On the most serious economic crisis

by The bookworm on December 4, 2012 · Business & Economics

The Economics of the Financial Crisis - Annunziata

The economy might be down, but as we are approaching the end of 2012 we are looking at yet another banner year for the rare book market. This increasingly popular vehicle in collectible investing, allows for better diversification with long-term investment planning. Last week we looked at two finance books written around the times of the Great Depression that is in many ways quite similar to the economic crisis problems that we have been experiencing in most recent years. It is by far the most serious crisis to hit the global economy since the Great Depression.

One of the books mentioned in last week’s post – Security Analysis, is still in print more than seventy years later and is still considered to be one of the most influential financial books ever written post the stock market crash of the Great Depression. The 1934 classic first edition, first printing is impossible to find in a dust jacket today, and the rare book speculator may ponder as to what the future Security Analysis equivalent that can be purchased inexpensively today may be. Here we offer, through some diligent scrutiny of the past, and through a bit of deterministic logic, our insights on a future, potential, important and scarce book of economics and finance.

First printings of blockbuster books are usually in the desirable collectible stage of limited supply with ample demand. Subsequent printings are released to balance such disequilibrium swiftly and efficiently by publishers that are extremely sensitive to bigger profits. Therefore, this future blockbuster has to be a well written book by an authority in the field of economics and finance, and still in its first printing. Leaving aside any additional attractive features or attributes that any particular copy may have such as autographs, associations, pristine condition and so forth, the number one requirement is “first edition, first printing, and first issue.”

While there are a number of economics and finance books that satisfy the requirements of authority, great content, and first printing, one book stands above the rest.  The author is a senior economist and strategist that held positions in both the public and private sectors, most recently as the Chief Economist of the UniCredit Group, and Global Head of Economics, Commodities and Fixed Income/FX Research.  Further, in January of last year he was hired by GE as the company’s Executive Director, Global Market Insights and Chief Economist. Dr. Marco Annunziata is the author of The Economics of the Financial Crisis: Lessons and New Threats (Finance and Capital Markets), Palgrave Macmillan, 2011. (ISBN: 0230282814).

The publisher is as important.  Palgrave Macmillan is the academic powerhouse of the merger between St. Martin’s Press Scholarly and Reference in the USA, and Macmillan Publishers in the UK, under the Macmillan Group that belongs to the German book giant Verlagsgruppe Georg von Holtzbrinck. Holtzbrinck has published everything from Salman Rushdie’s Satanic Verses to classics by Agatha Christie, Jean-Paul Sartre, Ernest Hemingway and John Updike. In fact, John Sargent, head of Macmillan, forced Amazon to an “agency agreement” allowing him, as the publisher, to price books paying Amazon a fixed discount.  It was the first time Amazon had ever given way in public on a big issue with publishers.

The final and most important component is, of course, the content of the book. Just as Benjamin Graham and David Dodd are as relevant today as when they first appeared nearly 75 years ago, the content has to be insightful and recognized as breakthrough work and of the absolute truth. Despite still suffering the consequences of the financial meltdown, especially in the eurozone, economists such as Annunziata, are able through compelling analysis to identify the sources and project their findings to help identify future threats. Just as the Security Analysis became the road map for investing, The Economics of the Financial Crisis has to be the road map for financial crisis. How valid are Annunziata’s analysis and arguments only time will tell. In the meantime book collectors place your bets.


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