The Sages: Warren Buffett, George Soros, Paul Volcker, and the Maelstrom of Markets.
Author: Charles R. Morris Publisher: Public Affairs Ah, if only we could capture the intellect of financial geniuses in a book.
Only then will we be able to finesse our craft of investing, boost our confidence, harness positive energy and make killings in the stampeding environment of stock markets.
Best yet, if the approaches of these geniuses are poles apart.
We can then garner the best of each and excel midway, making us fearless yet grounded by reality and logic.
With that need in mind, Charles R. Morris puts together in his new book three sages, distilling distinctive investment styles of the two, and reminiscing the essence of one fine public servant.
But does profiling the lives of sages offer useful lessons for all of us?
Not really, if the sages are Warren Buffett, George Soros and Paul Volcker.
Much less so if the profiles make up of a series of quick recounts and lack in-depth analysis of the financial wisdom of these successful individuals.
Furthermore, while the life of the enigmatic Buffett is never tiring to read, his investment philosophies are more comprehensibly documented in Alice Schroeder’s Snowball.
Soros, meanwhile, has authored a number of books in which he offers more detailed descriptions of his trading methods and strategies.
The most well-known one being Soros’ magnum opus, The Alchemy of Finance, from which Morris, too, has quoted.
Morris, in a ham-fisted attempt to document the extraordinary life and career of Soros in slightly over 50 pages, has made Soros seem less of a sage than he deservingly is.
Although Morris regards Soros as a keen global trend reader with “feline sensitivity to quivers of disharmony in the economic flux”, his account of Soros’ trading history in quick succession and brief summation makes Soros looks more like a barbaric trader short of conviction and confidence.
On a few occasions, Morris makes it seem like Soros’ success comes more from luck than flair. “My father changes his position on the market because his back starts killing him. It has nothing to do with reason,” Robert Soros is quoted as saying about his father’s investing intuition.
Morris’ inclusion of Robert’s comment offers little humour but reinforces Soros’ veering conviction. In addition, Morris’ narrative of economic scenarios prevailing at the time is too swift and brief, confusing reader sthe least but disabling them from doing their own analysis the most.
“Without great conviction, (Soros) expects credit contraction. The stock market and house markets are both weakening, banks are in serious trouble and currencies are pushing against their upper bounds. On the positive side, the budget deficit is falling along with interest rates, and banks are slowly improving their balance sheets. What to do?”
Anyone will get lost in this economic scenario. Yet there are more. Indeed, Morris’ impatience with economic theories is most obvious in the chapter on Paul Volcker, the man whom Alan Greenspan succeeded as former chairman of Federal Reserve.
Hoping to cover Volcker’s two-decade long career as an expert in monetary policies, Morris sails through the various economic conditions from which Volcker honed his lore, but remains short on specific attributes that make Volcker a man of implacable integrity.
The reader lapses into a trance of economic frenzy, hearing not the voice of a great man calming wave after wave of financial disruption, but the sound of screeching financial jargons that deafens anyone unfamiliar with the interlocking world of US economy and politics.
But the book does shine with its more personal portrait of Warren Buffett. Morris focuses less on the technicality of financial markets but more on the young and endearing Buffett, when he achieved his first billion and his journey to become the beacon of sound judgement in the world of investment.
At over 900 pages, Alice Schroeder’s Snowball seems to have covered nearly everything that people want to know about Buffett.
But Morris is sensible enough to know his disadvantage and smart enough to have included a summary of Buffett’s witty anecdotes on Wall Street’s follies.
On the issue of accounting misrepresentation, Buffett quips and compares it with Abraham Lincoln’s riddle: “How many legs does a dog have if you call his tail a leg? The answer: Four, because calling a tail a leg does not make it a leg.’”
His failure and inability to walk the reader through economic wilderness notwithstanding, Morris has done a fair job in drawing these biographical sketches.
But sages have feelings, too. A deeper look into their inner worlds may be more rewarding than the brief recounts that Morris has provided.
The Three Gorges Dam discharges water to lower the level in the reservoir in Yichang, Hubei province August 5, 2009.
Credit: Reuters/China Daily
BEIJING | Mon Jul 19, 2010 5:17am BST
Officials said the controversial Three Gorges Dam helped mitigate flooding this year [Reuters] BEIJING (Reuters) - China's massive Three Gorges dam is facing a major test of the flood control function that was one of the key justifications for its construction, as torrential rains swell the rivers that feed it, state media said Monday.
