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InvestmentBook Reviews
» SteveT - Confessions of a Wall Street Analyst Avoiding the Next Analystgate A Wall Street veteran's prescription for industry reform -- and diatribe against an old rival Edited by JAY PALMER Reviewed by Martin Fridson IN AUGUST 2001, global crossing founder Gary Winnick telephoned Credit Suisse First Boston stock analyst Dan Reingold to allay his concerns about the company's failure to meet its quarterly-earnings projections. Reingold had trouble hearing Winnick, who was famous for achieving billionaire status faster than anyone else in history. The problem was construction noise from a $30 million renovation of Winnick's Beverly Hills estate, for which the former Drexel Burnham bond salesman had shelled out what was then the largest price ever paid for a private home, $60 million. The call, and the home, were fitting symbols of those noisy times: Although Global Crossing had yet to turn a profit, its market value briefly exceeded General Motors'. Despite frequently absurd market conditions, and a general collapse of ethical standards, Reingold kept his bearings during a 14-year career as a telecom analyst at three leading Wall Street firms. Particularly astute was his rejection of an employment contract that would have tied his compensation to investment-banking revenues. Avoiding the inherent conflict of interest in such an arrangement kept Reingold clear of the regulatory troubles that destroyed the reputations of certain other prominent analysts. The most discredited stockpicker of all, as Reingold tirelessly reminds readers, is his one-time archrival, Jack Grubman of Salomon Smith Barney. Grubman appears on 40% of the book's pages, boasting, bullying and suffering the humiliation of learning in front of his peers that Reingold has ousted him as the No. 1 telecom analyst in Institutional Investor's survey. This book, subtitled A True Story of Inside Information and Corruption in the Stock Market, rehashes the more-than-twice-told tale of Grubman's revision of a research opinion to secure his children's admission to an elite nursery school. Reingold reproduces excerpts of Grubman's lewd e-mails from a female client, material covered at length in last year's Blood on the Street by Charles Gasparino. But readers who patiently wade through Reingold's anti-Grubman diatribes are rewarded with thoughtful proposals for reform of securities regulation. For example, Reingold argues that analysts should be barred from participating in "beauty contests" (competitions in which companies choose underwriters), but not from "road shows" (serial presentations in which managements pitch their stock to major investors). This kind of discussion benefits from Reingold's extensive, first-hand experience with investment bankers, speculators, and corporate chieftains who will go to any lengths to maximize their share prices. Reingold may have better insight than almost any elected official about which recent reforms are likely to prove ineffective or counterproductive, and which additional measures might actually make the market fairer. Especially valuable is his description of the profoundly negative impact on Wall Street ethics of a Securities and Exchange Commission "No-Action Letter" in 1997. This letter, though vague, essentially permitted publication of research opinions while an investment bank is engaged in a merger transaction. Whether or not one agrees in total with Reingold's prescriptions, Confessions of a Wall Street Analyst demonstrates -- sometimes unintentionally -- that there is considerable room for improvement in research practices. Toward the end of his narrative, Reingold recounts how he "lowered the boom" on WorldCom by downgrading the stock from Hold to Sell. By that time, the shares had already plummeted more than 85% from their peak. The WorldCom downgrade resulted in only the second Sell recommendation of Reingold's career, notwithstanding the statistical truism that 50% of all stocks underperform the median. Reingold defends his parsimonious use of the Sell designation on the grounds that he tried to avoid following unworthy stocks. With the assistance of his niece, an accomplished business journalist, Reingold keeps the story moving. The two collaborators also provide entertainment value by quoting garbled statements of financial luminaries, gleefully inserting "sic" in the appropriate spots. Five years after the events is too late to produce an exposé and too early to place the Tech Wreck in useful historical perspective. Dan Reingold has, however, written a book that fills some gaps for aficionados of financial-market lore. MARTIN FRIDSON is chief executive of FridsonVision, an independent research business, focusing on high-yield and distressed debt. -- posted by SteveT » SteveT - The Coming Economic Collapse Reviewed by Susan Witty $200 Oil? HE'S BAAACK. Stephen Leeb, derisively dubbed "the $100 oil guy," for the price prediction in his 2004 book The Oil Factor, ups both his petro-price forecast and the urgency of his message about a swiftly oncoming oil shortfall in his new work, The Coming Economic Collapse. While just a few years ago he was somewhat of a lone voice crying in the wilderness, Leeb -- who edits the Complete Investor newsletter and holds degrees in economics, mathematics and psychology -- no longer can be depicted as a total Cassandra: As escalating oil prices and their consequences are becoming less dismissible, the relevance of his viewpoint, and of this his latest book, becomes inescapable. We don't know whether President Bush, a.k.a. the oil-industry president, speed-read an advance copy of The Current Economic Collapse before encouraging development of alternative-energy sources in his State of the Union address. But Leeb's warnings certainly are timely in view of recent political events -- the disruption of oil-production in Nigeria; the ongoing insurgent attacks on Iraq's oil infrastructure; the U.S. standoff with Iran, home to 10% of the world's proven oil reserves; its deteriorating relations with Venezuela, currently its fourth-largest oil supplier; its increasingly ambivalent relations with Saudi Arabia, responsible for 15% of its crude, and competition with ever-growing China and India for depleting commodities. America's prosperous lifestyle, Leeb and co-author Glen Strathy note, has depended on maintaining access to an unlimited supply of inexpensive oil. But, they claim, America has "burned through more than half of foreign oil reserves," and "for the past 35 years" has witnessed a decline in domestic production. Worse yet, despite every evidence that "the earth's crust contains only so much oil that can be extracted for a reasonable cost," Wall Street and the media are mired in myopia and our leaders, "basking in over-confidence," continue to mislead the public. The common wisdom that upswings in oil prices will remain mild and are temporary is simply sleepy dust, the authors maintain. As a result of this misguided "groupthink," there is no plan in place