Customer Reviews

Financial Derivatives and the Globalization of Risk (Public Planet Books)

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

 

 

This book is great if you are interested in understanding derivatives and how they relate to globalization. This is definitely a book for those seeking a better understanding of how derivatives affect the world we live in, not just how to buy and sell them. The language can be dense at times but well worth it if you are really interested.

A very well written work. I wanted to learn about markets, invested a few hours in reading this book and learned everything from "what is a derivative, really?" to "what does that mean, really?" I'm lucky to have found this book when I did.

I also like the texture of the book - the paper is unusually smooth.

If you want to learn about derivatives and their influence on the economy, the banking system and society in general: don't buy this book.

This book was written by two anthropologists and you have to be an academic yourself to understand what they are saying. However, even if you understand these people the book has little value, because the authors just ventilate opinions with virtually no facts to back them up. There are very, very few references. There is no single graph, illustration, table or bullet list.

The book does give some (unsupported) useful insights. However, you can also get those by just searching the Internet, in that case you do not have to work through 200 pages of painful reading.

It is sad that this book is of such a poor quality. Derivatives do a form a danger to the current financial system. Ordinary people are also at risk, because of fiat money and of fractional reserve banking. Fiat money has no intrinsic value, the value depends on how others value it. Fractional reserve banking means that the bank does not hold your deposit (savings) for safekeeping. They just use it for making loans. If the bank goes bankrupt you loose your deposit.

Two sentences from chapter 1:

"By analyzing the role of financial derivatives in the imbricated networks of global circulation that channel the movements of capital, we seek to illuminate the socio-structural character of financial circulation, deconstructing the ways in which derivatives encapsulate, quantify, and speculate on conceptualizations of risk created in the very process of circulation. The analysis will show that derivatives represent a new means of objectifying economic reality because they seek to capture and mediate the entire ensemble of relations that create the social through the concept of quantifiable abstract risk."

btw, in case you don't know, as I didn't, imbricated means "so that they overlap like roof tiles." Right...

My translation of all that gibberish?

Risk is created through the circulation of money... and derivatives quantify and speculate on that risk. LiPuma and Lee analyze this by, uh, looking at the role of derivatives in the circulation of money...
Their analysis shows that derivatives are a new way to think of economic reality because they mediate and represent the different social relations by quantifying abstract risk.

Not impressed.

Now, I certainly could not write a book on derivatives so I imagine that they know a lot more about this than I do and I am just a stupid simpleton who is not as sophisticated as the two of them... but nonetheless I have read a great deal of technical finance books in my time - by economists and mathematicians of course, not anthropologists so maybe I am just use to another language - and this is unnecessarily complicated and convoluted. They should have written a 20 page article instead.