The Partnership - The Making of Goldman Sachs by Charles D. Ellis

There are two facets of our global economy which have an enormous impact on all levels of society - financial markets and oil. Both of these industries have experienced massive growth over the last half century that their impact has already played a role in shaping modern history. It is therefore important that I feel comfortable with my own understanding of these subjects even though it can be a tough go at times to read such material. There are plenty of other books I would prefer to be leisurely enjoying on my freetime.

The Partnership is a book about the history of Goldman Sachs - arguably the most successful investment bank in the market. Its rise from a modest American bank into a global superpower of finance is one of the greatest expressions of US-styled capitalism ever witnessed. It will forever make up a part of business history. Even more, several of its CEOs and partners have gone onto important public positions, thus meaning that GS' reach has effects on the political sphere as well.

Even in this time of resentment towards investment banks, there are certain positive traits that Goldman Sachs deserves to be commended for. Its belief in meritocracy, team results, and absence of politicking is commendable. There are lessons to be learned for any business manager in areas such as goal setting for employees, recruiting and running effective meetings.

To fully appreciate the book does require a certain level of financial understanding. I have a basic understanding of the subject and at times struggled to grasp certain concepts being discussed. This leads to another point: what level of understanding is required before you are justifiably allowed to bash the banking sector? Certainly there are plenty (millions) of people who, after having read a handful of articles on the industry since the crisis came into full swing, feel their insights are worthy of getting them on the short list for the Nobel Prize in economics.

I have read several books on the industry, taken a few courses and follow financial papers with regularity and I still do not feel adequate discussing the topic. However, I will make a small observation regarding The Partnership, which was published in 2008 before the crack of Lehman Brothers. Would Ellis have written this book in such a glowing light if he were publishing it in 2009? His praise for the firm rings much more hollow now after seeing how the events in finance have unfolded. Throughout the book he painted a picture of an institution that had made next to no mistakes. The last chapter was written just when first signs of the sub-prime crisis was emerging and he made it look as if Goldman Sachs had if anything profited from the situation. We now know this not to be true.

Goldman Sachs had to convert itself to a holding company so it could gain eligibility to the Federal Reserves emergency lending facilities. Yes, Goldman Sachs has already paid back the US government for lending it received but it did need government assistance to stave off collapse. Adding these points to an additional chapter would have not been enough for this book. It would really require a complete reexamination of the superior, worshiping tone that permeates throughout every page.

Goodbye Germany! For the next few weeks I will be heading to the sunny shores of Italy. In terms of the upcoming summer reads that will be making the journey with me are Bellow"s "Herzog" and Updike's "Couples". I look forward to writing about them when I am back.

Read more...

What we Talk About When we Talk about Love by Raymond Carver

This post is really a continuation of my previous one on Raymond Carver

I have not read many short stories in my time. After now having completed the second collection by Carver I am beginning to appreciate the skill involved in delivering messages about the characters using very little text. A full length novel has the luxury of being able to develop characters over time, and often still does not succeed. How do you, therefore, accomplish it in seven pages? Perhaps "developing" the character is not even the right term. How do you give glimpses of insight into the characters that allow you to, even momentarily, understand them? I am finding Carver's writing to rely on the logical thinking of his readers. Each sentence has a purpose in his writing and he leaves it up to us to determine their significance based on our own interpretation.

There are two stories that stayed with me the most. The first one is titled "Viewfinder". It is about a man with no hands who takes photographs of peoples houses and then sells them to the owners. He visits one house where the owner offers him coffee not necessarily because of his hospitable nature but instead due to a nagging curiosity to see how a man with two hooks for hands would hold the cup.

The second has the same title as the book itself. It is essentially a discussion between two couples about love. Their openness to elaborate on the more intimate aspects of their relationships is greatly aided by two bottles of gin. The conversation is good, honest and disturbing.

Read more...

Will you Please be Quiet, Please? by Raymond Carver

I do not exactly recall how I first came across Slavoj Zizek. I believe it was in my search for contemporary philosophers who discuss the events of modern society at a deeper level than journalism is able to do. A few online pieces of his work proved to be rather interesting, especially his fascination in film and the underlying messages it often conveys. So, I was happy to see an interview with him in the Financial Times a few months after my initial introduction. The interview jumps from the financial crisis to Marxism and even includes a brief anecdote on the movie, Titanic. However, it was one reference he made to the film, Short Cuts that caught my attention. He claimed it be a Hollywood film which deserves to be called "art" compared to many "fake" European films. This stuck with me namely because I remember as an early teen looking at the VHS case of Short Cuts at my local Blockbuster. It was a blue case with little cut outs of all the different actors in the movie. I never did rent it, most likely opting for True Lies instead.