to deal with a shortfall in oil production and very little chance of avoiding it. It is "entirely probable," the authors say, that oil will hit $200 per barrel by the decade's end. And the economic fallout, they state, will be devastating. The worst-case scenario: stagnant economic growth with sky-high inflation. The best scenario, for which Leeb hopes, is that The Coming Economic Collapse will jolt people out of Lotus Land into calling for the solution he advocates: an all-out national effort, comparable to the one the U.S. marshaled for producing armaments in WWII, to speed the development of alternative-energy sources. It's a welcome relief when the book switches from the scary stuff to Leeb's advice for the individual investor on how to make money when energy costs and inflation soar. Have the guts to separate from the herd, he says. Rule out cash and all but a few stocks and bonds; go for gold, oil and oil-service shares, the right real-estate investment trusts, and get into the next hot investment sector, alternative energy, with an emphasis on wind. Supported by fortifying factoids, these prescriptions and others Leeb puts forward are not simply hot air, but well worth considering. In the final chapter, the authors, cautioning us that over the course of the next 10 years, investors will either become much poorer or much wealthier, assert: "We want you to get on the right side of the trends, to become wealthy, not just for wealth's sake, but for the survival of yourself and your family." If you are of like mind and consider that goal admirable, this book -- which includes a model port-folio -- is for you. If you aren't of like mind, it nonetheless will challenge your assumptions. SUSAN WITTY is a copy editor at Barron's. URL for this article: -- posted by SteveT » SteveT - Ahead of the Curve Reviewed by Michael P. Niemira Buying Power JOSEPH ELLIS KNOWS the consumer, and believes that as consumption goes, so goes the economy -- and, ultimately, the stock market. Herein lies the premise of his new book. Subtitled A Commonsense Guide to Forecasting Business and Market Cycles, it is shaped around the chart-based analysis he developed during 25 years on Wall Street with Goldman Sachs, 18 of which saw him ranked as the top retail-industry equity analyst by Institutional Investor magazine. The book is written, Ellis says, for almost everyone who might be "lost in the morass of anecdotal and often conflicting economic reports." He offers a framework and methodology for navigating such reports that he believes is "novel" and, above all, practical. Ellis' approach is far from new, but it is indeed practical, inasmuch as it provides a framework on which to base analysis. There are two pillars holding up Ellis' approach: One, the consumer is the primary driver of the economy and the stock market. Two, the "growth-rate cycle," using year-over-year percentage change, is the key to understanding the relationship between consumer spending and the ebb and flow of business and market cycles. In essence, the book is a "How-To" look at the economy and retail companies' sales. He's all about "finding" relationships in the data, and betting, based on some conceptual link, that the timing and directional forecasts from leading indicators hold as they always have. Ellis does not provide specific forecasts, at least not beyond his almost throw-away warning midbook stating that his readings of real hourly earnings, his favorite indicator, indicate the strong possibility of a potentially steep decline in consumer spending in 2006 or 2007. Make of that what you will! The book provides a refreshing non-technical introduction to a long-established line of research on the "growth cycle" that began in academic circles in the 1960s and made its way to Wall Street by the 1970s. However, in failing to draw upon that rich body of work, Ellis' analytical framework falls somewhat short, and ends up being overly simplistic. Moreover, he leaves some crucial issues unaddressed. Have cyclical-timing relationships changed, even if the business-cycle dynamic has not? If his cyclical indicators decline today, when should an investor or business professional expect that decline in the target series? For the data to be of any practical use, forecasters and investors need to know the likely direction and timing. Ellis says "inflation is, without question, the most important of all economic indicators." Yet, his discussion of the "core role of inflation" is too brief -- only two paragraphs. Curiously, he also claims that the "third major engine of consumer demand" is the "often significant impact" of consumer borrowing -- yet, that discussion is relegated to an appendix. Still, Ellis' work is a readable reminder of the importance of staying ahead of the curve. MICHAEL P. NIEMIRA is chief economist and director of research of the International Council of Shopping Centers. E-mail comments to editors@barrons.com -- posted by SteveT » SteveT - The Little Book's Little Flaw By BILL ALPERT THE LITTLE BOOK THAT BEATS THE MARKET has become a bestseller since it appeared in November. In it, hedge-fund manager Joel Greenblatt describes a "magic formula" for picking stocks and shows how the formula identified winners when tested on an historical database. The awesome test results helped The Little Book win rave reviews. Stocks selected by Greenblatt's magic formula from 1988 to 2004 would have beaten the market by nearly 20 percentage points annually, he says, with yearly returns averaging almost 31%, versus 12% for the overall market. "It can't be this easy!" he writes. "The results are just too good!" But should you expect to nearly triple the market's performance, working just minutes every few months, if you apply his formula over the long haul? Greenblatt's strategy does make sense and probably would beat the market by some margin. But don't count on 30%-plus: Investment formulas that look great in a historical "back test" often prove less powerful in the real world. Trading commissions and other irksome frictions hurt performance, of course, but there are more fundamental limits to the predictive power of the kind of study The Little Book crows about. Simply put, the magic formula's jumbo returns were probably limited to the data Greenblatt used in his test. To get a rough sense of how data-specific the magic formula might be, Barron's arranged to test it on a different financial database. From the beginning of 1997 through 2002, The Little Book reports 16% average returns on large-capitalization portfolios chosen from a Compustat database. But on data from Bloomberg, Barron's found, the strategy averaged 10% annual returns in that span. Readers should probably moderate their expectations, therefore, if they plan to use the magic formula on freely available databases -- like that offered at www.smartmoney.com1, the Website of Smart Money (the monthly magazine published by Hearst and Dow Jones, Barron's parent). Don't get us wrong. Greenblatt's book is a great introduction to stock-picking. "What you're doing here, big