World Is Curved: Hidden Dangers to the Global Economy by David M. Smick
Portfolio. September 2008
The title, The World Is Curved: The Mortgage Crisis Was Only the Beginning, is a reference to Tom Friedman's The World Is Flat. Smick says “for the financial markets, the world is curved. We cannot see over the horizon. As a result our straight lines are limited.” He goes on to clarify, “We are always being surprised, and that is why the world has become such a dangerous place ... financial instability is here to stay.”
In an interview, when asked why he wrote this book, Smick replied: “Today the world financial system is still near a dangerous tipping point of uncertainty and chaos. The mortgage crisis was only the beginning. Yet our politicians, from both political parties, fixate on the trivial. Our financial house is on fire, yet our leaders are squabbling over arranging the furniture in the front parlor. Instead, they desperately need to develop a “big think” doctrine that defines America’s economic and financial future in the world.”
The reader of this book will question if governments will be able to permanently stabilize the global financial markets. What gives such power to the author's message is that he has had a front row seat on global finance for many years. Smick is an international economics consultant, who has dealt directly with governments, central banks, hedge funds. He has conferred with central bankers, such as Alan Greenspan and Ben Bernanke; advised top Wall Street executives and investors, from George Soros to Michael Steinhardt to Stan Druckenmiller; and political leaders including Bill Bradley and Jack Kemp. Smick knows the game and the players.
“Today is very similar to an earlier period of globalization and prosperity, from 1880-1914, which ended with World War I. Soon the seeds were planted for an economic depression. The world can't let that happen again. My book calls for a new financial order and offers other recommendations for surviving and prospering in a ‘curved’ world.”