Books and Book Reviews: August 2004 Archives

Sorry to Belabor the Point

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Following on the previous post (my enthusiasm for this book bubbles over) this bit of analysis:

from The (Mis)Behavior of Markets
Benoit Mandelbrot and Richard L. Hudson

Second, contrary to orthodoxy, price changes are very far from following the bell curve. If they did, you should be able to run any market's price records through a computer, analyze the changes and watch them fall into the approximate "normality" assumed by Bachelier's random walk. They should cluster about the mean, or average, of no change. In fact, the bell curve fits reality very poorly. From 1916 to 2003, the daily index movements of the Dow Jones Industrial Average do not spread out on graph paper like a simple bell curve. The far edges flare too high: too many big changes. Theory suggests that over time there should be fifty-eight days when the Dow moved more than 3.4 percent; in fact, there were 1,001. Theory predicts six days of index swings beyond 4.5 percent; in fact, there were 366. And index swings of more than 7 percent should come once every 300,000 years; in fact, the twentieth century saw forty-eight such days. Truly a calamitous era that insists on flaunting all predictions. Or, perhaps, our assumptions are wrong.

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When I was doing my graduate work, I hated most statistics. Most particularly I hated "random walk" models and "monte-carlo simulations." Whenever there was an anomalous blip that could not be readily explained, someone trotted out these hoary old creatures and set them to dancing.

How dellightful then to chance upon this:

from The (Mis)Behavior of Markets
Benoit Mandlebrot and Richard L. Hudson

With such theories [Bachelier's Analysis, Gaussian Curves (Bell-Curves), and Random Walks] , economists developed a very elaborate toolkit to analyzing markets, measuring the "variance" and "betas" of different securities and classifiying investment portfolios by their probability of risk. According to the theory, a fund manager can build an "efficient" porfolio to target a specific return, with a desired level of risk. It is the financial equivalent of alchemy. Want to earn more without risking too much more? Use the modern finance toolkit to alter the mix of volatile and stable stocks, or to change the ratio of stocks, bonds, and cash. Want to reward employees more without paying more? Use the tollkit to devise an employee stock-option program,with a tunable probability that the option grants will be "in the money." Indeed, the Internet bubble, fueled in part by lavish executive stock options, may not have happened without Bachelier and his heirs.

Alas, the theory is elegant but flawed, as anyone who lived through the booms and busts of the 1990s can now see. The old financial orthodoxy was founded on two critical assuptions in Bachelier's key model: Price changes are statistically independent, and they are normally distributed. The facts, as I vehemently argued in the 1960s and many economists now acknowledge, show otherwise.

The financial equivalent of Alchemy! Now there's a delight. I'll be the first to admit that I understand almost nothing of the stock market and its workings. What's more, life is too short, I don't plan to spend a lot of time learning more--I have far more essential things to be spending time with. However, my general theory of statistics and most statistical approaches was shaped, in part by my advisor, who quoting some source, now lost to memory, used to say, "A scientist uses statistics as a drunk uses a lamppost--for support, not illumination."

Yeah. Well, he had a higher opinion of most statistical work than I do. Once I discovered that you could manipulate your statistics by running non-parametrics, I realized that you could indeed make black into white. Didn't like the graphing in eigenspace try canonical cross-correlation, or better yet, run a rank variable analysis and then use a nonparametric correlation technique. I could run the information from my fossil sites through the number cruncher and come up with any environmental model you wanted. Want to prove that there was a gigantic four-hundred mile-an-hour hurricane that lasted most of the Permian Period? Just dump that paleocurrent data you derived from bryozoan analysis into the magic black box and turn the crank. You'd be amazed at what could spill out.

So, I will long cherish the trenchant analysis--"The financial equivalent of alchemy." Oh well, perhaps it's one of those things that you have to have been there.

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Yes, my mood changed and so my reading list shifted. (In addition I went to the library and found some absolutely irresistable delights.)

