Niall Ferguson, author of ‘The Ascent of Money’ has made a decent work of covering the history of finance starting right from the erstwhile Inca civilization till the recent credit crisis of 2008. In addition to being the author of ‘The Ascent of Money’, Ferguson is better known for his previous books ‘Colossus’ and ‘Empire’. Close on the heels of the Niall Ferguson’s latest book in India came a TV series on ‘National Geographic’ by the same name. Apparently, outside of India, TV series was followed by the book. There is no doubt that the author had worked out a neat marketing plan to hit the bull’s eye and the bull’s eye he did hit. ‘The Ascent of Money’ is a fast ride through the annals of financial evolution; an enlightening trip which illuminates somewhat obscure and lesser-known yet significant underlying events. These were the events that scaffolded the financial structures of the most successful erstwhile powers. As Ferguson himself says in the foreword to the book,” Behind each great historical phenomenon there lies a financial secret.”

Ferguson kicks off with the chapter quite aptly titled ‘Dreams of Avarice’. He mentions that the first revolution in the ascent of money was ‘Birth of Credit’. To explain it further, he hurtles through the role of money in the Roman society, talks about undoing of Hapsburg empire, sprinkles in accounts of Shylock and Venice, Florence and Medicis. Author also offers crisp explanations of certain significant financial concepts such as Cash reserves, Money supply, Credit creation, fractional reserve banking, Gold standard (whom Keynes dismissed as a barbarous relic), etc. He ends the chapter with an interesting account of long-existing dichotomy in the US economy. America has provided each of its citizens with the unalienable right to declare themselves bankrupt and seek a legal recourse to reorganization/liquidation of debt. To this, Ferguson remarks,” The world’s most successful capitalist economy seems to built on a foundation of easy economic failure.”

Ferguson then moves on to the ‘birth of Bond market’ which he considers the second revolution in the ascent of money. He delves into the history of bond market and quotes the ancient Greek philosopher Heraclitus,”War is the father of all things.” Ferguson angels off slightly and labels war the father of the bond market. The ability to fund a war through market for Government debt apparently gave rise to bonds, specifically, war bonds. Both Italy and France succumbed to the temptation of raising money through war bonds, and consequently, spiraled into defaults as looming debts became overwhelming. Author also sheds light on the booming bond market in 18th century London which had become attractive to foreign investors due to its liquid bonds called Consols. He then goes into an enlightening account of the famous banker Nathan Rothschild. Author digs up interesting pieces of information about Rothschild family to which many would be oblivious. For example, Ferguson says that Nathan Rothschild was as much responsible for the Napoleon’s defeat in the Waterloo as was the Duke of Wellington. It was Nathan Rothschild who sold bonds through the nexus of his brothers in different countries and stockpiled Gold for the British army. The first three chapters make the storytelling skills of Niall Ferguson more than amply clear. He segues from one account into another with mathematical neatness, stoking up the reader’s interest in anticipation of picking up rare historical facts.

After covering credit creation and bond market, Ferguson logically switches to more flamboyant topic of stock markets. Chapter is titled ‘Blowing Bubbles’. Ferguson explains that following three factors are always central to the creation of bubbles – a) Information Asymmetry, b) Cross-border flow of capital and c) easy credit creation (read sub-prime). Just like the previous chapters, ‘blowing bubbles’ has also got a fair share of discussion on some of the relevant concepts of stock markets which lend to the ascent of money. Apparently, what Rothschilds were to bond market, John Law was to the stock market. John Law could be obnoxiously branded as someone who gave the world its first stock market bubble. Historical account of John Law as told by Niall Ferguson is an engaging one. After the French revolution, the French monarchy saddled with huge debts made John Law the in charge of public finance.

