Excellent overview of a complex subject. Relatively easy to read with lots of examples.

Based on the endorsements for this book I assumed I would be getting an in depth description of how international finance worked and maybe a clue as to why so many were worried about trade deficits and the possible demise of the dollar.

Instead, what I got was more boosterism about free trade, globalization, and entrepeneurship - and warnings to politicians to not mess with this glorious world. No nuance. Very shallow.

Why it received so many prominent endorsements is a mystery to me. Rather than educating, the book just promotes political viewpoints.
I would not like to see free trade disrupted, but I have read all his arguments a hundred times before.

The book is an almost timely look behind the scenes at the world's financial bubbles. It was published after the subprime crisis but before the collapse of Wall Street's investment community. The author attempts to justify the continued practices of this community while calling for inspired attempts to regulate it. He has no real suggestions on how this could be done. He defends the system as moving people out of poverty in great numbers defined by those who no longer live on less than $1 a day. I would suggest that living on $2 a day is no less a reasonable definition of poverty.

The world is curved is filled with easily understood facts and figures but will astound the unknowing person. We are being kept in the dark by the drive by media and this book will shed light on our faultering economy. This is a good read.

If you wish to understand globalization and the global economy,
this book is for you. Well written, wordy in parts, but a good
reference as well.

First, the con: Smick is totally full of himself.

Pro: Very readable introduction to modern (up through Bear Stearns) international finance. To borrow the author's favorite metaphor, he channels a wide and deep river of facts, theories, opinions to describe the impact of the global ocean of money that surges through the financial world and influences everything.

My financial background: None. I can't speak to it's suitability for experts, but it's accessible to the motivated lay person.

excellent book about the current economic and credit crisis- what to do and what not to do in solving it. the future dangers (and possible opportunities ?) are discussed as is the dangerous disconnect between the political system and economics, somewhat mirroring Friedman's ideas in "The Earth is Flat." The dangerous delusion that impotent governments and central banks can control economies and credit with oceans of money that can move anywhere virtually instantly with a mouse click is disculssed.

A good read, a good yarn (exception: the sychophantic fawnings and name-dropping.) The most bothersome point is Smick's insistence that hedge funds etc. be allowed to do their magic unimpeded because the system promotes entraprenurial innovation. So what innovations have we seen in the past few years, other than fancy cell phones? How about innovations in affordable health-care? Low-cost housing? So the sop to the middle class for being terrorized by financial instability is to promote ownship. Presumably, owning shares will make them feel better when they lose their jobs.

Not much to be learned from reading the book. Save your money. You could select any other book on economics or risk management on Amazon.com for more information than was provided in this book.

Smick goes beyond the mainstream media's elementals of subprime crisis 101 and focuses on the crisis as a phenomena of international economics, global liquidity and money flow. Prescient, he fingers potential weakness in China banking, the withering of power of central banks, the huge growth of global liquidity, a possible repeat in the US of a Japanese banking scandal as in the 1990s, the rapid movement of money across borders and a credible even handed explanation of the deft monetary management and policies of Alan Greenspan. Mixing personal anecdotes and conversations with the world bankers and investment leaders, his sharp analysis and criticism is coupled with a centrist viewpoint tied to a strong advocacy for free market economic policy. His support for entrepreneurial initiative is convincing and highly readable. Defending the free trade policies of Reagan and Clinton and warning of the threat of class warfare, he targets the greed of the Wall Street bankers and their "off the books" securitization as the root cause of a lack of trust in the financial world today. Sensing a Democratic takeover in November, he warns against the recent populist attacks on free trade and governmental overregulation and interference. This is a book chocked filled with good sense and sound advice.

Smick's book starts out with a massive error - sub-prime loans amount to, at worst, $200 billion in the global market. Therefore, the panic that has since unfolded is because it is unknown which institutions held what sub-prime loans. Actually, experts say that "credit default swaps" became at least a $50 trillion market that was primarily betting that sub-prime loans would go sour; investors could bet multiple times on the same loans and didn't even have to own any of the loans.

