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Imserba Webstore - A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation
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List Price: $16.95
Our Price: $11.53
Your Save: $ 5.42 ( 32% )
Availability: Usually ships in 24 hours
Manufacturer: Wiley
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Average Customer Rating:  
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Binding: Paperback
Dewey Decimal Number: 332
EAN: 9780470393758
Feature: ISBN13: 9780470393758
ISBN: 0470393750
Label: Wiley
Manufacturer: Wiley
Number Of Items: 1
Number Of Pages: 304
Publication Date: 2008-12-10
Publisher: Wiley
Studio: Wiley
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Editorial Reviews:
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Inside markets, innovation, and risk Why do markets keep crashing and why are financial crises greater than ever before? As the risk manager to some of the leading firms on Wall Street–from Morgan Stanley to Salomon and Citigroup–and a member of some of the world’s largest hedge funds, from Moore Capital to Ziff Brothers and FrontPoint Partners, Rick Bookstaber has seen the ghost inside the machine and vividly shows us a world that is even riskier than we think. The very things done to make markets safer, have, in fact, created a world that is far more dangerous. From the 1987 crash to Citigroup closing the Salomon Arb unit, from staggering losses at UBS to the demise of Long-Term Capital Management, Bookstaber gives readers a front row seat to the management decisions made by some of the most powerful financial figures in the world that led to catastrophe, and describes the impact of his own activities on markets and market crashes. Much of the innovation of the last 30 years has wreaked havoc on the markets and cost trillions of dollars. A Demon of Our Own Design tells the story of man’s attempt to manage market risk and what it has wrought. In the process of showing what we have done, Bookstaber shines a light on what the future holds for a world where capital and power have moved from Wall Street institutions to elite and highly leveraged hedge funds.
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Spotlight customer reviews:
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Customer Rating:
Summary: Still on shelf....
Comment: I have started this book a couple of times... not really into it. Wrote this review to get it out of my review page.
May be very good, may be very bad... no opinion really except it has not grabbed me yet!
Customer Rating:
Summary: Informative
Comment: This book attempts to describe the mechanics of the previous financial meltdowns. Very advanced even for those with a finance background but takes time to elaborate on specifics. Good read for applying previous applications to future problems when they do occur.
Customer Rating:
Summary: Don't Blame Us- You Guys Did It Yourselves
Comment: This is an excellent book by a literate and intelligent and experienced market participant with impeccable credentials. It explains how complexity and interconnectedness of financial markets makes them failure prone, and it makes two excellent suggestions: reduce leverage and limit complexity of financial instruments. I recommend the book wholeheartedly, yet I cannot help feeling it largely misses a more important point.
We now inhabit a world of nearly infinite electronic money most of which serves no purpose but to undertake repeated financial transactions in the expectation of small returns. The results are of no importance to more than 90% of the population, except when they provoke financial catastrophe for those who must work to live. The results are at best a headache for over ninety percent of the remaining ten percent, who have somehow managed, defying all odds, to accumulate a modest competence subjecting them unavoidably to the world of `investments.'
Financial catastrophes and toxic investment markets are things we cannot afford as a democratic republic, even if they continue serving the financial interests of bankers, corporate poobahs, hedge fund managers, academic charlatans and politicians on the take. We tolerate banks because they lubricate the real economy by making productive loans, or at least they used to do so. We provide tax loopholes for hedge funds and the excuse is they provide liquidity for our financial markets, except when they do not. We encourage managers of public corporations to justify obscene compensation schemes amounting to looting operations on the theory that the executives are somehow responsible for corporate success. Failure apparently just happens.
A very few simple reforms would go far to resolve all our systemic problems. Reinstatement of Glass Stegall, a tax on financial transactions, prohibitions on gambling by institutions affected by a public interest, rational limits on executive options and compensation, progressive taxation of outlandish incomes. Let the investment banks and the hedge funds continue gambling on toxic derivative contracts, and pay a transaction tax with each roll of the dice. Prohibit derivative gambling by custodians of other people's money: banks, pension funds, insurance companies, public corporations, mutual funds, municipalities. No doubt the investment banks and the hedge funds will soon devour one another, inasmuch as trading is a zero sum game. Who cares? On the transaction tax money alone, the rest of the country can rebuild America
Customer Rating:
Summary: Confused and boring
Comment: Large parts of this book are anecdotes from Wall Street about people you have never heard about and will never care about. Entire sections of the book seem to be sort of an auto-biography of the author's professional life and the people he has met whilst on the job. It seems rather self-indulgent of the author to assume the readers are interested in this (he even tells us where he does Jiu-Jitsu ...) Other parts of the book are loose comparisons of financial markets to things such as nuclear power plants, or tales about the tulip mania in Holland and the non-liquidity of medieval England. The author also has a tendency to repeat himself several times within the same page and it gets quite annoying to read everything phrased three slightly different ways.
When the book finally comes around to discussing trading and quant strategies it assumes the reader is already a quant and knows the meaning of even the more obscure terms which are never explained.
The very last line of the conclusion is 'simpler financial instruments and less leverage will create a market that is more robust and survivable.' This is apparently only a surprise to people in finance.
Overall this is a confused and often boring patchwork of a book (sorry to be so harsh.) There are a couple of interesting bits here and there, but you have to dig for so long to find them that it's hardly worth it.
Customer Rating:
Summary: Had high hopes that fizzled half way through.
Comment: As a full-time trader of 12+ years I've read most good trading books out there. In fact most of them I end up reading multiple times. This won't be one of those books. The first half is fun and informative story telling. The second half...well I can't even comment on it because I found myself just scanning the pages looking for anything interesting or new to no avail.
If you want a good read on trading look to Market Wizards, When Genius Failed (LTCM), and Reminiscences of a Stock Operator.
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