A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation
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... (show more)
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. (show less)
Related Media
Photo Gallery
Reviews (See all 38) Write a reviewfor this
-
This book was pretty interesting. While mainly about the author and his adventures in finance-land, I got some insight and a different perspective on the LTCM and 1987 market crashes from it. While the book talks about financial derivatives, it also exposes the 'old boys' network and the revolving door that existed between the various firms. This book is a useful study of the past, and the reccomendation in the final chapter make far too much sense to ever be put into practice. While not as i... (show more)
This book was pretty interesting. While mainly about the author and his adventures in finance-land, I got some insight and a different perspective on the LTCM and 1987 market crashes from it. While the book talks about financial derivatives, it also exposes the 'old boys' network and the revolving door that existed between the various firms. This book is a useful study of the past, and the reccomendation in the final chapter make far too much sense to ever be put into practice. While not as important as "The Black Swan" or as amusing as "Economic Hitman" this book is well worth reading. It helps to explain how we find ourselves now in the middle of the biggest financial fustercluck in generations, and how problems in the financial world will become bigger and worse unless we take steps to address and adjust the entire system. This is written by the consumate insider, not some outsider screaming at the gate, which adds weight to it. (show less)
Already read
-
Bookstabber draws on his years of experience working in risk management and in hedge funds to describe the increasing complexity that the financial markets are experiencing. Furthermore, he puts forth ideas such as tight coupling and over regulation that could lead to natural events such as Chernobyl and financial market events such as the one we are currently experiencing. His advice is to refrain from the tendency to increase regulation when these instances happen and try to keep financia... (show more)
Bookstabber draws on his years of experience working in risk management and in hedge funds to describe the increasing complexity that the financial markets are experiencing. Furthermore, he puts forth ideas such as tight coupling and over regulation that could lead to natural events such as Chernobyl and financial market events such as the one we are currently experiencing. His advice is to refrain from the tendency to increase regulation when these instances happen and try to keep financial products relatively simple. It is after all the complexity and therefore lack of understanding by consumers of how these products work that cause the financial markets to collapse. (show less)
Already read
- See all reviews
Lists
This book has been added to these lists:
More Stuff
About Us
LivingSocial.com is a social discovery and cataloging network that allows people to review and share their favorite movies, books, games, music, restaurants and beer
