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When Markets Collide: Investment Strategies for the Age of Global Economic Change | 
 enlarge | Author: Mohamed El-erian
Publisher: McGraw-Hill
Category: Book
List Price: $27.95
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Rating:  25 reviews
Sales Rank: 341
Media: Hardcover
Edition: 1
Number Of Items: 1
Pages: 304
Shipping Weight (lbs): 1.5
Dimensions (in): 9.1 x 6.4 x 1.3
ISBN: 0071592814
Dewey Decimal Number: 381.101
EAN: 9780071592819
ASIN: 0071592814
Publication Date: May 23, 2008
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Condition: Brand New. 100% money back guarantee. All books shipped from Strand Bookstore, New York City, USA.
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Product Description
"ONE OF THE SMARTEST INVESTORS ON THE PLANET."--MONEY MAGAZINE “This book is an essential read for those who wish to understand the modern world of investing.”
—Alan Greenspan When Markets Collide is a timely alert to the fundamental changes taking place in today's global economic and financial systems--and a call to action for investors who may fall victim to misinterpreting important signals. While some have tended to view asset class mispricings as mere “noise,” this compelling book shows why they are important signals of opportunities and risks that will shape the market for years to come. One of today's most respected names in finance, Mohamed El-Erian puts recent events in their proper context, giving you the tools that can help you interpret the markets, benefit from global economic change, and navigate the risks. The world economy is in the midst of a series of hand-offs. Global growth is now being heavily influenced by nations that previously had little or no systemic influence. Former debtor nations are building unforeseen wealth and, thus, enjoying unprecedented influence and facing unusual challenges. And new derivative products have changed the behavior of many market segments and players. Yet, despite all these changes, the system's infrastructure is yet to be upgraded to reflect the realities of today's and tomorrow's world. El-Erian investigates the underlying drivers of global change to shed light on how you should: - Think about the new opportunities and risks
- Construct an appropriately diversified and internationalized portfolio
- Protect your portfolio against new sources of systemic risk
- Best think about the impact of central banks and financial policies around the world
Offering up predictions of future developments, El-Erian directs his focus to help you capitalize on the new financial landscape, while limiting exposure to new risk configurations. When Markets Collide is a unique collection of books for investors and policy makers around the world. In addition to providing a thorough analysis and clear perspective of recent events, it lays down a detailed map for navigating your way through an otherwise perplexing new economic landscape.
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| Customer Reviews: Read 20 more reviews...
 disappointed September 22, 2008
4 out of 4 found this review helpful
When you read a book like this, you are hoping to learn about the back story about an issue, the inside scoop. The only useful insights I received from this book are that the influence of the IMF and the Fed are dipping due to globlization. Other than that, the author spends a lot of time trying to convince us that the balance of power in the financal system is shifting from the US and Europe to the "expanding economy."
Many years ago when I was a McKinsey consultant, Paul Volcker gave a talk to the staff about how the accumulation of dollars in the middle eastern countries would lead them to unprecedented power over our economy, and possibly our ruin. They would be able to manipulate our financial system. They have more of our money today than ever and it is still not true today. The author seems to be stuck on this page as well.
What he could have covered was how the IRAQ war was designed, in part, to revive our financial system, much as the second world war was partially designed to get us out of the depression. Or he could have explained that globalization hasn't yet worked for the US since nobody "over there" is using the dollars we sent them to buy our products. They buy our financial products that are soon without value due to shenanigans such as the sub prime mortgage mess or the dot com collapse, etc.
Well, I'm not going to rewrite his book for him. But if I did, I would eliminate the stilted academic language that conveys little meaning.
 4.5 stars-Needs to clearly differentiate risk from uncertainty September 21, 2008
3 out of 5 found this review helpful
The author of this book is clearly quite knowledgeable about the standard approach to risk management.He knows that it is badly flawed under conditions of herd behavior.Herd behavior occurs under conditions of Keynesian uncertainty(The decision maker DOES NOT know enough or have enough data that is reliable and non-conflicting to specify a unique distribution.The decision maker works with a set of different distributions and/or intervals.Keynesian or Ellsbergian revision can lead to a change in the underlying probability distribution being used as a best estimate of the data.This is completely different from the subjectivist Bayesian view upon which all risk management courses are based on) and/or Ellsbergian ambiguity.The standard risk (The decision maker DOES KNOW the particular probability distribution's population parameters and/or the sample statistics under conditions of risk.Bayesian updating/revision simply means that you continually revise/update the estimates of the mean and standard deviation of the SAME initially specified distribution through time)
management techniques, taught universally in all undergraduate and graduate classes in economics,econometrics,finance,business,and actuarial " science " worldwide, are completely unable to prepare the student for what can happen under uncertainty.For example,the author appears to correctly realize that herd behavior and cascades results from decision making patterns which are completely rational for the individual decision maker operating under conditions of uncertainty but make no sense whatsoever if operating under conditions of risk.Such behavior patterns appear to some authors in the socalled " new " field of behavioral finance to be the result of " irrational exuberance " .Keynes and Ellsberg knew better.Extensive discussions of risk and risk management are made throughout the book but no clearcut distinction appears anywhere in the book that clearly differentiates risk from uncertainty.
