Goldman's Tim Leissner pleads guilty to money laundering

• Tim Leissner, a former Goldman Sachs star banker who led the bank’s investment business in Asia, is facing up to 10 years in prison and a lifetime ban from capital markets for his involvement in the 1Malaysia Development Berhad (1MDB) scandal, an elaborate cross-border financial fraud that involved the embezzlement of $4.5 billion from Malaysia’s government fund, 1MDB, between 2009 and 2014.
• Leissner — who is a German national living in America — is free on bond as he awaits sentencing on the federal charges he pleaded guilty to last month. 

(L-R) Russell Simmons, Shannon Elizabeth, Kimora Lee Simmons, and Tim Leissner attend The Weinstein Company & Netflix's 2014 Golden Globes After Party presented by Bombardier, FIJI Water, Lexus, Laura Mercier, Marie Claire and Yucaipa Films at The Beverly Hilton Hotel on January 12, 2014 in Beverly Hills, California. 

Kimora Lee Simmons' current husband Tim Leissner has been charged with money laundering , after the theft of billions of dollars from 1MDB, a Malaysian sovereign wealth fund. Leissner is a former Goldman Sachs partner in Asia who has plead guilty and agreed to forfeit $43.7 million.

The two other people involved include Roger Ng, who is also a former Goldman employee and Malaysian businessman Jho Low. Around $4.5 billion was incorrectly managed from 1MDB fund officials and their associates, which include Leissner along with his accomplices between 2009 and 2014, the DOJ has alleged. Court documents highlight more than $200 million alone went to Leissner and another alleged co-conspirator.

Kimora Lee Simmons' current husband Tim Leissner and her 4 kids

Once the charges were initially filed in 2017, Kimora spoke out and said she and her husband’s finances aren’t connected when it comes to her business endeavors, according to WWD. “I fund my own business. So all my money, not that I want to say it that way, this is my third marriage that I’m on so, no, my husband has nothing to do with my professional life,” Simmons told the publication. At the climax of Leissner’s involvement with 1MDB, The Wall Street Journal reported he earned more than $10 million a year, according to people familiar with the matter.

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Investigations into the $11 billion Malaysian sovereign fund were first reported in July 2015 by a pair of Wall Street Journal reporters, Tom Wright and Bradley Hope, after a Malaysian parliamentary committee noticed unusual transactions between the state fund and Razak’s personal bank account. Razak, who was then prime minister, as well as 1MDB’s board chairman, was believed to be the central figure involved in a series of financial frauds surrounding the fund.

Former Malaysian Prime Minister Najib Razak (you might recognize him as the spokesperson for Malaysia during the intense media coverage of missing flight MH370 in 2014), who recently lost power in an election, was arrested by Malaysia’s anti-graft authorities over his alleged embezzlement of nearly $700 million from the  1MDB.

Former Malaysian prime minister Najib Razak (C) arrives for a court appearance in Kuala Lumpur, Malaysia on July 4, 2018.


Leissner, Kimora Lee Simmons, Prime Minister Najib Razak and Tan Sri Azman in September 2013

The real mastermind behind the 1MDB scandal was Jho Low, a 36-year-old Chinese Malaysian financier whose only known connection to 1MDB was a hollow title called “special advisor.”

Low is the main character of Wright and Hope’s new book, Billion Dollar Whale, in which the two journalists consolidated their findings from three years of investigative reporting on the 1MDB saga into a nonfiction crime thriller about one of the largest financial heists in history.

Jho Low at Angel Ball 2014 hosted by Gabrielle’s Angel Foundation at Cipriani Wall Street on October 20, 2014 in New York City.

In 2009, Low—an unremarkable 26-year-old Wharton graduate who’d just returned to Malaysia—managed to persuade the country’s prime minister (Razak) to form a government investment fund and subsequently enlisted Goldman Sachs to help the fund raise $6.5 billion in debt from global financial markets. Over the six years between 1MDB’s inception and the beginning of a governmental probe, Low moved money from the fund into his personal bank account regularly, under the disguise of sovereign investments, and spent it on lavish parties in Hollywood, where Low bought his way into friendships with the world’s most famous actors and models, including Leonardo DiCaprio (Low financed DiCaprio’s 2013 hit film The Wolf of Wall Street with stolen money), Britney Spears, Miranda Kerr and Paris Hilton.

In 2012 and 2013, Goldman Sachs made $600 million in fees and commissions from three rounds of bond issuance for 1MDB, raising over $6.5 billion in government debt.

