About Me

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Melfort, Saskatchewan, Canada
I am a lawyer in Melfort, Saskatchewan, Canada who enjoys reading, especially mysteries. Since 2000 I have been writing personal book reviews. This blog includes my reviews, information on and interviews with authors and descriptions of mystery bookstores I have visited. I strive to review all Saskatchewan mysteries. Other Canadian mysteries are listed under the Rest of Canada. As a lawyer I am always interested in legal mysteries. I have a separate page for legal mysteries. Occasionally my reviews of legal mysteries comment on the legal reality of the mystery. You can follow the progression of my favourite authors with up to 15 reviews. Each year I select my favourites in "Bill's Best of ----". As well as current reviews I am posting reviews from 2000 to 2011. Below my most recent couple of posts are the posts of Saskatchewan mysteries I have reviewed alphabetically by author. If you only want a sentence or two description of the book and my recommendation when deciding whether to read the book look at the bold portion of the review. If you would like to email me the link to my email is on the profile page.

Monday, April 23, 2012

Boomerang – Travels in the New Third World by Michael Lewis

(19. – 651.) Boomerang – Travels in the New Third World by Michael Lewis – On Saturday I posted a review of Meltdown, a fictional book about financial disaster, published just ahead of the 2008 financial crisis. Tonight I have a review of another fine book by one of America’s best contemporary popular historians. Having explored the financial crisis of the last decade in America in The Big Short Lewis turns his attention to case studies, mainly of nations, caught up in the disaster.

He starts with Iceland where a conservative nation went wild with speculation in assets around the world with borrowed money. Led by their banks they went on a buying frenzy. In 2007 Icelanders owned 50 times more foreign assets than they had owned in 2002. The banks made paper profits by selling to each other assets at over inflated prices.

Lewis sums up the process as “a handful of guys in Iceland who had no experience in finance were taking out tens of billions of dollars in short-term loans from abroad. They were then relending this money to themselves and their friends to buy assets – the banks, soccer teams, etc. Since the entire world’s assets were rising – thanks in part to people like these Icelandic lunatics paying crazy prices for them – they appeared to be making money”.

He provides an example of one of those guys in Stefan Alfsson who, having only working as a fisher, quit at 20 years of age to become a currency trader who spent two years selling “people, mainly his fellow fishermen, on what he took to be a can’t-miss speculation: borrow yen at 3 percent, use them to buy Icelandic kronur, ant then invest those kronur at 16 percent”.

Lewis points to interesting facts that applied to both the Wall Street and Icelandic disasters such as women had little to do with either calamity. He pointed to Kristin Petursdottir, the only women in a senior position at an Icelandic bank, who quit in 2006 because she did not like how Icelandic men were handling finances and set up a financial services business run totally by women. She wanted to bring feminine values to finance. Since the disaster money has poured into her business for investment.

From Iceland he moves to Greece and then Ireland and then Germany before concluding with the fast developing financial disaster of California especially at the municipal level.

The city of Vallejo went bankrupt and, when Lewis visited City Hall, the city manager had 1 employee to help him run the city. He said public employees ended up with 20 – 30% of what was owed them.

I would be very uncomfortable if I were a California resident in a public defined benefit pension plan. After reading Boomerang I cannot see where governments, state and municipal, are going to have the money to pay the benefits promised as they lack the ability to adequately fund the plans.

Humour is a part of the book. In the chapter on Germany he discusses at some length the national fascination with excrement, especially human excrement. Using cruder language Germans feature it in a multitude of descriptions, sayings and nicknames.

It is fascinating, if frightening, reading on how entire nations in recent years have made collective horrible financial decisions that are going to be devastating for their countries long into the future. (Apr. 10/12)


  1. Bill - Thank you so much for sharing your thorough and well-written review on this book. I find it fascinating how the combination of the possibility of a lot of wealth with inexperience or at least not enough information can lead people to make such unwise decisions. And the worldwide ramifications are really sobering. And trust me, the situation in California is as bad as Lewis seems to portray it. I'm aware of thousands of California teachers who are now facing dire personal financial situations because of the terrible condition of cities and smaller towns. They're not of course the only ones in that position; they're just the situations I know best.

  2. Margot: Thanks for your comment. I guess I hoped, thought I did not expect, that the situation of public service employees in California was not as bad as Lewis set out. I wonder if Californians will re-consider their position on taxes.

  3. It is truly horrendous, what the so-called financial services industry has done either with taxpayers' money or with people's money now being bailed out by the taxpayer. Words cannot describe it. And the awful thing is that (with a few exceptions such as the Iceland women and the lone advice of Ann Pettifor in the UK) it is staying just as bad, via bonus culture, bamboozling customers as well as bank staff themselves with technology, etc. (the latter is how these rogue traders can come about, for example, or insurance policies get mis-sold by bank tellers on commission who don't know what they are doing).

    Anyway - rant over! Sounds a good book. Based on a review by Norman, I saw a very good film called Inside Job (narrated by Matt Damon) about the US perspective of this - beginning with the Iceland crisis. It was truly horrific, not least that Obama has kept all of those awful Bush treasury/financial people in control of the system even after so much money was lost.

  4. Maxine: Nice rant!

    Too much freedom for banks has proven unwise. In Canada stricter rules on loan reserves and lending meant that no Canadian banks needed any government money to survive the 2008 crisis.

    I hope they are still as strong today for ill financial winds are blowing through southern Europe.