Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives

ISBN: 0273704745
ISBN 13: 9780273704744
By: Satyajit Das

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Genres

Business Currently Reading Economics Economics Business Finance Finance Economics Money Non Fiction To Read Trading

About this book

Warren Buffett once memorably described derivatives as "financial weapons of mass destruction". Read this sensational and controversial account of the often dazzling business of derivatives trading, and see if you agree.No money is ever really made in financial markets. Markets merely transfer wealth. As to how to make money? Well, it is basically theft, misrepresentation, lies, cheating, deception or force. It is impossible to make the staggering amounts made in derivatives in good years honestly.Traders, Guns & Money is a wry and wickedly comic exposé of the culture, games, and pure deceptions played out every day in trading rooms around the world, usually with other people's money. Whether you move in the financial world yourself, know people who do, or have money invested in stocks, shares or derivatives, this is a fascinating read guaranteed to make you think.

Reader's Thoughts

Trans01mission10

After reading a book that makes me feel like an idiot for 1) what I don’t know, and 2) the assumptions I regularly make while speaking, I will break down my sentences and thoughts to rather small building blocks. -derivatives are hard. -this book does a fantastic job at walking someone through the complexities of the financial oubliettes that have caved in subsurface, if you bring your own spelunking tools. -it was a trial for me to get through since i really have no statistics or finance in my background, but very much worth it.

Argin Gerigorian

Firstly, I hope I’m spelling “Tolle Lege” correctly. Haven’t bothered to check.Anyways this week’s book comes from Satyajit Das entitled “Traders, Guns and Money…”. This book mainly deals with the knowns and unknowns of financial derivatives. What’s that? I’m glad you asked!Financial derivatives are an instrument (like a contact) which derive their value from another thing. Confused? Me too.About a year ago I was introduced to a man named Kyle Bass who is a hedge fund owner (Hayman Capital) and a growing figure in the financial world. The topics he talked about in interviews and conferences were fascinating to listen to. So I was encouraged to buy a book on derivatives to understand some of the jargon he and other hedge fund owners were throwing around.Thats where this books came in. Dat, however, didn’t do the job for me… not because he was a sloppy writer or ignorant, but because I am a sloppy reader and dumb! I’m fairly new to the derivative world and Dat’s writing method didn’t cut it for me. He mainly wrote about his interaction with other people in banking, corporate, etc. in a comical way and didn’t explain what a derivative actually is and go into the specifics (neither was the book intended to do that).But I did learn many things from the book so its not all that bad, in fact I’m planning on going back to it later after I’ve gained some more knowledge to the derivative world.For example I learned that derivatives can be both good and bad. Good in that it produces wealth and an abundance of it. Bad when it falls into the wrong hands. Dat gives ample examples of that (Enron, P & G, etc).Also this got me thinking that derivative trading was one of, if not, the main cause to the housing bubble. The author puts it succinctly when he says “credit was derivatized”.All in all the book was an okay read even if I didn’t retain all the information given.3.5/5 stars for Dat!Enjoy!

John

This is a good book, but I felt it oversimplified the explanations of what derivatives and structured financial products are and how they are put together. An entertaining read, but for me the technical aspects were presented at too high a level - glossed over. I didn't come away with the understanding of derivatives that I had hoped to obtain.

Philip

I watched the documentary Inside Job about the 2008 Financial Crisis and by far the author of Trader's Guns & Money Satyajit Das was the most interesting participate by far.I was looking forward to reading this book because of the great amount of incite that he brought within Inside Job.Honestly I consider myself a very Financially Savvy person, I really understand and deal with a variety of "Financial Instruments" but this book went into far too much detail for someone like myself. I felt dizzy at certain points and I like to consider myself a quick reader but it took me 2-3 hours to read the first 30 pages.I had to put this book down. Maybe one day after I graduate with an MBA from a business school I will be able to pick it up again, but until that happens this goes right back to the Queens Public Library after page 30!

Kelseysmith

Christ, that was hard work. It took me months to finish this book! This book was highly recommended but there must be better introductions to derivatives. The sentences make sense, but it ends there - pages, sections and chapters don't really hang together to form a narrative of any sort.I did learn something from this book, but imagine my hours could have better spent on something else.

Chris

This book gives you a realistic picture of the lucrative world of derivatives trading, you know, the enigmatic 'financial stuff' wall street types do to make staggering amounts of money. I'm pro-capitalism mind you, but this rather cynical book paints a not-so-glamorous picture. Three stars just cause it was a bit dry and I thought longer than necessary. And perhaps a bit too cynical, I think there are at least a few positive things to say about the contributions derivatives make to the functioning of the world economy.