At this time, Low remains an international fugitive, who’s being pursued by Malaysian and American officials.  Low is reportedly hiding somewhere in China.

Jho Low reportedly paid $250 million for the “Equanimity” vessel in 2014 with Malaysian government funds. 

The 300-foot-long luxury yacht has been put up for sale by the Malaysian government for a minimum price of $130 million, a steep discount from the $250 million that Low allegedly paid for it in 2014.

Low’s ex-girlfriend, supermodel Miranda Kerr, was once seen on the “Equanimity” shortly after Low’s purchase.

Jho Low / Miranda Kerr 

July 2017: Miranda Kerr handed over $11 million worth of jewels from her Los Angeles safe deposit box to US government agents. Among the jewels Kerr handed over, according to The Wall Street Journal, was a 11.72 carat heart-shaped diamond pendant, a Valentine's Day gift in 2014 from Low.
The gifts to Kerr, who dated Low for a year, are just part of more than $1.6 billion worth of assets — including property, art, jewels, the yacht and even a jet — that the US Justice Department is now trying to recover.

Low spent millions to fly around the world with Leonardo DiCaprio and to gamble with him.

DiCaprio announced through a spokesman that he was returning more than $13 million worth of art given to him by a Hollywood production company, Red Granite, which is connected to Low and which funded the actor’s 2013 movie “The Wolf of Wall Street.”

Red Granite was co-founded by Riza Aziz, the stepson of Malaysian Prime Minister Najib Razak, and Joey McFarland, a former party booker for Paris Hilton.

The US government charges that the Hollywood production company was founded on money stolen from the Malaysian development fund 1MDB.

More than $4.2 million of the stolen money was used to buy original movie posters, including one for 1939’s “The Wizard of Oz” and another, worth $1.2 million, for the 1927 film “Metropolis.”

Aziz plastered his New York condo, also bought with stolen cash, with the posters.

He also gave some as gifts to DiCaprio — who has not returned them — and to Martin Scorsese, director of “The Wolf of Wall Street.”

*******

“Dr Tim Leissner”

Leissner was sometimes billed as “Dr Tim Leissner” at speaking events and his official Goldman biography listed a doctorate in business administration from the University of Somerset.

• While an institution of that precise name does not appear to exist, one called Somerset University was fined in the UK in 1992 for selling unrecognized degrees.
• A retired US FBI agent testified to a 2004 Congressional hearing on “diploma mills” that Somerset University had once offered to deliver him an MBA within 15 days, complete with grade point average and professorial letters of recommendation, for $1,995. The agent said the Somerset University representative told him the degree was for “professional purposes, to get pay raises, and promotions”.

*******

Update 17 Dec 2018

Ng Chong Hwa, Low Taek Jho and Tim Leissner (from left to right). 

Malaysia filed criminal charges on Monday against Goldman Sachs and two of its former employees over the alleged theft of billions of dollars, heaping fresh pressure on the Wall Street titan over the 1Malaysia Development Berhad (1MDB) scandal.

Goldman subsidiaries and ex-bankers Tim Leissner and Ng Chong Hwa are accused of misappropriating $2.7 billion, bribing officials and giving false statements in relation to bond issues they arranged for state fund 1MDB.

Allegations that huge sums were looted from the investment vehicle and used to buy everything from yachts to artwork, in a fraud that involved former Malaysian leader Najib Razak, contributed to the last government’s shock defeat at May elections.

Both former Goldman employees had already been charged over the scandal in the US last month, with Leissner pleading guilty while Ng was arrested in Malaysia. Low Taek Jho, a fugitive Malaysian financier accused of masterminding the fraud, was also hit with new charges.

Malaysia’s new Prime Minister Mahathir Mohamad, who came to power in part on a pledge to investigate the 1MDB scandal, has been taking an increasingly tough line against Goldman and has accused the bank of having “cheated” the country.

A steady stream of negative news concerning the scandal has come out of the US, focusing on the great lengths the bank went to in courting 1MDB.

It emerged last month that former Goldman chief Lloyd Blankfein met with Jho – commonly known as Jho Low – at a reception in 2009 hosted by Najib at a hotel in New York.

Since his election defeat, Najib has been arrested and hit with dozens of charges over the scandal and is likely facing a long jail term.

Malaysian strategic development company 1MDB was set up in 2009 with the ostensible aim of developing the economy, with its work overseen by Najib.

But the US Department of Justice, which is seeking to seize back assets in America allegedly bought with stolen 1MDB money, estimates that $4.5 billion was looted from the fund by high-ranking officials and their associates.

