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Finally, i finished reading this book.  Have been reading it on and off for the past 6 odd months.  In the meanwhile have finished reading a few others too.  Odd, because the book is a very good read and written with lots of historical references.  For someone who loves to know the Roman, Greek, French, British and American history, this book is a treasure trove.

The authors of this book are Bill Bonner & Addison Wiggin who have been writing the free daily newsletter, The Daily Reckoning for more than 10 years now. The newsletter covers a lot about the daily economy, world politics, investment strategies, gold, stock market etc.  Bonner is also the founder and president of Agora Publishing.

The authors believe that the America of today has left the values of its founding fathers far behind and has become an imperial power instead of being a country.  Bonner also believes that the end of America is also coming soon.  The author talks about the dollar crisis, the coming end of the US economy. He writes about how successive US governments have gone to war and wasted all resources, the decoupling of the dollar to the gold standard, the federal reserve under Alan Greenspan with his inflationary policies totally wrecked the US economy.

Quoting from Amazon,

Bonner and Wiggin view ancient Rome as the classical model of empire. Running an empire was an expensive business; the folks in the homeland needed to be mollified with government handouts (bread and circuses), while a large military had to be maintained in the frontier. Rome used its military power to exact tribute from neighboring states; it was a protection racket, no different from the Mafia. Nevertheless, this scheme generally kept the central state solvent and the territories at peace. The United States is also an empire, Bonner and Wiggin maintain, but it does not follow the classical model. It placates its citizens with massive distributions of government largess while using its powerful military to exert influence and keep peace abroad. However, “[i]nstead of getting paid for providing protection, the United States is on the receiving end of loans from its tributary states and trading partners ” (p. 77). This is how the United States became the Empire of Debt.

Empire of Debt: The Rise of an Epic Financial Crisis
Authors – Bill Bonner & Addison Wiggin
Pages – 384
Publisher – Wiley

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A lot of good things and humongous amount of ugly things happened in 2008.  The global financial meltdown, terror attacks in Bombay and the rest of the country, millions of job losses, more than 20 banks going bust in the US.  Big investment companies like Lehman, Merrill Lynch, Bear Stearns etc down the drain.  All the bad things were very promptly covered by the world media.  So, let me look at some of the best things that happened to me this year.

Best thing to happen to me in 2008

I got married.  Is there anything better than this?

Travel in 2008

I made 4 trips to India this year and contributed my part to global warming.  So, other than the regular trips home, 2008 has been a pretty dry year when it came to travel.  2009 seems more promising as i already have lots of travel plans lined up now that i have my wife as my travel partner.

Movies in 2008

Have lost count of the number of movies i watched this year.  It should be more than 150.  That means around one in 2 days.  Fortunately, i dont restrict myself to any particular genre or language,  so i have had the honour of watching some truly remarkable movies across languages

Let me emphasize that all the movies mentioned below are not necessarily released this year.  These are just some of the movies that i saw this year which impressed me.

Aamir
A Wednesday
Mithya
Oye Lucky Lucky Oye
Jodhaa Akbar
Tahaan
Subramaniapuram (Tamil)
Dasavatharam (Tamil)
Gamyam (Telugu)
Slumdog Millionaire
Dark Knight
Children of Men
Death at a Funeral
Before Sunset
Taken
21
3:10 to Yuma
Transsiberian
Rebel without a cause
The Towering Inferno
In Bruges
Traffic
Gran Torino
28 weeks later
Rang-E-Khoda (Colour of Paradise) – Iranian
Bacheha-Ye aseman (Children of Heaven) – Iranian

Books in 2008

Kaoboys of R&AW – B Raman
Eleven Minutes – Paulo Coelho
Reluctant Fundamentalist – Mohsin Hamid
Freakonomics – Steven Levitt
Barefoot Investor – Scott Pape
Undercover Economist – Tim Harford
It happened in India – Kishore Biyani
We are like that only – Rama Bijapurkar
The World is Flat – Thomas Friedman
Intelligent Investor – Benjamin Graham

Investments in 2008

At the begining of the year even though there were predictions that the world economy was in for a rough ride, no one would have believed if the markets would be at a situation where it is now.  From 20,000 to 9000, the Sensex has been on a mother of all crashes.  My portfolio is totally in the red.  But then as some great soul said…

Buy when everyone sells and sell when everyone buys

Iam buying and have built up quite a bit of my portfolio by now.  I averaged out quite a lot of my losses and surely dont need the market to climb back to 20k to see a positive portfolio.  I still cant believe why people keep advising me that i should start buying only when the market is stable.

How does one judge when a market turns stable?  The worst thing you can do is to time the market.  Its practically impossible for anyone to guess the top and the bottom of the market. The only thing a long term investor can do is to religiously invest a bit of his savings in the market and cash out when he hits paydirt.

