    Well, maybe undergraduates are not what they used to be?

  6. Paul Handover

    I have it down for a read as soon as I am back in the USA. But over here in England I’m reading this book, http://www.guardian.co.uk/books/2010/sep/26/them-and-us-will-hutton and can thoroughly recommend it. Here’s just one of the many references that had me gasping for breath:

    Two incidents in September 2007 highlighted the new values. Lance Bombardier Ben Parkinson, who lost both legs after a landmine exploded in Afghanistan, was offered £152,000 compensation by the Ministry of Defence. The very same week, Eric Nicoli left his job as CEO of EMI – having failed to turn around the company – with a pay-off of £3 million.

    1. Ming

      Congratulatins Yves! May your book become a manadatory reading for all students of economics and contemporary history and all persons concerned about trustworthiness in our political and financial institutions

  7. Doug Terpstra

    Congrats, Yves! It is well-deserved for a labor of love that grows into its own as the curtain parts on our ‘economy’.

  8. Gerald Muller

    I read the book several months ago and found it, like many others, the best by far among quite a few I have also read. I disagree with “the rogue tradeur” (are you Kerviel by any chance?). The first part is essential to understand the downfall to the chasm we are not out of yet, by a long chalk. My only criticism is that this first part is a little slow for readers of this blog. But a banker friend to whom I just lent the book loves this first part. So it is probably not useless.
    Anyway, great work Yves! Keep banging on them banksters and their chief at the White House.

  9. Eleanor

    The reviwer has to be Michael Perelman, who teaches economics at Chico. I have read two of his books and very much liked them. As far as I’m concerned, praise from him is high priase indeed.

  10. Pwelder

    I share the high opinion of Econned that many have expressed, and have wondered why it didn’t get a lot more recognition. In terms of delivering useful reporting and analysis it’s far superior, IMO, to the books on the crisis produced by Sorkin and Wessel just to name two.

    Those writers have access to bigger megaphones for self-promotion (NYT and WSJ, respectively)but that doesn’t explain all of it. Of course the book has the unfortunate quality of making influential people with impressive credentials look bad. Also, the choice of title (not by Yves, I hope – seems like the kind of thing a publisher would do) was not helpful – to my old eyes it comes comes across as a bit cutesy. In hindsight, that’s not the best approach for a serious writer intending to bury some well-entrenched paradigms.

    It’s a fine piece of work, not yet fully appreciated.

  11. readerOfTeaLeaves

    Yves, congrats.

    I have a minor quibble, which I hope is read as well-wishing by you and your publisher.

    I tend to spend most of my ‘Internet time’ at NC most days. I find the Odiego links a real timesaver, because I can listen and keep up while doing other menial tasks.

    I have read Econned, and am currently re-reading (as I couldn’t absorb it all on the first quick sprint). However, I really wanted it as an audiobook. However, iTunes audio books does not show a listing for Econned on audio. And I can’t find Econned at audible.com.
    Hence, I conclude there is no audio version?

    These days, with iTunesUniversity and many university courses and lectures going online, IMVHO anyone who fails to provide multiple media for content like Econned is missing an opportunity!

    I can’t fathom for the life of me why your publisher hasn’t put out an audio version — plus, given your recent Technorati numbers, it’s clear that you are gaining new readers, and probably most of them have time constraints that would make an audiobook a more viable option.

    On a related topic, Econned is at iBooks (hooray!!), and it’s lovely to be able to bump up the font size and put in digital bookmarks, etc, etc.
    I raise this point because several people that I know were recently at a conference for librarians, and evidently there were multiple sessions on screen readers: Kindle, iPad, and soon-to-be-announced tablet devices. Those technologies also lend themselves to audio.

    With all due respect to your publisher, I would strongly encourage them to put out some kind of audiobook version.
    Honestly, I believe there’s a potential market, and heaven only knows that the more people who see through the smoke and dazzle of the pseudo-economics that is causing far too much commotion in the world, the better off we’ll all be. Some people aren’t going to read the book; but they’d listen to it if your publisher would offer it as an option.

    FWIW, I think the title is catchy and easy to remember. IMVHO, it’s a great title for a college text, partly because it’s not intimidating.

    1. readerOfTeaLeaves

      Should have noted: the screen/digital prices for the books tend to be less profitable than hard cover. For instance, I paid full price for the hardcover at my local bookshop last year, then paid $14.99 for the iBook version (because it’s a leisurely re-read).

      So the screen reader versions may be less ‘profitable’ for publishers – and definitely not so good for brick-and-mortar bookshops – as the hardcover and pbk versions.

