» A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation

A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation Reviews

Customer Rating:
Summary: A must-read
Comment: Bookstaber's "A Demon of our own Design" shouldn't be missed by anyone interested in what is going on in the financial markets today. His many years leading the risk management areas at top financial firms gave him a vantage point that he openly shares with his readers. His main topic is centered around understanding the volatility of an increasingly complex, tightly coupled global financial system as there is in place today.

I only wish I had read this book before the big market unwound earlier this year. He called the risk of the 2008 financial markets meltdown at least a year before events occurred. He was very close to the action during all financial crisis of the past 25 years, including 1987, LTCM and 2001/3. The lessons learned and the trend identified between these crisis leads to a coherent proposition on understanding risk that is both innovative and useful for the average investor.

A final comment on style: the book is very readable, even entertaining. This is no small feat when you cover dry and tedious topics such as risk management. He pulls no punches; is articulate and accessible even to the non-financially savvy reader.

Hope you enjoy and learn from it as much as I did.

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Customer Rating:
Summary: A good read in these troubled times we are at
Comment: I read this book back in December 07, the perfect timing for it would have been now, however.
A very simple conclusion from this book is that despite all the good intentions that the current bailout (TARP) might have, what we are doing is creating a new demon that will provoke a new crisis, with a different twist, anytime in the future.
Crisis are inevitable and we cannot go against financial innovations (like in the last 10 years with derivatives, CDS, MBOs, CDOs, etc.)
A better synchronicity among financial institutions and one regulatory agency (not several agencies that do not communicate between themselves as they should) could be a solution.

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Customer Rating:
Summary: Want to understand the current financial crisis?
Comment: Bookstaber has written a cogent, understandable and witty guide to the structural and human underpinnings of the current financial crisis. While this book requires thoughtful reading, it does not assume that the reader is technically savvy about markets or the plethora of financial instruments that have come to have such a dramatic impact on U.S. and world economies. I unhesitatingly recommend this book to anyone wishing a deeper understanding of the problems that can and have been created by financial markets and instruments.

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Customer Rating:
Summary: Thought-provoking reflection on Wall Street risk today
Comment: This book is part memoir, part reflection on risk, part tell-all, part recapitulation of recent financial crises and part polemic. If you fret that all these parts might blur author Richard Bookstaber's objectives and message, you are right, but, if you have the patience, keep reading. Enjoy the somewhat diffuse anecdotes and observations in the first few chapters until you reach the author's straightforward presentation of his case that the U.S. financial system is at risk from complexity and tight coupling. The book would have benefited from a slightly fresher take on the financial crises of the last three decades. However, given the author's years as a risk manager on Wall Street (Morgan Stanley, Salomon Brothers, Citigroup) and as a hedge fund expert (Moore Capital, Ziff Brothers, FrontPoint), his personal experience during fiscal crises and his close view of dramatic turns in the market, getAbstract finds that his diagnosis of systemic problems conveys several important stories and that his analysis deserves your attention.

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Customer Rating:
Summary: GLB
Comment: I have had great difficulty reading this book firstly as I am not a quant nerd. Secondly, the author deems fit to draw comparisons with hedge funds and a host of unrelated topics eg. Chernobyl, Two Mile Island and the military and the Post Office (for heaven's sake)! The less said about the ill fated shuttles the better!! Third, the book is poorly written and/or badly edited as there are many duplications throughout the text an example of which is LTCM which crops up in every other chapter. Nevertheless, I also read the authors' presentation to the oversight committee of Congress where he did a complete about turn and in complete contrast to this book stated that better regulation was the way forward!
Confused? You better believe it!!

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