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The five best books of 2016
Matthew Partridge casts his eye back over the five best books of 2016 for MoneyWeek readers.
The decisions that Alan Greenspan made as chair of the Federal Reserve from 1987 to 2006 continue to have an impact, even though the global financial crisis of 2007-2009 severely damaged his reputation. This 700-page biography offers a definitive account of his career, as well as the theories that inspired his actions. It "throws a sharp light on American policy and policy-making over four decades", says Martin Wolf in The Economist. It also underlines that "the forces generating monetary and financial instability are immensely powerful".
"This carefully researched and elegantly written book will be essential reading for those who aspire to make policy and for anyone who wants to divine what drives the choices that our leaders make," agrees Randall Kroszner in The Wall Street Journal.
The Man Who Knew: The Life and Times of Alan Greenspan, by Sebastian Mallaby. Published by Bloomsbury, £25.
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Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Having governed the Bank of England for a decade until 2013, Mervyn King certainly has plenty to say about the global financial crisis. However, instead of simply recounting key events, The End of Alchemy: Money, Banking and the Future of the Global Economy looks at how our financial system evolved, how it caused the crisis, and what needs to be done to reform it. Notably, King wants to abolish fractional reserve banking, and force banks to match their assets and liabilities.
Whether you agree with all his views or not (and I don't), this is an argument that you rarely hear from someone as senior as King. The result is a "fearlessly honest explanation of the 2007/2008 financial collapse", says Liam Halligan in The Daily Telegraph, even if "the narrative sometimes gets bogged down in descriptions of academic debates". "It is rare to encounter a book on economics quite as intellectually exhilarating," agrees John Plender in the Financial Times.
The End of Alchemy: Money, Banking and the Future of the Global Economy, by Mervyn King. Published by Little, Brown (£25).
Why we always make bad decisions
Michael Lewis is famous for books such as Liar's Poker and The Big Short that make the world of finance entertaining, even thrilling. His latest, The Undoing Project, isn't directly about Wall Street, but Daniel Kahneman and Amos Tversky, the two Israeli psychologists who are its protagonists, are "cut from the same cloth as many previous Lewis heroes", says Gary Silverman in the Financial Times. The duo's discoveries about human behaviour "upended economic models that assume people are rational". "Lewis has found the granddaddy of all stories about just how majestically, fantastically unreliable our intuition can be," says Jennifer Senior in The New York Times.
The Undoing Project: A Friendship that Changed the World, by Michael Lewis. Published by Allen Lane, £25.
A look at America's new president
Trump Revealed, the latest biography of America's next president, offers plenty of telling anecdotes about some of Trump's failed ventures and gives us an idea of what to expect in the years ahead. It's "crammed with court records, financial data, anecdotes and interviews about Trump's unscrupulous business practices, his liberal use of truthful hyperbole' and false promises to make himself rich, usually at the expense of others," says USA Today's Ray Locker.
Trump Revealed: An American Journey of Ambition, Ego, Money and Power, by Michael Kranish and Marc Fisher. Published by Simon and Schuster, £20.
The men behind the drugs trade
Proponents of legalising drugs argue that it could turn shady drug dealers into law abiding businessmen and there are certainly similarities between cartels and the average multinational, reckons Narconomics. Indeed, "there are so many well-reported examples of the smarts of the cartels" that "you end up with sneaking respect for some of the most heinous entrepreneurs in the world", says John Arlidge in The Sunday Times. The book is "lively and engaging" and "informed by... dogged reporting", says David Wessel in The Wall Street Journal.
Narcoeconomics: How to Run a Drug Cartel, by Tom Wainwright. Published by Ebury Press, £20.
New books by MoneyWeek's contributors
Two MoneyWeek contributors published books in the past year. Eoin Treacy's Crowd Money: A Practical Guide to Macro Behavioural Technical Analysis looked at how you could use technical, monetary and behavioural indicators to make money in today's markets. Tim Price wrote Investing Through the Looking Glass, which both analyses the many challenges that the contemporary investor faces and proposes ways to overcome them.
Meanwhile, small-cap fund manager Gervais Williams, who has been interviewed several times by Merryn in recent years, published The Retreat of Globalisation: Anticipating Radical Change in the Culture of Financial Markets, which addresses the rise of protectionism around the world and the investment implications of this.
Coming up in 2017 will be How to Pick Winning Shares from our former senior writer Phil Oakley, to be published by Harriman House. This will argue that many popular metrics, such as price/earnings ratios, can be misleading and investors should focus more closely on balance sheets, hidden debt (such as pension fund deficits) and cash flow, since these metrics are much harder for companies to manipulate.
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