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Showing 1-7 of 7 reviews(Verified Purchases). See all 12 reviews
on August 26, 2011
Economics is tricky. When it comes to buying sovereign debt, people everywhere seek to make informed investment decisions on the basis of "good" economic data but few seem to understand what that means. Contrary to popular economic theory, people are not rational decision-makers, rendering the predictive power of "efficient market" models weak. There also seems to be an overeliance on a suite of rather shallow metrics to judge the health of an economy, namely: GDP growth, credit expansion, and consumer spending, among others. Correspondingly, there is a widely-accepted notion in economics that growth is triggered by a combination of deregulation, privatization, trade, exchange rate and interest rate liberalization, and lifting capital restrictions, without qualtitatively understanding if doing these things is in the long-term best interests of a country. Aren't all countries different? Aren't all countries a product of their historical experiences as a nation? Finally, international investors seem to demonstrate overconfidence in international rating agencies, monteray unions, and artificial labels without paying attention to the strength of a country's underlying economic foundations. Why is that investors disregard warnings that become so glaringly obvious in hindsight? Why don't investors do some real homework before committing billions of dollars to what turn out to be wobbly debtors?

These are the primary questions that Jason Manalopoulos brilliantly addresses in his book: Greece's Odious Debt. Just 10 years after the Argentine debacle, how was tiny Greece - plagued by corruption, an uncompetitive ecnomomy, a bloated public sector, weak institutions, a reliance on minimal industries for foreign exchange, a sclerotic business environment, rampant tax evasion and an inherently disfucntional system where government revenue is used to buy votes rather than make prudent investments in the productive capacity of the nation - able to borrow close to $500 billion from the international investment community? Were the lessons from Argentina forgotten? Or never learned?

By far, the most important read of the year to fully understand the European debt crisis: simple yet informative and expertly logical, using astonishing examples of largesse, mismanagement,and mininformation that will likely catalyze an irreversible shift of power from the Euro-centric world to Asia and Latin America. This book is an important lesson for rethinking fiscal policy in the "developed" world.
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on July 16, 2013
Capitalism has no soul or sense of respect to historical heritage. Greece, a country tat should be regarded as every western nation cradle, is now struggling for survival, and its people suffering, because of poor corporate decisions -based only in financial figures. Of course, greek governments have their share of responsibility. This book intends to show the whole picture in a simple and easy to read fashion.
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on December 5, 2011
This book remimds us on why you cant listen to what they tell you in the news. The world needs an accurate account of whats going on in greece and this book gives it unlike anything else.
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on August 26, 2011
If there is one book you must read this year to understand the crisis in Europe -- the possible demise of the Euro, the arrogance of EU politicians and the continuing failure to deal with reality - it is this book. The main points of the book are:

(1) Like Argentina, which pegged its currency to the US dollar in the hopes that this would remove the ingrained structural and political problems in Argentina (vast corruption, underground economy, tax evasion, underdeveloped "knowledge" economy, extreme dependence on commodities), Greece's joining the Eurozone is in essence a currency peg too. EU leaders hoped that by letting Greece into the Eurozone, it would turn Greeks into Germans. Alas, like Argentina, this has not come to pass. Greece is not a European country, like Germany or the Netherlands. It is an Eastern country like Turkey. In addition, Greece is like Argentina in that it has massive tax evasion, especially among the rich, corruption and bribery, and a huge unproductive public sector. The problems of Greece will take a long time, maybe one or more generations to fix because they are so ingrained in Greek society.

The EU should have waited until Greece's economy became more developed and "converged" more with the economies of Germany, NL, France, etc. before letting them into the Eurozone. Alas, other countries like Portugal suffer from the same lack of convergence as Greece. The author concludes that the eurozone as it is right now is finished. There will probably be a smaller Eurozone with Germany, NL, Finland, France.

(2) Arrogance of EU politicians: they wanted Europe to become a world power like the US and to have a currency to rival the dollar so they went about expanding the EU beyond the limits that are prudent. As a result, they lied and continue to lie to Europeans, and bash Eurosceptics. Unfortunately, this is having the opposite effect, turning even pro-EU voters into Eurosceptics.

