Review of The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a Barrel (Hardcover)

I am giving this book a 5 instead of a 3 or 4 because I believe that it does a superb job of laying out some facts that every normal adult needs to understand, and I want to encourage everyone to buy and read this book.

That having been said, I also found it disappointing.The author's main points can be summed up in this review, and take less than an hour to absorb in the actual book:

1)Peak oil and the need for alternative energies are being over-shadowed by myopic media and lack-luster academics that focus on poverty, climate change, terrorism, everything but the core Achilles heel of the Western world, its addiction to cheap oil which is no more.

2)Cheap oil is made possible by blatant political and financial maneuvers that enrich a few and set the rest of us up for life long poverty.Government subsidies and tax breaks purchases by expensive lobbyists giving expensive gifts and cash bribes to our politicians are directly responsible for pre-determined failure of our energy policy and the lack of an energy strategy.

3)The catastrophic nature of the collapse of cheap oil is dramatically enhanced by the combination of the *huge* U.S. deficit and by the increased prospects of war over oil.

The author concludes with some bottom line advice for investors: get out quickly from stocks associated with high oil usage (airlines, autos, chemicals; followed by cosmetics, food requiring processing and transport, and retail dependent on far away factories and raw materials).

I disagree with one key point he makes.He assumes that Wall Street and the media have been ignoring this problem because of "group think."I certainly do agree that the larger mass of the public and the average bureaucrat that do not know any better have fallen prey to unethical propaganda, but I am quite persuaded by Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy; Crossing the Rubicon: The Decline of the American Empire at the End of the Age of Oil; The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century and other books that this catastrophe in the making was clearly understood by the White House and the US Senate in 1974-1979, and a very deliberate selfish even treasonous decision was made to profit in silence and let the people fry.

This is a much simpler book than most of the others I have read and recommend, but I give it a solid five stars because if you can only afford to buy and read one book, this is the one that will be easiest and most to the point.

And just to drive the point home, when WIRED had the cover story on alternative energy, Cheney was meeting secretly with Enron and Exxon, and went on to amass 25 documented high crimes, 23 of itemized in my review of this book (Cheney makes Agnew and Johnson look like wall-flowers--this is the guy that put HIGH into "High Crimes."
Vice: Dick Cheney and the Hijacking of the American Presidency



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Review of Do-It-Yourself Hedge Funds: Everything You Need to Make Millions Right Now (Hardcover)

I bought this book with the expectation that it would teach me the behind the scenes details of hedge funds and also provide the real tools needed to start one, but in the end it is just a very high level guide to macro investment themes, diversification, and elementary valuation.If you have a finance background I would strongly suggest passing on this one and pick a different, more appropriate, book; you learned more in your introduction to finance class.Also, if you are under 30 I would also stay clear as you have probably learned more from watching Cramer on CNBC or just thru general internet use and blog reading.In this book, there is an entire chapter devoted to yahoo finance and where to find financial data and what it means.I am sorry, but if you don't even know where to find financial data or what an ETF is (which means you have probably never really invested), you should not be worried about "starting your own hedge fund" as this book misleads.You should stick with your day job and keep getting your stocks from "Money" and other sources with conflicting interests.

Of 10 chapters, I found the final 2 the only semi useful ones.The final chapter was more for entertainment value, but it did provide a valuable reminder that everything in life is zero sum and there is no place more zero sum than wall street.The 2nd to last chapter provides some hedge fund strategies and high level differences between them with a couple of examples.

I am sorry, but I really expected more from this book and I can't say I really took one thing away from it.I kept waiting for the "meat", but it never came.It is clear that the author targeted the largest audience possible, which would be non-financial main street who are just hearing the term "hedge fund" for the first time.

Disclaimer: I have a finance degree, a finance job, and have worked in a hedge fund before as a bottom of the barrel analyst, so maybe I expected too much, but I really didn't learn anything from this book and don't think anyone with any sort of finance background will either.



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Review of Fast Profits in Hard Times: 10 Secret Strategies to Make You Rich in an Up or Down Economy (Hardcover)

Fast Profits in Hard Times well worth the money. It highlights ten successful strategies for wealth accumulation that work in rising or falling economic conditions. By wealth accumulation I mean money earned on investments. You still need seed money to start the process, of course.

Everyone knows it's easy to make money on investments when the stock market is bullish. Buy low and sell high. Even the worst mutual fund manager can't help but look like a star under this scenario. But what do you do when the bears come out? How do you generate a healthy return when stocks are dropping? This book helps answer these nagging questions.

