Traders, Guns & Money: Knowns and unknowns in the dazzling world of derivatives |  | Author: Satyajit Das
Publisher: FT Press
List Price: $29.99
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Rating:  37 reviews
Sales Rank: 11465
Media: Paperback
Edition: 1
Pages: 352
Number Of Items: 1
Shipping Weight (lbs): 1.4
Dimensions (in): 9.1 x 5.9 x 1
ISBN: 0273704745
Dewey Decimal Number: 332.6457
EAN: 9780273704744
ASIN: 0273704745
Publication Date: May 15, 2006
Availability: Usually ships in 1-2 business days
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Product Description
“I had been in derivatives for over 25 years. Many traders hadn't been born when I stumbled accidentally into the arcane world of derivatives trading. The Indonesians were at the fag end of that career. How did I get there? I had followed the money. I had ridden the tide and currents of financial markets. I had not known very much then. Even now I only knew the many unknowns. How did I get here? It was a very long story. Send Traders, Guns and Money is that story…..” Warren Buffet once labelled derivatives “financial weapons of mass destruction”. Unlike the military kind, financial WMD are not hard to find. Many great companies use them. These businesses use derivatives to make money or protect them from risk. It’s a simple case of greed or fear. Or is it? In derivatives, whoever you are, there are things that you don’t know that you don’t know. These are the real risks of derivatives. They’re generally left to the client to discover. So, if you’re entering the dazzling world of derivatives, ask yourself this: What do I know? What do I need to know? What don’t I know? What am I doing? You can find the answers in Traders, Guns & Money, a sensational and controversial first-person account of the business of derivatives trading and the financial products industry in the spirit of Liar’s Poker. It is a true insider’s view of the business of trading and marketing derivatives for a living. It details the nature of the business, the players, how money is made and lost, and the deceptions that underlie the entire process. Funny and poignant, and written in a wry and wickedly comic style, the book provides the ordinary reader with an insight into the seeming madness that underlies financial markets and the out-of-control process that is trading in complex financial products that few understand. Traders, Guns & Money throws light on the culture, games, and pure deceptions played out every day in trading rooms around the world, and played out with other people’s money. It describes the processes by which a small group of gifted, if avaricious, individuals parlay their knowledge of the arcane world of financial products into wealth, leaving shareholders, clients, regulators, and the tax paying ordinary public to bear most of the risk. This is the story of how one set of clients discovered the perils of unknowns in a derivatives deal. This tale will leave you amazed, and this book will make it all clear.In the sometimes dazzling world of derivatives, Traders Guns & Money shows you how we got here and tells it how it is. Go on, follow the money. An accessible companion and a wise counsel, Traders, Guns & Money weaves together three core themes: Known unkowns: if you’re entering the dazzling world of derivatives, ask yourself this: What do I know? What do I need to know? What don’t I know? What am I doing? This book will make it all clear. Follow the money: an insider’s, expert witness account of the rise and rules of the world of derivatives. This book will show you how we got here and tell it how it is Send traders guns & money: the story of how one set of clients discovered the perils of unknowns in a derivatives deal . This tale will leave you amazed, but wiser. "Ever since Warren Buffett memorably described derivatives as "financial weapons of mass destruction" there has been a thriller waiting to be written about them. Derivatives have frightened otherwise right-thinking people for some time. In part this reflects a natural tendency to fear what we do not understand." Financial Times
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Showing reviews 1-5 of 37
 Great read, but one major hole in the facts. November 15, 2009
Herb Hunter (Baghdad)
This book would have been worth five stars if not for two things. First, the language is overly expository and verbose in parts where a simple get-to-the-point approach will do.
Secondly but more egregiously, he mad a major factual error referencing a significant event in financial history. According to the author on page 33, he claimed that Nixon abolished the gold standard in 1973. From everything I've read elsewhere, this is incorrect. In a televised announcement, Nixon did this on August 15th 1971: [ [...] ]
This might not seem like a very big deal, and perhaps it was indeed a typo, but FT Press isn't known to be quite as sloppy as say, Wiley. If the author really missed this basic fact it makes me wonder what else he missed in the parts less familiar to me. Other than these two things, it was a very entertaining and informative read.
