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Archive for February, 2014

Friday, February 28th, 2014

On the Geneaology of Cosmology/Unscientific Postscribble

Worlds Without End

This week our featured book is Worlds Without End: The Many Lives of the Multiverse by Mary-Jane Rubenstein. Throughout the week, we will be featuring content about the book and its author on our blog as well as on our Twitter feed and our Facebook page. Today, we have an excerpt from the final chapter of Worlds Without End.

Don’t forget to enter our book giveaway to win a FREE copy of Worlds Without End!

Thursday, February 27th, 2014

Thursday Fiction Corner: Zulfikar Ghose on Machado de Assis

Stories

“The modern short story as created by Chekhov, Kafka, Henry James, Conrad and Joyce is a marvel of world literature. Add Machado de Assis to that list and you will find yourself in a world of sheer magic.” — Zulfikar Ghose

We are proud to be distributing Dalkey Archive Press, one of the leading publishers of avant-garde fiction and literature in translation! In today’s edition of Thursday Fiction Corner, we have an excerpt from an article at Dawn.com by poet, novelist, and literary critic Zulfikar Ghose. In “The Real Magicians of Latin America,” Ghose discusses the writing of some of the great authors of Latin America, and argues that no such list could be complete without Joaquim Maria Machado de Assis, whose newly translated Stories is newly available from Dalkey Archive Press. You can read the article in its entirety here.

The Real Magicians of Latin America
By Zulfikar Ghose

As has happened before in literary history, posterity’s impartial eye sees among the neglected shadows what a past age, blinded by the intense light in which it stared at the illumined famous, had all but completely missed. As our enchantment for the likes of Márquez and Vargas Llosa, which has been nourished and sustained by the publishing industry’s need to project writers of little more than ordinary stature as giants, diminishes, a more fastidiously discriminating perception shows us the figures who had been cast in the shadows. In South American fiction contemporaneous with Márquez is the remarkable Álvaro Mutis; before him Felisberto Hernandez, María Luísa Bombal, and Graciliano Ramos; and before them all, writing his best work at the end of the 19th century, the truly great Machado de Assis (1839-1908).

An unprecedented literary feast awaits readers for whom these names are new. Forget the thirdraters you were sold as geniuses, forget your Forsters and Hemingways, your Bellows and Lessings. Reader, come out of the tapas bar where you’ve been nibbling at stale, over-salted snacks and deluding yourself you’re at a banquet, come where your taste buds may experience ecstasy. A new English translation of the stories of Machado de Assis provides us with an occasion to commence this feast.

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Thursday, February 27th, 2014

Ending the Endless: Thomas Aquinas

Worlds Without End

This week our featured book is Worlds Without End: The Many Lives of the Multiverse by Mary-Jane Rubenstein. Throughout the week, we will be featuring content about the book and its author on our blog as well as on our Twitter feed and our Facebook page. Today, we have an excerpt from Worlds Without End in which Professor Rubenstein discusses Thomas Aquinas and his thought on whether there are many worlds or just one.

Don’t forget to enter our book giveaway to win a FREE copy of Worlds Without End!

Wednesday, February 26th, 2014

Interview with Caren Irr, author of Toward the Geopolitical Novel: U.S. Fiction in the Twenty-First Century

Toward the Geopolitical Novel, Caren IrrIn a wide-ranging interview with Critical Margins, Caren Irr discussed her new book Toward the Geopolitical Novel: U.S. Fiction in the Twenty-First Century. In the book, Irr argues that one of the dominant trends in twenty-first century American fiction are works that have a multinational or global reach. More precisely the works of writers such as Edwidge Danticat, William Vollman, Junot Diaz, Chris Abani, Susan Choi, and others are geopolitical in the sense that they explore issues arising in international disputes, travel, or networks.