Best trading books

1. Mastering The Trade (by John Carter)

This is the book that inspired me to take trading very seriously. In a way I was very lucky, because had I not come across Carter’s book early in my trading career, I may have well ended up blowing my trading account within months.

John Carter lucidly explains the psychological and tactical challenges that face a trader. What makes this book unique and enjoyable are three things: firstly that it contains several chapters on different high probability trading strategies; secondly that each chapter gives numerous real examples of how the strategy actually works and; thirdly and most importantly, precise entry and exit rules for each strategy including how to protect yourself against risk if you are wrong.

It is not necessary for traders to employ every strategy documented in this book. I personally have adopted one of them and it has since become part of my daily trading routine (more on that in upcoming posts).

What I really love about this book is Carter’s passion for trading. I admire the way he religiously carries out each trade in accordance to his rules and not based on impulse or whim.

This book is not for the beginner. Although, the advice given in the chapters on psychology and risk is absolutely crucial for everyone.

2. Market Wizards & The New Market Wizards (by Jack. D. Schwager)

These two books are a gem whether you are a beginner or an advanced trader. Each chapter is an interview with one of the world’s top traders. It is very easy to read – even a 12 years old could make sense of it.

The personal stories and insights of each individual trader is simply fascinating to read. I won’t spoil any surprises here. One of my favourites from the book is Linda Raschke, one of the few female professional traders out there. Her comment that while we can be good at predicting the direction of a move (up or down), but not so good at predicting the magnitudeof the move (how far a market will move), is a very significant one which has helped me a lot in my own trading.

What I found interesting about this book when I first read it was how some of the world’s best traders have experienced losses in their own trading on a scale that is unimaginable. Readers will also notice that different traders will often disagree on a number of issues.

The major downside with this book is that whilst the traders give very valuable insights to their style of trading, no actual specifics are given as to exactly how they trade. Also, the interviews pre-date the technological age of the internet and widely available charting and trading softwares. Having said that, this book is a must for everyone who wants to learn how real traders think.

3. Volatile Markets Made Easy (by Guy Cohen)

This book is an ideal starter for anyone who wants to grapple with the intricate but lucrative world of options and volatile markets. One reason I am recommending this book above all the other books on options, is that its author, Guy Cohen, is an expert not just in options but very adept at being able to explain how to trade options to the ordinary person.

The first few chapters cover the basics of technical analysis and breakout patterns. Where it gets really interesting (for me) is when he talks about “straddles”.  This is a strategy whereby you can potentially make money no matter which direction the market moves, up or down.

Guy Cohen does not seek to confuse the reader and he does an excellent job of clarifying what can be quite a complex topic. I definitely recommend it.

4. Technical Analysis of the Financial Markets (by John J. Murphy)

This book is the definitive guide to the world of technical analysis (analysis of charts). Fans of fundamental analysis (or “fundamentalist” as we like to call them) will probably scoff at the mere mention of technicals and charts, dismissing it as reading “tea leaves” and not serious trading. Don’t pay any attention. I don’t know of any serious professional trader who does not use some form of technical analysis.

John Murphy does a seriously good job of demonstrating how to analyse charts for the beginner traders. Trendlines, patterns, moving averages are all covered here. You can also check out his brilliant free charting service on StockCharts.com.

5. Trading In The Zone (by Mark Douglas)

If you haven’t started trading yet and you want to save yourself months of anguish and frustration, then do yourself a favour and read this book.

Trading in the Zone is not a book about “strategies” or “systems”. It is about something much more important. Any trader will tell you that 95% of trading is psychology. It is not the trading system that is important, as much as how your own mind will work against you when you do trade.

The most important concepts discussed in this book are: consistency and uncertainty. You need to be consistent in your trading method and you need to have an unshakeable belief in uncertainty – that in the markets anything can happen. Once you accept that, you can give up on the emotions that imprison your mind and learn to be a better trader.

DeMark On Day Trading Options

Overview

DeMark On Day Trading Options, Futures by Tom DeMark presents trading concepts used by large institutional traders and money managers which are almost totally new to individuals trading their own accounts, and may seem a bit daunting at first glance.

Tom details two of his most powerful indicators as they would be used by an individual day-trader. This book takes all the mystery out of Tom's indicators and shows you, step-by-step, how you can use them on a day-to-day basis to help you spot high-profit trading opportunities.

Description

World-Renowned Analyst Tom DeMark Reveals His 18 Most Powerful Indicators ... Including New Ones Just For Options!

