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Ask HN: Book recommendations for understanding financial systems?

• tracer4201 7y ago
  Reading Stress Test by Timothy Geithner taught me quite a bit, although it’s not a primer on the financial system but play by play of the financial crisis.
• chrisanthropic 7y ago
  I really enjoyed the graphic novel "Economix: How our economy works (and doesn't work)" by Goodwin & Burr. I found it informative, clear, concise, and funny at times, all uncommon for educational economic text in my experience.
• deleted 7y ago
  [deleted]
• igorkraw 7y ago
  Since I'm mainly interested in risk and volatility, this list might be a bit biased but here we go: A random walk down Wallstreet Options and volatility pricing, by Natenberg Why stock markets crash, by Didier sornette Manias, panics and Crashes by Aliber and Kindleberger Debt: the first 5000 years
  • harry8 7y ago
    I studied it, got the cfa designation, worked in the field. Yet to see a better, more accurate or more succinct treatment than "A Random Walk Down Wall St" by Malkiel. Can't recommend it enough. Readable. Required knowledge.
• docdeek 7y ago
  You can't go wrong with 'The Big Short'. I saw the film a few times before I ever bought the book, and it's still enlightening.
  • 0x1221 7y ago
    I would say that The Big Short is more impactful if you already have some general understanding of the markets.
  • kortilla 7y ago
    Michael Lewis has a habit of... let’s say focusing on convenient facts to emphasize a narrative that doesn’t usually match reality. His books are entertaining (I think I’ve read them all), but they are actually a pretty bad way to learn about how the markets work.
  • jayflux 7y ago
    The big short is a great book, but not sure it’s a good primer on how the financial system works for someone learning.
• allie1 7y ago
  I started "Big Debt Crises" by Ray Dalio a while ago and so far it's proving to be a very good introduction on what you're looking for.
• abeaulne 7y ago
  How The Economic Machine Works by Ray Dalio https://www.youtube.com/watch?v=PHe0bXAIuk0 https://www.youtube.com/watch?v=PHe0bXAIuk0 I don't agree entirely but good signal-to-noise ratio on this content
  • cinquemb 7y ago
    "Ray Dalio says 'cash is trash' and advises investors hold a global, diversified portfolio" - Jan 21 2020 Had you have listened to him, you would have just been taken out back, shot, and put in one of wuhans finest crematoriums… better off reading "Statistical Consequences of Fat Tails"[0] [0] https://arxiv.org/abs/2001.10488 https://arxiv.org/abs/2001.10488
    • nabla9 7y ago
      His advise is still sound if you are an investor and not speculator. The part of your investment that is in stock should be determined your investment horizon. If you don't need to sell your stock in next 15 years, don't hold cash.
      • cinquemb 7y ago
        Yeah, would have played out very well for those top ticking n225 in 1989, esp with every global CB's trying to follow in the footsteps of the BOJ, while everyone is crowding into "diversification" and searching for yield… I consider investors to be the same as speculators, just speculators who think their beliefs will remain valid over long time frames… cause that's the gamble.
        • nabla9 7y ago
          investor who does - dollar cost averaging, - diversification, small cost investing, - has sufficiently long time-horizon has never lost money on 15 year timescale, at least past WWII.
          • cinquemb 7y ago
• akga 7y ago
  For understanding how money works, I’d recommend Debt: The First 5000 Years by David Graeber.
• mrpickels 7y ago
  Simple - money is a scam, only value for it is trust of other people. Keynesian economics sucks, globalism is evil.
• WalterBright 7y ago
  "Monetary History of the United States" by Milton Friedman. It's tough sledding, but worth it. And by giving the history, one comes to understand how we got to where we are. "Capitalism" by Reisman gives a solid theoretical foundation on topics like rent control, inflation, etc. I especially found illuminating its coverage of the 1970's oil crisis and how the root cause of it was price controls. I'd avoid economics books written by journalists and politicians, as all I've run across are dominated by ignorance, bias, and agendas. Ones by economists often have agendas, too, but they aren't nearly as ignorant. Just imagine a technical book about electronics written by a journalist, and you'll know what I mean.
• smarri 7y ago
  Ascent of Money - Niall Ferguson The Long and Short of It - John Kay A great place to look is the second hand study books for professional qualifications like the CFA, Chartered Banker and so on
  • motohagiography 7y ago
    Ascent of Money is indispensable as a foundation for the whys and hows of banking from it's origins and first principles. It's a history book. Anything technical (mathematical finance) is really not going to provide a foundation without the historical why of the instruments creation and use. One you have that, the most efficient way to understand it after would be with Quantlib (https://www.quantlib.org/docs.shtml https://www.quantlib.org/docs.shtml) There is a lot of middle brow commentary (krugman, piketty, reinhard/rogoff, dalio, taleb, etc) that will be entertaining and philosophical, but only that. The guts of economics (Keynes, Galbraith, Mises/Hayek) are very dense, and provide a very narrow, depth first plunge into something you won't be able to apply well without a more complete education. Functional grasp of (re)insurance, securitization, liquidity, and the bond/debt markets is the best royal road, I"d say.