The rest of the book is non-stop, largely erroneous, conservative philosophy, with nothing to back up its assertions and quotations.

Example 1: Smick tells us that some estimate the U.S. is $10,000 richer per household/year because of free trade. That claim is obviously ridiculous, given the millions who have lost jobs, health, and pension benefits due to free trade.

Example 2: Smick asserts that large turnarounds appeared in India and China after both lowered tariffs. Again, a ridiculous point - India and China improved after they became more capitalistic and WE lowered our barriers to imports.

Example 3: Smick claims that American so far has been a massive net "insourcer" of jobs because foreigners invest $0.5 trillion more in the U.S. than vice-versa. How does China, etc. buying existing American companies create more jobs? (The best-known "example" is their buying a defense-critical magnet firm, and moving it to China.)

Example 4: Smick tells us to imagine foreign graduate students are banned from U.S. universities. Within several years, the U.S. becomes far less innovative. Smick makes this claim without any data support - eg. what proportion of foreign graduate students return to their homeland, boosting their competitiveness? (It's risen considerably now that China and others have strong economies.)

Example 5: Smick wants us to imagine a tax on imported goods from economies with high carbon emissions (eg. China). China then retaliates with a tariff on the American agricultural sector, claims Smick. Problem - the U.S. is now a net food importer from China, and thus American farmers would welcome such a move.

And on and on.

What was most troubling about Smick, however, was his bragging about being an economic advisor to President Reagan at age 26. (Actually, a three-day gig, riding on Jack Kemp's coattails.) Yet, his biography lists no academic training whatsoever, and his first two positions were that of speechwriter. Then he became Chief of Staff to Rep. Jack Kemp. Why should anyone, especially a president, believe Smick has the knowledge and credibility to warrant listening to him?

Smick's book makes one good point, at the beginning - sub-prime loans amount to, at worst, $200 billion in the global market. The panic that has since unfolded is because it is unknown which institutions held what sub-prime loans.

The rest of the book is non-stop conservative philosophy, with nothing to back up its assertions and quotations.

Example 1: Smick tells us that some estimate the U.S. is $10,000 richer per household/year because of free trade. That claim is obviously ridiculous, given the millions who have lost jobs, health, and pension benefits due to free trade.

Example 2: Smick asserts that large turnarounds appeared in India and China after both lowered tariffs. Again, a ridiculous point - India and China improved after they became more capitalistic and WE lowered our barriers to imports.

Example 3: Smick claims that American so far has been a massive net "insourcer" of jobs because foreigners invest $0.5 trillion more in the U.S. than vice-versa. How does China, etc. buying existing American companies create more jobs? (The best-known "example" is their buying a defense-critical magnet firm, and moving it to China.)

Example 4: Smick tells us to imagine foreign graduate students are banned from U.S. universities. Within several years, the U.S. becomes far less innovative. Smick makes this claim without any data support - eg. what proportion of foreign graduate students return to their homeland, boosting their competitiveness? (It's risen considerably now that China and others have strong economies.)

Example 5: Smick wants us to imagine a tax on imported goods from economies with high carbon emissions (eg. China). China then retaliates with a tariff on the American agricultural sector, claims Smick. Problem - the U.S. is now a net food importer from China, and thus American farmers would welcome such a move.

And on and on.

What was most troubling about Smick, however, was his bragging about being an economic advisor to President Reagan at age 26. (Actually, a three-day gig, riding on Jack Kemp's coattails.) Yet, his biography lists no academic training whatsoever, and his first two positions were that of speechwriter. Then he became Chief of Staff to Rep. Jack Kemp. Why should anyone, especially a president, believe Smick has the knowledge and credibility to warrant listening to him?

Just received and read the book. What a pile of garbage. The author is a dyed in the wool Clinton apologist. Every Clinton hack appointee has recommended the book. Author actually compared Clinton to Ronald Reagan, what a putz. He even had the audacity to quote the New York Times, implying that it had any credibility. Good thing winter is coming, I'll save it for kindling.

