The Money Changers (Published in 1975) by Arthur Hailey, focusing on the world of banks and money

Arthur Hailey was born in Lutton, Bedford-shire, England. He served in the Royal Air force as a pilot in World War II. He migrated to Canada and has written best sellers like Airport, Wheels and Hotel. He moved to the Bahamas with his writer wife Sheila. Arthur Hailey died on November, 2004 leaving a legacy of best sellers and over 170 million books in print.
Moneychangers is not only about money, it is about all the effects of money i.e. power, greed, affairs, isolation, loneliness etc. In Money Changers, Hailey tries to present the dynamics of banking. As usual a detailed prelude emerges about the principles of banking, the economics, ethics and above all the operations. He even makes the reader familiar with fake currencies, fraud credit cards and the risk of investment. Towards the end of the book he even explains about the advantages of investments in bullion.
The first Mercantile bank (FMA) is a family run bank and the current chairman Ben Roselli is fatally ill. He is grooming two vice-presidents of the company, Alex Vandervoot and Roscoe Hayward, as his successors. Alex Vandervoot is an honest, principled albeit easy-going person. But his banking fundamentals are strong and he feels that the future of banking lies in retail banking. He believes in giving back to the society and does not believe in risking the banks credibility to bring in the gains.



What is Hailey's book without a love and personal angle? Alex Vandervoot's personal life is in shambles. His once lovely wife is confined to a psychiatric facility and he himself fees very guilty about it. He chances upon Margot Bracken, a hard nosed activist lawyer who works for the underprivileged community. To compound matters, the First Mercantile American withdraws financial assistance from some of the projects of the community. Margot's spirited non-violent protest becomes a success, but Alex's detractors pin him down to the wall. They feel that Alex has been assisting Margot to pressurize the bank.
Roscoe Hayward, on the other hand, is a very religious, rigid person. He believes that the future profits of the bank lie with big business lending. He does not believe in charity and community projects. Roscoe teams up with a corrupt businessman and undertakes to lend big loans to him. In return for this, he strikes alliances with politicians and is treated to all the pleasure in the world.
But as the businessman defaults and flees the country, Roscoe is left with a huge crisis. This financial crisis threatens to engulf the whole system, setting up a panic reaction among the shareholders, stakeholders, employees and the stock market. Roscoe Hayward faced with criminal offenses commits suicide, paving the way for Alex Vandervoot to take over the ruined financial institution.
Money Changers is a book about the power struggle between two individuals, but Hailey's research gives the lowdown on the other operatives like mafia, currency rackets and fraudsters who at every stage try to undermine the system. Money Changers is a book for a banking student and a simple layman who does not understand numbers. It is an engrossing tale about the institution which determines the fate of millions in the world – the bank.

Freakonomics: A Rogue Economist Explores the Hidden Side of Everything

Whats great about this book is that it will change the way you look at things. Economics, for me, has never been my cup of tea. It is a science much bigger than reaching to Mars, I think. But this book is made for people like me. It is fun reading, all the while using data mining, to prove why things happen as they happen in terms of economics.




"Freakonomics: A Rogue Economist Explores the Hidden Side of Everything" is a book by Steven Levitt (University Of Chicago) and Stephen J. Dubner (New York Times). It proves that economics is not dull all time and not all related to finances most of the times. The book's topics include:
Chapter 1: Discovering cheating as applied to teachers and sumo wrestlers (See below)
Chapter 2: Information control as applied to the Ku Klux Klan and real-estate agents
Chapter 3: The economics of drug dealing, including the surprisingly low earnings and abject working conditions of crack cocaine dealers
Chapter 4: The controversial role legalized abortion has played in reducing crime
Chapter 5: The negligible effects of good parenting on education
Chapter 6: The socioeconomic patterns of naming children

Authors ask a lot of hilarious questions like: If drug dealers make so much money, why do they still live with their mothers? or Which is more dangerous, a gun or a swimming pool? or Do real estate agents have their clients’ best interests at heart? or What do schoolteachers and sumo wrestlers have in common? or How did the legalization of abortion affect the rate of violent crime?

The book was first published in 2005 and was a best seller, selling more than 3 million copies till now in around 30 languages. For many people, this book is an absurd book. But for me, this has been a "aha" effect book - nice one time read. Wonderful way of looking at things - it surely turns conventional wisdom on its head.

For more, have a look the book's official site.

Book Review: Barbarians at the Gate

This is not a new book. I remember reading it more than a decade back, and then suddenly I caught sight of the book in my office library, and it brought back memories. The book is an incredible piece of writing, and one can expect a great deal of detail, since the authors, Bryan Burrough and John Helyar are investigative reporters and had covered the takeover deal for RJR Nabisco in great detail. The book may seem a bit dated, since it was written in 1990 covering the Leveraged Buyout (LBO) of RJR Nabisco in 2 frantic months of 1988. However, I would argue that anybody who reads this book and is even moderately interested in the working of businesses, takeovers, and most importantly, the CEO's and boards of companies should read this book.



