Customer Reviews

Credit Derivatives and the Management of Risk (New York Institute of Finance)

5 star:		(0)
4 star:		(0)
3 star:		(0)
2 star:		(2)
1 star:		(3)

 

 

Very light on modeling contrary to the book's title. This book would be a good overview for someone with zero knowledge. If anyone has seen a published book with good models included, please let me know.

This is one of the worst books I have ever read. I was lucky to sell it on zShops for half of face value. Clearly, this guy has little or no experience with crederivs, and his weak command of English just makes it worse. While I think Nelken's book is also a little thin on material, and Tavakoli's book represents a somewhat dated view of the market, both are substantially more educational than this one. My own experience suggests that one is far better off to understand bond/loan trading first, plus some structuring and capital allocation. That is enough to figure out how to trade crederivs. All this hype about the insane risk in these things is crap - it's not substantially more risky than bonds, and people have been in that business for a long time. The only essential difference - counterparty risk - is not really addressed in any satisfactory manner anywhere.

The book is divided into 3 parts: Part 1 talks about the market and some accounting and regulatory implications. This part is very dry and difficult to get through. For me, this is partly because of the subject matter and more the way it was written. There are lots of generalizing statements that don't seem to add value. Part 2 goes over the actual building blocks such as asset swaps, credit default swaps, credit linked notes, etc. This section was not very insightful compared to other research and credit derivatives books I have read. A much better book on the mechanics is "Credit Derivatives" by Tavakoli. Part 3 discusses "credit derivative models" but is not very deep. There are no partial differential equations or a discussion of modeling the credit process. A better book on modeling is "Derivatives" by Wilmott. As a credit derivatives professional, I would not recommend this as your first CD book. It might add incremental knowledge as your third/ fourth book. Basically, I thought that the content could have be compressed. Overall, it seemed difficult to believe that the author could be a practitioner in the field. It makes more sense when you find out that this is only 1 out of 115 books he has written on a variety of topics.

A book with ostensibly some structure but lacks any logical lead through. I defy anyone to make sense of his few pages on structured bonds - all he says is that they're risky and those in the know have told him that many people do not understand them. I empathize with this lack of understanding - the author shares it.

The author has a bizarre bullet point writing system - certain sentences are pulled out for emphasis for no good reason. The book is littered with grammatical errors.

A real dud, spare your money.

Do not buy this book. If you own it, don't bother reading it. The information content is negligible. The English is appallingly bad. Material often has nothing to do with the sections to which it pertains. The book is written in a stream-of-consciousness rambling mode with no apparent logic. With 115 books to his credit, Mr. Chorafas is obviously in the business of churning out books on current topics, whether or not (and based on the evidence from this book, it is very much "not") he has any knowledge or experience with the subject. Prentice Hall should be ashamed to be associated as the publisher, and obviously did very little editing before publishing the book.