Traders, Guns & Money: Knowns and unknowns in the dazzling world of derivatives (Paperback)

by Satyajit Das (Author)
Key Phrases: yen royalties, senior note holders, dual currency bonds, Orange County, New York, Deutsche Bank (more...)

Editorial Reviews

Review

"Traders, Guns & Money is very fresh history, just two years old. Das picks apart the new machinery of the mega-trillion-dollar derivatives market, the one economists say might be next to collapse on our heads. And I'm with him, I really am. The guy has a thing for ridiculous puns and also for pitiable characters. We meet a couple of noodle makers who wreck their company on a deal no one but Das seems to understand. But by the end of his book, you'll get the deal too, I promise.” – All Things Considered, NPR, October 15, 2008

“WHETHER you are an investor, an observer of financial markets, or even an investment professional, Satyajit Das's Traders, Guns & Money should prove an entertaining, eye-opening read. –The Business Times, Singapore, September 27, 2008

“With the financial crisis tightening its chokehold on global banks, Das' forewarnings - outlined in his 2006 book Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives - are looking rather timely. Still, some in the industry initially scoffed at his warnings.” – The Toronto Star, September 23, 2008

"The sexier side of finance ... at last ... a convincing picture of what life is like in today's modern financial industry. Traders Guns and Money by Satyajit Das not only has a catchy title, it actually manages to entertain, educate and inform."  Corporate Financier, July 2006

"A must read for all CEOs, CFOs, Bankers and anyone who cares about what banks are doing with their money." - Finance Asia, May 2006

"... revealing insider's account"  - Director, April 2006

"... true rarity: a derivatives book that keeps your attention all the way through. " FOW April 2006

"... a welcome addition to the literature."  - The Sheet, April 2006

"... a scalpel of a book" - Financial Engineering News, July 2006

"A distincly timely book... This makes fascinating reading.... A good crib sheet for how the whole derivatives game works. " - Financial Times, May 2006

"Forewarned is forearmed." - Money Week, May 2006

"Das is especially good on structured products and on the recently fashionable world of structured credit... a diverting read" - Financial World, July 2006

"a worthwhile read for anyone with connection to the financial world" - World Finance, July 2006

"The murky and complex world of finances and derivatives is scrupulously and frantically told in this brilliant narrative. ... This is a collection and recollection of exquisite financial tales well worth your time.' Convergence, September 2006

"...a fascinating and compelling insight into the world of derivatives... [TGM has] a page turning quality more reminiscent of a John Grisham novel than a dissertation on derivatives." - FINASIA, October 2006

"An absorbing accessible primer... scoots along at a blistering pace" - Wilmott Magazine, December 2006

Author featured as expert in Asia Risk, Bloomberg, Financial Times all in December 2006

"one of the most entertaining investment books I've read in a long time... I can't recommend this book strongly enough" - Blogginstocks Jan 07

"part thriller, part expose… will be useful for anyone with connection to finance…will tell you some of the truth of what really does go on." Society of Business Economists Book Review - Jan 07

Product Description

“I had been in derivatives for over 25 years. Many traders hadn't been born when I stumbled accidentally into the arcane world of derivatives trading. The Indonesians were at the fag end of that career. How did I get there? I had followed the money. I had ridden the tide and currents of financial markets. I had not known very much then. Even now I only knew the many unknowns. How did I get here? It was a very long story. Send Traders, Guns and Money is that story…..”

Warren Buffet once labelled derivatives “financial weapons of mass destruction”. Unlike the military kind, financial WMD are not hard to find.  Many great companies use them.  These businesses use derivatives to make money or protect them from risk. It’s a simple case of greed or fear.  Or is it?

In derivatives, whoever you are, there are things that you don’t know that you don’t know. These are the real risks of derivatives. They’re generally left to the client to discover.   So, if you’re entering the dazzling world of derivatives, ask yourself this: What do I know? What do I need to know? What don’t I know? What am I doing?

You can find the answers in Traders, Guns & Money, a sensational and controversial first-person account of the business of derivatives trading and the financial products industry in the spirit of Liar’s Poker.  It is a true insider’s view of the business of trading and marketing derivatives for a living.  It details the nature of the business, the players, how money is made and lost, and the deceptions that underlie the entire process.

Funny and poignant, and written in a wry and wickedly comic style, the book provides the ordinary reader with an insight into the seeming madness that underlies financial markets and the out-of-control process that is trading in complex financial products that few understand.

Traders, Guns & Money  throws light on the culture, games, and pure deceptions played out every day in trading rooms around the world, and played out with other people’s money.  It describes the processes by which a small group of gifted, if avaricious, individuals parlay their knowledge of the arcane world of financial products into wealth, leaving shareholders, clients, regulators, and the tax paying ordinary public to bear most of the risk.