picture, makes sense," he told Barron's in an interview. "You're buying good companies, on average, at cheap prices, on average." Greenblatt presents a fairly clear screening formula, suited for people who lack the resources to do the deep company research done by investment firms like his Gotham Capital. The Manhattan hedge fund apparently has averaged over 40% annual returns since the 1980s. Greenblatt also took the trouble to back-test his formula on a state-of-the-art financial database maintained by Compustat, a unit of McGraw Hill's Standard & Poor's subsidiary. But his book brags so much about his back-testing's stellar results that he raises false expectations of future performance -- which he qualifies only on page 124 (where he warns that U.S. equity returns may decline). And he boasts about the power of his tests (on pages 70 and 92), with arguments that finance experts dismiss as statistical balderdash. What is this magic formula? Essentially, Greenblatt ranks stocks on two factors, weighted equally. First, he considers return on capital -- defined as the trailing 12 months' earnings before interest and taxes, divided by net tangible assets. Second, he looks at earnings yield -- earnings before interest and taxes, divided by stock-market value plus net debt. Real-world experience on Wall Street, as well as finance research, have shown that both factors have predictive power. The resulting strategy is somewhere between value investing and the growth-at-a-reasonable-price (GARP) approach. "This really is keying in on value stocks," said Marcus C. Bogue III, whose Dedham, Mass., consulting firm, Charter Oak Investment Systems, created the Compustat database that Greenblatt used. "Over the long run, value wins." Robert Haugen, another well-known finance researcher, and former professor of finance at the University of California, Irvine, lauds Greenblatt for popularizing a GARP approach -- buying profitable companies when their stocks are inexpensive. "The GARP phenomenon is out there," Haugen told Barron's, "and it's very powerful." Typical of the companies Greenblatt favors are those that sell software, services or brand-name products. These businesses can earn high profits with few tangible assets. Back tests like Greenblatt's are valuable -- far better than the vague assertions that characterize many investment books. But he downplays the difficulty of knowing whether his formula tested well because it's exploiting some persistent feature of the economy or because it randomly fit the particular numbers in a database. Spurious back tests are a hazard now that computers allow finance researchers to try formula after formula, until they get one that performs well on the data. If such a formula subsequently bombs out in the real world, it's said to have fallen prey to a problem known as overfitting, data mining or data snooping. There's no indication that Greenblatt deliberately engaged in data mining. Nevertheless, it's instructive to check a strategy on more than one collection of data -- that is, to see how it works "out-of-sample." IT WOULD BE HARD FOR MOST readers to replicate Greenblatt's work, because he used the very good -- and very expensive -- Compustat Point-in-Time data. Point-in-time data correct flaws that might otherwise produce false positives in a back test. First, it restores companies stripped out of the database because of insolvency or a merger. This avoids the "survivorship" problem, whereby a study fails to account for companies that have dropped out of the database. Next, a point-in-time database carefully unwinds financial restatements, to ensure that historical stock prices line up with the information that investors actually had at the time. Before the advent of point-in-time data, financial databases suffered from "look-ahead" errors: A stock price for Jan. 5, 1995, for example, might be matched with company earnings for the period ended December 1994, when, in reality, an investor picking stocks on Jan. 5 wouldn't have had access to results beyond the September quarter's. This Compustat product is the brainchild of Marcus Bogue, former Carnegie Mellon professor, now chairman of Charter Oak. Look-ahead bias in a database, says Bogue, makes a stock-picking strategy appear more profitable than it would have been by enabling a researcher to use information that wouldn't have been available in the real world. Because Compustat's database is out of most investors' price range -- it can cost over $100,000 a year -- Greenblatt generously created (with Compustat's help) www.magicformulainvesting.com2, a free Website where a reader can get the names of the latest stocks that the formula is picking from the Compustat data To try to replicate Greenblatt's study, Barron's worked with ClariFI, a Boca Raton, Fla., firm that is a Compustat partner and sells financial-modeling software that quantitative investors use to test strategies on data like Compustat's. ClariFI CEO Brad Winney says that a couple of clients had asked his firm to reproduce The Little Book's formula in a form they could tinker with and customize. Bottling the formula isn't easy. Greenblatt's book gives some details on how he defined his screening factors and how he formed portfolios, but it stops short of offering a complete recipe. When he calculates return on capital, for example, Greenblatt counts only cash in excess of what's needed to run the business. ClariFI analyst David S. Whitaker says that the way Greenblatt determines what is "excess" remains a mystery. It must be noted, however, that it's not unusual for a finance researcher to keep a few cards face down. After all, investing is a zero-sum competition. Even without Greenblatt's proprietary fine-tuning, the ClariFI quants came pretty close to replicating The Little Book's results on the point-in-time data. Applying their mock magic formula to the largest 3,500 U.S. stocks in the Compustat database, ClariFI's stock picks averaged returns of 28% in the span covered by the book -- compared with the 30.8% reported by Greenblatt. Both sets of selections easily surpassed the annualized returns of the 3,500-stock universe, which averaged only about 13%. ClariFI also replicated another of Greenblatt's tests, choosing from among the biggest 1,000 stocks. On these names, ClariFI's Little Book-like formula averaged 17.5% annualized returns -- versus the 22.9% reported by Greenblatt. So Greenblatt wasn't telling fairy tales about his Compustat results. But what an investor really wants to know is how the magic formula would perform in the world outside the database. No database test can answer that conclusively, but out-of-sample testing can give clues. To test the magic formula out-of-sample, we contacted researcher Robert Haugen. In 1996, Haugen and a colleague published a groundbreaking study that showed stock performance could be predicted with the help of fundamental factors like those that Greenblatt later used in The Little Book. In the past decade, most finance researchers have conceded that studies like Haugen's (and