Irr contends that the work of these contemporary writers differs from twentieth-century political novels not only because of the preponderance of interest in the global but because of its more skeptical attitude toward ideology or political doctrine. Irr explains:

The internationalism of the Old Left is an important source for some of the writers working in a contemporary geopolitical vein, but the concern with ideology and political conversion so apparent in mid-20th century works is usually absent in the new writing. The newer authors almost never position themselves as part of an international political movement, and very often they seem to be more concerned with documenting global processes rather than urging readers to adopt particular positions on them. In that sense, they tend to be problem novels rather than persuasion novels.

In the interview Irr also discusses the different genres that make up the twenty-first century geopolitical novel:

The genres I used to organize my project are all modifications of important existing forms. The digital migrant novel emerges out of immigrant assimilation narratives. The Peace Corps fugue is a variation on the political thriller. Neoliberal allegories develop out of the national allegory, while contemporary revolutionary fiction fuses the historical novel with apocalyptic near future fiction. Expatriate satires largely build on and invert conventions of the classic expatriate narratives of the 1920s.

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Wednesday, February 26th, 2014

Asceticosmologies: Modern Science as Religious Practice

Worlds Without End

This week our featured book is Worlds Without End: The Many Lives of the Multiverse by Mary-Jane Rubenstein. Throughout the week, we will be featuring content about the book and its author on our blog as well as on our Twitter feed and our Facebook page. Today, we are sharing a video of “Asceticosmologies: Modern Science as Religious Practice,” a lecture given by Professor Rubenstein.

Don’t forget to enter our book giveaway to win a FREE copy of Worlds Without End!

Tuesday, February 25th, 2014

How to Avoid the G-Word

Worlds Without End

This week our featured book is Worlds Without End: The Many Lives of the Multiverse by Mary-Jane Rubenstein. Throughout the week, we will be featuring content about the book and its author on our blog as well as on our Twitter feed and our Facebook page. In today’s excerpt from the introduction to Worlds Without End, Rubenstein looks back at the origins of the multiverse as a concept and a term.

Don’t forget to enter our book giveaway to win a FREE copy of Worlds Without End!

Tuesday, February 25th, 2014

New Book Tuesday: The DMZ, Gass, Millhauser, Slow Movies, and More New Titles

DMZ CrossingOur weekly listing of new books now available:

DMZ Crossing: Performing Emotional Citizenship Along the Korean Border
Suk-Young Kim

The Barnum Museum (Available again)
Steven Millhauser

Willie Masters’ Lonesome Wife
William H. Gass

Slow Movies: Countering the Cinema of Action
Ira Jaffe

The Sports Film: Games People Play
Bruce Babington

Beheading the Virgin Mary, and Other Stories
Donal McLaughlin

From Out of the City
John Kelly

adibas
Zaza Burchuladze

Monday, February 24th, 2014

Book Giveaway! Worlds Without End: The Many Lives of the Multiverse, by Mary-Jane Rubenstein

Worlds Without End

This week our featured book is Worlds Without End: The Many Lives of the Multiverse by Mary-Jane Rubenstein. Throughout the week, we will be featuring content about the book and its author on our blog as well as on our Twitter feed and our Facebook page.

We are also offering a FREE copy of Shifting Sands. To enter our Book Giveaway, simply fill out the form below with your name and preferred mailing address. We will randomly select one winner on Friday, February 21st at 1:00 pm. Good luck, and spread the word!

Friday, February 21st, 2014

Shifting Sands After the Arab Spring

Shifting Sands

This week our featured book is Shifting Sands: The United States in the Middle East by Joel S. Migdal. Throughout the week, we will be featuring content about the book and its author on our blog as well as on our Twitter feed and our Facebook page. On the final day of our feature on Shifting Sands, we have Joel Migdal’s afterword, in which he looks back at his book through the lens of the events of the Arab Spring.

Enter our book giveaway for a chance to win a free copy of Shifting Sands!

Thursday, February 20th, 2014

The Yom Kippur War and the Changing Calculus of U.S. Foreign Policy

Shifting Sands

This week our featured book is Shifting Sands: The United States in the Middle East by Joel S. Migdal. Throughout the week, we will be featuring content about the book and its author on our blog as well as on our Twitter feed and our Facebook page. Today we have an excerpt from the fifth chapter of Shifting Sands, in which Migdal discusses the ramifications of the Yom Kippur War on U.S. policy in the Middle East.

