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Lehman Trader Goes Mad, Geithner Saves Citi: Top Business Books

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Dec. 13 (Bloomberg) -- Madness, hubris and betrayal: Who needs drama when all the elements of a Greek tragedy, including Greece itself, can be found in the best business books of 2011?

In one, a trader from Lehman Brothers Holdings Inc. loses his grip and attempts suicide. Another says U.S. Treasury Secretary Timothy Geithner ignored a presidential order about Citigroup Inc.

Here’s a list of my favorite books this year on the financial maelstrom, followed by some top economics and general business titles.

Crisis Books

1. “Confidence Men” by Ron Suskind (Harper). A behind-the-scenes look at how President Barack Obama came under the spell of Geithner and Lawrence Summers, two men who had “contributed to the very financial disaster they were hired to solve.” Obama doesn’t deny that Geithner ignored his order to draw up plans to wind down Citi, writes Suskind in this nuanced account; Geithner says he didn’t “slow walk the president on anything.”

2. “Civilization” by Niall Ferguson (Penguin Press/Allen Lane). The prolific Harvard historian offers his riposte to crisis books asserting that the West is swirling down the drain. Sure, the U.S. and Europe are struggling. Yet China and the rest have risen because they’re copying six powerful advantages -- including competition, science and the work ethic -- that allowed the West to dominate the globe.

3. “Boomerang” by Michael Lewis (Norton/Allen Lane). The former Salomon Brothers bond salesman who wrote “Liar’s Poker” and “Moneyball” regales us with his romp across “the New Third World” -- countries from Iceland to Greece that were devastated after the credit bubble burst.

4. “Money and Power” by William D. Cohan (Doubleday/Allen Lane). A scrupulously balanced if sometimes ponderous history of Goldman Sachs Group Inc. by the author of “House of Cards” and “The Last Tycoons.” A former Lazard Freres & Co. banker, Cohan evinces an eye for images and an ear for quotations as he explores Goldman’s “schizophrenic” behavior.

5. “Exorbitant Privilege” by Barry Eichengreen (Oxford). Eichengreen, who teaches at the University of California, Berkeley, presents a brisk primer on the dollar’s rise -- and potential decline -- as the dominant international currency. The biggest threat to the greenback, he says, won’t come from abroad; it will arise from America’s failure to strengthen its own economy.

6. “Extreme Money” by Satyajit Das (FT Press). The derivatives specialist who wrote “Traders, Guns & Money” puts his inside knowledge to good use in this withering analysis of how 30 years of financial alchemy and excessive credit plunged us into the Great Recession.

7. “Models.Behaving.Badly” by Emanuel Derman (Free Press/ Wiley-Blackwell). The former head of quantitative finance at Goldman Sachs explains why models failed during the mortgage meltdown and why modelers must use them more wisely.

8. “Fatal Risk” by Roddy Boyd (Wiley). An engaging reconstruction of how American International Group Inc. committed “corporate suicide.”

9. “Red Capitalism” by Carl E. Walter and Fraser J.T. Howie (Wiley). An eye-opening look at how Communist Party bosses control China’s economy.

10. “Greece’s ‘Odious’ Debt” by Jason Manolopoulos (Anthem Press). A hedge-fund manager examines how his Greek compatriots frittered away their future -- and how German and French bankers egged them on.

General Business

1. “Street Freak” by Jared Dillian (Touchstone). A former Lehman trader describes his battle to survive in a business that tested his sanity. From hair-trigger bets to trashy banter, Dillian captures how the market’s “malignant omniscience” feels to a dealer caught “in the hands of an angry God.”

2. “Steve Jobs” by Walter Isaacson (Simon & Schuster). A memorable biography of the brilliant and maddening man who revolutionized the way we work and play.

3. “The High-Beta Rich” by Robert Frank (Crown Business). The Wall Street Journal wealth reporter returns to “Richistan,” only to find billionaires flailing in debt and losing their Sea Ray yachts and Gulfstream jets to repo men.

4. “Punching Out” by Paul Clemens (Doubleday). A blackly comic journal of what happens after a Detroit factory shuts down.

5. “Idea Man” by Paul Allen (Portfolio/Viking). This memoir by Microsoft Corp.’s co-founder offers a fascinating look at what it took to build the software behemoth.

Economics Titles

1. “Thinking, Fast and Slow” by Daniel Kahneman (Farrar, Straus and Giroux/Allen Lane). The Princeton psychologist, who won a Nobel Prize in economics, synthesizes decades of research in this absorbing journey through our “mental machinery.” In unpretentious prose, he discusses how we make choices about everything from picking stocks to predicting the future value of Bordeaux wines.

2. “Grand Pursuit” by Sylvia Nasar (Simon & Schuster/Fourth Estate). A vivid narrative history of economists -- from Beatrice Webb to John Maynard Keynes -- who pursued the idea that mankind could control its destiny.

3. “Poor Economics” by Abhijit V. Banerjee and Esther Duflo (PublicAffairs). An enlightening look at what randomized control trials, such as those used to assess new medicines, tell us about the behavior of impoverished people -- and how to help them. The Massachusetts Institute of Technology economists describe the rational motivations that underpin “irrational” decisions. We meet, for example, Moroccan villagers who find money to buy televisions, DVD players and cell phones when they can’t afford enough food.

4. “Adapt” by Tim Harford (Farrar, Straus and Giroux/ Little, Brown). The Undercover Economist contemplates why “success always starts with failure.”

5. “Spousonomics” by Paula Szuchman and Jenny Anderson (Random House/Bantam). A geeky guide to finding marital bliss through economics.

(James Pressley writes for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are his own.)

To contact the writer on the story: James Pressley in Brussels at jpressley@bloomberg.net.

To contact the editor responsible for this story: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net.

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