God's Secretaries--Adam Nicolson
The (Mis)Behavior of Markets--Benoit Mandelbrot and Richard L. Hudson
The Hidden Stream--Ronald Knox
Time of the Ghost--Diana Wynne Jones

Next up is still

Queen of the South--Arturo Perez-Reverte

and a host of contenders from my personal library.

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From Summa Mamas via Video Meliora


Via Smock & Mama T

Hardback or Paperback
Highlight or Underline (And write in margins, whatever's conventient--ebooks are even better because you can copy out and annotate exactly as you wish)
Lewis or Tolkien Lewis for apologetics, Tolkien for his magnificent studies of Medieval literature and philology. I don't understand some of them, but I love to read them. On the trilogy, I have cooled appreciably since my youth, but still find it magnificent and unmatched.
E.B. White or A.A. Milne
T.S. Eliot or e.e. cummings
Stephen King or Dean Koontz
Barnes & Noble or Borders (If either group would deign to hire someone who was literate, it might help. No, give me Half-Price Books, PLEASE!!!)
Waldenbooks or B. Dalton
Fantasy or Science Fiction
Horror and Suspense
Bookmark or Dogear
Large Print or Fine Print I'll read anything I can get my hands on.
Hemingway or Faulkner (Without Faulkner, no Flannery, no Walker Percy, perhaps even no Eudora Welty--although her debt is somewhat vaguer)
Fitzgerald or Steinbeck
Homer or Plato
Geoffrey Chaucer or Edmund Spenser--Some of the greatest Anti-Catholic Diatribe ever in the pamphlet spewing dragon of Canto I, not to mention the foul Duessa, whore of Babylon and potential seducer of the Red Crosse Knighte.)
Pen or Pencil Depends on the task
Looseleaf or Notepad--Theme books--harder to remove something you don't like so you're forced to see it over and over again. Excellent for journals, no self-censoring after the fact.
Alphabetize: By Author or By Title (neither)
Shelve: By Genre/Subject or All Books Together
Dustjacket: Leave it On or Take it Off
Novella or Epic
John Grisham or Scott Turrow (Ick!! One of two genres I can't get into at all. The other is the Clancy/Ludlum school of spy and know how to do everything books.)
J.K. Rowling or Lemony Snicket
John Irving and John Updike
Salman Rushdie or Don Delillo
Fiction or Non-fiction
Historical Biography or Historical Romance
Reading Pace: A Few Pages per Sitting or Finish at Least a Chapter Depends on the book and the purpose for reading.
Short Story or Creative Non-fiction Essay
Blah Blah Blah and Yada Yada Yada
“It was a dark and stormy night…” or “Once upon a time…”
Books: Buy or Borrow (buy early & often)
Book Reviews or Word of Mouth

In other words, when it comes to reading, the answer is yes--whatever (with the exceptions noted above) whenever, with whatever tools I have at hand.

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From Mixolydian Mode


The List of the 100 SF books you MUST have read. Those I've read are bold. Those I recommend are italicized. (Kinda following on Don's original). Those marked by an asterisk were actually better in their novella forms.

I have a number of divergences with Don. I found Neuromancer tedious, pretentious, and very nearly incomprehensible. I far preferred The Difference Engine and almost anything by Bruce Sterling. J.G. Ballard is definitely an acquired taste, but I have enjoyed nearly every work I've read, short stories to Empire of the Sun

I would concur with these two additions:

Mary Doria Russell, The Sparrow
Gene Wolfe, The Island of Dr. Death and Other Stories and Other Stories

and would further add (although some titles are only arguably SF at all):

Neal Stephenson, The Diamond Age
Niel Gaiman, Coraline
Philip K. Dick, Flow My Tears, the Policeman Said
Fritz Leiber, The Big Time
J.R. Dunn, Days of Cain
Jane Yolen The Devil's Arithmatic
Jane Yolen Briar Rose
Zanna Henderson's "The People" Stories
Cordwainer Smith, The Complete Works--every word beginning to end
And almost anything by Jack Vance