Enter our book giveaway for a chance to win a free copy of Shifting Sands!

Thursday, February 20th, 2014

The Post-Book

Permission

As close readers of our blog might have noticed in our recent New Book Tuesday posts, we are now distributing Dalkey Archive Press. Needless to say, we are very excited to be working with one of the leading publishers of avant-garde fiction and literature in translation. Today, we have a fascinating excerpt from a conversation in BOMB Magazine’s BOMBlog between S. D. Chrostowska, author of Permission, and Kate Zabreno. The two “discuss Permission, the vagaries of readership and publicity, rag-bags, and the transgressive novel as essay, commodity, and monster.” You can read the interview in its entirety here.

The Post-Book
S. D. Chrostowska

… By semi-public I did not mean small presses and poetic novels. I am not arguing for writerly oblivion, for self-mortification for the sake of Literature, unless as a ritual of asceticism. The existence of this literature is, as you point out, largely funded, dependent on grants and academic support. I am not romanticizing this. And I share what I take to be your concern over the increasingly public nature of writing as encouraging automatic over-sharing and self-indulgence. I think the book industry still keeps a tight rein on this, but not for long as literary publishing continues its transition to the digital. The blog and the book each have something to offer us. The blog is great for unlacing, for defining oneself by overstepping limits normally in place or, in the way you conceive it, as a counterattack against self-censorship, against the self-discipline that leads to partial self-erasure. The idea that no one reads us does, as you say, liberate, and publicness constrains. Anonymity is not the answer because we identify with Anon too. Nor is the answer to the problems that come with publicity to be found in the handwritten diary—not, anyway, for the self-aware writer who expects his/her private work to fall into the hands of others. As the standards relax thanks to the fluidity of written communication, professionalism and relative formalization catch up with us in the permissive online environment, which is neither a womb nor a solipsistic mind.

I am trying to highlight that there is no escape from publicity if you are a dedicated writer. Giving it up is not an option. One can resist some of it, discipline oneself spiritually for being overly invested in one’s public self, distracted from core concerns. And one can certainly fight against its pernicious systemic effects. This is what I find so refreshing and valuable in your work.

Isn’t it possible for the tide to turn? For certain writers to become semi-private without feeling they are sacrificing something—ambition, praise, recognition? For writers to go underground, where it is safe to say that with the aid of modern technology their work will be preserved for those who come later when the tide turns again? For writers to embrace ephemerality, not as preparatory for the real work of writing, not as a means of working up to the world of the book, but as valid in itself? For writers—some writers at least, or for some of the time—to self-semi-publish? (more…)

Wednesday, February 19th, 2014

The Olympics, Large Sporting Events, and Recalibrating the Discussion on Human Trafficking (It’s Not Just For Sex, People) — Stephanie Hepburn

The following post is by Stephanie Hepburn, coauthor of Human Trafficking Around the World: Hidden in Plain Sight:

Human Trafficking Around the World, Stephanie HepburnIn preparation for the Winter Olympics this month and the Paralympic Games in March, Russia has spent an estimated (U.S.) $51 billion transforming the coastal town of Sochi and the neighboring Caucasus Mountains. Construction has included an Olympic stadium, a village for athletes, arenas, visitor accommodation, a media center, modern transportation and telecommuting systems, and hotels. These projects required tens of thousands of workers, including 16,000 migrant workers from Armenia, Kyrgyzstan, Serbia, Tajikistan, Uzbekistan, and Ukraine. These low-wage workers often earned (U.S.) $1.80 to $2.60 an hour performing odd jobs or working as carpenters, welders or steel fitters. Some employers didn’t pay full wages or didn’t pay workers at all.