 After knowledge, comes what? October 10, 2009
Linksman (Pinehurst, NC)
I cannot say enough good things about this book. Anyone hoping to understand the existing financial world ought to read Traders Guns and Money first. Then he should carefully avoid all other financial books and reread this one whenever he feels an itch to speculate in financial markets.
What is best about this one is that every word is carefully chosen. How Das managed this I have no idea. One comes away with the helpless feeling that while every asset has a price, value is a thing of the past. In this circumstance, what ought an investor to do? I have some ideas but why should I share them with you?
The conventional justification for derivatives trading claims that it permits risk to be shifted to those willing and able to absorb it. Das makes proper hash of this idea. He explains how in fact risk is difficult to identify, and that when highly leveraged actors strive simultaneously to avoid it, what we get is musical chairs among the overcompensated, and a leaning tower of Ponzi to which the prosperity of all becomes hostage. Of course, we had this lesson from Long Term Capital Management more than ten years ago.
Das provides an indellible portrait of our current world of limitless money, in which ninety percent of our citizens have only what they can borrow at 30%. Our government is busily destroying the nation's credit to preserve a system in which 1% of the population owns everything worth owning. If people understood this there would be a revolution or at least a general strike or two, but similar situations have existed throughout American history without social consequences. What is different now, of course, is that understanding the situation doesn't really help when it comes to personal survival. That is our new paradigm. As the French say, 'sauve qui peut.'
 Good parts, poor parts June 14, 2009
Nicholas Warren (New York, NY USA)
4 out of 5 found this review helpful
This book is really two, rather disimmilar, halves. I suspect that the kind of audience that would enjoy each half would be different too.
First, it is worth noting that Das is very knowledgeable about derivatives, not only in a marketing, but also a technical sense. He has written a series of (very lengthy and very good) books over the years on most aspects of derivatives/structured products.
Knowing his background and given my own significant experience with derivatives, I found the first half of the book (before the chapters on risk management and models)boring and not much more than a collection of trading floor anecdotes that tried to make the author sound more "hip" than I suspect he is. There was very little of substance, other than a bit of flavor.
If you can stay the course, the book gets progressively much better in the middle as it adresses risk management, models and structured products (first FX and interest rate, then equity and, finally, credit). It would be difficult to appreciate the full significance of some of the things Das was telling you about the shortcomings of these products, their risks and the ways they are sold without a decent prior knowledge. I felt there were still rather too many slick anecdotes and phrases, but that there was real substance too. I found myself saying, at several points: "oh, that's a very inciteful point," (e.g. for a convertible bond, from the investors' perspective, if they don't convert the bond into stock because the issuer's equity price is too low, that's probably precisely the time that, when they are left with a bond, the issuer's credit quality for the bond payments has suffered along with the stock price).
If I had rated the two halves of the book separately, I would have given the first half two stars and the second half four stars. I was left with the belief that it could have been so much better if it didn't have the feeling of being hastily put together as a kind of stream of consciousness, dictated quickly, from many years of valuable experience. Some sharp editing would have helped the author a lot.
Derivatives: Outsourcing Our Brains April 26, 2009
Red Dawn (Glendale, AZ, USA)
"In 1998, I was talking to the head of trading for a bank. 'Thank God for the Asian crisis,' he said. I expressed surprise. The bank had lost over $1 billion, blaiming the collapse of Asian markets. 'You have no idea what we were able to write-off,' he said with a broad grin."
Satyajit Das' jaundiced view on investments & investment managers is a wry & entertaining read. Whether moving products or currencies from one country to another or enhancing return on investments or helping to manage risk, a derivative should be metaphorically compared to the legendary Fugu fish: if not prepared properly, it is fatal.
An added bonus can be found within these pages. While given conditions for buying cherry investments are listed in El-Erian's WHEN MARKETS COLLIDE (see the Theory of Lemons), conditions for selling investments are found in TRADERS, GUNS, & MONEY (see the Law of Financial Gravity).
Fun & informative reading April 18, 2009
Jorge Palacios Goddard (Mexico)
As a former derivatives trader in emerging markets I can tell that Traders, Guns & Money is an accurate description of what goes on between derivatives' salespersons and companies' treasuries.
The recent events in the financial markets make this book required reading to understand how companies, banks and other entities could get in so much financial trouble.
Showing reviews 1-5 of 37
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