Nearly 15 years after having first seen it dawning the wall of the New Release section at Blockbuster, I finally sat down to watch Short Cuts. It did not disappoint. As an American living abroad now for several years, I am becoming more and more curious about my native country. I find myself constantly in search of those cultural works which best describe the true essence of the U.S. This serves two purposes. The first is that it allows me to have a portfolio of recommendations for those individuals who actually show a curiosity in better understanding the U.S. and its people beyond the stereotypes often conveyed by our own pop culture. I have not come across many interested takers yet but I am ready when it does happen. The second is simply because I relate to these albums, books, or films more now than when I am living in America. I appreciate them more, mainly due to nostalgia. Returning to Short Cuts it depicts the real life of normal people living in the more mundane neighborhoods of Los Angeles and confronts the difficulties they face in their day-to-day lives.

The film was based on the short stories of Raymond Carver. The director, Robert Altman, took a dozen of Carver's stories and weaved them together. The Criterion Collection of this film included a documentary on Carver. Thus my introduction to Carver began here with the first scene being of his widow reading one of his poems above his gravestone in Port Angeles. I only discovered he was buried there after the fact. However, I only needed to see the evergreens in the background running up to the cliffs edge above a large body of water to know that she was in the Pacific Northwest. Such an interesting string of connections served as the sign to me that the author's works deserved reading.

Will you Please be Quiet, Please? is Carver's first collection of short stories. He lived his entire life on the West Coast and this comes through in the stories. I found myself relating with his words. I have two more collections of his short stories to read and will describe in my future posts those that I enjoyed the most. In the meantime, go and rent Short Cuts. It is certainly no longer in the New Release section of Blockbuster, especially the one on N.E. 8th in Bellevue which closed down two years ago. Actually, the action "go and rent" isn't really valid any more either. It can be substituted with "go to 'Your Favorites' folder on your browser, left click, Search on Netflix 'Short Cuts', left click three times".

15 years is a long time.

Read more...

The Ambassadors by Henry James

I often found myself calling out to my junior year high school English teacher while reading The Ambassadors. I can only describe this undertaking as a literary journey in its purest form and frankly it was not one I was prepared to make on my own. Ms Tramontine would have certainly provided the explanations needed to fully appreciate some of the finest uses of the English language I have ever come across.

The journey was the same as one would experience in its more traditional definition with moments of frustration and confusion later disregarded after witnessing glimpses of sheer beauty - in this case a result of a series of sentences written with such fluidity that left me smiling and then rereading the prose out loud.

I have since read a handful of literary reviews on this work that James claimed to be his best. One theme emerging more than once is how it is a difficult book to break into initially. I concur, succeeding only to do so in the last one hundred pages.

The story in itself, is simple in nature especially when comparing it to modern fiction which is constantly being required to push the creative envelope. A young American in the early 20th century is having too much fun in Paris. His concerned mother sends her fiancée to convince the son to return to the States to take over their successful business. However, upon arrival the fiancée is overcome with the beauty and splendor of Paris and its gens. He meets the son and his friends who he finds to be fabulous in all senses. Several different women play vital roles throughout the story yet the book is free of sex and expressions of hedonism. Yet, James' greatest ability is how he enhances the tensions in these relationships using the subtle aspects of human nature often not written about - the longer than usual glance, the words not spoken in that moment.

I do want to read this book again as there is bound to be so much more to be gotten from it. If anyone in my vast blog audience would like to join me on this journey please let me know. I cannot offer to be the guide, per se, but perhaps the role of the scout could be a more realistic and suiting one.

Read more...

Se Questo è un Uomo (If This is a Man) by Primo Levi

Primo Levi was an Italian Jew who fought against the fascists during the second the World War. He was captured at the age of twenty five and sent to Auschwitz for one year from 1944-1945. Educated as a chemist, he went on to write what is probably the most highly regarded account by an Italian of life in the concentration camps. He went on to become a successful journalist until his suicide in 1987, 42 years after having survived Auschwitz. After having read his simple and honest recount it becomes more understandable how such an experience cannot be forgotten in one lifetime. The memories still haunted him four decades later.

My own childhood education gave a fair amount of attention to World War II and in particular to the stories of Holocaust survivors. However, it had been fifteen years since I had read a personal account of this nature. It is important for all of us to do for the simple reason that it reminds us how fortunate we are.

It is my impression that pop culture with its happy endings, perfectly manufactured characters, and material excess often has the reverse effect than that which is intended. I often hear the justification to be how people need something light, easy, and happy that allows them to relax after a stressful day. Therefore, watching your standard formula Hollywood film or flipping through Maxim are accepted means for overcoming the difficulties of the day-to-day grind. But what often is happens is that society is instead presented with a reality that does not exist and worse yet, leaves them desiring something unattainable. You cannot have rock hard abs in just six weeks.