As you may have noticed in your news feed, numerous publications ranging from Salon to the New York Times recently put out articles focused on debunking the human trafficking myth surrounding large sporting events. Experts and journalists concluded that human trafficking does not increase during large sporting events. The arguments were fallible as they were framed exclusively around sex trafficking and failed to include the most prevalent form of human trafficking, forced labor. The Super Bowl was the impetus for the discussion and dialogue ended as soon as the event did, even as the Sochi 2014 Winter Olympics was on the horizon. So far the influx of Sochi news has focused on stray dogs, privacy issues regarding surveillance videos in hotel room showers, gripes about unfinished hotel rooms, and the cost of the Sochi megaprojects, but not the workers who built them.

Grandiosity is the recent trend of sporting events, resulting in pressure on hosts to live up to bigger than big expectations. This means that in a short amount of time governments have to build billions of dollars worth of state of the art structures and accommodations. What experts on human trafficking know is that a sudden demand for construction and low wage labor creates opportunity for unscrupulous employers to come in and exploit and traffic workers. This is a worldwide issue, regardless of whether we are examining post-Katrina New Orleans or Russia’s sudden economic (and resulting construction) boom. (I talk about this in my book Human Trafficking Around the World: Hidden in Plain Sight.)

Since 2009 Human Rights Watch documented exploitation of migrant workers that labored on the Russian Olympic projects. Exploitation included the confiscation of passports and work permits. This is a common trait of human trafficking as it is a successful means to control the movement of workers. (Meaning, they can’t leave if they don’t have their documentation.) Workers also experienced 12-hour workdays seven days a week and unpaid (or excessively delayed paid) wages. Some employers placed migrant workers in overcrowded housing and reported them to authorities if they complained about the abuses, resulting in deportation. It is unclear how many cases rose to the level of human trafficking, but certainly these abuses warrant further investigation and a step up in migrant worker protection on the part of the government. The good news is that the Russian government has acknowledged (U.S.) $8.34 million in unpaid wages among several of the more than 500 companies that participated in the development of the Sochi Olympic site. In response the government stated in January that the identified employers would pay workers all unpaid wages. The issue is that hundreds of the workers have been detained and deported for alleged violations of employment regulations or migration, making it unlikely that they will receive payment. If human trafficking did take place, the deportation of victims (critical witnesses) would pose a serious obstacle to pursuing cases against the traffickers.

(more…)

Wednesday, February 19th, 2014

Tiptoeing Through Minefields

Shifting Sands

This week our featured book is Shifting Sands: The United States in the Middle East by Joel S. Migdal. Throughout the week, we will be featuring content about the book and its author on our blog as well as on our Twitter feed and our Facebook page. In today’s guest post, Joel Migdal discusses John Kerry’s surprisingly active tenure as Secretary of State.

Enter our book giveaway for a chance to win a free copy of Shifting Sands!

Tiptoeing through Minefields
Joel S. Migdal

John Kerry has taken on as activist a foreign policy agenda as any secretary of state in recent memory. In the year or so that he has been in office, he has dived into thickets of crises on every continent and on a wide array of issues. Most recently, he derided climate-change deniers as akin to believers in a flat earth. He made his remarks in Indonesia on the heels of the first U.S. environmental agreement with China, with hints that more agreements with other countries were on the horizon. His assault on climate change—and those who do not take it seriously—came during an Asia tour in which he also directed tough words at North Korea, defending U.S. joint military exercises with South Korea. And, at the same time, he leaned hard on South Korea and Japan to repair their frayed ties.

Nowhere has Kerry been more aggressive than in the turbulent Middle East. He has been out front simultaneously on three sets of talks—to end the brutal war in Syria, move Iran away from the development of nuclear weapons, and solve the seemingly interminable Palestinian-Israeli conflict. Any one of these negotiations would have provided him with a full plate. When he came into office a year ago, no one would have bet that any of these initiatives could succeed and, even now, few would bank on more than one of these actually showing results. But Kerry has not been shy about tilting at windmills.
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Tuesday, February 18th, 2014

The Middle East in the Eye of the Global Storm, by Joel Migdal

Shifting Sands

This week our featured book is Shifting Sands: The United States in the Middle East by Joel S. Migdal. Throughout the week, we will be featuring content about the book and its author on our blog as well as on our Twitter feed and our Facebook page. Today, we have an excerpt from Migdal’s first chapter, “The Middle East in the Eye of the Global Storm.”