Another important analyst's perspective is missing .The missing analyst is Benoit Mandelbrot's distiction between the wild risk of the Cauchy distribution and the mild risk of the normal distribution.The mild risk of the Normal distribution is what risk managers mean by controlling/managing risk.Risk managers are completely helpless when faced with behavior patterns that generate the wild risk of the Cauchy distribution.The recently proposed 1-1.5 Trillion dollar bailout of Wall Street by President Bush,Ben Bernanke,and Treasury Secretary Paulson demonstates the complete and total intellectual bankruptcy of the standard approach to risk management
I recommend that the book be purchased because the author does make it clear that present analytic techniques for evaluating and choosing stock portfolios is flawed.It would have helped if he had been more specific about the nature of the flaws and how the work of Keynes,Ellsberg,and Mandelbrot,if implemented ,would have prevented this type of catastrophe from occurring or reoccurring in the future.
 Needs a good edit September 11, 2008
2 out of 5 found this review helpful
El-Erian's publisher McGraw-Hill badly let down the author, and his readers, with a poor to nonexistent copy-edit. The book is full of jargon and poorly written paragraphs--to illustrate, here is a rather typical one-sentence paragraph: "The challenge of how to deal with consequential and volatile endogenous liquidity relates to another policy issue that I will discuss in Chapter 7: how to refine the traditional instruments of monetary control and ensure more meaningful and sophisticated supervision on a range of activities, with volatile leverage, that have been enabled by the ongoing structural transformations and yet are outside meaningful oversight."
This is technocratic obfuscation at its worst, and El-Erian, who is no lightweight, could have better been served by a heavier edit.
Perhaps the worst feature of the book is its attempt to reach three entirely different audiences--individual investors, policy-makers, and institutional investors. If you are an individual investor, realize that 75% of the book is written for others.
If you find your way through the jargon and infelicitous structure, some solid, thought-provoking ideas gleam in the darkness. Be prepared to dig, though, and bring your headlamp!
Expected more September 3, 2008
2 out of 4 found this review helpful
I purchased this book at an airport while waiting for a flight. It was prominently displayed in the business section of the bookstore (perhaps that should have been a warning). The book includes endorsements from such august figures as Alan Greenspan, Seth Klarman and Michael Spence, yet I doubt if any of them actually read the book in its entirety. Moreover, Mr. Greenspan works as a consultant for PIMCO (also the employer of the author).
The book makes some decent macro-orientied observations but none of them are really new or unique. Moreover, the writing style is ponderous and prolix. The typical, individual investor can skip the first five chapters and go directly to chapter six, where you will find a recommended portfolio. However, there is nothing especially enlightening about the portfolio he recommends. (He also fails to mention the tax issues surrounding TIPS).
I was surprised at how he rather cavalierly addressed index funds vs. actively managed funds when discussing equity allocations. I understand that he didn't want to get into the active vs. passive debate, but I was expecting more from someone with his background and expertise. For example, he suggests that retail investors use Lipper and Morningstar (bottom of page 203) to gain "insights" into this process. However, he doesn't say how using these services will lead one to pick a superior actively managed fund.
In addition, although the book was published in 2008, it would have greatly benefited the reader if it had included more discussion and insight into the events and implications surrounding Bear Stearns, Fannie and Freddie. At times (and I realize that this is not directly the author's fault) the book sounded outdated. While hindsight is 20-20, both the author and the reader might have been better served if the book was released later to allow Mr. El-Erian to include more of his candor and insight on these important developments.
 Excellent 5- to 10-year Outlook September 1, 2008
2 out of 4 found this review helpful
It's hard to imagine someone having more cred's than Mohamed El-Erian or having a better understanding of trends in the global economy, and as articulate. For those reasons alone, it's hard for investors, large or small, to justify NOT spending a little with with Mr. El-Erain. This book is a global financial compass, not a recommendation on specific companies to invest in or run from. When Markets Collide gives the reader a frank overview of the forces behind macro global financial trends (i.e, reality check), where those financial trends are almost certainly taking us in the next 5 to 10 years, and what those trends mean for investors that are in the market for the long-term.
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