Book Bits | 21 October 2017

A Century of Wealth in America
By Edward N. Wolff
Review via Publishers Weekly
Wolff (Top Heavy), an economics professor at New York University, will remind many of Thomas Piketty’s Capital in the Twenty-First Century with this comprehensive and thorough study of the accumulation, distribution, and preservation of wealth in the United States. Wolff confirms the middle class’s increasingly precarious standing and the rise of income inequality. As to who the rich are in America, he shows that they are overwhelmingly white, married, highly educated, older, and self-employed, most likely in finance or business and professional services. And the remaining 99%? Their incomes have stagnated since the 1970s, despite the compensatory addition of many women to the workforce and huge increases in household debt levels—the latter, Wolff writes, just to maintain living standards, not to “binge” on consumption.

Fixed Income Analytics: Bonds in High and Low Interest Rate Environments
By Wolfgang Marty
Summary via publisher (Springer)
This book analyses and discusses bonds and bond portfolios. Different yields and duration measures are investigated. The transition from a single bond to a bond portfolio leads to the equation for the internal rate of return. Its solution is analyzed and compared to different approaches proposed in the financial industry. The impact of different yield scenarios on a model bond portfolio is illustrated. Market and credit risk are introduced as independent sources of risk. Different concepts for assessing credit markets are described.

● Is Capitalism Obsolete?: A Journey through Alternative Economic Systems
By Giacomo Corneo
Summary via publisher (Harvard University Press)
After communism collapsed in the former Soviet Union, capitalism seemed to many observers like the only game in town, and questioning it became taboo for academic economists. But the financial crisis, chronic unemployment, and the inexorable rise of inequality have resurrected the question of whether there is a feasible and desirable alternative to capitalism. Against this backdrop of growing disenchantment, Giacomo Corneo presents a refreshingly antidogmatic review of economic systems, taking as his launching point a fictional argument between a daughter indignant about economic injustice and her father, a professor of economics.

A History of the World in Seven Cheap Things: A Guide to Capitalism, Nature, and the Future of the Planet
By Raj Patel and Jason W. Moore
Summary via publisher (University of California Press)
Nature, money, work, care, food, energy, and lives: these are the seven things that have made our world and will shape its future. In making these things cheap, modern commerce has transformed, governed, and devastated Earth. In A History of the World in Seven Cheap Things, Raj Patel and Jason W. Moore present a new approach to analyzing today’s planetary emergencies. Bringing the latest ecological research together with histories of colonialism, indigenous struggles, slave revolts, and other rebellions and uprisings, Patel and Moore demonstrate that throughout history, crises have always prompted fresh strategies to make the world cheap and safe for capitalism. At a time of crisis in all seven cheap things, innovative and systemic thinking is urgently required. This book proposes a radical new way of understanding—and reclaiming—the planet in the turbulent twenty-first century.

WTF?!: An Economic Tour of the Weird
By Peter T. Leeson
Summary via publisher (Stanford University Press)
Step right up! Get your tickets for WTF?! An Economic Tour of the Weird! This rollicking tour through a museum of the world’s weirdest practices is guaranteed to make you say, “WTF?!” Did you know that “preowned” wives were sold at auction in nineteenth-century England? That today, in Liberia, accused criminals sometimes drink poison to determine their fate? How about the fact that, for 250 years, Italy criminally prosecuted cockroaches and crickets? Do you wonder why? Then this tour is just for you! Join WTF?!’s cast of colorful characters as they navigate the museum, led by guide and economist Peter T. Leeson. From one exhibit to the next, you’ll overhear Leeson’s riotous exchanges with the patrons and learn how to use economic thinking to reveal the hidden sense behind seemingly senseless human behavior—including your own. Leeson shows that far from “irrational” or “accidents of history,” humanity’s most outlandish rituals are ingenious solutions to pressing problems—developed by clever people, driven by incentives, and tailor-made for their time and place.

How to Think: A Survival Guide for a World at Odds
By Alan Jacobs
Summary via publisher (Currency/Penguin Random House)
How to Think is a contrarian treatise on why we’re not as good at thinking as we assume—but how recovering this lost art can rescue our inner lives from the chaos of modern life. As a celebrated cultural critic and a writer for national publications like The Atlantic and Harper’s, Alan Jacobs has spent his adult life belonging to communities that often clash in America’s culture wars. And in his years of confronting the big issues that divide us—political, social, religious—Jacobs has learned that many of our fiercest disputes occur not because we’re doomed to be divided, but because the people involved simply aren’t thinking.

Risk in Extreme Environments: Preparing, Avoiding, Mitigating, and Managing
Edited by Vicki M. Bier
Summary via publisher (Routledge)
Risk in Extreme Environments presents a wide-ranging discussion of approaches for assessing and managing extreme risks. Extreme events are not only severe, but also outside the normal range of experience of the system in question, and can include environmental catastrophe; engineering failure; and nuclear or other extreme terrorism. The book focuses on synthesizing research results in a way that provides insights useful to decision makers, and enables them to ask probing questions about the risks faced by their organizations, identify creative solutions, and minimize the neglect of extreme risks that can come from an excessive focus on mundane or ordinary management challenges.

Conscious Investing: Practitioners’ views on holistic investing approaches that benefit people and the planet
By Christin ter Braak-Forstinger
Summary via publisher (Harriman House)
Conscious investors are part of a growing movement who believe they can do better things with their money when they deeply connect with their money and when they allow themselves to see the big picture: namely, the wider systemic impact that their investment decisions entail. Humanity’s current social and environmental challenges require us to dramatically rethink global growth for long-term prosperity and to transform capital markets into a force for good. This will need a fundamental shift towards a regenerative economy as well as a regenerative form of investing. Consciously reflecting and consciously acting upon one’s own personal- and financial choices will definitely be part of the solution.

The Quest for Prosperity: Reframing Political Economy
By Raphael Sassower
Summary via publisher (Rowman & Littlefield)
Envisioning a different mode of economic relations requires a rethinking of the classical frames of references we commonly take for granted. The implicit assumptions that we carry into critical debates are the stumbling blocks for finding useful solutions to age-old economic problems. And these impediments constrict our political imagination. This book asks what are these frames of references? How many of them are worthy of retaining, while others might be discarded? And what new framings should be adopted in order to bring about a less crisis-prone and morally acceptable mode of human interaction?

The Growth Mindset: Leadership Makes a Difference in Wealth Management
By Rick Capozzi
Excerpt via Advisor Perspectives
Many people in our space see technology firms’ interest in wealth management as a direct threat to the traditional investment advisory model—and rightly so. If new competitors can deliver better service at a competitive cost, then why should clients stay with us? We’d better have an answer. Finding the right solution may mean we need to redefine our value proposition and accept that we’ll have to innovate and reinvest in the client experience if we are going to remain competitive. We need to use predictive analytics to enhance client experience, financial planning, and advice tools; and offer a truly integrated wealth management experience. The HNW market wants value, and I believe most will pay for this customized value.

Applied Probabilistic Calculus for Financial Engineering: An Introduction Using R
By Bertram K. C. Chan
Summary via publisher (Wiley)
Applied Probabilistic Calculus for Financial Engineering: An Introduction Using R provides R recipes for asset allocation and portfolio optimization problems. It begins by introducing all the necessary probabilistic and statistical foundations, before moving on to topics related to asset allocation and portfolio optimization with R codes illustrated for various examples. This clear and concise book covers financial engineering, using R in data analysis, and univariate, bivariate, and multivariate data analysis.