Next chapter titled ‘The return of risk’ takes a swath of issues ranging from the role of public and private insurers in the aftermath of Hurricane Katrina to Japan’s welfare system and Milton Friedman’s mentorship of Latin American finance ministers. Fifth chapter ‘Safe as houses’ is somewhat singularly framed and focuses on property as investments. Ferguson traces the history of financial institutions such as Fannie Mae, Freddie Mac which were instrumental to the increasing number of households owning or wanting to own properties. He does an incredible job of explaining well beyond clichés the linkages between the Great depression and recent financial crisis. He calls into question the role of credit-rating agencies which abetted the crisis by obfuscating the toxic nature of various exotic instruments such as CDOs and Credit default swaps.

Last chapter of the book is titled ‘From Empire to Chimerica’ which basically signifies the momentum shift that is taking place from America as the central hub of Finance to the joint China-America entity often called Chimerica. As interesting as the title sounds, the content doesn’t do any justice to it. Ferguson has taken a motley collection of topics from prevailing times and patched them together in the last chapter of the book. This book would have been better off sans the hotchpotch in the final chapter. You have everything from account of rising Chinese capitalism to account of human epitome of capitalism George Soros to some tidbits on Behavioral finance. Having said that, one can safely skip the final chapter at the expense of losing out on some general and easily available information.

Finally, Niall Ferguson’s ‘The Ascent of Money’ is a wonderful read. This book successfully unwraps several of the lesser-known historical facts of our financial world. Despite the let-down towards the end of the book, the rest of the book makes for a bold and original attempt to highlight the history of what, some say, makes the world go round.

I usually am very choosy about my movies. I learnt that critics have been going gaga over QT’s latest movie, so I decided to check it out. Weird as it may sound to those who have loved this movie, to me, this was the worst movie Tarantino has ever made.
I won’t say I am a big fan of QT but I have seen all his movies. And things I like best about his movies are the subplots, character development, long-drawn-out sequences wherein characters engage in peppy and interesting parleys. ‘Inglourious Basterds’ had all the ingredients, typical of a QT movie, but then, something ‘significant’ was amiss. To start with, movie moves at an agonizingly slow pace; i almost yawned to death in the middle of the movie. As if that isn’t enough, a good part of the movie is subtitled. Finally, graphic violence in this movie, unlike Tarantino’s other movies, i thought, was quite dispensable.

There is this scene towards the climax wherein one of the characters(Pvt. Zoller)jokingly remarks to another character(Shosanna)while the former’s movie is being played that it’s a terrible movie and asks for his money back. I wryly smiled and let the feeling of being ridiculed slide.

At the outset, let me break it that by no yardstick is ‘Madoff’ by Peter Sander a biography or a complete inside-out, threadbare research of ‘Madoff’s scandal’. Yet he deserves all the applause. Madoff scandal broke on 8th Dec, 2008. And by the references in the book, it’s quite clear that author had wrapped up his research on Bernie Madoff and his dirty work by January 2009. There is no doubt in my mind that author was in a hurry to publish this book. After all, when it’s a $50 billion con game exposé, you can be rest assured that even those resting in the graves would be itching for the lowdowns. However, I don’t hold it against him because despite all the rush Peter Sander has written a smart book. Right from the first chapter, Sander gets down to the brass tacks. He expands upon the various con artists that existed before Bernie Madoff and reasons why Madoff is the biggest of them all. Sander takes the readers through facts, whatever were available by January’09 end about the scandal and a lot of assumptions and second-hand confirmations, credibility of which could be dubious. I admire author for his forthcoming attitude in admitting to the lack of facts. Though he leaves no stone unturned when it comes to research. From the interviews of whistle-blower Markopolos, members of Jewish charity foundations whom Madoff duped to the excerpts of various reports including the FBI charge-sheet against Madoff, Peter Sander has let everything roll. Finally, Peter Sander’s Madoff is not a play by play account of the scandal or the man himself, nonetheless it’s a very well-though-out and well-written book. Read this one or wait for the yet-to-be-published tomes on Madoff and his scam.