Book Bits For Saturday: 6.11.2011

Winning at Risk: Strategies to Go Beyond Basel
By Annetta Cortez
Excerpt via publisher, Wiley
Since risk plays an absolutely crucial role in a financial institution’s very existence, you would expect it would know virtually everything about risk. You would expect all of the institution’s executives, managers, and employees to possess a strong understanding of risk, and you would expect the institution to have specialists in every aspect of measuring and managing risk. You would also expect the institution to have developed a common language for discussing and evaluating risk with maximum clarity and transparency. Chances are good, however, that reality would not live up to your expectations. Not because your expectations are unreasonable; in fact, they are quite reasonable… You can’t really understand finance unless you understand risk. You can’t just skip over the risk component of finance. That would be like taking an advanced class in molecular biology without first understanding basic chemistry. It ain’t gonna happen—or if it does, watch out. And that’s why risk management must be a core competency and primary capability of every financial institution. Instead, risk management is often considered a burden, something that controls and restricts legitimate business activities without adding any real value.

Good Strategy Bad Strategy: The Difference and Why It Matters
By Richard Rumelt
Review via Management Today
John Maynard Keynes famously observed: ‘Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.’ Such a fate, of quietly informing future generations of pragmatic business leaders, may well fall, in time, to Richard Rumelt. Although for now he and his ideas are far from defunct. His book represents the latest thinking in strategy and is peppered with many current real world examples. Good Strategy/Bad Strategy has much to offer and has every chance of becoming a business classic. The overblown language of many management books makes them hard going. Good Strategy/Bad Strategy is an enjoyable exception. The book is easy to read and one of the best ways to convey its flavour is to let it speak for itself with a few quotes. The book argues that the notion of strategy has become much misunderstood: Simply being ambitious is not a strategy … ‘for many people in business, education and government the word “strategy” has become a verbal tic. A word that can mean anything has lost its bite.’ In terms of what strategy actually is, Professor Rumelt offers a simple definition. A good strategy does more than just urge us forward … it honestly acknowledges the challenges being faced and provides an approach to overcoming them.
Human Action
By Ludwig von Mises
References via The Wall Street Journal
“If I’m in, I’ll be all in,” says Rep. Michele Bachmann of Minnesota, artfully dodging my question of whether she’s running for president. Given that she just hired campaign strategist Ed Rollins, whose past clients include Ross Perot and Mike Huckabee, rumors abound. “We’re getting close,” she says, “and if I do run, like all my races, I will work like a maniac.”… Ms. Bachmann is best known for her conservative activism on issues like abortion, but what I want to talk about today is economics. When I ask who she reads on the subject, she responds that she admires the late Milton Friedman as well as Thomas Sowell and Walter Williams. “I’m also an Art Laffer fiend—we’re very close,” she adds. “And [Ludwig] von Mises. I love von Mises,” getting excited and rattling off some of his classics like “Human Action” and “Bureaucracy.” “When I go on vacation and I lay on the beach, I bring von Mises.”
World Wide Mind: The Coming Integration of Humanity, Machines, and the Internet
By Michael Chorost
Review via Web Teacher
The title of this book is a good summary of what it’s about. It’s not about web design or web education, it’s about how the human brain could connect with other human minds through the Internet. Chorost describes the book as a thought experiment about things that are conceptually plausible, though not yet in practice. He gives many examples of how his ideas about the future are based in technology that is already in use. There are chapters on the technology that is used to detect brain activity, chapters on nanowires and optogenetics – both mechanisms that can read and write brain activity, chapters on communications protocols for sending perceptions and memories from one brain to another, chapters on examples of what might result from linking humans to the Internet, and chapters on a possible future collective mind. The writing style is accessible and clear. In an age when people talk about neural pathways over the dinner table, the science discussions in the book are open and written for the average informed person.
The Filter Bubble: What the Internet Is Hiding from You
By Eli Pariser
Interview with author, via Democracy Now
The internet is increasingly becoming an echo chamber in which websites tailor information according to the preferences they detect in each viewer. When some users search the word “Egypt,” they may get the latest news about the revolution, others might only see search results about Egyptian vacations. The top 50 websites collect an average of 64 bits of personal information each time we visit—and then custom-design their sites to conform to our perceived preferences. What impact will this online filtering have on the future of democracy? We speak to Eli Pariser, author of The Filter Bubble: What the Internet Is Hiding from You. “Take news about the war in Afghanistan. When you talk to people who run news websites, they’ll tell you stories about the war in Afghanistan don’t perform very well. They don’t get a lot of clicks. People don’t flock to them. And yet, this is arguably one of the most important issues facing the country,” says Pariser. “But it will never make it through these filters. And especially on Facebook this is a problem, because the way that information is transmitted on Facebook is with the ‘like’ button. And the ‘like’ button, it has a very particular valence. It’s easy to click ‘like’ on ‘I just ran a marathon’ or ‘I baked a really awesome cake.’ It’s very hard to click ‘like’ on ‘war in Afghanistan enters its 10th year.'”