      I don’t understand the economics of audiobooks, but still – you already own the copyright, and to make it more competitive in the university textbook market – particularly as students are becoming used to downloading lectures and listening to content.

      However, I am aware that some of those librarians that I mentioned are dealing with smaller budgets, and if they have to decide between a full price hardcover, or an audio version then simply due to budget pressures they’re likely to go to the audio version.

      So despite not being familiar with the economics of audiobooks, I still think your publisher is missing a potential market.

      And obviously, your blog is making an impact.
      So is your book.
      But I think the book has ‘long legs’ and your readership hasn’t begun to peak yet, IMVHO. People are still finding out about your book.

    2. Yves Smith Post author

      Thanks a lot for your comments. I’ve pressed my agent repeatedly about the audiobook, I’m at a loss to understand the lack of action here.

      1. readerOfTeaLeaves

        Well, my email contact info should be in your blogsite software, so if you need any stats to send along to your agent…

        Really terrific book.
        Even better the second time; I swear, it only becomes more timely by the week.

    3. Jack Parsons

      Audiobooks tend to have a lot less content than the print version. Also, read your McLuhan to get how audio v.s. print v.s. video have very different “attack vectors” into consciousness. The “second part” is probably more appropriate and effective on audio.

      http://www.marshallmcluhan.com/

  12. MarcVdB

    I’ve read the book several months ago and I’m really pleased I did. The criticism that it’s really two books mingled into one is fair, I think. But I can imagine it is one of those cases where any way of telling the stories is imperfect.

    I have a minor quibble about the writing style. You have a very dense, concise writing style, which makes the book a very very slow read. On the upside, every word seems to have been weighed and clarity is more important to you than effect. But I do wonder… Are economics departments really noticing this book? It’s a gun aimed at the heart of many of their beliefs, so I would imagine you are being ignored (or misrepresented, which is worse).

    How can you make them notice it better? Perhaps you should ask Taleb to start namedropping you. (even if he won’t).

  13. skippy

    Kudos Yves, well deserved and only time will tell if your accepted by the general population, after many years of special interest ideology marketing. Tis hard to tell some that they backed over their kids…kids in a rush to get out of the driveway.

    On another note many of people that I gifted your book to have begun inquiring, asking for further clarification, secondary research materials. Maybe someone could create a short list of other authors/materials and insert it in the sidebar.

    Skippy…never getting in the ring with you…lol.

  14. Fred Heutte

    I skimmed through it when it came out and am reading it carefully now. It’s well worth the time. It’s not a genre book — textbook, case study, breezy overview, etc., all the usual categories. It’s quite clearly the book you -wanted- to write, Yves, and we’re fortunate you found a way to make it happen.

    Econned is on my very short list of must-reads relating to economics and finance, which includes Anthony Sampson’s classic study of the oil industry, the Seven Sisters (I find Yergin to be useful pre-WWII and selective and slanted afterward), several of Martin Mayer’s books (all somewhat dated now, but Markets and a couple others laid out the foundations of what became the 2008 crisis), Frank Partnoy’s Enron book, Traders Guns & Money by Satyajit Das which I read right after it came out, Mandelbrot’s (Mis)Measure of Markets, which has been completely ignored in the recent obits, and a few others.

  15. sgt_doom

    The only book possibly superior to Ms. Yves’ book is Paul Craig Roberts’ How The Economy Was Lost.

  16. psychohistorian

    Congratulations on growing recognition and a fine book Yves.

    And

    Thanks for not being broken by the powers of Wall Street and the uber rich.

  17. Francois T

    Congrats for the excellent review.

    Now, if Terry Gross could bring herself to listen to me (I’m a WHYY member so…) and ditch Gretchen Mortgenson for Yves Smith when Fresh Air wants to talk about the fraudclosure…we’ll be golden!

  18. M.InTheCity

    What a great succinct review. This is exactly the book that finance majors MUST read – if only so we don’t keep churning out such dolts.

  19. okl

    yes, i absolutely loved the book; every bit of praise there is well deserved.

    hoping to find some time to re-read it, right now I’m reading “Traders, Guns and Money”; tragically funny, I guess.

    i thought about joining the financial industry here in Singapore; i’m still in two minds about it, but I’m constantly reminded of Volcker’s dismay at the number of engineers, scientists, technicians joining the financial industry since the 90s, which he thought had a big part to play in the financial rubbish we see today… the same thing is happening here in Singapore and i do see my friends doing the same thing.

    how about too big to fail/save? there are only 3 major banks in Singapore, maybe 4 if you include the ubiquitous govt… enough said.

    yeah, I probably shouldn’t.

    great book Yves, just makes me want to marry you =)

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