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"Wickedly original, one of the most fascinating accounts I haveever seen. A rollicking and highly opinionated read." (RiskProfessional, October 2011)
“No one who reads Red-Blooded Risk: The Secret History ofWall Street will ever again regard risk management as anecessary but unproductive appendage of the financial industry.Other authors have chronicled how quantitative finance influencedinvestment management, but Aaron Brown has made a compelling casefor a far more profound economic impact. . . If Red-BloodedRisk: The Secret History of Wall Street dealt with nothing morethan the inadequacy of models used in highly important activities,it would represent a valuable contribution to financial economics.Brown’s book, however, covers a great deal more thaneconometric malpractice. Probably no other book offers as muchinsight into the process with so little resort to mathematicalnotation. Especially valuable are Brown’s discussions ofmiddle-office risk management and value at risk, comparativelyrecent innovations that are essential to understanding modernfinancial institutions. Readers of Red-Blooded Risk shouldbe prepared to have many of their assumptions challenged.Red-Blooded Risk is one of the most original andthought-provoking books reviewed in these pages in the past 20years. No one who reads it will ever again regard riskmanagement as a necessary but unproductive appendage of thefinancial industry. Other authors have chronicled how quantitativefinance influenced investment management, but Aaron Brown has madea compelling case for a far more profound economicimpact.”
—Martin S. Fridson, CFA Institute PublicationsBook Reviews
“Red-Blooded Risk mixes risk history and philosophynimbly and provides a perspective that can be both refreshing andchallenging (often on the same page). While the book is not withoutweaknesses, it is also brimming with original perspectives andcontroversial opinions. Those who work in risk management orquantitative finance will enjoy Brown’s story-telling andexpert perspectives, even if they do not share his views, whilenon-quants will find his insights and confessions to be a usefulglimpse into the psyche and ethos of an influential group of earlyquantitative risk takers.
—Roger M. Stein, Research and AcademicRelations, Moody’s Corporation, as reviewed inQuantitative Finance (August 6, 2012)
Everyone talks about risk, but few people give serious thoughtto what risk is. It's hard to describe it without expressing anopinionwe like things that are innovative, daring, creative,and bold; but those are exactly the same things that are reckless,speculative, risky, and irresponsible.
This book is the story of a group of young math whizzes whounleashed a revolutionone that reshaped our financial systemand continues to echo through the halls of government,universities, and corporations today. In the 1970s, disillusionedwith the sorry state of quantitative analysis, these youngmathematicians (soon to be known as "quants") invented a new way oflooking at probability and set out to prove it in the ultimatetesting ground of odds-making: Las Vegas.
Once there, the quants turned conventional wisdom about gamblingon its head. People said you can't beat the house, yet the quantsmanaged to beat blackjack and other casino games. People said youneeded a lifetime to learn poker, yet the quants' aggressivemathematical tactics swept the table against the best players inthe world. Then the quants turned to sports betting, overturningthe business model and squeezing out local bookies with a globalorganization that matched bets without taking risk.
Armed with their theories and experience, the quants raisedtheir sights and headed to Wall Street, determined to replicatetheir success. Finance was a tougher challenge than gambling, butby the mid-1990s, the quants had remade Wall Street as thoroughlyas they had remade Las Vegas. That transformation went unnoticed bythe bond salesmen and investment bankers who ran Wall Street, aswell as by academics, regulators, journalists, and investors; yetthese changes caused both the greatest wealth creation event in thehistory of the world, and also to the financial disasters we havewitnessed in its wake.
There's more here than just a lesson in recent financialhistory, however. Brown's story goes beyond the headlines toexplore basic questions of economics, like the meaning of propertyand the nature of exchange. Along the way, it reveals secrets aboutthe building of the pyramids, the glory of ancient Athens, theforcethat built the Roman Empire, a world-changing invention frommedieval Italy, a secret in a mysterious letter written in 1654 andnot decoded until the 1990s, and an essential aspect of theAmerican Revolution left out of history books.
This book will change the way you think about everything fromhistory, risk, and money to vampires, zombies, and tulips. Itoffers a fascinating and thrilling account of great events thathave never before been described in an easily accessible form.There are bold ideas, colorful characters, and, most important, thekeys to understanding the modern financial world and how its innerworkings affect our daily lives.
Aaron is good friends with Nassim Taleb and they share similar views about risk.
It is an easy and enjoyable read, and at the same time it offers a deep and different perspective that cannot be found in academic textbooks.
Would be interesting to hear what Taleb has to say!Comparing to other books it makes fun reading.
The book has some interesting topics but so much rant it's not worth time or money. Illustrations are hard to impossible to read on kindle and not very revealing or interesting... Read morePublished 8 months ago by EB
If you like taleb, this is a must read. I have not seen a better distillation of what finance is all about, and the personalities within it.Published 8 months ago by Caleb
I really don't know what to make of this book. Parts of it are hugely interesting, even brilliant, and other parts are simply strange. Read morePublished 10 months ago by investingbythebooks
Emerson said that America's geography is sublime but the men are not. Aaron Brown instantiates that statement by officiating this risk-ladden matrimony between conventional finance... Read morePublished 18 months ago by Obinna Ajoku
This author walks through (rather, with his facility with words, sometimes gracefully flies high over, then zooms down for sharp-focus closeup of) what seemed like more or less... Read morePublished 22 months ago by PHIL
Excellent reading and very analytical.Would be interesting to hear what Taleb has to say!Comparing to other books it makes fun reading.Published on January 14, 2013 by Narendra Modi
While parts of this book were slow going, I found myself learning quite a bit from the book. If you want a more detailed explanation of how Wall Street works, and how it has... Read morePublished on January 1, 2013 by michael meyers
I envy Mr. Brown's gift for networking and self-promotion - two highlights are the book-cover endorsements by his associates, and use of "we" when (constantly) referring to an... Read morePublished on November 11, 2012 by Dimitri Shvorob
Aaron Brown's 400 page book on risk is a synposis of a life in risk management with keen insights on the technical as well as human elements. Read morePublished on April 18, 2012 by Abbas Riazati