My entire career has been spent in finance. From life insurance to central banks, from stock exchanges to post-trade clearing and settlement, this is all I’ve ever done. My college degrees include BSBA in Business/Marketing, MBA in Management, and PhD in Economics. In addition to knowing what a lot of people know about finance, I also worked inside the “black box” of the Federal Reserve System and depository trust and clearing corporations (in 4 cities, on 2 continents). Therefore, I know more about the plumbing of stock market infrastructure than most people who have careers (and education) as long as mine.
I wrote
Lessons Not Learned: 10 Steps to Stable Financial Markets
This is the first book I read about the stock market. I was taking a college course on investments and working as an editor at the Federal Reserve Bank of San Francisco. Watching the Fed try to hit various monetary targets looked to me just like what this book was suggesting: throw a dart at the stock quote page of the Wall Street Journal (back in the days when people looked in newspapers for stock quotes!) and you were just as likely to make money as you would when you did research into a particular company before buying their stock.
Today's stock market is not for the faint hearted. At a time of frightening volatility, the answer is to turn to Burton G. Malkiel's advice in his reassuring, authoritative, gimmick-free and perennially best-selling guide to investing. Long established as the first book to purchase before starting a portfolio, A Random Walk Down Wall Street now features new material on "tax-loss harvesting"; the current bitcoin bubble and automated investment advisers; as well as a brand-new chapter on factor investing and risk parity. And as always, Malkiel's core insights-on stocks and bonds, as well as investment trusts, home ownership and tangible assets…
This was required reading in my MBA program at Golden Gate University. In fact, the economics teacher, Joe Fuhrig, inspired me to go on for my PhD in Economics at New York University. The book explains how economics isn’t just about mathematical models: it is about how people think and behave. Once you learn to think like an economist, you will find investing (and even grocery shopping!) a completely different experience.
Intended primarily for one semester survey courses in general economics, this text also provides practical content to current and aspiring industry professionals.
Learn how to think like an economist.
The Economic Way of Thinking goes beyond explaining the basic principles of micro- and macroeconomic analysis by showing readers a method of reasoning that teaches them how to apply these principles as tools. The authors expose readers to a method of reasoning that makes them think like an economist through example and application and also shows them how not to think, by exposing errors in popular economic reasoning.
I started working at Depository Trust Company in New York in September 1987 – a month later the “Black Monday” stock market crash happened! At the time, it was very difficult to see exactly what caused it. “When you are up to your neck in alligators, it is hard to remember why you drained the swamp!” This book explains how Wall Street banks hatched all those alligator eggs by hiring MIT math-whizz-kids and turning them loose without explaining the simplest thing about the stock market to them. One of the errors in their models was that they did not take bank holidays into account when calculating the time value of stocks and option prices.
Inside markets, innovation, and risk Why do markets keep crashing and why are financial crises greater than ever before? As the risk manager to some of the leading firms on Wall Street-from Morgan Stanley to Salomon and Citigroup-and a member of some of the world's largest hedge funds, from Moore Capital to Ziff Brothers and FrontPoint Partners, Rick Bookstaber has seen the ghost inside the machine and vividly shows us a world that is even riskier than we think. The very things done to make markets safer, have, in fact, created a world that is far more dangerous. From the…
At New York University, I attended the Austrian Colloquium every week. I learned more about economics listening to Dr. Kirzner talk for 5 minutes than I did in any 2-hour class. Austrian economics is about human action – not unlike what you’ll find in The Economic Way of Thinking. The US stock market today seems to be drifting further and further away from Kirzner’s definition of a market: “Disequilibrium prices generate direct disappointment of plans… Such disappointment can be expected to alert entrepreneurs to the true temper of the market” and result in price discovery. Market makers and short sellers disrupt this process by altering the appearance of supply and demand for the shares of companies. This reason alone should call into question the stock exchange as a “marketplace.”
In the last hundred years or so, the neo-classical school has come to dominate microeconomic thinking. Economists concerned with competition have taken refuge in increasingly complex models which emphasize the end-state of competitive equilibrium. This paper presents, in non-technical terms, an 'Austrian' view of how a market economy works. The writer of this book follows in the Austrian tradition as he tries to crystallize the theory of entrepreneurial discovery and of its implications for economic understanding and policy.
Co-author Ken Rogoff taught my PhD course in Global Economics while he was a visiting professor at NYU (from Princeton). We used Foundations of International Macroeconomics as our textbook; Ken was writing the book with Maurice Obstfeld. When I turned in a handful of pages to him with editorial corrections, he hired me to edit the rest of the book and a research paper for him! It caused quite a stir among my peers when Ken thanked me by name when the article was published (JEL, June 1996). This book traces eight hundred years of financial crises to demonstrate that they are, in fact, predictable. Economists and policymakers are taken by surprise only because they do not learn the lessons from one crisis to the next.
Throughout history, rich and poor countries alike have been lending, borrowing, crashing--and recovering--their way through an extraordinary range of financial crises. Each time, the experts have chimed, "this time is different"--claiming that the old rules of valuation no longer apply and that the new situation bears little similarity to past disasters. With this breakthrough study, leading economists Carmen Reinhart and Kenneth Rogoff definitively prove them wrong. Covering sixty-six countries across five continents, This Time Is Different presents a comprehensive look at the varieties of financial crises, and guides us through eight astonishing centuries of government defaults, banking panics, and inflationary…
This book shows that the theoretical framework for regulating financial systems available since at least 2001 could have prevented the systemic failure in the United States that led to the collapse of global credit markets in 2008. Step by step the book guides you through what could have been done to prevent the crisis and what investors can do to protect themselves from the next one. It concludes with a key idea for making financial services businesses stand out from the crowd, ensuring future success. For each step, the reader will find: legislative and regulatory background on existing rules; academic research on the theory behind each step; and the facts and data connecting each missing step to the financial crisis of 2008.
