Skip to main content

The Ascent of Money by Niall Ferguson

Not up to the standards of Ferguson's very good biography of Kissinger. A highly derivative (heh) history of money that jumps around, covers certain eras in depth, others superficially, and others by parroting what other historians have already done better. 

I'll share two glaring examples of "parroting": 

1) The latter part of the book (particularly the portions discussion the late 1990s tech boom, the failures of Enron and the collapse of Long Term Capital) read more like an airplane bookstore business book, summarizing other, better books (see "When Genius Failed" for example) and standard media stories from that era. 

2) Much of the discussion of market bubbles (France's Mississippi Bubble and John Law scandal, the 1929 bubble and crash, etc) contains no original work or research, just regurgitations of standard bubble history books like Mackay's "Extraordinary Popular Delusions and the Madness of Crowds" and Kindleberger's "Manias, Panics and Crashes." 

It strikes me that Ferguson did some meaningful original research on Dutch and Italian financial innovations as well as on innovations in insurance and actuarial science in Scotland, but he mailed it in on these other aspects of the book. 

Further, the reader gets the impression that Ferguson may understand many of the conventions of modern finance (eg: Black Scholes pricing models, CDOs, RMBS, interest rate swaps, etc.) but he doesn't understand them well enough to explain them in plain language. 

Finally, a thought about the overconfidence of historians when looking at the past vs their predictions about the future. This work contains many sentences like "It is wholly unsurprising" when event Y follows event X. This is the confident language of the historian who isn't "surprised" by what's going to happen next... because it already happened! It's narrative fallacy combined with epistemic overconfidence, both used to make a "postdiction." But when this author makes *pre*dictions (like the hilariously incorrect "bond insurance companies seem destined to disappear") we see that historians--even epistemically confident ones--know no more about the future than the rest of us.

More Posts

Why We Sleep by Matthew Walker

Tedious, weak, and worst of all  "riddled" with errors  and oversights. Do not read. I recommend instead  Dreaming: A Very Short Introduction  by J. Allan Hobson  for information about the REM/dreaming stage of sleep, as well as  Restful Sleep  by Deepak Chopra  for readers interested in practical help for improving sleep quality. Unlike Why We Sleep , both of these books are short, direct, readable and clear. Sadly, I also have to spend a brief few sentences  on Alexey Guzey's devastating criticisms of this book . Alexey's entire post is very much worth reading, but if you want to see just one glaring example of atrocious academic ethics, you can start with a chart Matthew Walker uses in Chapter 6 to prove a linear relationship between sleep loss and sports injury-- except that he cuts off the part of the chart that disproves his argument . This is childish middle school stuff, way beneath the line of a Berkeley and Harvard professor, a...
Read more

The Dhandho Investor by Mohnish Pabrai

Worth reading, and rereading, and re-rereading. An elegant book that teaches fundamental principles of value investing, and much more. The Dhandho Investor  also has the highly unusual quality of being useful at a wide range of reader sophistication levels: you can gain tremendously from this book as a beginner or as a deeply experienced investor. I'll single out Chapters 5 and 6 for particular mention: Chapter 5 describes author Mohnish Pabrai's investing framework, with nine interlocking and synchronistic rules. Chapter 6 describes in very simple language all of the gigantic structural advantages of investing in the stock market, as it offers low frictional costs, a tremendous selection of possible businesses, and, most importantly, periodic incredible opportunities. These two chapters explain why you will take a pass on almost all investments--but then, once in a while, make large bets on specific situations that meet your requirements. [A quick  affiliate link to Amazon ...
Read more

By All Means Available: Memoirs of a Life in Intelligence, Special Operations, and Strategy by Michael G. Vickers

The least deceptive way to read this endless, muddled and minutia-laden memoir would be to view it as a very long piece of propaganda: a type of limited hangout of all of the covert (and overt) things the United States does globally in its attempts to project power. It can also be read as an attempt at an extended--and I mean extended --defense of the CIA and all of its meddlings all over the world. This is if you actually read the book. Don't. Piled up with words but saying little of substance, this is the most obfuscatory memoir I've ever read. The author's voice fundamentally irritates: he has a compulsive need to share staggering amounts of unnecessary detail, he comes across as a relentless credit hog, and he repeatedly attempts to place himself right in the middle of the action--even when it's clear he wasn't. Perhaps least ethical of all, he has a habit of framing his actions and decisions so they appear more correct and predictive in retrospect than they ac...
Read more