Tom DeMark is known 'round the world for his expertise in developing technical indicators that spot developing trends and high-profit opportunities. Today, his indicators are used by some of the investment world's top money and fund managers.

Now Tom has turned his attention to day trading and options, and has co-written (with his son, "TD," ) a book that details his newest TD indicators and how they work in day-trading options, stocks and futures.

Thanks in large part to help from TD, all the hard-to-understand technical jargon has been eliminated. Instead, you'll find page after page of easy-reading explanations that make even the most complex and sophisticated of Tom's indicators easy to understand.

No detail is left out. You get the complete picture on every single indicator, including Tom's blockbuster favorite...

Picks A Winner 90% Of The Time!!

The indicators detailed in this book aren't just ivory-tower theories. They really work! To prove it, we asked Duane Davis, one of the world's foremost trading system analysts, to test them against historic real-market prices. The results of Duane's testing were astounding:

• One of Tom's most powerful trend-spotting indicators correctly identified major market turnarounds 90% of the time an astonishing record in the volatile S&P market!
• Another TD indicator returned over 830% on equity during the same time period!
• The systems tested by Duane Davis delivered 1-lot profits of $284,988 in 42 months that's $6,785 per month! This tell-all book gives you precise details of these top performers, plus more than a dozen others - 21 indicators in all.

Tom DeMark Range Expansion Index (TD REI)

The DeMark Range Expansion Index is a market-timing oscillator described in DeMark on Day Trading Options, by T.R. DeMark and T.R. Demark, Jr., McGraw Hill, 1999. The oscillator is arithmetically calculated and is designed to overcome problems with exponentially calculated oscillators, like MACD. The TD REI oscillator typically produces values of -100 to +100 with 45 or higher indicating overbought conditions and -45 or lower indicating oversold. DeMark advises against trading in extreme overbought or oversold conditions indicated by six or more bars above or below the 45 thresholds. For more information on using TD REI the user is referred to the DeMark text.

The Formula . . .

IF( ( (HI>=LO5 OR HI>=LO6) AND (LO<=HI5 OR LO<=HI6) ) OR ( (HI2>=CL7 OR HI2>=CL8) AND (LO2<=CL7 OR LO2<=CL8) ) )
THEN
VALUE = HI - HI2 + LO - LO2
ABSVALUE = ABS(HI - HI2) + ABS(LO - LO2)
ELSE VALUE = ABSVALUE = 0
TD_REI = SUM(VALUE, N) / SUM(ABSVALUE, N)

where N is the the TD_REI Period

"Lords of Finance" wins a Pulitzer Prize

With penetrating insights for today, this vital history of the world economic collapse of the late 1920s offers unforgettable portraits of the four men whose personal and professional actions as heads of their respective central banks changed the course of the twentieth century. It is commonly believed that the Great Depression that began in 1929 resulted from a confluence of events beyond any one person’s or government’s control. In fact, as Liaquat Ahamed reveals, it was the decisions taken by a small number of central bankers that were the primary cause of the economic meltdown, the effects of which set the stage for World War II and reverberated for decades. In Lords of Finance, we meet the neurotic and enigmatic Montagu Norman of the Bank of England, the xenophobic and suspicious Émile Moreau of the Banque de France, the arrogant yet brilliant Hjalmar Schacht of the Reichsbank, and Benjamin Strong of the Federal Reserve Bank of New York, whose façade of energy and drive masked a deeply wounded and overburdened man. After the First World War, these central bankers attempted to reconstruct the world of international finance. Despite their differences, they were united by a common fear—that the greatest threat to capitalism was inflation— and by a common vision that the solution was to turn back the clock and return the world to the gold standard. For a brief period in the mid-1920s they appeared to have succeeded. The world’s currencies were stabilized and capital began flowing freely across the globe. But beneath the veneer of boom-town prosperity, cracks started to appear in the financial system. The gold standard that all had believed would provide an umbrella of stability proved to be a straitjacket, and the world economy began that terrible downward spiral known as the Great Depression. As yet another period of economic turmoil makes headlines today, the Great Depression and the year 1929 remain the benchmark for true financial mayhem. Offering a new understanding of the global nature of financial crises, Lords of Finance is a potent reminder of the enormous impact that the decisions of central bankers can have, of their fallibility, and of the terrible human consequences that can result when they are wrong. more at http://www.pulitzer.org/works/2010-History

Books - Best books on Japanese candlestick technical analysis

Steve Nison - "Japanese Candlestick Charting Techniques"

Stephen W. Bigalow "Profitable Candlestick Trading"

Gregory Morris - "Candlestick Charting Explained"

Book : Too Good to Be True: The Rise and Fall of Bernie Madoff

When Bernie Madoff’s $65 billion Ponzi scheme unraveled at the end of 2008, many in the industry wondered how he did it, how otherwise savvy investors were lured into it, and how regulators failed to stop it. These are the questions that Erin Arvedlund attempts to answer in her book “Too Good to Be True: The Rise and Fall of Bernie Madoff.”