This book will delight anyone who enjoys reading Greenspan. The first 100 pages are simplistic banal ECO001 clichés disguised by the magic of the written word as "powerful deep thinking" and highly recommended as a much safer alternative to sleeping pills for the insomniac bibliophile.

Even better, the sleeping pill has been especially designed for disciples of Greenspan, Paulson or Bush: all the financial delusion/fantasm they share are present and this will comfort the typical Wall Street reader in these troubled time (the book was released sep 4, 2008) and lead them in an (at last) comforting sleep.

Especially, when the eminent author compares China, which banks

"do not understand credit risk management, not to mention even the rudimentary rules of financial transparency"

with ...

"large American and European financial institutions" that "look like paragons of financial purity". (p. 108)

No kidding!

You can hardly be more delusional than that!

The author is remarkably candid about his ability to evaluate the global economy. When he learned on aug 10, 2007, that inter-bank loan market had seized and the stock market had dropped 3%, the author, who "confers with central bankers (such as Alan Greenspan and Ben Bernanke) and advised top Wall Street executives and investors", reasoned:

"None of this makes sense, I though. The markets had become hysterical over losses in the so-called subprime market...why a near-global market meldown and a collapse of lending simply because of some mortgage foreclosures? After all, the problem loans amounted to, at worst, $200 billiom in exposure in a global market worth hundreds of trillions"

Sorry, but any reasonably alert investor who would have read Buffett 2002 letter to investors, or listened to Nouriel Roubini (IMF 2006) would have known exactly what was going on ... months in advance!

That smart investor only had to put his money in his mattress and he would have made more money during the ensuing 1.5 year than the sum of the 4 largest investement bank and 5 biggest bank in the world COMBINED, institutions, let us remind, repleted with "genius traders", managed by CEO worth $10 millions/yr, and last, but not least, enlightened by highly paid consultant such as Mr Smick.

The author was a consultant to Greespan and Bernanke and hadn't a clue on the importance of the bursting of the housing bubble and its amplification by the derivative structure even in the month leading to it. Unbelievably frightening reality.

Before completing the book, I had read enough. It was clear that this book's return on investment (time and money wise) was already too negative to continue.

I will retun it for a full refund. I feel it would be immoral and unconscionable to financially support such writing.

ADDENDUM

One could wonder why such as book got such lavish endorsement by Greenspan, Trichet, Summers, etc.
Very simple.
The author by initiating international banking conferences acted as a middle man between a significant number of high-level financial personalities. True to form, the book contains a few sycophantic pages on each of them to the point that one could be easily led to believe that the true purpose of the book is a public relation exercice to rescue the reputation of the financial actors involved. Highly grateful, they, not surprisinly, are enthusiastically "endorsing" the book.

And surely, those people are indeed in desperate need of hagiographers:

Remember Greenspan's deep insight of the financial market? :

"The use of a growing array of derivatives and the related application of more-sophisticated approaches to measuring and managing risk are key factors underpinning the greater resilience of our largest financial institutions" (Greenspan, May 2005)

Remember Trichet management at Credit Lyonnais?:

Trichet was prosecuted because as "directeur du trésor" with the complicity of others he had knowingly signed on a falsifed 1992 annual report of the nationalised Credit Lyonais which dramatically reduce its loss and therefore adroitely prevent it from becoming insolvent. He was later rewarded for his brilliant service by being named head of the French Central Bank and the entire world was waiting for him to take the helm of the European Central Bank when, very inconveniently, a stubborn prosecutor continued to press the case forward which threatened to prevent France from having its man at the helm of the ECB. In the end some others were given slap-on-the-wrist sentences and he was himself completely absolved (in 2003) by the judge (the defense being more or less that he had notified/warned the board of director), conveniently just in time to take on his new job.

Smick details and justifies the narrow, self serving elitist' economic global view (the 10%) while ignoring the destructive effects of global economics on the lives of the "little people" (the 90%). It is a facinating read giving details of global economics while attempting to appear benign.