Greenblatt's) show that there are predictable aspects to stock performance...even if most investors fail to beat the market. Only a dwindling number of academics still cling to the belief that markets are too "efficient" to allow profitable stock-picking. Haugen runs an advisory service in Durango, Colo., called Haugen Custom Financial Systems, where he supplies his updated models to institutional investors who collectively manage more than $70 billion (you can see his Website at www.quantitativeinvestment.com4). Instead of using Compustat, Haugen has a point-in-time database that has gotten its raw data from Bloomberg. It wasn't hard to interest Haugen in testing Greenblatt's strategy. The Little Book praises Haugen's influential 1996 paper, which showed that a system of 70-odd factors could profitably select stocks. But The Little Book goes on to say that Greenblatt's simple two-factor magic formula had beaten Haugen's fancy model. Comparing portfolios of the top-ranking 10% of stocks picked by each model and held for a year, Greenblatt says his magic formula's portfolios averaged 18% annual gains from 1994 to 2004, compared with the Haugen model's 12.6% gains. "He's got a short-term trading model that works very well," Greenblatt said of Haugen, in an interview, "and I have a long-term investing model that works incredibly well when held over a long period of time." Using the rather cumbersome portfolio strategy described in The Little Book, Haugen tested the magic formula on the largest 1,000 U.S. stocks for the six years from 1996 to 2002. Over this period, The Little Book had reported average returns of 16.4%. On Haugen's data, however, the magic formula returned just 10% annually. That still beat the S&P 500's average of a bit more than 4% for the same stretch. But Haugen's model would have returned 17%. Of Greenblatt, Haugen said: "His formula is not very magical." To test how good Greenblatt's two factors are, Haugen tested some other two-factor models similarly designed to find profitable companies selling cheaply. In the 10 years through 2005, several other pairs would have bested the magic formula on Haugen's data set. A combination of earnings yield and profit margin would've averaged 19% annually, for example, while Haugen's 65-factor model would have averaged 24.5%. To see how, go to www.quantitativeinvestment.com. Haugen says he was not surprised to see his multifactor model outperform Greenblatt's two-factor formula (all on the Bloomberg data, of course). He's tested his own model on 50 years of U.S. stock-market data, as well as data from Europe and Japan. Like many long-running quant models, Haugen's takes into account fundamentals, but also considers such elements as stock-price momentum and analysts' earnings estimates. It varies the weight given to each factor, as the market changes, so that in some markets the model looks for value stocks, while in others, it seeks growth. A new feature at Haugen's Website lets anyone enter the names of the stocks in their portfolio and then see if Haugen's model predicts that the portfolio will outperform the S&P 500. The sport of magic-formula testing has become quite popular in the investment community. A Little Book replication report appeared March 9 from James Montier and Sebastian Lancetti, two London-based analysts for Dresdner Kleinwort Wasserstein Securities. The pair tried Greenblatt's factors on data from the U.K., Europe and Japan, as well as the U.S. Like Haugen, they find that the magic formula beats the market -- but not by as much as reported in The Little Book. In data covering 1993 to 2005, they found average gains of 17% in U.S. stocks, 22% in European stocks and 18% in Japanese stocks. Why is there such variance among the back tests? For one thing, there are differences among the U.S., European and Japanese economies. And there are also differences among databases -- including those from Compustat and Bloomberg -- that ostensibly document the same economy. Each uses different accounting adjustments: Compustat standardizes results more than does Bloomberg, which tends to enter numbers "as reported." The vendors also include different populations of stocks, with Compustat best documenting industrial corporations and Bloomberg better covering financial companies. Compustat data are widely used; Haugen's Bloomberg database is only used at his company. And even though those databases look large, there's actually a scarcity of historical data in relation to the complexity of the patterns that financial researchers like Greenblatt are trying to test. Physical scientists can repeat an experiment over and over, to generate data on hundreds of independent trials. Our financial history happened only once. Charter Oak's Bogue notes that The Little Book exaggerates the number of independent tests run on the magic formula -- by counting overlapping periods as distinct trials (see pages 70 and 92 of the book). In fact, statisticians consider each of Greenblatt's multi-year studies to be just one portfolio test. So investment researchers can't gloss over the uncertainty in their sparse data. "We don't get the luxury of going back and having four or five or 50 or 100 chances to run the experiment," said Bogue. "Did the magic formula work in the 'Fifties and 'Sixties? We don't know," he said. "Will it work from 2006 to 2016? We don't know." That's why only time will tell whether Greenblatt has found an eternal truth, or whether recent times have been unusually hospitable for the sort of asset-light service stocks that the magic formula favors. Extend your Barron's subscription another 10 years, and we promise to let you know. The Bottom Line
Hyperlinks in this Article: -- posted by SteveT » Normxxx - The Little Book's Little Flaw In response to The Little Book's Little Flaw posted by SteveT:How about combined with Sy Harding's SST? -- posted by Normxxx » Normxxx - A Mother and Son Confront <img align="left" src="http://images.amazon.com/images/P/0813925134.01._PIdp-schmooS,TopRight,7,-26_SCMZZZZZZZ_.jpg" border="0"> What Time And Sadness Spared: Mother And Son Confront the Holocaust by Roma Nutkiewicz Ben-atar, Doron S. Ben-Atar A Mother and Son Confront the Holocaust— Part I: A Mother's Memory By Roma Ben-Atar | Wednesday, March 22, 2006 There have been many books on the Holocaust, but few as enlightening as "What Time and Sadness Spared." In this new book, Roma Ben-Atar and her son, Doron, provide a multi-generational perspective on the Holocaust and its effects on their lives. In the first of our two part series, Ms. Ben-Atar confronts her memories. Sixty-six years ago, I was caught in the avalanche of hatred cruelty and death that swept Europe. I moved on and, since 1945, built a life and family and took a most modest part in the creation of a Jewish state. And very late in life, urged on by my daughter and son, I wrote "What Time and Sadness Spared: Mother and Son Confront the Holocaust" (University of Virginia Press, 2006). No language to call her own Writing is hard for someone who does not have a language to call