The book explores Madoff’s background, interviewing classmates from his days at Far Rockaway High School in New York, who noted that Bernie was an average guy who they never dreamed would ascend to titan of Wall Street and chairman of the Nasdaq. She also discusses Madoff’s involvement in the early development of electronic trading, including the Nasdaq and the Cincinnati Stock Exchange, an all-electronic stock market that actually moved to Chicago through a membership deal with the Chicago Board Options Exchange (CBOE) in 1995.


The book goes on to explain how Madoff carried out his Ponzi scheme through his illegal advisory business with the help of the legal side of his business, a brokerage firm. Both businesses were on three floors of the same building. Arvedlund’s descriptions of how the activity on the broker-dealer business on the eighteenth and nineteenth floors differed from the advisory business on the seventeenth are fascinating. It’s amazing how Madoff was able to get away with mailing his investors tickets for trades supposedly made on their behalf that never actually happened. The book explains that instead of actually trading for the advisory business, he would take investors money, deposit it into a bank account, and send it back to earlier investors.

One of the more amusing accounts in the book is the story of Salomon Konig, a money manager who is essentially in exile in the United States after running a mini Ponzi scheme in Venezuela. Konig would ask any fund of hedge funds he considered doing business with if they had any money in Madoff, and if they did, he would not deal with them. As another of Arvedlund’s interviewees points out, “it takes a crook to smell another crook.”

“Too Good to Be True” is an informative account of how Madoff carried out his scheme, how he lured in his victims, how industry experts raised alerts about it, and, ultimately, how the investigations into it failed. Anyone who is interested in this Ponzi scheme to end all Ponzi schemes will find it a worthwhile read.

New comprehensive book on High-Frequency Trading

A hands-on guide to the fast and ever-changing world of high-frequency, algorithmic trading

Financial markets are undergoing rapid innovation due to the continuing proliferation of computer power and algorithms. These developments have created a new investment discipline called high-frequency trading.

This book covers all aspects of high-frequency trading, from the business case and formulation of ideas through the development of trading systems to application of capital and subsequent performance evaluation. It also includes numerous quantitative trading strategies, with market microstructure, event arbitrage, and deviations arbitrage discussed in great detail.

• Contains the tools and techniques needed for building a high-frequency trading system
• Details the post-trade analysis process, including key performance benchmarks and trade quality evaluation
• Written by well-known industry professional Irene Aldridge

Interest in high-frequency trading has exploded over the past year. This book has what you need to gain a better understanding of how it works and what it takes to apply this approach to your trading endeavors.

Book: The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History

“How Paulson and a handful of contrarian investors pulled off this once-in-a-lifetime coup is the subject of The Greatest Trade Ever ... a fascinating and believable counter-narrative to the growing pile of books recounting the disastrous mistakes made by many of the supposedly smartest minds on Wall Street. It is also a surprisingly dramatic work...In The Greatest Trade Ever, Zuckerman skillfully shows how Paulson and a few cohorts anticipated a disaster and figured out a way to profit.”
--BusinessWeek

Book: Crash Proof 2.0: How to Profit From the Economic Collapse

A fully updated follow-up to Peter Schiff's bestselling financial survival guide-Crash Proof, which described the U.S. economy as a house of cards on the verge of collapse, with over 80 pages of new material

The economic and monetary disaster which seasoned Wall Street prognosticator Peter Schiff predicted is no longer hypothetical-it is here today. And nobody understands what to do in this situation better than the man who saw it coming. For more than a decade, Schiff has not only observed the U.S. economy, but also helped his clients restructure their portfolios to reflect his outlook. What he sees today is a nation facing an economic storm brought on by growing federal, personal, and corporate debt; too little savings; and a declining dollar.

Crash Proof 2.0 picks up right where the first edition-a bestselling book that predicted the current market mayhem-left off. This timely guide takes into account the dramatic economic shifts that are reshaping America and provides you with the insights and information to navigate the dangerous terrain. Throughout the book, Schiff explains the factors that will affect your future financial stability and offers a specific three step plan to battle the current economic downturn.