Career in 2008

Nothing interesting happened in my career during 2008. In fact, hanging on to the job one has is the mantra in this gloomy economy. In fact this is a good time to start studying and get certified in some courses that can make a difference when the economy rebounds.

My resolution for 2009

…. is to have no resolutions

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The annual Economic Survey has put the ball in the government’s court. Now its for the government to decide whether to bite the bullet. As 2009 is going to be an election year, most of these recommendations looks like will be buried for the time being.

Selling a stake in the PSU will be impossible for the UPA government to pursue. The commies are surely going to raise a stink. Also with elections coming up, the commies have got nothing to lose. The 60 hour working week is something that is much necessary. Everyone knows how corrupt our government sector is and how much of work a normal government employee does in a normal day (for examples walk into any public sector bank or any other government office). Its time for someone to hold the whip and make them work, even if it looks like slave drive.

• Complete selling of 5-10% equity in previously identified profit making non-navratnas, must list all unlisted PSUs and sell a minimum of 10% equity to the public.

• Auction all loss-making PSUs that cannot be revived and those where net worth is zero, allow negative bidding in the form of debt write-off.

• Allow a share for foreign equity in all retail trade and 100% foreign equity in foreign-branded, specialized retail chains.

• Raise foreign equity share to 49 per cent as well as allow 51 per cent foreign equity in a special category of insurance companies that provide all types of insurance to rural residents and for all agricultural related activities including agro-processing.

• Increase work week to 60 hours (from 48 hours) as well as set the daily limit to 12 hours to meet seasonal demand through overtime.

• Allow 100% FDI in greenfield private rural-agricultural banks with the caveat that such banks would be free to set up any number of branches in any rural or semi-rural area. These banks should be free to lend to agriculture & allied sectors as well as to any industry located in non-urban area.

• Amend Coal Mines Nationalisation Act to allow regulated private entry into coal mining.

• Phase-out controls in sugar, fertilizer and drugs.

• Sell old oil fields to private sector for application of improved or enhanced oil recovery techniques.

• Implement Open Access in a manner that shifts focus from a distribution company to “wire owners”. The intent is to allow access to electricity pillars to “string” wires and make wire owner accountable for T&D losses. Allow private (corporate) investments in nuclear power.

• Some of the other reform options include allowing public bus transport systems in cities and metros to be run by private companies; introducing a separate section on bankruptcy in the company law; form a public sector rail track company to own new tracks and signals and thereafter allow free entry of private and public-private partnership rail freight companies.

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On this trip to Hyderabad, i bought some books from the book hawkers on the footpaths. The ones i managed to accumulate

The Intelligent Investor – Benjamin Graham

Freakonomics – Steven Levitt

The Reluctant Fundamentalist – Mohsin Hamid

Straight From The Gut – Jack Welch

Kaoboys of R&AW – B Raman

….and a very sweet friend of mine gifted me “The 80/20 Principle – Richard Koch”

Guess how much the whole stuff cost me? Around 1500 rupees (USD 37 approx). The same books on Amazon would have costed me around USD 150.

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Used up my credit card’s vouchers for a massage session on my birthday. Its been a long time since i went for one and since i was getting a good discount, i took it up. It was quite relaxing and felt, i needed one After which, met up a couple of friends for lunch. Of all the places, we hopped into a Bangladeshi restaurant. Ya, its my first time ever. But, the food was simply fabulous. The dal, chicken and fish were very tasty. Ended up wondering, how come i never ate in a Bangla restaurant even though i have been staying in Singapore for the past 7 years now.

Went shopping after lunch and since i felt i had to reward myself, walked into a bookstore. Browsed through and my eyes fell on a book that i had been wanting to read for a long long time. “The world is flat – Thomas Friedman”. Had been reading quite a few good reviews of the book. So thought of picking up something to keep myself occupied till my India trip when iam going to raid a few bookshops in Hyderabad. I have quite a few books on the top of my mind that i want to buy on my India trip cos books are freakin costly here in Singapore. These are the few iam looking out for:

The Intelligent Investor – Benjamin Graham
The Reluctant fundamentalist – Mohsin Hamid
The Kaoboys of R&AW – B Raman
Freakonomics
City of Djinns – William Dalrymple

There are so many books that i have bought and am yet to read them. Another superb book that i would recommend anytime is “Undercover Economist” by Tim Harford. The book is in one word. Magnificient. The author also writes some superb articles under the heading “Dear Economist” in the Financial Times website.

If anyone of you has read any of the mentioned books and has any comments about them, please do write. Sometimes i wish, the day had more than 24 hours. There is so much to do and so less time.

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