(3) The dire state of European banks: the book, written in 2010, predicted with astonishing accuracy, the terrible financial state of European banks which hold a lot of Greek, Portuguese, Irish bonds. What really should make people mad is that EU politicians are more keen on bailing out the big banks with taxpayer money, than with real reform -- kicking out Greece, Portugal. The author also points out that a lot of the EU subsidies that went to Greece were recycled back into the pockets of big companies like Siemens, which was involved in a bribery scandal.

After reading this book, you will come to the conclusion that the EU, as it is today, is a nice but dangerous fantasy, and it cannot go on. If the EU's politicians continue to bury their heads in the sand, the extreme right wing will gain more power. Ironic, isn't it? The EU - which was designed to prevent the resurgence of the extreme Right in Europe - may in fact lead to it.

NOTE: this book is also a terrific read on what ails Argentina. Although the broad economic indicators make it seem like Argentina is doing fine, it's not. I was just in Argentina several times this year and I can tell you it's broken. The author points out that relying solely on these broad economic statistics, many of which are suspect -- as the EU did when evaluating Greece's admission into the Eurozone -- is fatal.
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on June 10, 2012
I came to this book as a recommendation from a fellow professional colleague. I was looking for more insight and context for Greece's economic problems; specifically I wanted a better understanding of the history behind Greece's indebtedness. I held some reservations: hedge fund and financial professionals, while often very good at their own jobs, typically make poor authors. I will admit, though, that the title itself was provocative and was enough to draw sufficient interest for me. I regret that interest now. This was a really poor effort and I seriously question the five star reviews on this site.

Firstly, as regards the title and premise, it is not until the final chapter that Manolopoulos sets out the case for Greece's debt being odious. Strangely, there is ample economic and legal literature on the subject and very recent in fact, though his reference is rather old. The author himself, in the few paragraphs he deals with the presumptive topic of the book, does not even seem convinced that Greece even meets the standards. I certainly am not, at least by the scant evidence provided here. In fact, there is so little time describing the history of policies and the debts incurred no reasonable reader could make that conclusion.

The book in fact is a long-winded personal treatise on his own opinions about the Eurozone and the economic and monetary union, Greek corruption and how financial markets have come to become duped by economic policy makers, bankers and their own behavioral limitations. While there is plenty of truth to these claims they are more amply and better covered in other places. The author spends far too little time quantifying his claims and far too much time pontificating with anecdotes. Greece would certainly seem to have its share of problems but nowhere here does it seem obvious that these problems are greater than any other lesser developed nation. To the author's credit he is effective in making the case that European leaders pushed for the union too hard without considering whether the more backward peripheral countries like Greece would actually be able to make the required economic adjustment. But nowhere does he make the link with Greece's debt meeting the legal requirements for being treated as "odious". The closest he comes is in the descriptions of military spending.

The tone of the book also is far too condescending and snarky. All the actors appear as misguided or foolish while the author alone seems to have prescience. Of course, though, anyone with knowledge of European politics knows full well that the limitations of EMU were known from the start. Public pronouncements aside, the issues of convergence were fully understood by the founding members and most all global policy-makers. Any economist worth his or her salt was not so blind. The question here is why for so long markets were able to hold the issue of exchange rate stability synonymous with creditworthiness. It's a valid question and one worthy of thorough analysis. Manolopoulos seems poorly equipped to deal with the subject adequately.

In the absolute height of irony in the book the author states:

"When economists using the English language want to sound serious and academic, they use Greek or Latin terms. The often to give an air of seriousness..."

Fortunately we are mostly spared the Greek or Latin here but sadly we are given the full retinue of behavioral economics lingo: optimism bias, illusion of control, herd behavior. Just like his vilified economists the lingo does not make this book sound any more serious. It really just distracts from the fact that the book lacks a purpose and never makes the case from the outset.
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on December 19, 2012
The Greek debt and cultural way of doing thinks were detailed and written very well. The information flowed smoothly and I cannot deny how true the Greek culture deals with debt.
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on July 3, 2012
I find it a very good and illuminating reading about the crisis both in country and eurozone level. And it is quite timely in the information contained within. Also the writer is a practioner in the markets and that makes his views having a bearing.
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