• Discusses the measures you can take to protect yourself-as well as profit-during these difficult times
• Offers an insightful examination of the structural weaknesses underlying the economic meltdown
• Outlines a plan that will allow you to preserve wealth and protect the purchasing power of your savings
• Other titles by Schiff: Crash Proof and The Little Book of Bull Moves in Bear Markets

Book : Colossus: The Rise and Fall of the American Empire

Reviews:

• Every page of Colossus is provocative. (Ernest May)
• Amid the seemingly endless writings and decisions about ‘America as Empire,’ the most prominent recent voice is that of Niall Ferguson. (Paul Kennedy, New York Review of Books)

Wall Street Makes It Hard to Earn Legal Living

Alice Schroeder is the author of “The Snowball: Warren Buffett and the Business of Life”, a former managing director at Morgan Stanley, and is a Bloomberg News columnist. Below is a great opinion piece she wrote for Bloomberg.

Read more here:
A group of university students I spoke to recently asked if it was possible to make a living on Wall Street without compromising your values. I had to tell them no.

Wall Street has many decent, honorable people, but they work in a system that fundamentally compromises people’s ethics. The high pay is like an anesthetic that numbs you from feeling how you are being corrupted. Not only that, many honest people who work there would agree with an even more extreme statement: It’s hard to make a living legally on Wall Street.

The goal of investing is to get an edge, whereas the securities laws presume all investors should have the same information at once. If ever there was a recipe for a system rife with abuse, this is it. The harder that money managers, traders and analysts must work to get information that gives them that edge, the more likely some are to cross a legal line..........

Book: Lords of Finance: The Bankers Who Broke the World

Even those who aren't generally interested in economics will enjoy this historical look at wealth and power in the early twentieth century. Four magnates, each with the power of his country's federal reserve, controlled the world's finances. Their dealings in regulating the cost of currency among their respective countries became influential in causing the Great Depression.

The Washington Post's Book World/washingtonpost.com Reviewed by Frank Ahrens:

From the 1870s to 1914, the world's developed nations basked in a shimmering age of commerce. The European powers were at peace. Goods flowed home from colonies. The newly reunited United States was growing into muscular adolescence. And all of the world's major economies rested on a seemingly solid base: the gold standard.

But it proved to be a system in a snow globe, easily shattered. World War I broke the idyll and unhooked country after country from dependence on gold. They resorted to printing money to fund the war, leading to massive inflation, unemployment, political instability and general suffering across the Continent.

It's no wonder, then, that after the signing of the armistice in 1918 the world's four most powerful bankers -- a fraternity described in newspapers of the time as "the world's most exclusive club" -- did everything they could to force nations back to the discipline of the gold standard.

It was a ruinous decision. as Liaquat Ahamed notes in Lords of Finance, all the gold mined in history up to 1914 "was barely enough to fill a modest two-story town house." There simply was not enough of it to fund a global conflict or to allow economic recovery afterward.

Ahamed's illuminating and enjoyable book focuses on the four men whose arrogance and obstinacy, he contends, caused the worst depression in modern times: Benjamin Strong Jr., the morphine-using, consumptive governor of the New York Federal Reserve; Montagu Norman, the spiritual seeker at the helm of the Bank of England; Emile Moreau, the xenophobic governor of the Banc de France; and Hjalmer Schacht, the president of Germany's Reichsbank, a Prussian by temperament, if not by birth, whose sensibilities led to a flirtation with the Nazis.

They were the most important central bankers in their respective nations when those four countries controlled most of the world's wealth and one -- England -- was its unrivaled lender. It was a time, almost unrecognizable to us, when the central banks that printed each nation's currency were privately owned, and regulation was unheard of. As a consequence, this handful of men -- who knew each other intimately enough that one was godfather to another's son -- could wield a coordinated, long-lasting and terrible impact on the global economy.

The gold standard's role in the worldwide depression of the 1930s has been probed before, notably in Barry J. Eichengreen's scholarly Golden Fetters (1992). But Ahamed -- a hedge fund adviser, a World Bank veteran and a supple writer -- personalizes the story, exploring how insular relationships led to bad choices. Strong and Norman, for instance, became friends and gained each other's trust through lengthy correspondence. Strong used his influence to secure a loan for England, then prodded Norman to put England back on the gold standard. Norman, in turn, persuaded Strong to push down U.S. interest rates, helping to create the stock bubble that eventually burst in October 1929. When Strong died in 1928, his replacement became Norman's thrall and fell in lock-step with the emphasis on gold, extending the economic agony.

