Book Bits | 23 August 2014

Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations
By Tobias E. Carlisle
Summary via publisher, Wiley
Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations is a must-read exploration of deep value investment strategy, describing the evolution of the theories of valuation and shareholder activism from Graham to Icahn and beyond. The book combines engaging anecdotes with industry research to illustrate the principles and methods of this complex strategy, and explains the reasoning behind seemingly incomprehensible activist maneuvers. Written by an active value investor, Deep Value provides an insider’s perspective on shareholder activist strategies in a format accessible to both professional investors and laypeople. The Deep Value investment philosophy as described by Graham initially identified targets by their discount to liquidation value. This approach was extremely effective, but those opportunities are few and far between in the modern market, forcing activists to adapt.

Austerity Bites: A Journey to the Sharp End of Cuts in the UK
By Mary O’Hara
Review via Times Higher Education
It is increasingly clear from household survey data and statistical projections that the burden of deficit reduction is being carried disproportionately by the bottom half of the income distribution. Stark figures from the Institute for Fiscal Studies indicate that the income drop between 2011-12 and 2015-16 will be greater the lower one’s income was to begin with, while only the top 30 per cent will experience growth. O’Hara’s valuable contribution is to capture what these projections mean in reality for families struggling to make ends meet. The sense of desperation is palpable, as is the helplessness of job centre advisers under pressure to increase sanctions, and the anger and despair of community and public-sector workers. Both the immediate injustice and the waste of human potential leap from the pages of this book.

Carbon Shock: A Tale of Risk and Calculus on the Front Lines of the Disrupted Global Economy
By Mark Schapiro
Summary via publisher, Chelsea Green
Journalist Mark Schapiro’s multi-year investigation into the economic disruption caused by climate change, delves deep into a new kind of chaos—one where carbon, the stand-in for all greenhouse gases, rules. At the heart of that disruption, questions swirl around how to establish a price for carbon. To find answers, Schapiro deftly explores the key axis points of economic change, records the shifting economic and political powers, unveils new understandings of financial risk, and shows readers the costs of carbon in their everyday lives.

Show Me the Money: The Image of Finance, 1700 to the Present
Edited by Paul Crosthwaite, et al.
Summary via publisher, Manchester University Press
Show me the money documents how the financial world has been imagined in art, illustration, photography and other visual media over the last three centuries in Britain and the United States. It tells the story of how artists have grappled with the increasingly intangible and self-referential nature of money, from the South Sea Bubble to our current crisis. Show me the money sets out the history and politics of representations of finance through five essays by academic experts and curators, and is interspersed with provocative think pieces by notable public commentators on finance and art. The book, and the exhibition on which it is based, explore a wide range of images, from satirical eighteenth-century prints by William Hogarth and James Gillray to works by celebrated contemporary artists such as Andreas Gursky and Molly Crabapple. It also charts the development of an array of financial visualisations, including stock tickers and charts, newspaper illustrations, bank adverts and electronic trading systems.

The Rush: America’s Fevered Quest for Fortune, 1848-1853
By Edward Dolnick
Review via Publishers Weekly
This headlong narrative from former Boston Globe science writer Dolnick (The Clockwork Universe) covers the tumultuous years from the discovery of gold in California to the gold bubble’s burst. Dubbed “a new history of the gold rush,” it’s new in its color and descriptive riches, all enlivened by the author’s prose. However, it doesn’t break any new ground, offer new explanations for the action-filled scenes Dolnick portrays, or change our view of the mad scramble for riches in California’s rivers. Dolnick tapped into the diaries and memoirs of men and women of the era to bring brilliantly alive the experiences of so many thousands (1% of the U.S. population) who left the East Coast, Europe, and even Asia in the search for freedom (often found, if only briefly) and wealth (mostly never found). He also emphasizes the great irony that many of those who grew rich during the gold rush did so not from the panned gold but from provisioning the miners and camp followers with their necessities. Dolnick’s compulsively readable story is one that’s rarely been told better.

A Capitalist in North Korea: My Seven Years in the Hermit Kingdom
By Felix Abt
Review via South China Morning Post
Felix Abt spent a remarkable seven years in North Korea representing the ABB Group, a Swiss power company, with plenty of adventures along the way. Few Westerners have had a similar opportunity to meet and work alongside ordinary North Koreans – let alone socialise with them – and his book demonstrates an abiding affection for the people of this benighted state.
Unfortunately, Abt carries over that genuine respect and warmth for its people to a regime that deserves no such devotion.
The personal insights are fascinating – plastic surgery is all the rage in Pyongyang, we are told, hamburgers are readily available and young North Koreans are excited about the possibilities of a more open future – but too often Abt comes across as an apologist for the regime of Kim Jong-il and his son and successor, Kim Jong-un.

Risk Topography: Systemic Risk and Macro Modeling (National Bureau of Economic Research Conference Report)
Edited by Markus Brunnermeier and Arvind Krishnamurthy
Summary via publisher, University of Chicago Press
The recent financial crisis and the difficulty of using mainstream macroeconomic models to accurately monitor and assess systemic risk have stimulated new analyses of how we measure economic activity and the development of more sophisticated models in which the financial sector plays a greater role. Markus Brunnermeier and Arvind Krishnamurthy have assembled contributions from leading academic researchers, central bankers, and other financial-market experts to explore the possibilities for advancing macroeconomic modeling in order to achieve more accurate economic measurement.