On Money and Markets: A Wall Street Memoir [Hardcover]

Henry Kaufman (Author), Paul A. Volcker (Foreword)

Book Description

Publication Date: April 30, 2000

A leader's provocative look at 20th century financial markets Henry Kaufman, former vice Chairman of Salomon Brothers, was a key Wall Street figure in the 70s and 80s. His projections about interest rates, bond performance, unemployment, and government debt impacted monetary policy in more than one presidential administration, and prompted swings in the markets. You'll find On Money and Markets --Dr. Kaufman's look back at the financial and economic arenas he helped shape for half a century -- both fascinating and valuable. His memoir gives you insight into such questions as why the Federal Reserve has gained so much power, and what it means for investors....and what patterns we can see in the credit crunches and other financial crises that have rocked Wall Street and world markets. The dozen or so questions he explores are of serious concern to today's investors. And few other experts have Dr. Kaufman's perspective and experience to answer them.

Editorial Reviews

Amazon.com Review

A giant among pundits, Henry Kaufman is the Wall Street legend who founded the science of Federal Reserve watching, now a popular spectator sport. In a career that spans the last 50 years, his views and forecasts have grown increasingly influential, and his pronouncements often move markets, earning him the sobriquet "Dr. Doom" because of his oft-expressed concern about financial excesses and the failure of regulators to take steps to prevent them from occurring. "Policy can not be predicated on the assumption that reasonable financial behavior is the norm," he writes. On Money and Markets is both a personal memoir and a historical retrospective in which he elaborates on these concerns and prescribes a reorganization of the IMF and the World Bank and the creation of a new international entity with oversight of major financial institutions and markets.

Kaufman believes himself "more sensitized than many native-born Americans to economic developments that might endanger the country--a concern that dates back to my formative years, when I listened to my grandfather's recitation of the German hyperinflation of the 1920s--how it contributed to the rise of Nazism and thus forced us to flee Germany." Starting as a $45-a-week bank credit analyst in 1949, Kaufman joined Salomon Brothers in 1962 to build a world-class research department, later becoming a senior partner and vice chairman. He was the first person at Salomon to hold a doctoral degree, beginning a trend in the financial community toward greater analytical sophistication, one that would broaden and deepen in later decades. When he began interest-rate analysis and forecasting, information on the Federal Reserve was rare, and his observations quickly gained a large audience of investors, fund managers, economists, and policymakers. He writes, "In spite of its imperfections, the Federal Reserve comes closer to being an independent and objective arbiter and policy body than any other institution in our economic democracy."

He concludes the book by looking backward a century for a sense of perspective on the role of finance in the modern world. Former Fed chairman Paul Volcker, Kaufman's contemporary, rightly suggests in the foreword that this book "should be prescribed reading for all whose future and fortunes are tied to the performance of our financial system." --Scott Harrison

From Publishers Weekly

Crisp, jargon-free and self-assured, this memoir traces a famous economist's rise from rural Germany to the top of Wall Street. Born in a remote farming village in the upper Hessen region in 1927, Kaufman emigrated to America at age 10, when his family left Nazi Germany after a raid on their house. In New York, his lack of English put him four years behind in school, although Kaufman's intelligence and hard work later help him earn a Ph.D. in economics, gain a job at the Federal Reserve and, in the 1980s, rise to become the vice chairman of Salomon, Inc. and eventually found his own firm. Kaufman recounts these events with passion and precision, carefully avoiding melodrama. Among his recollections are several amusing anecdotes, including one from his years as an industrial banker in 1950s New York City, when he discovered a bank client on a rendezvous in a nightclub with a young woman who was not his wife and promptly revoked his credit line. His insider's perspective on the birth of the modern bond market and the globalization of banking will appeal to market watchers. Particularly interesting are Kaufman's candid revelations of how his experiences have affected his fiscal opinions. For example, his middle-class grandparents' memories of how 1920s German hyperinflation disenfranchised them made him a strong supporter of anti-inflationary policies; he was acutely sensitized to the relation between economic and social stability after witnessing how skyrocketing unemployment provided tinder to Nazi hatred. The book concludes with a survey of contemporary financial problems and the lessons of the recent and distant past. Though Kaufman's prose is starchy, his blend of moving personal history and insightful financial analysis make this memoir a sure bet for finance mavens. (June)
Copyright 2000 Reed Business Information, Inc.

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Product Details

• Hardcover: 388 pages
• Publisher: McGraw-Hill Companies; First Edition edition (April 30, 2000)
• Language: English
• ISBN-10: 0071360492
• ISBN-13: 978-0071360494
• Product Dimensions: 9.1 x 6.2 x 1.6 inches
• Shipping Weight: 1.8 pounds
• Average Customer Review: 4.3 out of 5 stars  See all reviews (13 customer reviews)
• Amazon Best Sellers Rank: #1,163,351 in Books (See Top 100 in Books)

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26 of 26 people found the following review helpful:

5.0 out of 5 stars Contains the value of any dozen business books, August 12, 2000

By 

taking a rest - See all my reviews
(HALL OF FAME REVIEWER)   

This review is from: On Money and Markets: A Wall Street Memoir (Hardcover)

The business section of any bookstore has shelves stretching to the horizon with business books, or more specifically books about Wall Street, and how to get rich in various absurdly short periods of time. My personal favorite is "The 20 Stocks To Own Right Now", how is now defined? When the book was written, or the day the book is purchased. The title by definition makes the volume worthless. The latest section to expand exponentially is the area of "Day Trading" which is for a select few with some key talents and a massive tolerance for risk. The odds are better you will make money writing about day trading than playing the 300-500 trade a day frenzy. These are the types of books that have their moment of fame when movies like "Wall Street" and "Boiler Room" are in theaters, when those who have a career that spans the length of the current unprecedented growth populate Wall Street. The worst of these are the badly written kiss and tell books written by 20 something's who detail the evils of Wall Street that they made money from, and then they write a book when their brief fling with the street is over.

