Friday, 16 September 2011

Weekend post - Extreme Money Book review


 Satyatjit Das has delivered an epic work here. This book has not even taken me very long to read, which considering ho little time I get to myself is quite impressive.

The book is a tour de force through the history of modern money, but with the focus being on the 'financialisation' of the last 30 years. The book is split into four parts and each has a different angle.

Das is in many ways writing a text book and he tires to turn it into a readable story. For my money he succeeds even though the subject is the complex world of finance and he is delving into the workings of derivatives, securitisations, the sub-prime crisis, economic theories of money.

Whilst readable in its own right due to the elegant way he describes such complexity, Das lightens the tone with a cacophony of quotes from everywhere.Although I can imagine some will find these off-putting, they do help to deliver insight and comparisons. Das' own insights are clear and incisive, someone who has worked deeply in the industry and has the clarity denied to us as outsiders:

"Complex chains of transactions allowed risk and debt to move from a place where it was observable to places where it was hidden and unregulated"

"Short-term profits were pursued at the expense of risks that were not evident and would only emerge later. Financiers entered into increasingly destructive transactions, extracting large fees and leaving taxpayers to cover the cost of economic damage"

Perhaps to those who have followed the financial world of the past few years, this book will seem like something of a collation and with the same prognosis of a dark future as can be found elsewhere. But if you really want to understand the pointlessness of hedge funds, why bankers don't deserve their bonus' and why the Government's are so powerless this is a great read and text book background.

Das wrote in 2006 a book which predicted the credit crunch as it saw the issues in leverage and derivatives; this book sees the future as the Government try to reset the same system for as long as they can. It is not a book that will make you feel at ease with the world, but at least it is a cure for naivety.


Anonymous said...

Try this for extreme.

CityUnslicker said...

They say this every month....

Steven_L said...

Sounds good, I need to finish off Roubini's book, then I might go for this. Also interested in that one about better regulation that was launched at No 11 recently.

Dana said...

It seems a good book to learn. Thanks for the info.