Book review: 'Mobs, Messiahs and Markets', by William Bonner and Lila Rajiva

An irreverent take on the world of finance

The recent market turmoil stemming from concerns about loans in the so-called subprime mortgage market in the United States makes this book extremely timely. As markets around the world reacted first to the sudden emergence of doubts about the availability of credit associated with this lending policy and then to each other's reaction, observers were treated to a typical example of the mania of crowds.

None of it would have surprised William Bonner, head of Agora, one of the world's largest financial newsletter companies. The easing of credit that was a characteristic of Alan Greenspan's long spell as head of the US central bank, the Federal Reserve, was a disaster waiting to happen in his view.

He has long been a maverick commentator on the financial world and you get an idea of his world view from the titles of his previous books: Financial Reckoning Day and Empire of Debt. With Lila Rajiva, a contributing editor and writer at Agora, he has - rather like the historian Barbara Tuchman, whom he name-checks early on - decided to look at the present through the past. The result is an irreverent but thought-provoking examination of the goings on in international finance today.

Growing businesses have been less than impressed with the idea of gaining stock market listings for some time. This is a marked change from just a few years ago, when seeking a listing was a key ambition and sign that they had "made it". Now, the level of scrutiny from both outsiders and market analysts, and the perceived inability to make the quick decisions necessary to succeed in an intensely competitive environment have combined to make it much less attractive than it once was. Anybody still contemplating seeking a listing - on either side of the Atlantic - who reads this book is likely to come away with serious doubts.

Though the book is light-hearted in tone, it packs a serious punch. One particular target is globalisation, as described by Thomas Friedman's best-selling book The World Is Flat. Mocking this view in a chapter entitled "The Flat Earth Society", Bonner and Rajiva write: "We are all one: one people, one world with one idea - to get rich. And in this new flat earth, we can all get rich, too. It is as if the world had been flattened into a kind of United States of Earth, where people in Mississippi can live as well as those in New Guinea - competing for the same jobs, trading, co-operating and schlepping their way toward a new world order that is better for everyone".

It is all very tongue-in-cheek, but you get the point. The idea that globalisation is good because it enables people in less developed countries to buy the same clothes as those in industrialised ones has become pretty well accepted by most people, at least those in business, largely because it has been repeated so often. As Bonner and Rajiva point out, just a few don't get this sort of "United States of Earth". They are "losers, who think religion is more important than material progress; insurgents, who defy the empire; and protectionists, who want to push a stick into the wheels of history".

Of course, it is not as simple as that. Not only is the spread of huge companies across the world not all good for people in less developed places it is also certainly not good for many workers in developed countries, who are suddenly seeing their jobs threatened by low-cost competition from the same sort of places that are being sold goods they never knew they wanted.

Though there will be many victims, this might be a fad that passes. More worrying is when the crowd or mob mentality takes over the stock markets. In a chapter towards the end of the book that advises on "how not to be chumped by Wall Street", Bonner and Rajiva make the obvious point that investments should be bought when they are down and sold when they are up. Of course, the uninitiated do the exact opposite. "The lumps get excited about an investment when everybody else is excited about it - which is precisely the time not to buy".

This is straightforward enough, but how does an individual know when a stock is up and when it is down? They tend to seek answers from the so-called experts in newspapers and elsewhere. But such commentary is part of the general noise. Without such sources of information, investing would be more of a private matter, more a question of an individual making his or her own assessments and acting accordingly - and it would be better for it, the authors assert.

Perhaps that is why owner-managers who know their own minds and have an instinct for what will work often see opportunities that larger organisations with all their strategists and analysts and advisers do not.

(John Wiley, £19.99)

PROMOTED VIDEO
News
Johnny Handle, Northumberland, Ted Relph, President of Lakeland Dialect Society, and Sid Calderbank, Lancashire, founder of the National Dialect Day
newsMeet the enthusiasts determined to stop them dying out
News
The data shows that the number of “unlawfully” large infant classes has doubled in the last 12 months alone
i100Mike Stuchbery, a teacher in Great Yarmouth, said he received abuse
Arts and Entertainment
The starship in Star Wars: The Force Awakens
filmsThe first glimpse of JJ Abrams' new film has been released online
Sport
Rio Ferdinand returns for QPR
sportRio Ferdinand returns from his three-game suspension today
News
The Speaker of the House will takes his turn as guest editor of the Today programme
arts + ents
News
ebooksNow available in paperback
Arts and Entertainment
St Peter’s Seminary in Cardross. Argyll, has remained derelict for more than 25 years
arts + ents
News
people

Watch the spoof Thanksgiving segment filmed for Live!
Sport
Billy Twelvetrees will start for England against Australia tomorrow with Owen Farrell dropping to the bench
rugbyEngland need a victory against Australia today
Arts and Entertainment
The cover of The Guest Cat – expect to see it everywhere
books
Sport
Tyson Fury poses outside the Imperial War Museum in south London ahead of his fight against Dereck Chisora
boxingAll British heavyweight clash gets underway on Saturday night
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Austen Lloyd: Company Secretary

Excellent Package: Austen Lloyd: EAST ANGLIA - SENIOR SOLICITOR LEVEL ROLE** -...

Citifocus Ltd: German Speaking Client Specialist

£Attractive Package: Citifocus Ltd: Prestigious asset management house seeks a...

Citifocus Ltd: Performance & Risk Oversight

£Negotiable: Citifocus Ltd: This is a varied role focusing on the firm's mutua...

h2 Recruit Ltd: Sales Director - SaaS (SME/Channel) - £140,000 OTE

£90000 - £140000 per annum + benefits: h2 Recruit Ltd: Are you a high achievin...

Day In a Page

Homeless Veterans Christmas Appeal: ‘We give them hope. They come to us when no one else can help’

Christmas Appeal

Meet the charity giving homeless veterans hope – and who they turn to when no one else can help
Should doctors and patients learn to plan humane, happier endings rather than trying to prolong life?

Is it always right to try to prolong life?

Most of us would prefer to die in our own beds, with our families beside us. But, as a GP, Margaret McCartney sees too many end their days in a medicalised battle
Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night - is that what it takes for women to get to the top?

What does it take for women to get to the top?

Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night and told women they had to do more if they wanted to get on
Christmas jumper craze: Inside the UK factory behind this year's multicultural must-have

Knitting pretty: British Christmas Jumpers

Simmy Richman visits Jack Masters, the company behind this year's multicultural must-have
French chefs have launched a campaign to end violence in kitchens - should British restaurants follow suit?

French chefs campaign against bullying

A group of top chefs signed a manifesto against violence in kitchens following the sacking of a chef at a Paris restaurant for scalding his kitchen assistant with a white-hot spoon
Radio 4 to broadcast 10-hour War and Peace on New Year's Day as Controller warns of cuts

Just what you need on a New Year hangover...

Radio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
Cuba set to stage its first US musical in 50 years

Cuba to stage first US musical in 50 years

Claire Allfree finds out if the new production of Rent will hit the right note in Havana
Christmas 2014: 10 best educational toys

Learn and play: 10 best educational toys

Of course you want them to have fun, but even better if they can learn at the same time
Paul Scholes column: I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season

Paul Scholes column

I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season
Lewis Moody column: Stuart Lancaster has made all the right calls – now England must deliver

Lewis Moody: Lancaster has made all the right calls – now England must deliver

So what must the red-rose do differently? They have to take the points on offer 
Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game