Enter our book giveaway for a chance to win a free copy of Shifting Sands!

Tuesday, February 18th, 2014

New Book Tuesday: Eating and Praying in North America, Medieval China, New from Dalkey Archive, and More!

Our weekly list of new titles now available:

Religion, Food, and Eating in North AmericaReligion, Food, and Eating in North America
Edited by Benjamin E. Zeller, Marie W. Dallam, Reid L. Neilson, and Nora L. Rubel

Early Medieval China: A Sourcebook
Edited by Wendy Swartz, Robert Ford Campany, Yang Lu, and Jessey J. C. Choo

Intelligence and U.S. Foreign Policy: Iraq, 9/11, and Misguided Reform (Now available in paper)
Paul Pillar

The Novel After Theory (Now available in paper)
Judith Ryan

Four Cold Chapters on the Possibility of Literature: (Leading Mostly to Borges and Oulipo)
Pablo M. Ruiz

The Literature Express
Lasha Bugadze

Monday, February 17th, 2014

Book Giveaway! Shifting Sands: The United States in the Middle East, by Joel S. Migdal

Shifting Sands

This week our featured book is Shifting Sands: The United States in the Middle East by Joel S. Migdal. Throughout the week, we will be featuring content about the book and its author on our blog as well as on our Twitter feed and our Facebook page.

We are also offering a FREE copy of Shifting Sands. To enter our Book Giveaway, simply fill out the form below with your name and preferred mailing address. We will randomly select one winner on Friday, February 21st at 1:00 pm. Good luck, and spread the word!

Friday, February 14th, 2014

University Press Roundup

Welcome to our weekly roundup of the best posts from the blogs of academic publishers! As always, if you particularly enjoy something or think that we missed an important post, please let us know in the comments.

We’ll kick things off this week with some romantic Valentine’s Day advice, courtesy of Glenn Geher and Gökçe Sancak at the OUPblog: “This Valentines’ Day, display some of the core elements of human mating intelligence.” If you are looking for the science behind romance, this is the post for you. Geher and Sancak claim that “[b]ased on extensive past research on the nature of human mating, it turns out that the sexes are more similar than portrayals of the recent research in this area often suggests. So in thinking about how to woo your partner this year, you may first want to think about what people across the globe want in long-term mates.” Meanwhile, the MIT Press blog offers a more romantic (or Romantic) take on love in celebration of Valentine’s day. They’ve provided an excerpt from Irving Singer’s Philosophy of Love, in which Singer discusses love as “the idea of merging with another person.” He claims that “[n]owadays when people treat Romantic love as the only kind of love, they tend to assume that passionate attachment alone makes life worth living. That is a wholly Romantic idea.”

The Winter Olympics in Sochi are in full swing this week, and a couple of academic blogs have excellent posts looking at different aspects of the Games. First, at the Indiana University Press blog, Stephen M. Norris points out that, while “everyone who watched the London opening ceremony knew that Danny Boyle was behind it, just as NBC highlighted Zhang Yimou’s widely-praised direction in Beijing, no one watching NBC’s coverage learned that Sochi also had a director and that he too was involved with the film industry.” Norris describes the film career of director Konstantin Ernst leading up to his direction of the Opening Ceremonies. While Norris is interested in the Games as an event, the science behind the sports themselves come under the microscope in Mark Denny’s post at the JHU Press Blog. He claims that, “unlike summer sports, the physics of athlete movement in winter sports is actually quite simple…. There are three basic forces that dominate the movement of athletes: the force of gravity acting down; aerodynamic drag, which acts opposite to the direction in which the athlete is heading; and, in many sports, the centrifugal force that acts on athletes, such as bobsledders, who are moving around a curve.”

