Category Archives: Book Bits

Book Bits | 10 June 2017

Money Machine: The Surprisingly Simple Power of Value Investing
By Gary Smith
Review via NY Times
“Instead of trying to predict short-term zigs and zags in stock prices, value investors evaluate individual stocks and the market as a whole by looking for good companies that have low stock prices relative to their dividends, earnings and assets,” he writes….
Throughout the book, Mr. Smith provides financial formulas to help you identify value stocks, and his writing is clear and often clever. For example:
* “Bargains are not going to be found when investors are optimistic, but when they are pessimistic.”
* “Value investors do not buy metals — no matter how precious — because metals do not generate cash.”
* “It’s tempting to confuse a great company with a great stock.”
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Book Bits | 3 June 2017

The End of Loyalty: The Rise and Fall of Good Jobs in America
By Rick Wartzman
Review via Publishers Weekly
Wartzman, a senior advisor at the Drucker Institute, documents the deterioration of company-employee loyalty at some of America’s corporate giants in this insightful economic history. Identifying the “great American dream” as having a “good job”—a dream that’s increasingly precarious—he notes driving for Uber as a perfect example of many jobs in the U.S. today that involve no real, long-term commitment between employer and employee. He cites dismal statistics about many Americans being unprepared for retirement due to low pay, poor pension benefits, and increased medical costs, all while corporate earnings climb to historic highs. In order to understand how this came to pass, he examines four companies—General Electric, General Motors, Kodak, and Coca-Cola—over the past 70 years. He identifies a combination of factors as responsible for weakening the corporate social compact: globalization, company-wide spates of downsizing, ineffective unions, and more. Perhaps most significant is the elevation of shareholders over employees.
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Book Bits | 27 May 2017

Grave New World: The End of Globalization, the Return of History
Review via Prospect
Stephen King, a Senior Economic Adviser to HSBC, has written a timely book called Grave New World, which is an excellent guide to this new global landscape. The combination of up to the minute economic analysis with a long look back at the lessons of economic history is written in an easy to follow and (mostly) jargon free manner.
King argues that the globalisation of the past few decades could easily be reversed. The division of the spoils from globalisation, both within and between countries, has been far from equal.
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Book Bits | 20 May 2017

Who Stole Our Market Economy?: The Desperate Need For Socioeconomic Progress
By A. Coskun Samli
Summary via publisher (Palgrave Macmillan)
This book discusses the current landscape of our market economy, which is in the hands of financiers and billionaires who decrease competition as well as consumer power. In order for society to fully thrive and provide its members higher living standards and quality of life, it must distribute and deliver the fruits of the economic activity without discrimination and favoritism. This book exposes the real problem of economic inequality, poverty, and the elimination of the middle class and argues for a progressive market economy in the face of regressive conservatism. The author warns of business failures, rigid and unrealistic laws, widespread unemployment, and class warfare without a fair, functional system.
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Book Bits | 13 May 2017

Cents and Sensibility: What Economics Can Learn from the Humanities
By Gary Saul Morson and Morton Schapiro
Summary via publisher (Princeton University Press)
Economists often act as if their methods explain all human behavior. But in Cents and Sensibility, an eminent literary critic and a leading economist make the case that the humanities, especially the study of literature, offer economists ways to make their models more realistic, their predictions more accurate, and their policies more effective and just. Gary Saul Morson and Morton Schapiro trace the connection between Adam Smith’s great classic, The Wealth of Nations, and his less celebrated book on The Theory of Moral Sentiments, and contend that a few decades later Jane Austen invented her groundbreaking method of novelistic narration in order to give life to the empathy that Smith believed essential to humanity.

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Book Bits | 6 May 2017

Can We Avoid Another Financial Crisis?
By Steve Keen
Review via NakedCapitalism
At first glance this book seems too small-sized at 147 pages. But like a well-made atom-bomb, it is compactly designed for maximum reverberation to blow up its intended target.
Explaining why today’s debt residue has turned the United States, Britain and southern Europe into zombie economies, Steve Keen shows how ignoring debt is the blind spot of neoliberal economics – basically the old neoclassical just-pretend view of the world. Its glib mathiness is a gloss for its unscientific “don’t worry about debt” message. Blame for today’s U.S., British and southern European inability to achieve economic recovery thus rests on the economic mainstream and its refusal to recognize that debt matters.
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Book Bits | 29 April 2017

Adaptive Markets: Financial Evolution at the Speed of Thought
By Andrew W. Lo
Summary via publisher (Princeton University Press)
Half of all Americans have money in the stock market, yet economists can’t agree on whether investors and markets are rational and efficient, as modern financial theory assumes, or irrational and inefficient, as behavioral economists believe—and as financial bubbles, crashes, and crises suggest. This is one of the biggest debates in economics and the value or futility of investment management and financial regulation hang on the outcome. In this groundbreaking book, Andrew Lo cuts through this debate with a new framework, the Adaptive Markets Hypothesis, in which rationality and irrationality coexist.
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Book Bits | 21 April 2017

Upside: Profiting from the Profound Demographic Shifts Ahead
By Kenneth W. Gronbach with M.J. Moye
Interview with author via
Q: Your book is about predicting the future with accuracy. Can you explain why demographics provide clear evidence of where we’re headed?
A: Demographics precipitates economics — not the other way around. Commerce is reliant on market size, and market size is determined by demographics. Cultural shifts are determined by demographic changes. Demography is dependent on live births, deaths and migration, and so is politics. People are easy to count. It is math. So much of what people influence is determined by their number, their age, and where they are.
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Book Bits | 8 April 2017

The One Percent Solution: How Corporations Are Remaking America One State at a Time
By Gordon Lafer
Summary via publisher (Cornell University Press)
In the aftermath of the 2010 Citizens United decision, it’s become commonplace to note the growing political dominance of a small segment of the economic elite. But what exactly are those members of the elite doing with their newfound influence? The One Percent Solution provides an answer to this question for the first time. Gordon Lafer’s book is a comprehensive account of legislation promoted by the nation’s biggest corporate lobbies across all fifty state legislatures and encompassing a wide range of labor and economic policies.
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Book Bits | 1 April 2017

Confessions of a Wall Street Insider: A Cautionary Tale of Rats, Feds, and Banksters
By Michael Kimelman
Review via Forbes
As former U.S. Attorney Preet Bharara contemplates his next move after being fired by President Trump, he leaves behind a mixed record on insider trading cases. Instead of cleaning up Wall Street by going after senior executives at the big banks who were responsible for much of the 2008 financial crisis, he chose to go aggressively after the hedge fund industry. While he can take credit for convicting, and sending to prison, billionaire Raj Rajaratnam and Goldman Sachs board member Rajat Gupta, he proved to have reached too far by going after Todd Newman and Anthony Chiasson who had their convictions overturned. As most media outlets touted Bharara’s record of wins and losses, few looked into the tactics used to win a number of these cases. Now, Michael Kimelman gives us a view of what it was like.
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