Much of China has been suffering flooding and landslides after weeks of torrential downpours. At least 146 people have died since the start of this month, as a result of the rains, and another 40 are missing.
The peak flow of water hitting the giant reservoir on the Yangtze River, China's longest, will be higher than in 1998 when devastating floods killed over 4,000 people and forced some 18 million to relocate, the official China Daily said.
Engineers have raised the rate at which water is being sluiced out of the reservoir, to make room for new waves of floodwaters expected this week.
"The levels of this flooding will be higher than the historic floods of 1954 and 1998," Wei Shanzhong, Head of the Flood Control and Drought Administration office for the Yangtze River, told state Television.
"The rain in the gorges area will have an immediate affect on the water flow, to around 70,000 cubic meters (per second)."
Overall however, the flood this year is expected to be shorter than the 1998 disaster. When the flood-tide hits, locks that allow shipping on the reservoir up to the city of Chongqing, a southwestern hub, will be closed if the water comes faster than 45,000 cubic meters per second, the China Daily report added.
The dam was given the go-ahead by the government in 1992, against unusually visible domestic opposition -- with environmentalists warning the reservoir could turn into a cesspool of raw sewage and industrial chemicals trapped behind the dam, and feared silt could also cause problems.
The government justified its decision to push ahead by citing massive clean power generation and flood control were cited as the reasons it was pushed through. If it fails in the latter task it will add to concerns about the dam's overall cost and impact.
However even if the dam succeeds in its role of holding back deadly floodwaters there may still be problems downstream where continuous rains have also weakened dikes. Further north at least 20 people are missing after a landslide last night in a mountainous corner of Shaanxi province, around 400 km (250 miles) from the provincial capital of Xian.
Altogether over 38 million people have been affected and over 1.3 million have had to be evacuated, because of the weather, the Ministry of Civil Affairs was quoted as saying by the China Daily. July 20 (Bloomberg) -- China’s Three Gorges Dam, the largest in the world, help alleviate flooding in central China by containing the heaviest rush of water in more than 12 years.
Water flow down Asia’s longest river was contained and released at a “safe level,” Huang Hua, assistant director of public affairs at China Three Gorges Corp., the operator, said by phone today. Operations at the Hubei province dam, including power generation, are “all normal”, he said.
Rainfall since July 1 has affected about 38 million people and forced the relocation of 1.3 million in 11 provinces, the Ministry of Civil Affairs said July 16. Rice output in China, which accounts for 35 percent of global production, may drop by 10 percent on torrential rains and outbreak of pests, industry website cngrain.com said today.
“Three Gorges can comfortably handle the flood water,” Chairman Cao Guangjing said in a statement on its website today. “For the control of flooding downstream, Three Gorges is working very effectively.”
The speed of the water rushing down the river peaked at 70,000 cubic meters a second, though the volume probably won’t be as big as 1998, with the peak level lasting a shorter time, Cao said in the statement. The flow is expected to drop to 60,000 cubic meters a second by 8 a.m. tomorrow, it said.
The 1998 flood, when the water flow reached 50,000 cubic meters a second, killed about 4,000 people and forced the evacuation of 18.4 million, causing economic losses of at least 166.6 billion yuan ($25 billion). That flood, which had affected central and northeast China, lasted for months.
Record Level
The Three Gorges Dam, which started operations in 2003, can handle water flow at 98,800 cubic meters a second, the official Xinhua News Agency said, citing Cao. The record high was 70,800 cubic meters per second in 1981, the news agency said, citing an unidentified spokesman at the dam operator.
Flood and landslides triggered by torrential rains have left at least 41 people dead and 84 missing in Shaanxi and Sichuan provinces, the official Xinhua News Agency said, citing flood control authorities. Economic losses in the 11 provinces totaled 29.52 billion yuan, the civil affairs ministry said.
“Heavy rains in July pounded on Hubei’s grain, cotton, vegetable, aquaculture and livestock producing areas before shifting westward and northward,” said cngrain.com, which is owned by China Grain Reserves Corp. “The rains also induced pests outbreaks this week.”