Rohan

Well having some interest in derivatives, I choose to read this book. So I picked up a copy n just started reading this book and as a first word, it has really captured by attention. The prologue is magnificently written and makes you want to read more. So far so good, will be updating as I read more.**a little advise for those who don't know what derivatives are, this book might not interest you**

Royston

Despite what some reviewers say about the book bringing derivatives to the masses and making the understanding of them easier, it is still better to have some experience with them through working or studying derivative courses previously to be more appreciative of Satyajit Das' writing. This is in no fault Das' but rather the complicated nature of derivatives. It's actually not an easy topic to write about but Das does this with finesse, ease and candour. It gets a wee bit complicated and maybe boring towards the last few chapters because of the large amount of information. But yes, it's a very informative book, written by an experienced banker that takes the stance of the anti-establishment. Also a bit ironic yes?

Bernard Chen

After reading this book, I learned how one of my annuities manages to guarantee the lesser of 6% per year or the actual market growth of my investments. (Zero coupon bond worth 106%, call option on my portfolio purchases, they keep a percentage for themselves.) I also learned that I was a sucker for buying into this annuity - except that I was lucky and did it a year before the market drop of 2008. Now if I can just get my 106% out...I was a big fan of Frank Portnoy's Fiasco and this is the geekier version with more finance than most people want to read. The author, Das, also includes stories of derivatives deals which drive home how outmatched most purchasers, no matter how sophisticated they think they are (Fortune 500 CFO's et al), compared to the folks who spend their entire days thinking of novel financial vehicles.

Matthew

I take back what I said earlier, which is that Traders, Guns and Money is rather disappointing for such a critically acclaimed book. I still stand by what I said about the book's tone -- from the punchy three-word title you could recognise it for the way it reads, sort of a stand up comic routine on the derivative markets. The first half wasn't especially compelling, as the castigation of financial professionals is so generalised. You have to be offensive to be funny, I guess. Once you get past that, the second half rocks -- perhaps because I don't take any personal offense, not being involved in derivatives. It's a great insider's view of how and why derivatives evolved, with great and simple (and cynical) explanations of why various structures were created (generally, to evade taxes, get around trading regulations, and other ways to give investors more yield and earn banks more fees). The anecdotes and narrative read like a late-night drink confessional -- probably exaggerated but sounding true enough in essence, and deeply educational. As mentioned previously, it doesn't claim to be a rigorous, comprehensive risk management textbook (which Das has written) so it won't be that sort of educational if that's what you're looking for.But through anecdotes it gives a sharp sense of the culture of the people involved, something you could never find even in very good textbooks.

Byron Wright

This book is a very cynical (yet I suspect highly accurate) account of derivatives trading from a guy that's been there and done that. You do not need to be a financial geek to appreciate this book. It is written in a very entertaining way. For those that are interested you can expend some mental effort and get a basic understanding of derivatives, but you can ignore the details and still enjoy the story. The chapter on credit derivatives is particulary entertaining given the recent meltdown.The moral of the story: Everyone in the financial industry is at least a little bit corrupt and they're interested in their bonus money more than helping you or their company.

Adam Bertram

An enlightening read from an intellectual aspect...the author does an admirable job translating the obscure, and often obtuse, world of financial derivatives into layman's terms. Although I found some of the characters is this book to be charming, I kept waiting for more. The lack of a solution, or attempt to rationalize the issues presented by this book, left me wanting more. I don't recommend this book for anyone who is not fascinated by trading and the financial markets. There were a disturbing number of grammatical errors, especially towards the latter half of the book. In the end, I was happy to be done with it.

Trevor

An accesible and wryly funny book on derivatives and their historical uses such as hedging risk, making bets, avoiding regulations of forbidding investors from certain types of investments, avoiding taxes, hiding losses / creating paper profits,etc.

Karen

I found the attempts to make the material more exciting (for example, the "known unknowns, unknown unknowns," etc. a la Donald Rumsfeld) distracting, and initially difficult to get past.But this book really explained a lot of what was going on in the world of derivatives, clearly and concisely (even has some simple diagrams to make it clearer).Great book, once you get into it.

Themistocles

Definitely not one of the better books on the subject. There are two major faults with this one:First, the writing is all over the place, with the author jumping hither and thither every other paragraph, with almost no cohesion.Second, there are a great deal of technical bits that are not explained well at all, and some times they don't even need to be that technical.Some interesting anecdotes and case studies, all marred by these downsides.

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