A book of this nature, instead, pulls at such a vast range of emotions. One cannot read it without feeling a reoccurring sadness and anger. Yet, for me, the positive aspects were greater. I understood the true strength of the human spirit - capable of overcoming the unimaginable. I was able to see how true individualism without the help of others does not exist. It was impossible to survive a lager without the partnership of at least one other person.

On a more superficial level, the winter at its coldest is something I will no longer be able to complain about when I have a warm down coat and a heated house. Winter for those in a concentration camp meant working 12 hour days in wooden shoes, a cotton shirt and a canvas jacket with temperatures at -20 degree.

Stories such as this allow us to better content ourselves with what we have instead of subliminally pointing out our physical imperfections or small bank account. Finding this self-contentment is a truly relaxing experience which is more likely to be found in a difficult book than in season four of Desperate Housewives.

Read more...

Bowling Alone by Robert Putnam

After having finished Hope against Hope which spoke of the condition of Russia in 1930's, I decided to swing in the opposite direction with the next book. In this case, Bowling Alone maps the sociological progression of the American community after World War II by examining the external relationships that Americans have with one and another. In 1930's Russia, no clubs, teams, or organizations could exist except one - the State. On the opposite end of the spectrum is the USA, where people are given the full freedom to take part in any community-based organization that exists. And, if one does not exist, we are entitled to create our own. This freedom of social involvement is one of the most crucial aspects of a vibrant democracy. Unfortunately, it has been in consistent decline since the late 1960's. Putnam attempts to seek out why this is the case and what can be done about.

The first part of the book introduces an important theme running through America. There are more clubs and organizations now than there ever were in the preceding decades. How then can one say that club memberships are down? What Putnam shows is how the dynamics of membership in these clubs are different. Today, there are all types of clubs imaginable. Organizations like Greenpeace, the NRA, or the Sierra Club have millions of members. However, the vast majority of these members will never actually come together to discuss a new approach to recycling or the caliber of their assault rifle. Instead they will rely on these organizations to act as lobbies mainly for political purposes. It is the other type of clubs that Putnam says are at risk: local Kiwanis, Boy Scouts, and Knights of Columbus.

Why have these organizations seen their memberships decline? Putnam plows through piles of data in search for the answer. However, like much in life, there is never just one justification. Instead, he identifies a few key contributors, which come as no surprise. Longer commutes, television viewing, duel income households and a generations shift, e.g. Americans in the 1940s were united by World War II. All of this leads to a reduction in social capital, which along side human and physical capital are crucial components of a successful society.

People that interact with others often are happier, more civic and less likely to commit crimes than those who are isolated. The communities in which social interconnectedness is strong, is a better, safer place to live than a less connected society. And, what I found to be most interesting is that encouraging certain aspects of social capital will lead to positive effects in what, at first glance, would seem not related.

For example, North Carolina scores 41st in the nation on SAT scores in High school while Connecticut scores 8th. According to Putnam, "by controlling for all the other ways in which the two states differ (wealth and poverty, race, adult education, and so on), for North Carolina to see education outcomes similar to Connecticut's, according to our statistical analysis, residents in the Tar Heel state could do any of the following: increase their turnout in presidential elections by 50%; double their frequency of club meeting attendance, triple the number of non-profits per thousand residents." As he goes on to explain, these factors above have a greater effect on test scores than many traditional, and often costly, education policies such as reducing class room size. Social capital is more difficult to measure but its presence in our lives cannot be ignored when attempting to tackle many of the problems facing our schools, inner cities, or entire states.

The question that I kept waiting to be answered is - so what do we do now? It never really was. I have a hard time believing the findings of this book came as a huge surprise back in 2000 when it was written. Has the situation improved since then? Have the I-pod or Facebook done more to worsen the situation? Has September 11th brought us together like World War II did in to previous generations?

On an even more philisophocial level, are these devices and trends simply a reflection of our society and the direction in which we want to go? Is it wrong if we find more satisfaction in isolating ourselves from others than in meeting with others? I, personally, believe it is. However, more importantly, my human instincts often act as my guide pushing me towards interaction with others. For me it is the best guide. However, I am not burdened by many of the damaging factors Putnam atributes to the reduction of our social interaction, namely a grueling commute or excessive TV watching. Eliminating these two factors would certainly open a new world up to hundreds of millions of people throughout the world. It seems like a good start could be to put down the remote. Let's start there.

Read more...