February is Black History Month, and several presses are continuing series of posts in honor of the occasion. From the Square, the NYU Press blog, kept their Black History Month series this week with a couple of fascinating posts. First, Dorceta E. Taylor argues that industrial pollution and other environmental issues in cities have combined with the displacement of African Americans to create a system in American urban areas where African American communities end up in “the most hazard-prone areas of cities.” Second, Catherine R. Squires believes that we should move past the study of just the “Firsts” of Black History. She claims that by focusing on milestones and ignoring gaps between them, “we fail to see the ways that other individuals, institutions, and social practices worked—often quite deliberately—to crush the spirit of those Firsts, and to make it plain that Black people who wanted to follow in their footsteps would be met with massive resistance.” Stephen Colbert often jokes that he doesn’t see color when looking at people. And at the Stanford University Press Blog, Osagie K. Obasogie examines race and “color-blindness” from a unique angle: how do people who are actually blind think about race and skin color? It turns out that blind people “see” race “[j]ust like everybody else. More often than not, blind respondents talked about race in terms of skin color, facial features, and other visual cues—just like sighted people.”
(more…)

Friday, February 14th, 2014

Happy Valentine’s Day — Roy Brand on Love and Knowledge

LoveKnowledge

Happy Valentine’s Day! In honor of the occasion, we are reposting an essay from Professor Roy Brand, author of LoveKnowledge: The Life of Philosophy from Socrates to Derrida, in which Brand discusses the relationship between love and knowledge.

What is the love that turns into knowledge and how is the knowledge we seek already a form of love?

LoveKnowledge is a book for lovers, but love is taken here in the widest sense, as the love of life and of humanity, the love for culture, for thinking and for art. Romantic love comes up numerous times, be it in Plato’s Symposium or Foucault’s History of Sexuality. And it is indeed carnal and passionate, far from the view that philosophy is all about abstractions and lofty ideas. But romantic love is a fairly new invention. And it is used nowadays for marketing purposes, such as in this Valentine’s Day. The general Greek word for love is philia, which applies indifferently to the feelings one might have to his family, friends, and lovers. Thomas Mann expresses this in beautiful prose in The Magic Mountain:

Isn’t it grand, Isn’t it good, that language has only one word for everything we associate with love- from utter sanctity to the most fleshly lust? The result is perfect clarity in ambiguity, for love cannot be disembodied even in its most sanctified forms, nor is without sanctity even in its most fleshly…Irresolute? But in God’s name, leave the meaning of love unresolved! Unresolved—that is life and humanity, and it would betray a dreary lack of subtlety to worry about it.

To achieve a “perfect clarity in ambiguity” might be the very purpose of philosophy–a practice of love that begins with not knowing and teaches us how to live with uncertainty without being crippled by hesitation.

Friday, February 14th, 2014

Moralism and the Facts — The Pillars of Paul Cabot’s Investment Strategy

Passion for Reality, Michael YoggWe conclude our week-long feature on Passion for Reality: The Extraordinary Life of the Investing Pioneer Paul Cabot, with an excerpt from the epilogue. In these excerpts, Yogg considers some of the core values that shaped Cabot’s investment strategy and what it might mean for today’s investors:

Two modes of thought shaped Paul Cabot’s approach to investments and the conduct of his business: moralism, inherited largely from his fam­ily and the culture of Boston; and empiricism, a demand for the facts, a trait he was probably born with but which was reinforced by his education and his experience in the stock market. He was not unique in this, but Paul also had the self-confidence and the passion to challenge the prevailing business culture and move to change it.

When confronted with wrongdoing, Paul often displayed the mindset of a Massachusetts Puritan of an earlier era, even though his lifestyle was far from puritanical and he was not overly religious. When he discovered price manipulation of trust shares, he gave a speech that sounded in parts like a jeremiad. When the perpetrators tried to have him silenced, he “flamed up. (He) got so goddamn mad.” It was truly righteous anger. Echoing the early Puritans, he believed that if sinners were tolerated, they would—at least figuratively—bring God’s wrath down on the entire com­munity. Referring to the abuses of the British trusts of the nineteenth century, he declared in 1928 that “unless we avoid these and other errors and false principles we shall inevitably go through a similar period of disaster and disgrace. If such a period should come, the well run trusts would suffer with the bad as they did in England forty years ago.”

