A Demon of Our Own Design

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… show more.

This is, hands down, the best account of our new age of financial derivatives that I’ve ever read – and I’ve read more than a few! It was riveting and terrifying in equal measure, showing how vulnerable we are to bad ideas emerging from the laboratories of modern finance. A conscientious insider, Bookstaber cares passionately about making markets more stable and less prone to meltdowns and malfunctions. His riveting book helps us make sense of where we are now, and where we may be going.