Sunday, April 19, 2009

Where Did All The Money Go?


Blame it on the media - an overexposure to the economic crisis that is currently plaguing the whole world apparently has it's effects, including inducing curiosity in people like myself, who as I have mentioned in a previous post lacks proper knowledge in this field due to the narrow scope secondary school education had provided.

In a move to understand things better, I had gone on a search for a book that went by the title Freakonomics - firstly because the long lost friend who had recommended the book said it was pretty good and had in fact made him interested in Economics, so much so that he had actually contemplated doing his post grad in Economics. This was back in December 2006 and we had lost contact since. Secondly, this coming from someone who is a self-professed non-reader was quite interesting in itself, especially after hearing his sad encounter with books (apparently he was handed old copies of girlish boarding school stories by his older female cousins - this I added here for your entertainment only), thirdly, I didn't want to get into a very academic and detailed book and this seemed like the best bet, and fourthly - I had a few book gift vouchers I had to use, and this book was there in front of me and was also discounted on top of that!

I had spent the past two weeks with the book, finishing it just about a few hours ago (my reading time is unfortunately limited to about 15 minutes before work begins and about an hour before I sleep, but that also depends because I have woken up in the middle of the night/morning with the book on my face feeling terribly disoriented), and I must sadly admit that it could not possibly answer my question to "Where has all the money gone?" I actually realised this even before I was halfway through the book, but decided to continue reading because you never know what you might get and then say it out loud.

Nevertheless I found the book enlightening to say the least. It's all about asking the right questions and interpreting data in the best way possible, which is a small part of what I do in the field I'm in. It is also a very interesting read, the kind that makes you think to yourself "Oh wow!" or "Why didn't I think of that?" Although it did not necessarily make me an instant fan of economics, I still think that if we get the opportunity to have a copy in our hands, no matter who we are, reading it would be a wise choice because you just never know what it might give you!

I quote from pp 196 from the bonus material section "If you ask me if the stock market's going to go up or down, if you ask me if the economy is going to grow or shrink, if you ask me if deflation is good or bad, if you ask me about taxes - I mean it would be total fakery if I said I knew anything about those things" If an economist himself says something like that, then I guess it is OK for someone whose basic knowledge in economics was mostly about a subject called engineering economics that encompassed finding the price of pumps and distillation plates, converting them from USD to RM to know the ROI to not be able to answer the question to where has all the money gone, right?

13 comments:

  1. I thoroughly enjoyed this book. In fact, it's in my list on my blog profile page.

    ReplyDelete
  2. Oh, yes... I just noticed. :)

    ReplyDelete
  3. oh it is a must read book!
    will get one soon!

    ReplyDelete
  4. Economics is all about feelings.... but only the very best economists will actually admit this!

    ReplyDelete
  5. In other words - unpredictable? :)

    ReplyDelete
  6. yeh, sounds interesting... Business analysts are indeed like weather forecasters :P

    ReplyDelete
  7. They say (by 'they' I mean AHD and my cousin who works in real estate in NY) that if you put three economists in a room to discuss an issue, you will end up with five different opinions. There are lies, damn lies, and economics.

    ReplyDelete
  8. Rakesh: I foresee clouds, and I'm not an economist/business analyst :D

    Hoozle: That sounds like something we could test out. Alas! I don't know 3 economists... :)

    ReplyDelete
  9. They don't know what the economy will do. It's like throwing darts blindfolded. Like who knew the world economy would crash like it is now?

    ReplyDelete
  10. You're probably better off not knowing three economists!!

    and by feelings I mean that money is a theoretical construct.... even when it does exist in notes and coins (which is only something like 10% anyway)... how much something is valued depends on how much people think it's worth, which is totally subject to massive fluctuation. And how the economy is going is dependent on how we feel the economy is going... which really means economics is not about numbers (and some pretend) and more about feelings!

    ReplyDelete
  11. Ricardo: Yeah, that is indeed true...

    Aunty: LOL! Ok... thanks for the clarification. I did have something a bit different in mind, actually...

    ReplyDelete
  12. I ask that question to myself daily ... LOL!

    ReplyDelete