Most of the specific abuses that Paul objected to—price manipulation, dumping unwanted securities into mutual fund portfolios, unnecessarily complicated and deliberately confusing capital structures—were breaches of fiduciary duty, instances in which a manager put his own interests above those of the client. Takeovers in which a financially-driven conglomerate took over businesses it did not fully understand were another concern. There was a sense in New England and elsewhere, both before and during Paul’s day, that people should stick to their business, do what they do best, and not buy something merely because the acquisition would increase reported profits. He compared the takeovers of the 1960s to various past financial scandals, “all born of greed and lust for power.”

Paul’s lack of greed complemented his moralism. He was known for his frugality and even ridiculed for it. While writing this, I heard for the first time the story of how he raced a neighbor to the back of a Needham supermarket to grab the last loaf of discounted day-old bread. But being frugal and unostentatious meant he had no need for great wealth and was not even tempted to break the rules governing a fiduciary’s conduct. Unlike many financial executives during the 1982–2000 boom and since, he lived in the same world as his clients—wealthier than most but not or­ders of magnitude wealthier. It also meant he was not likely to get caught up in the greed-driven, frenzied last stages of a bull market….

(more…)

Thursday, February 13th, 2014

Paul Cabot’s Jeremiad

In the following passage from Passion for Reality: The Extraordinary Life of the Investing Pioneer Paul Cabot, Michael Yogg examines Paul Cabot’s ideas about reform for the financial industry and the characteristics of a good investment manager. He also looks at some of the parallels between Cabot’s time of the late 1920s and 1930s and our present time:

Passion for Reality: The Extraordinary Life of the Investing Pioneer Paul CabotWhen a country loses its common sense and confidence, as America did in the late 1920s and the 1930s, it takes hundreds of clear-thinking leaders in government and the private sector to establish the rules, formal and informal, through which society rebuilds and functions. [Sidney Weinberg, head of Goldman Sachs] was one of those leaders. Paul was another….

For Paul, clarity, simplicity, and honesty were inextricably linked. He knew that a trust with an excessively complicated capital structure oft en had trustees who did not know what they were doing or had something to hide—in other words, trustees who were something less than able and honest. This is what lay behind Paul’s preference for the Boston-type open-end fund, with its one class of shares leading to all shareholders being treated equally. It is also why this type of fund accounts for almost all mutual funds today.

Among the many parallels between the late 1920s and late 1990s was the formation of exceedingly complicated investment funds whose structures of­fended the common sense of the clearest thinkers of their day. When Long-Term Capital Management (LTCM) sought the aid and the capital of Warren Buffett during its crisis, Buffett’s objection to the fund—according to Roger Lowenstein, biographer of Buffett and chronicler of the LTCM saga—was the overly complicated structure. If it took hours for Paul to figure out how profits were divided by some of the trusts of his day, he would have required months to understand LTCM’s capital structure or Enron’s deals with special-purpose partnerships owned and controlled by its own corpo­rate officers. He would not have been tempted by either of these “opportu­nities,” so popular with “sophisticated” investors at the end of the century.

Both 1929 and 2000 marked peaks in what Galbraith refers to as the “bezzle, an inventory of undiscovered embezzlement,” which is a measure of corruption that is as cyclical as any financial index. In prosperous times, when people are making money, they relax and look less critically at ex­actly how it is being made. Unscrupulous operators take advantage of this by perpetrating various types of fraud and “the bezzle increases rapidly,” according to Galbraith. When the prosperous times end, everything goes into reverse. Investors are more skeptical, even suspicious. Morality im­proves and the “bezzle” shrinks. The stock market boom and the ensuing crash caused a traumatic exaggeration of these normal relationships.

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