This is the story of how one set of clients discovered the perils of unknowns in a derivatives deal.  This tale will leave you amazed, and this book will make it all clear.In the sometimes dazzling world of derivatives, Traders Guns & Money shows you how we got here and tells it how it is. Go on, follow the money.

An accessible companion and a wise counsel, Traders, Guns & Money weaves together three core themes:

Known unkowns: if you’re entering the dazzling world of derivatives, ask yourself this:  What do I know? What do I need to know? What don’t I know? What am I doing? This book will make it all clear.

Follow the money: an insider’s, expert witness account of the rise and rules of the world of derivatives.  This book will show you how we got here and tell it how it is

Send traders guns & money:  the story of how one set of clients discovered the perils of unknowns in a derivatives deal .  This tale will leave you amazed, but wiser.

"Ever since Warren Buffett memorably described derivatives as "financial weapons of mass destruction" there has been a thriller waiting to be written about them.  Derivatives have frightened otherwise right-thinking people for some time. In part this reflects a natural tendency to fear what we do not understand."  Financial Times

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Product Details

• Paperback: 352 pages
• Publisher: FT Press; 1 edition (May 15, 2006)
• Language: English
• ISBN-10: 0273704745
• ISBN-13: 978-0273704744
• Product Dimensions: 9.1 x 5.9 x 1 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 4.5 out of 5 stars See all reviews (35 customer reviews)
• Amazon.com Sales Rank: #15,460 in Books (See Bestsellers in Books)

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Customer Reviews

Most Helpful Customer Reviews

62 of 63 people found the following review helpful:

5.0 out of 5 stars The starting point to the world of derivatives, September 22, 2007

By	Jaronimo (NJ, the garden state) - See all my reviews

"Knowns and unknowns in the dazzling world of derivatives" great subtitle and the author really delivers. I love books on finance. Possibly stemming from being dropped on my head as a child. Some are pretty brutal to read but this one is as entertaining as it is educational.

I was familiar with some derivatives like futures contracts and options, before reading this book. Now derivatives like CDO (Collateralized Debt Obligations), CCO (Commodity Collateralized Obligations), currency swaps, interest rate swaps, or even inverse floaters make sense to me. Obviously I am far from being an expert on any of these, but after reading this book I can now understand why Warren Buffet called derivatives "Financial Weapons of Mass Destruction".

The author does a great job educating you in story-like fashion. The book told of numerous investors that ended up getting screwed by some pretty good salespeople at different dealer firms. Buyer beware comes to mind time and time again as I read these episodes. The treasurer of Orange County California got in way over his head because he was making a ton of money. Which he attributed to his financial wisdom. Then when interest rates went against him and his county lost 1.5 billion dollars he changed his tune saying he had some kind of brain defect and could not understand numbers. That would have been handy for the voters of Orange County to know BEFORE they elected him to office.

I guess there are many reasons to use derivatives like avoiding taxes, moving risk from highly regulated areas to less regulated areas, using loans as collateral for even bigger loans, or repackaging bad credit in a way that transfers the risk to someone else. The more I learn, the more I am amazed that supposedly very intelligent people see these as a great way to make money. It just goes to show that most people invest in things they do not understand.

I read an article by the author, Satyajit Das today. In the article he mentioned that "1 dollar supports 20-30 dollars worth of loans" and that the derivatives market at the moment is valued at 485 trillion dollars, or to make that a little more understandable, 8 times the global gross domestic product. 8 times the GDP of the entire planet. Wow.

This book is a great introduction to the world of derivatives and I highly recommend it.

36 of 36 people found the following review helpful:

5.0 out of 5 stars Required reading for finance majors, November 17, 2006

By	Joe Kolman (New York, NY United States) - See all my reviews

This is not another journalist musing on the financial world. This is not an academic explanation of how financial instruments work. It's something else entirely -- a rare inside glimpse into the world of derivatives by a literate professional who's been a handshake away (or closer) from the major events in the market. Das leavens a series of technical discussions about particular strategies with more entertaining glimpses into the culture the drives the deals. Although I have bones to pick with the book's episodic structure, I can't think of a better way to get a crash course in how the capital markets really work.

39 of 42 people found the following review helpful:

4.0 out of 5 stars A double agent's account of his life as a spy, January 9, 2007

By	Valeri Pushnya (London-Moscow) - See all my reviews (REAL NAME)

As a derivatives trader I've seen many of my colleagues who just enter the field paying hundreds of dollars for thousands of pages of Mr. Das highly unreadable and stupefying compendiums on the subject of structured products. It is impossible to imagine a more serious and devote approach to derivatives than that exuding from his technical volumes. In comparison this new book feels like a gush of fresh air and while demystifying and ridiculing what used to be his bread and butter Mr. Das may look a bit cynical it is an honest book full of interesting and plausible examples and stories. For novices it can be very educational and for experts quite entertaining. It is like a memoir of a spy who turned out to be a double agent on his lifetime in secret services. When a guy knows so much who cares what side he was serving on?