Meanwhile, the unchecked concentration of power in one banker's hands was also roiling Germany. In 1924, Schacht went bizarrely off the farm and attacked his government, releasing public statements accusing the state of losing control of its finances and saying that Germany was too broke to pay additional war reparations. While Schacht partly spoke the truth, his freelancing undermined already shaky public confidence. Later, he sabotaged a loan his nation tried to secure in New York, nearly bringing down the government.

Ahamed damns the dead, placing blame at the feet of men largely lost to history. The risk in writing about forgotten men, however, is that they might not have been interesting enough to be remembered. Lords Of Finance unearths some gossipy details: Norman, for example, was a salad-bar spiritualist who tried a little of this, a little of that (including Theosophy and autosuggestion) and once told colleagues he could walk through walls. But quirky does not equal memorable. These four bankers are about as compelling to us as, say, Treasury Secretary Henry Paulson may be to readers a century from now. My guess is that readers in 2109 will instead remember Warren Buffett and Bill Gates, just as we still know J.P. Morgan and John D. Rockefeller.

Rather than splendid personalities, this book's real advantage is timeliness. Parallels to today's global financial collapse come with regularity throughout, sometimes causing spit-take laughs, sometimes shudders. Heading into the Paris Peace Conference of 1919, one pugnacious English banker proposed forcing Germany to pay reparations of $100 billion, eight times its pre-war gross domestic product. He said he came up with the figure "between a Saturday and a Monday" -- which sounds a lot like the three-page request for $700 billion Paulson whipped up one weekend in September and sprang on Congress.

Until last year, few believed anything would stop U.S. homes from going up in value 10 percent every year. That is, until the sub-prime mortgage crisis exploded. Likewise, in the prosperous and interdependent Europe of 100 years ago, war was considered unthinkable because it would destroy all. By 1917, an entire generation of young male university graduates was dead. And, frankly, the brainpower needed for forward-thinking was lacking. European bankers of the time carried a cavalier ignorance of economics, and that goes double for America's first Federal Reserve directors. The science of monetary policy was still in its infancy, and no one could have expected four dreary bankers to turn suddenly into brilliant, ahead-of-their-time economists.

That role should have fallen to John Maynard Keynes, one of the few heroes of Ahamed's book. Keynes called the gold standard a "barbarous relic" and clearly explained its limits; in 1925, he accused the British banking elite of "attacking the problems of the post-war world with unmodified pre-war views and ideas." But despite being a well-known Cambridge don, Keynes was an outsider, not a member of the world's most exclusive club, and those in power largely ignored his warnings.

Looking at the events of the 1920s and 1930s, one wonders: Could a modern confluence of catastrophes cause another global depression? No major power is likely to return to the gold standard, so that risk is off the table. But is there a comparable systemic problem today, something we refuse to see? Ahamed thinks we're plain lucky that recent financial crises -- in Mexico in 1994, Asia and Russia in 1997-98, the United States beginning in 2007 -- "have conveniently struck one by one, with decent intervals in between." After reading his bracing book, one can only hope that our economy is in the hands of decision makers who are more numerous, less powerful or much wiser than in the past.

Book : The House of Rothschild: Volume 1: Money's Prophets: 1798-1848

Founded in the late 18th century by expatriate German Jews, the London-based House of Rothschild was within decades the largest banking enterprise in the world. Its principals controlled a vast portion of the industrial world's wealth--more so, Oxford historian Niall Ferguson writes, than any family has since--and as a result enjoyed tremendous political influence in the major capitals of Europe, counting as allies such important figures as Metternich and Wellington. That influence would provoke countless anti-Semitic tracts fulminating against Jewish usury and against the power of "Eastern potentates" in the empires of England and France. Although the Rothschilds were well aware of their power and not reluctant to use it, they operated fairly, Ferguson notes. For example, whereas lending rates in the textile industry, in which the Rothschilds got their start, were often 20 percent, the fledgling house charged 5 to 9 percent. Through shrewd, complex negotiations they helped promote peace and the beginnings of economic union throughout Europe.