The text is less than 250 pages, so it's an easy read. The style of writing is direct; it's like Jordan E. Goodman is sitting across the table from you in a conference room. There are ample call-outs and highlights to make sure you catch and remember the most important points of each of the ten chapters.

My favorite chapters are the ones on high-yield equities, dividend reinvestment programs (DRIPs), bonds and the mysterious foreign exchange. The chapter on stock options is solid, but I think it underemphasizes the risk associated with these leveraged investments. A summary chapter at the end of the book on risk vs. return is something I longed for. Also I found the chapters on tax liens and below-market-value real estate and trusts to be a bit too timely. It seems like everyone is pushing these vehicles nowadays in the foreclosure-rich environment. But make no mistake; the chapters are well-written and chock-full of information.

I'm still chuckling about the chapter on investing in vending machines.

Armchair Interviews says: For the novice investor, Fast Profits in Hard Times is a goldmine with ten solid veins. For experienced investors, there are some good tidbits.



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Review of Missed Fortune 101: A Starter Kit to Becoming a Millionaire (Hardcover)

Every flimflam man knows that the con must be carefully layered around a kernel of truth for credibility. Missed Fortune 101 by Doug Andrew succeeds in this by wrapping a number of preposterous ideas and prevarications around three basic and true axioms. They are: (1) income is taxed in what are essentially "chunks," (2) the only relevant tax rate for decision making is the marginal rate, and (3) tremendous wealth can be created by borrowing at one rate and investing at a higher rate. Everything else in this book is not only utter nonsense, but potentially lethal to one's financial health.

The author arrives at two basic conclusions. We should borrow out of our homes and invest the proceeds at a higher rate. Universal life insurance serves as Andrew's means to this end. We should also suffer the consequences of withdrawing from our IRAs and other retirement plans now rather than later, since the tax from such withdrawals will only get worse. Naturally, the leftover funds (heavily diluted by taxes) should be invested in the same insurance policies, which supposedly offer a higher--and safer--yield than whatever the retirement plans were invested in. By page 5, I realize I'm reading a book-length sales pitch and con that has the potential to wreak havoc in my clients' lives (disclosure: I've been an Enrolled Agent tax professional and Certified Financial Planner licensee for almost three decades).

Anything this full of nonsense is difficult to critique. Short of writing a book-length retort, I've settled on the idea of listing the multitude of problems by category and providing examples from each.

A far more comprehensive review is available at my personal sites; just Google my name to find me. This is an abstract from that review. Serious readers will want to check out my books to see what links may exist between financial abuse and the field of addiction. You may wish to start with Drunks, Drugs & Debits: How to Recognize Addicts and Avoid Financial Abuse or Alcoholism Myths and Realities: Removing the Stigma of Society's most Destructive Disease.

Highly misleading examples
(2) "A $6,000 interest expense deduction on an itemized tax return has the same impact as a $6,000 qualified plan contribution. They are simply reflected in different sections of the return." Aside from numerous other issues, the tax savings from the interest deduction may be zero if you don't already itemize deductions.

(3) He implies that ordinary investors can double their money for 20 periods by comparing one dollar pre-tax and one dollar taxed-as-earned, doubling each "period" for 20 such "periods." The number of humans who have done this or something equivalent numbers perhaps a few thousand, which wasn't accomplished by investing in insurance contracts.

Faulty and twisted logic
(4) "...Your home may likely sell much more quickly and for a higher price with a high mortgage balance rather than a low mortgage balance." What the heck does the balance on my mortgage have to do with what a buyer is willing to pay me for my house?

Broad, sweeping and misleading generalizations
(2) Andrew advises that we all sell our homes and repurchase with 100% financing with the goal of freeing up equity to invest in his recommended universal life policies. He ignores the higher interest and property mortgage insurance costs on such loans, overlooks possible increased property taxes and disregards fixed transaction and moving costs.

(4) "Unfortunately, non-spouse heirs far too often end up with only about 28 percent of the money that was left in their parents' IRAs and 401(k)s." This is exceedingly rare and, therefore, scare-mongering.

Questionable predictions and grand assumptions
(3) "Conservatively, [our cozy retirement] cabin will double in value every ten years..." and our $100,000 cabin will be worth "$800,000 in thirty years." Very few areas in the country even during the late real estate boom of the last three decades have done that well. What would qualify as "aggressively"?