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Reading List

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Time of the Ghost Diana Wynne Jones
Queen of the South Arturo Perez-Reverte
In the Spirit of Happiness The Monks of New Skete
Lancelot Walker Percy

On deck:

Lilves of the Mind: The Use and Abuse of Intelligence from Hegel to Wodehouse Roger Kimball
Vile Bodies Evelyn Waugh
God's Secretaries: the Making of the King James Bible Adam Nicolson
The Other Nineteenth Century Avram Davidson
Renovation of the Heart Dallas Willard
Supper of the Lamb: A Culinary Reflection Robert Farrar Capon

And I'd like to get to something by Robertson Davies over the next couple of weeks. I remembering reading something in the dim mists of the past, but I can't recall it very clearly and it come very highly recommended.

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I have not reflected much on this book as I read it because many of my thoughts were entirely too personal to be relevant to much of an audience. However, having finished the book, I must say that it was a marvelous journey. If Ms. Huston can do for other readers what she managed to do for me, you will be richly rewarded for spending the time with this book. Each of the first ten chapters focuses both on a particular discipline and on a Saint who particularly exemplified the perfect practice of that discipline. For example, in the chapter on poverty, Ms. Huston uses St. Francis of Assisi

The subtitle is Practices for a Simple Life. Throughout the book Ms. Huston introduces us to a number of ancient practices that have served the servants of the church well throughout the ages. In the course of discussion, she give practical tips and hints through her own discovery of how the practice works. With everything except the final chapter, her story is a useful insight into how one might go about putting some of the practices to work.

Let's look for a moment at the one serious weakness of the book--the last chapter on "Contemplative Prayer." There are a number of errors in this chapter that make it less that perfect, while still rewarding. For example, Ms. Huston confuses meditation with contemplation. Moreover, using Bede Griffiths as her model, she appears to fall into an error regarding precisely what meditation is. It seems that she goes through a great deal of stress and strain to achieve the right "meditative position" and location. She then spends time regulating her breathing and holding her hands "just so." Perhaps this is more indicative of her personal needs than of the needs of the meditator. One need not bend like a pretzel or "breathe through the belly" or engage in esoteric practices to have access to the King's throne room through meditation. But this may be more indicative of how the spirit moved Ms. Huston than a suggestion for a general practice--above all, one must meditate in a way that encourages one to continue the practice.

Overall there are some splendid and frightening insights. The chapters on Celibacy (St. Augustine) and Poverty (St. Francis) pack a powerful punch in today's society.

I benefited tremendously from the time I spent reading this wonderful work and I think any serious seeker will do likewise. Highly recommended--but be warned, rather strong stuff (spiritually speaking).

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Book List Changes

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Because of circumstances beyond my control my booklist has momentarily narrowed and slightly shifted.

I'm still reading Joseph Ellis's Founding Brothers and reviving my distaste for both Jeffersonian Business as usual and Hamiltonian business as usual. Mr. Perry makes some good points about these figures, but it does little to allay the momentary distaste I have for the casual amorality of some of their actions.

For the week I have dropped Lancelot, which I plan to pick up again on the weekend. I'll be doing a lot of travel and I find the Percy doesn't read well in fits and starts--you need to concentrate and really focus attention on large chunks at a time.

In addition, the time for the book group approaches and I have not yet gotten into Time of the Ghost by Diana Wynn Joes. I really hope it picks up a bit as the story moves along.

Finally, von Balthasar's study of St. Thérèse and Blessed Elizabeth of the Trinity, while profoundly good, is a bit too academic for my needs at the moment. Passing through a period of dryness--perhaps sloth-induced, perhaps induced by the ennui of too many Florida days that look like the dregs and loose-ends of hurricanes, I need something a little more practical and a little more focused on my perennial problem--lack of simplicity. As a result I've taken up Paula Huston's The Holy Way: Practices for a Simple Life. I may follow this with a rereading of Richard Foster's remarkable study Simplicity I also have a work by St. John Chrysostom and Richard Mathes. I need to figure out what simplicity is really about and how to really put it into action in my life. Right now that necessity overrides almost all other considerations.