Ravages Crops
In some of the main producing areas, the output decline may be as much as 20 percent, cngrain said. Persistent and wide- ranging rains ravaged early rice crops in Jiangxi and Anhui provinces, with about 23 percent of the area in Jiangxi affected, it said. The early rice crop was in flowering stage when the rains hit, it added.
Regions in Liaoning, Jilin, Heilongjiang, Inner Mongolia, Shandong, Anhui, Hubei, Hunan, Chongqing, Guizhou, Yunnan and Guangdong will have heavy rain in the next 24 hours, the China Meteorological Administration said in a statement.
Typhoon Chanthu may land in Guangdong or Hainan province on July 22, the weather bureau said at 11:18 a.m. local time.
Highways, Old Towns
More than 80 percent of the old township in Guangan city in Sichuan province were submerged after the biggest flood since 1847 hit the city, China Broadcasting Union reported today. More than two kilometers of the No. 318 national highway in county Qu, located in the eastern part of Sichuan Basin, was flooded yesterday at 6 p.m. The water blocked cars from the area and left the county an “isolated island,” according to the Chengdu Business Day.
The Chongqing Maritime Bureau has suspended shipping in the areas of Baishatuo Bridge, Chongqing Port, Tongluoxia, and Huangcaoxia since yesterday, Xinhua said. Chaotianmen port, the largest in Chongqing and the site where the Yangtze River and Jialing River merges, was partly inundated by the peak flow yesterday afternoon, People.com.cn reported.
Part of the Sichuan-Tibet highway may only be open again on July 28, after rain led to spillage of mud and rock, Xinhua said, citing the Communications Bureau of Tibet.
Flooding in southern China this year poses a challenge for agricultural production, Chen Mengshan, the Ministry of Agriculture’s spokesman and chief economist, said July 16.
China Three Gorges, the parent of Shanghai-listed China Yangtze Power Co., is building dams on the Yangtze River to control floods and help end electricity shortages in the world’s fastest-growing major economy. The nation is the world’s largest consumer of energy, according to the International Energy Agency.
--Winnie Zhu and Feiwen Rong, with assistance from Penny Peng and Miao Han. Editors: Tan Hwee Ann, John Liu. To contact the editors responsible for this story: Bruce Grant at bruceg@bloomberg.net; Andrew Hobbs in Sydney at ahobbs@bloomberg.net.
China braces for more floods
Officials said the controversial Three Gorges Dam helped mitigate flooding this year [Reuters]
China is bracing for its second powerful storm in less than a week, as the death toll from floods and landslides across the country climbed to nearly 300 this month.
Tropical storm Chanthu is expected to make landfall in Guangdong and Hainan provinces on Thursday, and it may pick up force while over the South China Sea.
The government has advised people to stay indoors, the official Xinhua news agency said. Last week, typhoon Conson skirted the resort island of Hainan, killing two people, before heading into Vietnam.
Spreading north
Much of southern and central China has been suffering flooding and landslides after weeks of torrential downpours and the deluge is spreading north, with Liaoyuan city in northeastern Jilin under waters 1m deep on Wednesday, state television reported.
Weeks of torrential rains have left three-quarters of provinces under water [Reuters]
Northeastern Liaoning province was experiencing its heaviest rainfall since 1994, state news agency Xinhua said.
Flooding is common in southern China during the annual rainy season, but this year has been the worst in decades in some areas.
At least 273 people have died as a result of the rains this month, bringing to 701 the number killed so far this year.
Another 347 are missing, the government said on Wednesday.
This year's death toll is the worst since 1998, when the highest water levels in five decades claimed 4,150 lives.
Already, three-quarters of China's provinces have been plagued by flooding and 25 rivers have seen record-high water levels, officials said.
Flooding, particularly along the Yangtze river basin, has overwhelmed reservoirs, swamped towns and cities, destroyed farms, and caused landslides that have smothered communities, including toppling 645,000 houses. The government estimates that the rains have caused direct economic damage of $21bn.
Typhoon season
With the typhoon season only just starting - six to eight typhoons are expected this year – and another bout of heavy rain forecast in the Yangtze region for Thursday, there are fears of another mass disaster on the scale of 1998. But Liu Ning, general secretary of the government's flood prevention agency, said that should not happen. He said the country was far better prepared than in 1998 and the overall water volume was not as high this time, although some rivers had risen above the peak of that year.