Assertions and generalizations that may be lethal to your retirement
(1) "Home equity has no rate of return when it is trapped in the house..." This is outright nonsense. The return is what you save in interest or rents.

(5) He concludes that if not done before, "roll-outs" from IRAs commence at age 59 ½ over a five year period and that some younger people under age 50 should commence withdrawals despite the imposition of early withdrawal penalties. The value of tax-deferred growth is ignored, as is the fact that "repositioning" of funds shrink the amount available for investment by the tax paid, which greatly distorts his calculations.

Inane or incorrect assertions
(2) He states that the interest on an equity line used to purchase universal life insurance from which you contemplate borrowing is deductible. Under IRC section 264(a)3, it isn't.

Sloppy editing of facts
(2) "One requirement [for withdrawing tax-free income from a Roth IRA] is that a distribution may not be made until at least five years after the first contribution is made." This is incorrect. Principle contributions, which are withdrawn before earnings, can be taken at any time at no cost in tax or penalty.

Poor writing and berating of those who disagree with him
(2) "There are two ways to handle information: ignore it as false or increase your level of understanding to accommodate new ideas." Obviously, we are supposed to accommodate his ideas or we're complete idiots.

(3) There are probably hundreds of examples poor writing. "...Premium payments can be varied, fluctuated, and adjusted according to circumstances..." should be, simply, "Premiums can be adjusted."

Throughout, Andrew uses variations of the typical bunko-artist salesman ploy: scare you into agreeing to do whatever he says because life will be filled with disasters if you don't. On the contrary: your financial life will likely turn into a catastrophe if you do.




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Review of Game Over: How You Can Prosper in a Shattered Economy (Hardcover)

The Game Leeb writes about is whether or not alternative energy systems can be developed before there is painful economic collapse."Game Over" refers to a world where the easily extractable energy and mineral resources are gone (peak commodities) and we haven't developed the alternative technologies to maintain our society in the absence of low cost oil.Leeb outlines how energy and other resource limitations have come to dominate global economics.He explains the familiar concept of peak oil, and introduces the concept of absolute peak oil, the point where the energy cost of oil production just matches the energy extracted. Further Leeb goes on to describe how the extraction of minerals, water and even food are coupled to energy production.Leeb is concerned with the problems of building out of the most common alternative energy systems to a large scale.

Much of this book is recycled material found in Leeb's earlier work
The Oil Factor: Protect Yourself and Profit from the Coming Energy Crisiswhich made a more technical presentation of most of the economic ideas in the first few chapters.As in the The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a Barrel this book is written for a more general audience, but unlike his other books which are mainly directed at individual investors, the first three sections of Game Over are directed to the broader questions of how our complex and technological society can deal with resource limitations, which have been magnified by rapid economic development of Asia.Only the last section of the book is directed to investment choices for individuals.

One weak spot in the book is a chapter on the costs of complexity, which comes off as a bit of a political rant against the costs of having bad regulations and archaic ownership systems that make it difficult to move to solutions to the Energy supply problems. He might have added some material about how the demand for safety, adds to energy costs over time, as in pollution controls and automotive safety features making cars less efficient.

For a book emphasising alternatives to oil, Leeb says surprisingly little about global warming. He seems to underestimate the size of US coal reserves and so doesn't discuss the CO2 production problem. My suspicion is that when things get tough, concerns about our ecological commons will be swamped by immediate and local economic concerns.Another item almost entirely left out of the discussion is population control.In a world where change is driven by the billions in the third world expanding their consumption patterns, it seems Leeb is implying its already too late to do anything about overpopulation.

Leeb's investment advice has been fantastic.My interpretation of his oil price indicator was a market sell signal in late 2007. A big question right now is how long will the deflationary fears and trends last. This book's advice is based on the premise that the pain of deflation is so threatening to government revenues that inflation will be manufactured to keep the housing market from collapsing.His advice is premised on the view that the stimulation needed to solve the short term problems(thanks George) will flip us into a world of inflation that will make the 70's look like a cakewalk. Leeb paints a very nasty and depressing picture of our economic future. The rapid consumer growth in Asia has pushed up the Malthusian day of reckoning that much closer.Leeb's depressing picture may well prove prophetic unless we see some tremendously clever improvements in our industrial, land use, trade and energy policies combined with some timely technical advances in energy development.

Ignore Leeb's warnings at your own peril.



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