Revisiting the tech bust: The great meltdown of 2000 took down with it the get-rich-quick dreams--and the life savings--of a whole generation of the American middle class

BACK OF THE BOOK

The plot: middle-aged and well-known film critic faces divorce and the loss of a seven-room Manhattan apartment that he owns with his wife. Desperate to buy out his wife's share, he plays the stockmarket, trying to ride the New Economy bubble. His objective: make a million dollars so that the apartment doesn't need to be sold. He invests heavily in tech stocks, which are the flavour of the moment. The bubble bursts and he ends up losing money instead of making any.

In American Sucker, David Denby, staff writer and film critic for The New Yorker, chronicles his brief but disastrous fling with the stockmarket in 2000, at the end of the last boom. Driven by the urge to make money and make it fast, Denby, a relative newbie in the stockmarket becomes a CNBC junkie. He becomes a friend of Henry Blodget, the now-disgraced dot-com stock messiah, and Sam Waksal, the biotech entrepreneur (who was later convicted on charges of insider trading). What's more, he seeks out the prophets of the New Economy and attends tech conferences by prominent stalwarts of the period, including George Gilder. Needless to add, he also invests heavily in tech stocks, especially those that were driving the Nasdaq crazy in those heady days.

But Denby's stockmarket foray was doomed. Unfortunately, Denby charged into the market naively like a novice. For one, his timing was all wrong: he entered the market at the fag end of the boom, or rather, at the beginning of the bust. Second, like many investors of the period, he ignored the fundamentals and went with the hype. Writes Denby: "...as the market soared, you could feel it. You would have to be insensitive not to feel it. All around, in the suddenly resplendent corporate pomp of once-dreary San Jose in Silicon Valley, in the crisp linen and sparkle of a downtown Manhattan restaurant at lunch-time, in the fattened pages of new and brazenly successful Internet magazines like the Industry Standard-in all these places and many more, you could sense the thrilling, oxygen-rich happiness of wealth being created overnight."

AMERICAN SUCKER By David Denby Little Brown Little, Brown & Co. PP 338 Price: Rs 1,150

Like a film with a bad plot, American Sucker lacks punch. The absence of suspense is one reason. Denby's war-chest of $325,000 (savings plus an inheritance from his mother) and his portfolio that was 80 per cent weighted in favour of tech stocks spell disaster from the word go. Nor is his book an enlightening account of the stockmarket and short-lived euphoria about the New Economy in the late 1990s.

Instead, Denby chronicles what happens to him-a middle-aged man whose 18-year marriage falls apart. We get to know about his obsession with pornography via the internet, his dependence on anti-depressants and other mood lifting drugs; he muses on about movie reviews, consumerism and the pursuit of money. Not exactly scintillating fare, unless you really care about the author and want to indulge him.

Yet American Sucker is written well and Denby doesn't shy away from doses of self-deprecation. If you condone what seems to be the author's attempt to write for therapeutic reasons, the book has humour and derives much from Denby's obvious eclectic knowledge. To Denby's credit, although he gets very personal about his own emotions following the divorce, he manages to balance it well by keeping it discreet and not in-your-face. Finally, although Denby tried to make a million but ended up losing money, he probably had the last laugh by writing a book about that experience. A book that people will pay to read!

IN DEFENSE OF GLOBALIZATION By Jagdish Bhagwati Oxford University Press PP: 308 Price: Rs 445

Is globalisation good? It makes the world wealthier, but does it pass the test of compassion? Does it satisfy the moral imperative fleshed out so imaginatively in the globe-wowing Diesel jeans ad campaign of 2001: what policy would the powerful 'haves' have the powerless 'have-nots' pursue if they were to switch places?

Thought experiments call for thought. In this book, Columbia University's Jagdish Bhagwati brings together his erudition and gentle wit to the debate raging over the impact of economic globalisation on poverty, women's rights, democracy, wages, the environment and much else. In his response to the agitation against globalisation, the professor deftly ignores those who're implacably hostile to the phenomenon, opting instead to address the economically naïve, as most otherwise open-minded critics are, to make his point. Economic openness and a social conscience are not mutually exclusive. Not just that, globalisation is good; it is precisely what the "immiserized" need to escape their misery. His conclusion: "Reason and analysis require that we abandon the conviction that globalisation lacks a human face, an assertion that is tantamount to a false alarm, and embrace the view that it has one."

Bhagwati isn't a kick-the-door-in advocate of barrier busting, and he takes the opportunity to restate his support for gentle reforms-calibrated by market specifics. This would boost his good-guy credentials among those already endeared by his concern for gender equality (and digressions on revelations from O.J. Simpson's trial and V.S. Naipaul's literature). But farmers fuming about grossly oversubsidised farming in the West may not be equally receptive to this book. But then again, Bhagwati defines economic globalisation broadly, and the compassion test isn't about the efficiency of its current instruments. It's about how we want the world to evolve.

-Aresh Shirali

YIELD CURVE By Moorad Choudhry John Wiley & Sons PP: 359 Price: Rs 2,574

You are probably no stranger to the term 'yield curve', constant reader. As a magazine that features a section on investing, it is impossible for too many issues of Business Today to go by without using the term. The yield curve is simply the yield (read: return) on debt over time. Given that long-term interest rates are usually higher than short-term ones (the risk is greater when the investing horizon is longer), most yield curves slope upwards. Debt-market analysts and fund managers swear by yield curves. So, it isn't altogether surprising that Moorad Choudhry, the head of treasury at KBC Financial Products, a London-based trading house should choose to write a book on the holy curve. The book is, as one would expect it to be, an academic's delight, and provides details (arithmetic-heavy ones, we should add) on the various shapes of yield curves, fitting a curve and modelling one, replete with examples, work-it-out-yourself numerics, and case studies. However, treasury-manager that he is, Choudhry cannot help but provide some insight on how analysts can use yield curves (or read them) to create strategies focussed on delivering profit. Should you be in the business of making money from bonds, we cannot recommend a better book.

-R. Sukumar