An ex sell and buy side derivatives trader, Das got out of the industry because he thought most players weren't interested in learning or hearing about real risk. He predicted many elements of the GFC and this book exposes how the global derivatives market is really just gambling on a grand scale.
Taleb "bought" his financial independence by working as a risk expert in financial markets, then became an academic specialising in risk and forecasting. Here he explains how humans are their own worst enemies when it comes to predictions, and that risk is almost always underestimated, particularly when it comes to the probability of large scale "Black Swan" events that can change the planet.
Smart guy.... I hate that phrase but it's ok to use it here. Silver worked for KPMG in a boring consulting job until he quit to be a professional poker player. He always loved baseball so he built PECOTA, a statistical tool for predicting baseballers' potential success and then correctly predicted 50 of the 51 state results in the 2008 and 2012 US Presidential Elections. This book is about how to build a good prediction philosophy and model, and where we go wrong.
Seminal book on the genesis of the GFC. Detailed and long, but really engaging. What I found amazing was, despite the intellects involved and what was at stake, how little work these guys actually did. Not hours spent, which were huge, but real analysis and work; just lots of meetings. The birth of the GFC, with the crash of Lehmann, sale of Bear Stearns and Merrill Lynch and near failure of AIG was really about egos and disbelief that they could all have been so wrong.
Original masterpiece on the perversity of bond markets and the fat Italians at Salomon Brothers who created the mortgage backed bond market. Same generation as Tom Wolfe's Bonfire of the Vanities and Oliver Stone's Wall Street, Lewis said he wrote this as a satirical, non-fictional cautionary tale, but it appeared to have the opposite effect, with more and more of the smartest young people flocking to the finance industry.
Lewis is now one of the most well regarded financial commentators in the world, using satire and humour to expose the ridiculous failures of the financial "Masters of the the Universe". Here he exposes how the ability to "bet" against investment instruments by "shorting" them caused the GFC, and more damningly, how the Wall Street investment banks had to invent the instruments to allow this shorting. Crazy stuff.
Why did German banks continue to buy mortgage backed bonds and Collateralised Debt Obligations (CDOs) long after the underlying mortgages started defaulting? How did Iceland become one of the global epicenters for investment banking in the lead up to the GFC? Are we really smart and innovative, or just arrogant and stupid? Tough questions in the wash up of the GFC.
Gladwell has made some big calls here, like it takes 10,000 hours of practice to develop world class ability at anything, and that the apparent difference in work ethic between east and west flows from different historical agricultural practices. Bold. Want to know why Koreans where once much more likely to crash a commercial jet airliner than an American? Or why, if you were born in 1951 in the US and went to public school in California you were more likely to become a tech billionaire? This is your book.
Stiglitz is an ex Chief Economist of the World Bank and a Nobel Laureate and this book is a damning expose' of 4 decades of western government policy failures that, combined with free market economics, has lead to the greatest level of inequality and wealth concentration seen in centuries. He calls it "rent seeking", but the rest of us call it getting ripped off. Made me think about what happens next to fix things.
This book has got a lot of press, and I have to be honest and say I haven't read it all. It's a text book and is pretty heavy reading, but the central theme is similar to Stiglitz's in that inequality is currently at dangerous levels. Where they differ is Piketty suggests this inequality is a natural impact of capitalism, not poor policy. If that's the case, then what do we have that can replace capitalism?