Rescue teams have been struggling to help those affected by the floods [AFP]
Since 1998, dykes have been improved and the massive Three Gorges dam completed.
Only a few dykes have failed this year, unlike in 1998 when thousands did, Liu told a news conference. But he warned that since 60 to 80 per cent of the annual rainfall occurs between June and August, the authorities should ramp up preparations and "be prepared to prevent and combat potential disasters".
The Three Gorges dam was given the go-ahead by the government in 1992, against unusually visible and vocal domestic opposition – with environmentalists warning the reservoir could turn into a cesspool of raw sewage and industrial chemicals trapped behind the dam. The $50bn project has already displaced millions as their homes were covered by the damming of the river. Millions more are expected to have to move within the next decade.
The government justified its decision to push ahead by citing massive clean power generation and flood control.
The Three Gorges Dam faced its highest levels ever this week and water breached the 2km long and 200m high dam.
But Liu said although water levels in the upper stretches of the Yangtze had surpassed 1998 marks, "the flood situation is still not as severe because the Three Gorges Dam has played a key role in preventing floods along the river this year"
Blogetery.com, a little-known WordPress platform used by more than 70,000 blogs, was shut down by its Web hosting company more than a week ago and nobody seems willing to say why or who is responsible.
BurstNet, the Web-hosting company, informed Blogetery's operator that service was terminated at the request of some law enforcement agency but wouldn't say which one. As for the reason, BurstNet hasn't made that clear either. In an e-mail to Blogetery's operator, BurstNet managers did say that they had little choice but to terminate service.
"Please note that this was not a typical case in which suspension and notification would be the norm," BurstNet wrote to Blogetery's operator. "This was a critical matter brought to our attention by law enforcement officials. We had to immediately remove the server."
BurstNet executives were not immediately available for comment.
Though BurstNet never indicated Blogetery's problems were caused by copyright violations, TorrentFreak, a blog that covers Web file-sharing issues and broke the story, wrote that the U.S. government may be involved as part of stepped-up antipiracy operations. Nearly three weeks ago, a group of federal law enforcement agencies, including the U.S. District Court for the Southern District of New York and the U.S. Immigration and Customs Enforcement (ICE), a unit of the Department of Homeland Security--seized assets and Web sites belonging to people authorities say operated illegal file-sharing sites. President Obama has said his administration is going to get tough on piracy and counterfeiting.
But on Sunday, a spokeswoman for ICE said "while ICE's Internet piracy enforcement efforts are still very much ongoing, we were not involved with the action."
A spokesman for the Recording Industry Association of America said Sunday that the trade group for the four top record labels had nothing to do with Blogetery's shut down. A spokesman for the Motion Picture Association of America said he had never heard of Blogetery.
That the MPAA and RIAA may not be involved makes sense. Typically, they give warnings before they move like this. They also try to make big news out of any enforcement efforts; they want them to act as deterrents.
And these trade groups have historically had to file lawsuits, spend millions of dollars, and wait years before convincing courts to shut down such sites as TorrentSpy, Isohuntand Napster. If this was a copyright issue, BurstNet would likely have to deal with the Digital Millennium Copyright Act's safe harbor. This a provision designed to protect Web service providers from being held responsible for copyright violations committed by users.
Blogetery's operator said he played by the rules. In the e-mail exchange with BurstNet, the blog platform's operator, said that he always obeyed copyright law. Whenever anyone on his platform was accused of posting links to unauthorized movie or music files, he said he removed the material "within 24 hours."
Sure, there's still lots unanswered questions. We don't know which law enforcement agency is involved. We don't know whether BurstNet disconnected Blogetery with proper cause. We don't know for sure whether the reason for the shut down was due to copyright violations.
But at this point, it sure doesn't appear to be a generic file-sharing issue.
Update 3:20 p.m. PT: In an interview, a BurstNet spokesman declined to identify the law enforcement agency that ordered Blogetery shut down or provide the reason but did say that it had nothing to do with copyright violations.
Greg Sandoval covers media and digital entertainment for CNET News. He is a former reporter for The Washington Post and the Los Angeles Times. E-mail Greg, or follow him on Twitter at @sandoCNET.
Greg Sandoval covers media and digital entertainment for CNET News. He is a former reporter for The Washington Post and the Los Angeles Times.