her own. Thoughts freely and rapidly race in my head in a mixture of sounds, uncontrollably switching from one tongue to another, each having a moment of dominance only to be replaced by another. Polish is no longer my mother tongue— I rarely speak it. Hebrew will never assume that position. The other languages that I learned through the years— English, German, Yiddish— retain their acquired-tongue status. Breaking through the silence After all those years of silence, I felt the need to write, though I wondered, could I tell anything new? Is there a special meaning to my narrative? The dry facts of the Nazi project, after all, are more or less known. What is the meaning of telling another story of pain and suffering? Has the well of Holocaust memories run dry? And even if my own story deserves a hearing, could I actually tell it? Could I tear off the layers of insulation that I wrapped around myself for all these years? A common, yet different experience The variety of Holocaust experiences is equal to the number of survivors. A terrible common reality engulfed all of us. And yet, when I speak to other survivors, I sometimes have the distinct impression that each of us, despite having been in the same “there,” had been in a different place. We experienced the horrors as differently as we reacted to the events at the end of the war: to the sudden freedom, to the liberation we dreamed of, and to the return home to find nothing— and, most horribly, nearly no one. Time is running out Some turned to writing. The number of survivors’ accounts— a strange literary genre whose audience is the future rather than the current reading public— had thus far discouraged me from telling my story. I feel that I am running out of time and oxygen, and that if I don’t open up now, my story will die with me and so will the people that inhabit it. As if they never existed. I no longer need to plan for a future. More and more, I see my past in front of me. Important to remember The memories come and force themselves on me with a power and frequency that overwhelm my resistance. I allow them to come— and do not push them away. In contrast to my inclination in the years following my liberation— which was not to dwell on what I had been through— I now fear I will forget the little I can recall. Suddenly, it is important to remember. Recalling the past The dread of pain has left me. It has been more than six decades and I am now troubled less by the pain of remembering than by the realization that I can no longer recall the faces of those I lost. I need to think of specific circumstances as to create the context that would allow me to remember their faces. I resort to the same methods to bring to mind their voices: my mother’s beautiful alto as she sang me Mozart’s lullaby, “The Little Prince is Already Asleep”. My brother’s slightly hoarse speech. My father’s recitation of German, Polish and Latin poetry (his friends joked that he was the only living person who could actually speak Latin). My grandfather’s singing of traditional Jewish songs at the conclusion of Saturdays’ lunches. Difficulty remembering I clearly remember the house and the furniture. Why is it that I can easily envision in my mind meaningless places and possessions and have great difficulties recalling the faces of those that were so dear? I am frustrated by my need to locate them in a specific situation— just so that I could imagine their faces. No one can relate At Auschwitz, during the long lonely nights and in the few days of rest, I had no difficulty recalling their images. I dined with them. I talked to them. These were the only rays of light in that chamber of fire and torture. I wonder how it feels to be 17 or 20— and not realize that you are alone. That every move or decision you make is yours only. That you cannot lean on the experience, wisdom and love of a mother, father or brother. No one to turn to I was married for 47 years to a man who immigrated to Israel from Turkey and could not relate to my past. For a short time, I had a grandmother. My mother’s mother had moved to Palestine in the 1930s and had been spared. I could not, however, confide in her. She had lost siblings, children and grandchildren. I did not want to cause her any additional unnecessary suffering. I was alone. A most significant part of who I was I could not share with someone who did not come from there. Mourning means finality I never really allowed myself to mourn them. Mourning would mean finally accepting their death— something I fought against. Putting words on paper made them real, while at the same time, in an odd way, allowing me to let them go. I naïvely thought that I could put it behind and spare them the horrors and suffering— allow them to grow and develop free of my tragedy. I failed. Leaving a dark cloud behind It turned out in the end that we have all been hiding things from each other. Both my children have in their own way been preoccupied with the Holocaust. My daughter chose to study the subject in college and my son not only collaborated with me on the book, but I recently learned, has written a play which takes place, of all the locations, in the Birkenau latrine. Am I leaving a threatening dark cloud on those most dear to me? Part II: A Son's Perspective By Doron Ben-Atar | Thursday, March 23, 2006 In this second part of our feature on "What Time and Sadness Spared," Doron Ben-Atar provides the son's perspective of what it takes to create a multi-generational Holocaust autobiography. As a professional historian, he finds a need to balance documented historical evidence against the limits and twists of human memory. On some basic level, "What Time and Sadness Spared" is a testimony of the sufferings and tortures Nazi Germany inflicted on European Jewry that is part of the grand project of inscribing into the pages of history the memory of those that perished. [ Normxxx Here: And, in a larger sense, all those who have perished in the various pogroms of history— of whatever persecuted minority. ] No memoir can claim to be merely a transparent record of the past, and survivors’ recollections are no exception. To be sure, there is the danger that admitting the uncertainties, ambiguities and treasons of memories in such an account could aid the deniers, whose ranks are only growing with the years. These hate mongers, however, must not be allowed to shape the debate. Our narrative is not a trial-like testimony. It cannot be. The beginning of a memoir Five and a half decades after the end of World War II, in the midst of the deadliest season of suicide bombings in Israel, my recently widowed mother sat by her computer and wrote an associative journal of her World War II experience. Her journal is the genesis and core of our book. I translated the manuscript into English. I probed into events and situations, asked questions and invoked episodes I remembered hearing about as a child. Verifying the facts I set her story in chronological sequence. I checked to make sure that details corresponded with documented historical evidence, knowing