This book will delight anyone who enjoys reading Greenspan. The first 100 pages are simplistic banal ECO001 clichés disguised by the magic of the written word as "powerful deep thinking" and highly recommended as a much safer alternative to sleeping pills for the insomniac bibliophile.

Even better, the sleeping pill has been especially designed for disciples of Greenspan, Paulson or Bush: all the financial delusion/fantasm they share are present and this will comfort the typical Wall Street reader in these troubled time (the book was released sep 4, 2008) and lead them in an (at last) comforting sleep.

Especially, when the eminent author compares China, which banks

"do not understand credit risk management, not to mention even the rudimentary rules of financial transparency"

with ...

"large American and European financial institutions" that "look like paragons of financial purity". (p. 108)

No kidding!

You can hardly be more delusional than that!

The author is remarkably candid about his ability to evaluate the global economy. When he learned on aug 10, 2007, that inter-bank loan market had seized and the stock market had dropped 3%, the author, who "confers with central bankers (such as Alan Greenspan and Ben Bernanke) and advised top Wall Street executives and investors", reasoned:

"None of this makes sense, I though. The markets had become hysterical over losses in the so-called subprime market...why a near-global market meldown and a collapse of lending simply because of some mortgage foreclosures? After all, the problem loans amounted to, at worst, $200 billiom in exposure in a global market worth hundreds of trillions"

Sorry, but any reasonably alert investor who would have read Buffett 2002 letter to investors, or listened to Nouriel Roubini (IMF 2006) would have known exactly what was going on ... months in advance!

That smart investor only had to put his money in his mattress and he would have made more money during the ensuing 1.5 year than the sum of the 4 largest investement bank and 5 biggest bank in the world COMBINED, institutions, let us remind, repleted with "genius traders", managed by CEO worth $10 millions/yr, and last, but not least, enlightened by highly paid consultant such as Mr Smick.

The author was a consultant to Greespan and Bernanke and hadn't a clue on the importance of the bursting of the housing bubble and its amplification by the derivative structure even in the month leading to it. Unbelievably frightening reality.

After 100 pages, I had read enough. It was clear that this book's return on investment (time and money wise) was already too negative to continue.

I recieved my book a week before it was estimated to arive. This seller does not sit around and waste your time.

I thought it went a long ways in explaining the problem with subprime loans in a way that was understandable

This is an excellent book. The author keeps you focused and moving from chapter to chapter without repetition or minutia. The topic is covered with exceptional detail and in the end leaves the reader with invaluable insight. Simply put, it's an essential topic and an absolute must read.

Easy and interesting read on the present financial crisis.
Only drawback for me is that it contains much on China which is not very well researched.

Excellent overview of the current (29 Sept 2008) macroevents and the how we got here. Fascinating for me as I remember the 70's gas lines and lived in DC in the 80's -- Mr. Smick, clearly walked the halls of power and understand how we got into this mess. Note - he seems to be quite balanced in that both Dem's and Republicans are at fault. He gives Bill Clinton a lot of credit for pushing thru NAFTA, Welfare reform and cutting Capital Gains by 30% thus allowing all of us to benefit from globalization.

He also suggests that China is in a large bubble and what the impact is to us. I was there a few years ago and they and Dubai are clearly over the top (dot commish even) so it will likely get ugly for all of us when China blows.

The only disappointment I have is the last chapter "Surviving and Prospering in This Age of Volatility". This is about how to govern better not what you can do in your personal investments. Interesting but not something I can act on, except perhaps voting.

Best quote was from Marc Leland, former US Treasury official... "Globalization is like the two institutions we know as democracy and marriage. Both institutions at times can be problematic, but the alternatives are highly unattractive" Reminds me of Churchill's famous quote "Democracy is the worst form of government, except for all those other forms that have been tried from time to time."

This extremely well-written book describes the current financial problems of globalization. It is easy to follow, easy to understand, and eliminates jargon. It's a great example of communication out of the Frank Lutz 'words that work' school.