Then there are the legends, the players who measure their careers not in 15 minutes, but in blocks of 15 years. They built "The Street", they have seen the hotshots come and go, at times to a minimum-security prison. They may have not bought Cisco the day it was offered to the public, but over time their success is the envy of the investing world.

In this case the man is Mr. Harry Kaufman, a man who has had the ear of Presidents, and Federal Reserve Chairmen, and countless CEOS', one of who wrote the introduction to this book, Paul A. Volcker. Mr. Kaufman, Mr. Buffet, Mr. Benjamin Graham, and an additional select few, have or can lay claim to truly having the knowledge, the depth and breadth of understanding finance both domestically, and as discussed in this book, internationally as well. They burst the bubble not of the Internet, but the abandon with which an enormous percentage of today's households invest in the markets without the most basic understanding of what they are investing in.

Some of the book does delve into Derivatives, Interest Rate Swaps, and some of the enormous losses incurred recently that took down the bank where the Queen Of England kept her spare change. A youngster toppled that bank if you recall. If this level of detail puts you off, the book is still an important book to own.

Mr. Kaufman tells much of his story as it coincided with the rise of Solomon Brothers from its infancy to the colossus it has become, and the memory it almost became. He also explains why he left that institution with exceptional candor. He is literally one of the originators of research as it has developed to this day. Some gave him the sobriquet of "Dr. Doom" not because he was wrong, rather because he dispassionately studied markets and then explained reality, not what people wanted to hear. He invented many of the methods that are used today and are taken for granted. When "analysts" today make proclamations they stand on several sets of shoulders, and invariably included are those of Mr. Kaufman.

He shares his life from a young boy who watched Hitler pass 6 feet in front of him. He explains the feeling of waiting for the splintering of the front door, as former neighbors became persecutors. And then the trip to America, and his education to the level of Doctorate prior to starting on Wall Street. He had some other odd jobs as well, like working at the Federal Reserve at a very young age.

Throughout the book he constantly refers to his very young life experiences and how they influence him to this day. And the depression stories, and the immigrant stories are so numerous they at times sound like the norm not the exception. The great danger now is that these stories are becoming history as these people age and are replaced by those who have not been tested by severe life experience, but rather have grown up with little discomfort at all.

When the market cycles straight down like it has before and will again, be sure to check the bookstores. There still will be nonsensical books about making millions in a Bear market, but most books will be out of print and will have resurfaced again in a recycled newspaper, that tells the story of all the college educated that cannot find jobs in the then miserable economy.

This book will become a standard, for common sense is never a fad, and when men like Henry Kaufman exercise their common sense, it is something we call genius. And that genius produces a life experience this book presents, as this man never once thought in 15 minutes of fame, wrote an insipid tabloid storybook, or thought about getting rich in 5 years much less 5 weeks or days.

Mr. Kaufman will not be on the cover of a magazine standing on a new $100 million toy that impresses Gorden Gecko. He will continue to expand his knowledge and continue to influence those who should be listening, for the truth often does hurt, but it is survivable, doom however is final.

A brilliant work, to be included in any library, financial or otherwise.

22 of 23 people found the following review helpful:

5.0 out of 5 stars A Book for the Ages, June 2, 2000

By 

John C. Bogle (Valley Forge, Pa USA) - See all my reviews

This review is from: On Money and Markets: A Wall Street Memoir (Hardcover)

Henry Kaufman's book is much more than a compelling saga of a life, a career, and a financial history. It is a reminder of the risks that abound in today's markets, and of the compelling importance of the great values that have led to the strength of the nation's financial system. In the book's most important chapter (16), Dr. Kaufman presents 17 neglected lessons for policymakers, financial institutions, and investors. If we ignore them, the well-catalogued sins of our financial past will return to haunt us. Consider Lesson 4: "..basic fiduciary duty too often has been forgotten in the high-voltage, high velocity financial environment of recent decades . . . the notion of financial trusteeship has been lost in the shuffle." He's right, and readers will profit immensely by taking heed, not only of those words, but the entire book.

13 of 13 people found the following review helpful:

5.0 out of 5 stars A good book for students ..A reader from Yale University, May 27, 2000

By 

K Lee (New Haven, U.S.) - See all my reviews

This review is from: On Money and Markets: A Wall Street Memoir (Hardcover)

I am tempted to recommend "On Money and Markets" to students who are aspiring a career in corporate finance and banking industry.

I like this book especially in its spectacular overview of the history of modern financial markets. Mr. Kaufman's accounts of his own life were also impressive in that his life exemplifies a passionate man's incessant pursuit of understanding and adapting to turbulent changes in the modern economy.

Mr. Kaufman's erudite illustrations which are equipped with detailed graphs and data make this book easier to understand and provide solid grounds to his insights into the financial architecture in the new century.

I would say that this book is a good start for non-finance major college students to take a brief look at the financial market and its history. I strongly recommend this book.