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Let's face it--most of us don't like to think about the poor or look beyond the placid surface of what surrounds us to what is really going on. Well, perhaps many do, but I know that it makes me distinctly uncomfortable. Ms. Ehrenreich's book forces us to do this.

First, we need to acknowledge a certain truth which is that being poor in America, while not nearly as easy as those of us well-off would like to think, is still better than being poor almost anywhere else in the world. That said, Ms. Ehrenreich's book explores the world of the working poor and reminds us at every step that every convenience, every help, every inexpensive thing we have comes at a cost--sometimes a great cost--to someone else. There is no leisure class without an underclass to support it.

Barbara Ehrenreich spent several months in three different cities scattered throughout the country--Key West, Portland, Maine, and Minneapolis, Minnesota. She decided that she would try to "make it" on the salaries of the working poor, looking to live as they did. From the start she admits to certain flaws in her plan to live this life, and as she continues through the experiment, she recognizes more. For example, late in the book she gets an offer from a family member for housing and realizes that SOMETIMES the people she has been hobnobbing with have this same recourse. However, all too frequently they do not.

Ms. Ehrenreich exposes much of what life in the underclass is like. She has a particularly harsh experience as a maid in Portland under the aegis of a taskmaster who watches her scrub the kitchen floor on hands and knees and then calmly tells her to go and do the entryway too. For most kitchen situations, there is simply no need for anyone to get on hands and knees to scrub (having a six-year old child, I undertand that there are exceptions.) However the image of the imperious householder lording it over a group of hireling maids will not soon leave my mind.

How often do we take for granted the services that we receive from the working poor? The other day I called my cable company and asked them to send someone to install an additional cable outlet. This person came and crawled around in my attic (in Florida, in the middle of July) for something approaching an hour. He was actually grateful because my roof was vaulted enough that he could easily walk through much of the attic. His recompense for this work was a glass of ice-water and a check for something over thirty dollars. Of this he may have gotten as much as fourteen.

He was truly pleasant and said to Samuel who was utterly fascinated by what he was doing, "Stay in school, it will make it much easier when you need to get a job. Do not drop out as I did." This was too much of a window into a life and I desperately wanted to be able to change his condition. But the reaiity is that I'm not going to.

How many of us think about those people who may be raising families who do work at minimum wage, who often have no access to benefits that help the unemployed, who have no health insurance, and who can't afford a day of illness because they will not be paid? In a note below, Alicia indicates that she helps with medical assistance to these uninsured and underinsured. I'm sure there are a great many others who may do so as well. But how many of us would like to be in the role of Blanche, "I have always relied on the kindness of strangers?"

Ms. Ehrenreich's book forces us to look at these issues. What is remarkable about it is that there is relatively little diatribe. The chapter titled Evaluation heaps scorn and blame upon both parties. Her investigation was conducted at the height of the era of good feeling that was the latter days of the Clinton Administration when everything was just peachy in the economy. The policies she attacks were largely democratic/Clinton era initiatives. But she doesn't let either party off of the hook. In addition, she does not offer us easy answers and pat solutions. She lets the dilemmas and ambiguities of life among the poor stand. There is no simple resolution, no signpost that indicates the way out. Except for one, one small indicator of the way we should travel. Ehrenreich does point out our individual and corporate (though not necessarily governmental) need for almsgiving, sacrifice, and just plain mindfulness of those around us who may not be as well off.

I agree with Alicia's comments below on certain peripheral elements of Ehrenreich's books--I don't much care for some of the attitudes and "politics" that seep through at the seams. Nevertheless, this is an insight into the depths of poverty, and the resilience and lived-out hope of the working poor.

Highly recommended social-conscience-raising reading. And strangely, at moment, highly enjoyable.

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This page is a archive of entries in the Books and Book Reviews category from August 2004.

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