Book : The Return of Depression Economics and the Crisis of 2008

Krugman’s facility with both arcane details and vast unified explanations boils down complexity so much that the reader often wonders: Why didn’t I see it that way myself? (Boston Globe )

The most celebrated economist of his generation. (The Economist )

Book : The Ascent of Money: A Financial History of the World

Niall Ferguson makes a strong, compelling case for the development of money and banking as a catalyst for the advancement of civilization. Yet while some critics praised his clear, comprehensible writing, punctuated with anecdotes and historical details, others were nonplussed by his explanations and narrative detours. Several critics also bemoaned the book's choppy and uneven structure—an echo of the episodic, six-part television series it was meant to accompany. So it seems the UK critics liked the book less because they had seen the show. Though perhaps best suited to readers with a fundamental understanding of financial terms and theories, Ferguson's latest work provides valuable insight into the inner workings of the global economy, past and present. For interested readers, it demonstrates how our current fiscal meltdown fits into the bigger historical picture and laments humanity's perennial inability to learn from this history.

Book : The Great Crash 1929

Rampant speculation. Record trading volumes. Assets bought not because of their value but because the buyer believes he can sell them for more in a day or two, or an hour or two. Welcome to the late 1920s. There are obvious and absolute parallels to the great bull market of the late 1990s, writes Galbraith in a new introduction dated 1997. Of course, Galbraith notes, every financial bubble since 1929 has been compared to the Great Crash, which is why this book has never been out of print since it became a bestseller in 1955.

What Went Wrong When Bear Stearns Fell?

It took 72 hours for Bear Stearns to crumble. In one day, Bear Stearns went from $18 billion in cash on hand to $3 billion, as investors panicked. Reporter Kate Kelly from the Wall Street Journal wrote about the final days of the investment bank's collapse in her book Street Fighters  and talks with host Kai Ryssdal about what happened.

http://marketplace.publicradio.org/display/web/2009/05/18/pm_streetfighters_q/

Book : Devil Take the Hindmost: A History of Financial Speculation

"The longest bull market in history" is a term that gets used a lot these days. Since 1990, the Dow Jones Industrial Average has risen some 8,000 points, from around 2,700 in January 1990 to nearly 11,000 today--a boom by anyone's standards, including Edward Chancellor's. In Devil Take the Hindmost, Chancellor takes an entertaining, albeit sobering, look at the history of speculative manias and the mass delusion that surrounds them.

Beginning with the "tulipomania" that gripped Holland in the 1630s, Chancellor chronicles the formations and irrational euphoria that can inflate markets, from shares of South Sea stock in England in the 1720s to real estate in Japan in the late 1980s. He characterizes the speculative spirit as one that loves freedom, detests cant, and abhors restrictions. From the tulip Colleges of the seventeenth century to the Internet investment clubs of the late twentieth century, speculation has established itself as the most demotic of economic activities. Although profoundly secular, speculation is not simply about greed. The essence of speculation remains a Utopian yearning for freedom and equality which counterbalances the drab rationalistic materialism of the modern economic system with its inevitable inequalities of wealth.

But it's precisely such inevitability that always seems to win out, when "sharply rising prices followed by sudden panic without cause" bring speculative excess to an abrupt end.

Book : Manias, Panics, and Crashes: A History of Financial Crises

Manias, Panics, and Crashes, Fifth Edition is an engaging and entertaining account of the way that mismanagement of money and credit has led to financial explosions over the centuries. Covering such topics as the history and anatomy of crises, speculative manias, and the lender of last resort, this book puts the turbulence of the financial world in perspective. The updated fifth edition expands upon each chapter, and includes two new chapters focusing on significant financial crises of the last fifteen years.

Book : The Panic of 1907: Lessons Learned from the Market's Perfect Storm

Though business professors Bruner and Carr approach their subject, the spectacular financial crisis that gave America the FDIC and the Federal Reserve, with grave pedantry, they devote the majority of the book to the more colorful events and personalities of the crisis, which even academic prose cannot dull. The chronicle follows one speculator's attempt to corner the copper market, which leads to panic, the failure of banks and trusts and the impending bankruptcy of New York City. In the midst of chaos, one man was able to halt the domino effect with calm, character and capital: J. Pierpont Morgan. The Panic, the authors note, hit America at a moment eerily similar to our own: coming off 50 years of postwar economic expansion with a Republican "moralist" in the White House, an increasingly interventionist government, the formation of enormous new corporate conglomerates and a muckraking news media fueling resentment. Further, in a didactic final chapter, "Financial Crises as a Perfect Storm," the authors list the seven forces that, once converged, trigger alarm in investors, among them "buoyant growth," "inadequate safety buffers," "adverse leadership" and "undue fear, greed, and other aberrations"; that many (if not all) of these conditions are already met by today's market gives this authoritative history a relevance and vitality that should make business types sit up and take notice.