The problems of globalization, as the book described' are critical as a major period of entrepreneurial prosperity may be coming to an end. The availability of `oceans of money' started with a liberalized program in the USA during the early 1980's and later elsewhere with the rejuvenation of pension funds and other financial instruments. Capitalization/reserve requirements of banks were reduced, capital gains taxes were cut and a variety of new investment vehicles freed up large sources of capital. Smaller businesses were funded as the need to invest capital continued to grow and consequently, new wealth, new jobs and prosperity resulted. Moreover, many countries established sovereign funds that needed to be invested too. Rapid machine computation facilitated an explosion of capital transfer and global investment. Because the USA was perceived as the safest haven with the highest level of global transparency, it benefited from these changes. Moreover, the USA with labor market flexibility, higher education, a benign political environment, innovative strategies and quality of corporate management is considered the prime country in which global funds invest. However, the USA is not an island, but is interconnected and therefore subject to global economic events. But is it fading?

The downside was securitization, a process of spreading out investment into multiple income streams to reduce risks. Securitization also involves arcane practices that are difficult for most policy makers, bankers and financial institutions to fully understand. In the process are no longer tied to the risk of the borrower, making capital easier to lend. Even riskier is the overlay of lack of transparency in many countries, including China. Eventually, underpriced and hidden risk will lead to major market corrections, as we have seen recently. Moreover, global forces and lower international trade barriers have diminished the role of government to influence their own economies.

We now see increasing political risk in the USA that may kill the goose that laid the golden egg. The rising tendency of anti-global trade pacts, envy, class warfare, and populism, are placing the US at economic risk. American politicians, according to Smick, have only one option and that is to make the American economy the most attractive destination for global investment on a LONG-TERM basis.

The wild card in all of this is China and I cannot detail the intricacies in Smick's chapter. China's approach includes widespread investment for strategic advantage, and a lack of transparency. Also it is involved in widespread commodity stockpiling. There, foreign investment is controlled. Chinese banking does not understand credit risks and are viewed instead as social and political instruments. In short, their economic system is extremely unstable and a bursting of its bubble will have worldwide cascading consequences

The chapter on Japan's economic activities is well worth reading, as is the chapter on the sterling crisis of 1992.

But perhaps the biggest change during the past 25 years is the diminishing role of central banks. As private entrepreneurs and government sovereign funds accumulate large amounts of cash, the role of central banks has diminished. With diminished governmental roles, people's vulnerabilities are increasing and one of the consequences is political pandering in the form of abetting class warfare,. We see it today. That is the underlying cause of the current backing-off by congressional democrats from free trade. It is a disaster in the making
The closing chapter on "Surviving and prospering in this age of volatility" would require a long review in itself. It is not only worth reading, but needs to be reread to fully comprehend the economic mess we are in today and possible solutions out of that mess.

Other reviewers have suggested both major presidential candidates should read this book. I can only concur. In fact, everyone needs to read this book to navigate the choppy waters ahead.

This is an on point book about the current crisis that captures the reasons why there is and should be fear in the markets today. He tells us how the world that he knows from the inside was never what it appeared. While he is part of the hedge fund and central bankers club, his skepticism of their abilities remains high. He explains how he invested in China Cement early, and despite the vast growth of the country and industry, lost money (probably the only time). Even he will need to turn this book into a blog, as events overtake the markets. I wonder what he advised regarding the U.S. takeover of Fannie Mae, Freddie Mac, and AIG.

The impact of so-called free trade agreements have been a Pandora's Box for many in the United States who have had to suffer through off-shoring and trade imbalance. Smick argues persuasively that the influx of capital from globalization has fueled a level of growth and innovation that is unprecidented and that tampering with that with protectionism or poorly conceived legislation to control complex financial instruments, such as Mortgage Backed Securities, will result in a contraction in the global economy that could be catastrophic. Americans need to understand what has been created. Given that the Chinese are consciously accumulating vast reserves that they can use as an ocean-sized war-chest to exert vast global influence, we must find a way to safely level the playing field. I did not appreciate how difficult that might be until I read this book. It is very well written and terrifying!