Book Bits | 16 May 2020

The Coming of Neo-Feudalism: A Warning to the Global Middle Class
Joel Kotkin
Summary via publisher (Encounter Books)
Following a remarkable epoch of greater dispersion of wealth and opportunity, we are inexorably returning towards a more feudal era marked by greater concentration of wealth and property, reduced upward mobility, demographic stagnation, and increased dogmatism. If the last seventy years saw a massive expansion of the middle class, not only in America but in much of the developed world, today that class is declining and a new, more hierarchical society is emerging.
The new class structure resembles that of Medieval times. At the apex of the new order are two classes—a reborn clerical elite, the clerisy, which dominates the upper part of the professional ranks, universities, media and culture, and a new aristocracy led by tech oligarchs with unprecedented wealth and growing control of information. These two classes correspond to the old French First and Second Estates.

Modern Asset Allocation for Wealth Management
David M. Berns
Summary via publisher (Wiley)
An advanced yet practical dive into the world of asset allocation, Modern Asset Allocation for Wealth Management provides the knowledge financial advisors and their robo-advisor counterparts need to reclaim ownership of the asset allocation component of their fiduciary responsibility. Wealth management practitioners are commonly taught the traditional mean-variance approach in CFA and similar curricula, a method with increasingly limited applicability given the evolution of investment products and our understanding of real-world client preferences. Additionally, financial advisors and researchers typically receive little to no training on how to implement a robust asset allocation framework, a conceptually simple yet practically very challenging task. This timely book offers professional wealth managers and researchers an up-to-date and implementable toolset for managing client portfolios.

Flash Crash: A Trading Savant, a Global Manhunt, and the Most Mysterious Market Crash in History
Liam Vaughan
Excerpt via Bloomberg
On March 9, U.S. stocks had their biggest one-day point drop ever as the economic fallout from the novel coronavirus sank in. Within a week that record had been broken twice, only for the S&P 500 to register its greatest weekly gain in decades in April, after the Federal Reserve intervened by slashing interest rates and buying bonds.
This rattle of volatility arrives 10 years after another famously tumultuous episode in the markets—the so-called Flash Crash of May 6, 2010, when, without warning, the S&P 500 plummeted 5% in four minutes, temporarily erasing $1 trillion. The incident sparked a government investigation and led to questions about whether the rise of high-frequency trading was having a destabilizing impact on the markets. In the end, the U.S. Department of Justice focused on a different culprit: a 36-year-old day trader named Navinder Singh Sarao who operated out of his bedroom in his parents’ suburban semidetached house on the outskirts of London.

Black Gold and Blackmail: Oil and Great Power Politics
Rosemary A. Kelanic
Summary via publisher (Cornell University Press)
Black Gold and Blackmail seeks to explain why great powers adopt such different strategies to protect their oil access from politically motivated disruptions. In extreme cases, such as Imperial Japan in 1941, great powers fought wars to grab oil territory in anticipation of a potential embargo by the Allies; in other instances, such as Germany in the early Nazi period, states chose relatively subdued measures like oil alliances or domestic policies to conserve oil. What accounts for this variation? Fundamentally, it is puzzling that great powers fear oil coercion at all because the global market makes oil sanctions very difficult to enforce.

Foretelling the End of Capitalism: Intellectual Misadventures since Karl Marx
Francesco Boldizzoni
Summary via publisher (Harvard University Press)
Prophecies about the end of capitalism are as old as capitalism itself. None have come true. Yet, whether out of hope or fear, we keep looking for harbingers of doom. In Foretelling the End of Capitalism, Francesco Boldizzoni gets to the root of the human need to imagine a different and better world and offers a compelling solution to the puzzle of why capitalism has been able to survive so many shocks and setbacks.

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