that minor errors could undermine the historical standing of the entire narrative. My mother, for example, wrote that she was sent to work in Commando Canada by SS officer Heinz Schulz, commander of the crematorium in Auschwitz. I had a hard time finding a record of Schulz’s presence in Auschwitz in the fall of 1943 and, in an earlier draft, I identified the selector as merely a German officer. I reinserted Schulz’s name only after I found the record during my 2004 visit to the Auschwitz archive of SS officers confirming that Heinz Schulz was indeed the crematorium Kommandoführer. The limits of human memory I could not ignore the tension between the obligation to remember what happened on the one hand, and my recognition of the limits and twists of human memory. We tried to be sensitive to these issues. In direct description of events I chose to remain faithful to my mother’s recollection of thoughts, feelings and actions of her younger, less-educated self who was unaware of the broader historical forces shaping her surroundings. Different layers of narration Since we could not be sure what people said to my mother exactly in the variety of tongues used in Eastern Europe during the war, we have opted to report conversations using, for the most part, indirect speech. Only the sentences that burned their way onto her mind were put in quotation marks. Further, we produced a narrative of things that happened to a young girl, told by an older woman, and put together by her son— a man who did not have a direct experience of the events, but who is trained as a historian and has a passion for psychoanalysis. The text is thus layered with different levels of narration. There are the memories themselves. There are my mother’s recollections of what she thought as she went through the events. There are the reflections of a mature woman about what she went through and how she coped. Cultural influences There are the influences of culture, from Primo Levi to Hollywood, from Yad Vashem to Adolf Eichmann’s trial. And finally, there is the guiding hand of the historian who imposed sequence and chronology and has shaped an associative journal into a historical narrative. Acknowledging these complexities, however, does not compromise the historical reliability of our account. One of the most alarming trends of current scholarship of the final solution is its condescending attitude toward survivors’ memoirs. [ Normxxx Here: Today's Islamicists think that any nonreligious depiction of Muhamed is desecration; but laugh hilariously at Holocaust 'jokes.' ] Because people have different recollections of similar experience, so the logic goes, these memories tell us little of what actually happened. Truth associated with power Instead of applying equally critical stance in relation to all texts, established historians attach greater truth value to the official documents of genocidal murderers than to the recalled experiences of their victims. The Nazi officials who authored official documents were just as unreliable as those who survived the hell they had made. Current historiography rests on prejudices that assume that those with power are more objective judges of reality than their victims. This perspective is all but extinct in other historical subfields. Different response to slavery Few would dare to write the history of slavery relying exclusively on accounts written by slave-owners, while dismissing the voices of the slaves— or to tell the history of colonialism exclusively from the perspective of London and Paris. But a historicist reasoning which privileges the voice of the Nazis over that of their victims has assumed the dominant position in modern scholarship of the Holocaust. [ Normxxx Here: As the New York Times insisted throughout WW II that rumors of the death camps were just disinformation and 'Jewish propaganda.' ] An act of witness I wholly reject this new trend. Our work is an act of witness. The events we recount did really happen. The persons we recall walked the face of the earth, breathed its air and were tortured and murdered in the most ambitious anti-Semitic project in human memory. I do not deny that human memory is suspect. As a professional historian, I often thought of producing a footnoted scholarly history of my mother’s journey. Yet, I felt deeply ambivalent about assuming the role of narrator to her story. The power in a personal connection A few years ago, students in a class on American history turned the conversation to the Holocaust and asked specific questions. They seemed hypnotized by the discussion. I realized that even though I told nothing personal, there was a commanding, almost demonic, power to the words that emanated from my intimate personal connection to the subject. Violating the survivor’s memories? I was intoxicated and guilt-ridden at the same time. When the class ended I felt as if I was swimming in a swamp of sweat and humiliation. I worried whether I violated the authenticity of the survivors’ torturous memories. Did I reap the psychological benefits that befall narrators of Holocaust horrors? Who authorized me to be the voice of the victims? But the generation of survivors is passing from the world— and with them the living memory of that most awful chapter in human history. Do survivor’s children have a role? Do their children have a special role in keeping the horrors of the final solution present in our modern culture? Should we deposit the holocaust in the vaults of Jewish and German historians? Has the time come for recognizing the final solution as just one bloody chapter among many similar ones in the chronicles of Jewish existence amongst Christian and Muslim hosts? Re-emergence of anti-Semitism We are, after all, living through a most worrisome re-emergence of anti-Semitism. Jew baiting runs strong from the streets of Cairo and Jakarta to the ivory towers of the west— from the lips of the President of Iran to the Mayor of London. Has the writing of the next chapter of Jewish death and destruction begun? Does the fact that the horrors of the final solution left a powerful imprint on the lives of survivors’ children in numerous ways command us to be the living memory of the Holocaust? A responsibility to the past I fear that we are not up to the task. The children of survivors can never yell or call out. Our voices are a whimper. Our sadness is never poignant enough. Our misery is in no way worthy of consideration— and our nightmares are always a cheap imitation. We cannot become the authentic voice of our parents. And yet, my experience and my gut tell me that we cannot let go of the raw connection to that well of pain, for our sake— and, dare I say, for the sake of humanity. -- posted by Normxxx » Normxxx - The End of Faith
