*The Sages*

Before Bear Stearns, AIG, & Lehman, there was the collapse of Long Term Capital Management (LTCM). Investor Warren Buffet described that collapse as an

example of what happens when you get (1) a dozen people with an average IQ of 160; (2) working in a field in which they collectively have 250 years experience; (3) operating with a huge percentage of their net worth in the business; (4) employing a ton of leverage.

Sound familiar? The current crisis had its precursors and a few men of unusual character were able to resist the foolish trends that lead to the current collapse. That's the point of Charles Morris' book The Sages. Morris presents a brief sketch of George Soros, Warren Buffet, and Paul Volcker and how these men were able recognize the downside to the financial industry's recent destructive practices when so many others either could not or would not.

The book doesn't fully cross over into hero-worship territory, though it comes close. Still, it provides a succinct look at how not everyone was fooled into thinking a collapse like the current one could never happen and is well worth its short read.

Two additional highlights include a scathing attack on the economics forecasting profession that Morris unleashes in the final chapter and a lengthy quote from a May 2008 speech by Volcker that includes this:

[T]he United States as a whole [has become] addicted to spending and consuming beyond its capacity to produce. The result has been a practical disappearance of personal saving, rapidly rising imports, and a huge deficit in trade.

If Volcker is right, we may not recognize 'recovery' even when it is in full swing.