The book is gripping reading, especially because it desists from going into details into arcane financial details and boring readers (except the ones who get their kicks from too many financial details). Let me re-phrase; the book does not desist from providing financial details and certainly does not try to dumb down how things work, but the way in which the story line is crafted would make this seem like a thriller based on company mergers (and if you did not know this actually happened, you could believe this to be a work of fiction).
For a lot of readers, the stock-market boom of the internet era and the crash-and-doom of 2001 was a major thing, and they would have expected a period in history to be similar. But the fact remains that the 1980's was also an extra-ordinary period of financial turmoil with 2 great (and very controversial) terms coming to life; the junk-bonds most popularized by the junk-bond king Michael Miliken of the Drexel Burnham Lambert, and the Leveraged Buyout kind of takeover made most popular by a small firm called KKR (Kohlberg Kravis & Roberts).
These came together in a burst of what seemed like a great financial innovation - the Leveraged Buyout. What does LBO mean ? Loosely put, a LBO is used when the executives of a company believe that the company is being under-valued, or they want to make a pitch for the company when it is under hostile attack; and they go in for buying the company outright. They need to raise a bid high enough that shareholders (including the institutions - typically pension funds and others) sell of their shares. However, this requires a massive amount of money, and the net result of this is high debt levels (indeed, in many cases, crippling debt levels where interest payments demand massive cost-cutting). Some companies manage, becoming lean and mean, and in other cases, the whole stack of cards crumble.
Barbarians At The Gate is the story of the LBO launched by the CEO of RJR Nabisco, Ross Johnson, and his battle with the takeover firm, KKR (Kohlberg Kravis and Roberts - the important partners being Henry Kravis and George Roberts). Now KKR was a firm with extremely efficient partners, and the battle between Ross JOhnson and KKR was an epic battle with many rounds of discussion, debate and escalating payoff's, all being weighed by the board of RJR Nabisco, former friends and partners of Ross JOhnson, and now being the principle representatives of shareholders.
The interesting part of the book is a telling of the history of the companies, main people involved, their ambitions, their motivations and how they plan and scheme to get ahead. The book has what is called the 'people' perspective, and you will get a fair idea of what the personal ambitions of a person as ambitious (and ruthless) as Ross Johnson will cost many of the other people involved. However, it also details the variability involved in decision-making, particularly when Ross Johnson did not anticipate anybody else getting involved.
Also, you get to see something evolving in this book that continues to this day, namely the notion of how executive perks have kept on increasing. It is a fair understanding that many shareholders do not know the full level of executive perks, otherwise you would see far more resentment especially when the company is barely plodding along with not much dividend or increase in stock value.
This book is a great read, and I was absolutely hooked after reading it.

Tom Clancy: Debt of Honor

Somehow, I have always liked reading books by Tom Clancy. His books always contain a good deal of learning about things that you read superficially about in news articles, but when you read about them as he explains them, they make much more sense. So, for example, in this book by Tom Clancy that was published in 1995, you learn about trade, about the politics that drive bills in Congress, a lot about the stock market and the working of major financial institutions, and about the military (a pet subject of Tom Clancy), as well as about the effects of a fully laden plane flying into a building.
Now, in a book about a major trade war between the US and Japan, you would expect to see a lot of Japan bashing, but it is not so obvious actually. There are many people in Japan who are depicted as weak or with ill-will towards the US, but then you have major American politicians who are also shown as weak, or philandering. So, there is some Japan bashing, but very minimal, and I am pretty sure that from what I read earlier, the depiction of the influence of businessmen in Japanese political life is accurate to a large degree.
What appeals most about Tom Clancy is how he keeps several stories running at the same time, switching between the stories from time to time and still making sense. One problem of course is doing this, giving character to the novel makes it cumbersome and a bit big to read in terms of pages (this book itself being 900 pages), but I don't mind it too much. He also plays a lot on honor, considering that too be a core attitude in a person, and he has a set of core characters who are honorable, such as the lead man, Jack Ryan, the CIA operatives, the Russian head of the spy agency, his FBI friend, and so on.
The book starts 2 years from where the previous book (The Sum of All Fears) left off, with Jack Ryan getting called back into public life and getting appointed as the National Security Advisor. He has a couple of initial successes, and then the story takes a twist on its own. A car accident and a botched gas tank leads to politics that leads to a trade war as a politician leverages on the public outrage; this action leads a disaster in terms of the Japanese trade and economy getting badly affected. The Prime Minister has to resign and a hardliner takes over, being guided by a businessman who has visions of Japan regaining old glory. The businessman has also influenced an attempt by the Japanese to develop nuclear weapons, with old Russian missile bodies being used for the delivery mechanism (ostensibly for space launchers).
The trade war escalates, with the Japanese businessman coordinating a melt-down of the storage of American stocks records, leading to a disaster as with no records, there are no established trades. In the midst of this, a planned naval exercise with Japan turns ugly for the Americans when the Japanese sink 2 submarines with all the personnel on board, and America is now at war, with a nation that also has nuclear capability.
In addition, the Americans do not have current nuclear missile capability, they do not have naval assets to take back some islands that the Japanese have taken over. In the midst of all, there is a sexual criminal scandal against the Vice-President. Jack Ryan has to deploy all his skills to win back the initiative for the Americans, and he eventually does that. The description of the military battles as well as the stock mechanisms are very detailed. The only weak point was the sudden termination of the scandal involving the Vice-President.
At the end of the book, with the Vice-President having resigned, Jack Ryan is called to be the Vice-President, at which a time a disgruntled Japanese pilot puts his fully fuel loaded plane into the Capitol Hill, killing most of Congress, the President and the Supreme Court. Jack Ryan will have to be President now.