"The End of Faith: Religion, Terror, and the Future of Reason (Paperback)" About the Author Editorial Reviews (edited) Amazon.com Interestingly, Harris is not just focused on debunking religious faith, though he makes his compelling arguments with verve and intellectual clarity. The End of Faith is also a bit of a philosophical Swiss Army knife. Once he has presented his arguments on why, in an age of Weapons of Mass Destruction, belief is now a hazard of great proportions [no great mystery if we have religions that make death and/or martyrdom seem far more appealing than life; Ed: normxxx], he focuses on proposing alternate approaches to the mysteries of life. Harris recognizes the truth of the human condition, that we fear death, and we often crave "something more" we cannot easily define, and which is not met by accumulating more material possessions. But by attempting to provide the cure for the ills it defines, the book bites off a bit more than it can comfortably chew in its modest page count (however the rich Bibliography provides more than enough background for an intrigued reader to follow up for months on any particular strand of the author's musings.) Harris' heart is not as much in the latter chapters, though, but in presenting his main premise. Simply stated, any belief system that speaks with assurance about the hereafter has the potential to place far less value on the here and now. And thus the corollary- when death is simply a door translating us from one existence to another, it loses its sting and finality. Harris pointedly asks us to consider that those who do not fear death for themselves, and who also revere ancient scriptures instructing them to mete it out generously to others, may soon have these weapons in their own hands. If thoughts along the same line haunt you, this is your book. Publishers Weekly
On balance, Harris's book generalizes too much about both religion and reason. Natalie Angier, The New York Times Book Review The Economist The San Francisco Chronicle Joseph C. Hough, Jr., President, Union Theological Seminary, New York Alan Dershowitz, author of America on Trial Book Description This important and timely book delivers a startling analysis of the clash of faith and reason in today's world. Harris offers a vivid historical tour of mankind's willingness to suspend reason in favor of religious beliefs, even when those beliefs are used to justify the most harmful of behaviors and sometimes-heinous crimes. He asserts that in the shadow of weapons of mass destruction, we can no longer tolerate views that pit one 'true god' against another. Most controversially, he argues that we cannot afford moderate lip service to religion- an accommodation that only blinds us to the real perils of fundamentalism. While warning against the encroachment of organized religion into world politics, Harris also draws on new evidence from neuroscience and insights from philosophy to explore spirituality as a biological, brain-based need. He calls on us to invoke that need in taking a secular humanistic approach to solving the problems of this world. Natalie Angier wrote in the New York Times: "The End of Faith articulates the dangers and absurdities of organized religion so fiercely and so fearlessly that I felt relieved as I read it, vindicated....Harris writes what a sizable number of us think, but few are willing [or dare; Ed: normxxx] to say."
Reviewer: Kerry Leimer We now have big, powerful and easily portable weapons. What is effective about this book is that it finally opens the door to this virtually taboo observation: Middle east or West, by being treated as infallible and unquestionable, religion quantifiably does more harm than good.
Mr. Harris points out just how utterly antiquated and basically wrong so many religious tracts are by using the tracts themselves. Proof enough that religions no longer hold the key to human happiness is demonstrated by the convenient "editing" of some tenets of faith by none other than the faithful who, in our culture, get closer to god by picking and choosing those aspects of the word of god which best suits the starkly more secular and practical aspects of their lives. Is everybody comfy? Good. It is even more important and highly effective to point out how faith continues to divert our society from coming to terms with the objective facts[!?!] [as if we could actually do that, religion or no religion; Ed: normxxx] which define the issues facing us today in favor of consistently relying on 'belief.'
The dangers of this practice in our daily social and political life are being felt in innumerable ways, and the danger continues to grow. By connecting the way in which religious beliefs affect our world, our interaction with others and with a more 'objective' reality, Mr. Harris has helped begin the only conversation that really matters. What took me aback is the position that Harris is advocating- that it is okay to subject religion to careful scrutiny, in fact, it is desirable as religion is having such a negative impact on us all. He's talking about a change in social norms, attitudes, what is considered mannerly... he's saying that we can no longer afford to be respectful and tolerant of others' religious beliefs when those beliefs could do us all in. He suggests that we ask: What is the evidence for your God? And can it justify any action? I learned that a person's religious beliefs are his own private business- every person has to work out his own salvation- and it was not for me to question these beliefs. I learned that it is behavior that counts- how we treat others and the world we live in. But in America this has flipped. Now many people talk about their beliefs, the one-on-one they have with Christ, while they indulge in the most hateful and unchristian behavior. Worse, they think their beliefs call for such behavior. Harris suggests that it is time for us to grab this hornet's nest and challenge religion's hold on so many people. I have been researching a book on Middle East peace. I was startled to learn the role that Bible prophecy is playing in the Israeli/Palestinian conflict. The US's policy, under President Bush, has more to do with laying the groundwork for Christ's Second Coming than a careful search for justice and peace. It is amazing to me that in this day and age that ancient religious writings- the Koran and the Judeo/christian Bible- are playing such a heavy role in our lives. One of the factors that produced the 'Dark Ages' was the rise and promulgation of the Christian church, especially the aggressive way it persecuted and stifled those who disagreed with even its most ridiculous notions. I ask if we are on the verge of a new Dark Age? Prophecy, creationism, the Bible taken literally, fear of hell fire, 2,000 year old myths on how we should live... This book helps us address this urgent question. This is also a courageous book. It is courageous as an important component of the identity, sense of self, of so many millions of people is tied to the religios notions disparaged. The author will no doubt endure a lot of anger and hatred directed at him from many of these people. I am thankful that he is the one taking this stand. FOR A GLIMPSE OF SOME OF THAT "anger and hatred" SEE: Letter to a Christian Nation "I can't sign my name to this blurb. As a New York Times best selling author of books about business, my career will evaporate if I endorse a book that challenges the deeply held superstitions and bigotry of the masses. That's exactly why you should (no, you must) read this angry and honest book right away. As long as science and rational thought are under attack by the misguided yet pious majority, our nation is in jeopardy. I'm scared. You should be too. Please buy two, one for you and one for a friend you care about." -- posted by Normxxx » SteveT - Holiday Brain-Stuffers . PEOPLE LIKE ME WHO READ ECONOMICS FOR FUN have to keep reminding ourselves that not everyone shares our choice of amusement. So, of the seven titles I'm about to recommend this holiday season, only two are by economists, while another is about investing in commodities. Still another suggestion is not a book at all, but a full-length, fictional movie that deals with economic themes. Any book called Commodities Rising (Wiley, 2006) is necessarily a meditation on the laws of supply and demand, even if its ostensible purpose is to advise investors on the intriguing potential of such staples as oil, copper and cotton, or such comparative exotica as uranium, palladium and zinc. The author, CPM Group Managing Director Jeffrey M. Christian, happens to be one of the most brilliant and independent-minded analysts I know. So I approached his work, subtitled The Reality Behind the Hype -- and How to Really Profit in the Commodities Market, with the highest possible standards, which he rarely disappointed. For example, Christian writes convincingly about the "myths and conspiracy theories" relating to gold. Never mind if I take issue with his incidental defense of the Federal Reserve as "an attempt to solve some fundamental...problems that had contributed to enormously destructive economic fluctuations." Also convincing is the author's interpretation of the rise in oil prices as a form of "indirect opposition" to the Bush administration's war in Iraq. FOR A MORE INFORMED perspective on why institutions like the Federal Reserve actually worsen economic fluctuations, try Money, Bank Credit, and Economic Cycles (Ludwig von Mises Institute, 2006), by University of Madrid Professor of Political Economy Jesús Huerta de Soto. Directly acknowledging his debt to Austrian economists Ludwig von Mises and Friedrich A. Hayek, de Soto makes his position clear at the outset. "The privilege bankers have come to enjoy and have been granted in the past by governments for reasons of mutual interest" -- namely, the power to create money and credit -- is precisely what causes "boom, crisis, and economic recession," he writes. Words like "magisterial" and "definitive" might scare off the average reader, so I'll refrain from using them to describe this book -- a readable and often entertaining treatment of an extremely important topic. It has been translated into clear and graceful English from the original Spanish by Melinda A. Stroup. This tome will also delight history buffs. For example, in the course of a fascinating tour of banking practice from the time of ancient Greece and Rome through the Middle Ages, it traces the formation of the first central bank to Ptolemaic Egypt, circa 300 B.C. Nor do you have to read all of the book's 800 pages to appreciate its argument. FOR SOMEWHAT LIGHTER fare, try thumbing through The Quotable Mises (Ludwig von Mises Institute, 2005), edited by Mark Thornton, which consists of a series of quotable statements by Ludwig von Mises on nearly 300 topics sorted alphabetically, from "Action" and "Advertising" to "Working Conditions" and "Youth." The "habitual clarity" that Spanish economist de Soto rightly attributes to Mises is revealed by statements like this on the topic of value: "Value is not intrinsic; it is not in things," observed Mises. "It is within us; it is the way in which man reacts to the conditions of his environment...It is not what man or groups of men say about value that counts, but how they act." COPIES OF PRINCETON sociologist Katherine S. Newman's Chutes and Ladders (Russell Sage Foundation, 2006) should be given as presents to the legions of undergraduates whose minds have been addled by Barbara Ehrenreich's bestseller, Nickel and Dimed. Based on essentially no research, Ehrenreich concluded that low-wage work only gets you "deeper into poverty and debt." Based on painstaking research, sociologist Newman finds just the opposite. The special strength of Newman's book, which bears the subtitle Navigating the Low-Wage Labor Market, lies in the unsparing, unsentimental, but ultimately inspiring stories she tells about the struggles of the subjects in her "longitudinal" research. Not only did most of the low-wage workers she followed improve their lot -- in certain cases, spectacularly; based on her review of the broader research, she finds that "upward mobility is possible...in good times and in bad." Hoover Institution fellow Shelby Steele's essay-length book, White Guilt (HarperCollins, 2006), is a good companion volume to a much longer work I've previously recommended, John McWhorter's Winning the Race (see "Hot Reads for the Summer1," July 17, 2006). The following from Steele's book, subtitled How Blacks & Whites Together Destroyed the Promise of the Civil Rights Era, helps convey its tone and theme better than any brief summary. He writes, "When you give a racial preference to the child of two black professionals with advanced degrees and six-figure incomes...then you are clearly implying an inherent and irremediable black inferiority. You are saying that even...the fruits of a privileged life do not make it possible for blacks to compete with whites and Asians who may come from underprivileged backgrounds and fractured homes." ONE QUALITY THAT distinguishes The Cure (Encounter, 2006) from other books on the topic of health care is that it's a pleasure to read. Its highly accomplished author, Manhattan Institute fellow Dr. David Gratzer, is both a practicing physician and a Canadian who knows his own country's vaunted health-care system first-hand. If The Cure falls short of the promise of its subtitle -- How Capitalism Can Save American Health Care -- it proposes market-oriented reforms that can improve the delivery of health care. The book is well worth reading, especially by anyone who believes government is part of the solution. The Barbarian Invasions -- the title is an oblique reference to the "barbarians" of 9/11 -- might be seen as a companion movie to Dr. Gratzer's book. Written and directed by Montreal filmmaker Denys Arcand (in French, with English subtitles), it concerns the clash and eventual reconciliation between an oil-derivatives trader and his father, a socialist intellectual who is dying in a Montreal hospital. The film not only provokes laughter and tears, it offers a visceral lesson in the horrors of the Canadian health-care system. As many readers know, my book, Econospinning (Wiley, 2006), also was published this year. No movie deals yet. E-mail comments to editors@barrons.com -- posted by SteveT
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