    • eruditely 7y ago
      I disagree that Taleb is "middle-brow", check out his new technical incerto book, from what I've heard its rather rigorous.
• talolard 7y ago
  I liked Trading and Exchanges by Larry Harris
  • haileris 7y ago
    Seconding this. It's a fantastic book, a little outdated but easy to fill in the gaps. I think the best route is to read this, skip all of the books marketed to retail traders. Read the things the professionals read like the CFA study materials. Mark Meldrum also has a comprehensive coverage of the CFA body of knowledge on YouTube.
  • FabHK 7y ago
    That book is about securities trading and market microstructure; it has very little to do with what OP asked for.
• gargarplex 7y ago
  Why would you ever read a book on financial systems by someone who isn’t absurdly rich
  • regularfry 7y ago
    Some of the books being mentioned here are by people who got absurdly rich.
    • gargarplex 7y ago
      Which ones?
      • regularfry 7y ago
        Just on a quick scan we've got Graham, Buffett, Soros, Taleb... those are before I need to go and look up personal net worth for some of the other names. I'd bet on Burton Malkiel having done alright for himself, too.
        • gargarplex 7y ago
          Graham, Buffett, Soros – sure, ok, although I doubt they're giving away the keys to the kingdom in their books. Buffet himself is notorious for saying that great ideas are proprietary and not to be shared. In the investment world, in stark contrast to the tech community, ideas are as valuable as execution. Even in VC proprietary dealflow is considered to be valuable. There is actually some controversy as to how much money Taleb made from trading and portfolio management as opposed to writing.
          • regularfry 7y ago
            Right, so your argument is what? That no valuable idea is ever written down? Or that no written down idea is valuable? Why would either of these be true?
            • 7y ago
• yalooze 7y ago
  For a slightly different take, Fooled By Randomness and The Black Swan by Nassim Taleb. I would read some of the more direct recommendations here and then read Taleb to remind you that not everything is predictable or easily explainable.
  • evjan 7y ago
    The entire Incerto book series by Taleb (which includes Fooled by Randomness and The Black Swan) are awesome and they are talking about big catastrophic events like the current one. This pandemic is a classic Black Swan event: it's a surprise, it has a major impact and lots of experts will try to say that it was easily foreseeable in hindsight.
    • pergadad 7y ago
      It's not a black swan, a pandemic was long on the horizon (think SATS, MERS, Ebola, ...). Just to add: I found taleb pretty opionated and had trouble distinguishing his own opinions from facts/theories.. I'd not recommend his books.
      • cinquemb 7y ago
        > It's not a black swan, a pandemic was long on the horizon (think SATS, MERS, Ebola, ...). I agree with this statement > Just to add: I found taleb pretty opionated and had trouble distinguishing his own opinions from facts/theories.. I'd not recommend his books. Everyone has an opinion… but very few will step through the mathematical models (and where/how they break down) behind how they are gauging/backtesting the risk of ones assumptions (and go about figuring out how to adopt it to your own circumstances), like taleb does.
      • katzgrau 7y ago
        "a surprise for the turkey is not a surprise from the butcher." Whether it's a black swan event depends on the perspective you're taking.
      • Grustaf 7y ago
• regularfry 7y ago
  I've been having an interesting time working through Security Analysis by Graham and Dodd. It's ancient, but it really gets to the heart of what bonds and stocks actually are, and gives you an insight into how everything worked before it all got accelerated to the Nth degree. The historical perspective of the 1928 crash being recent memory is really interesting too.
• notomorrow 7y ago
  Nick Nick Szabo's long essay: Shelling Out: The Origins of Money https://nakamotoinstitute.org/shelling-out/ https://nakamotoinstitute.org/shelling-out/
• redis_mlc 7y ago
  The short answer is this. Wall Street exists to profit by skimming money off society, like a predator waiting for gazelle to approach a watering hole. The Chinese government produced an excellent short film on this that was shown on airlines about 5 years ago. At the end was a warning to the USA not to devalue the dollar (to wipe out Chinese holdings.) :) Silicon Valley VC's also do that, by skimming 2/20 (or more) from institutional investors with no downside risk to the VC. The long answer - it will take you decades to study and learn. Do some reading and watch NBR.
• noufalibrahim 7y ago
  Money: The unauthorized biography by Felix Martin discusses money as social technology and its history https://www.amazon.com/Money-Unauthorized-Biography-Coinage-Cryptocurrencies/dp/0345803558 https://www.amazon.com/Money-Unauthorized-Biography-Coinage-...
• AlphaGeekZulu 7y ago
  Unfortunately only in German language: Bernard A. Lietaer: Das Geld der Zukunft Bernard A. Lietaer: Mysterium Geld
• Cro_on 7y ago
  Debt: The First 5000 Years https://libcom.org/files/__Debt__The_First_5_000_Years.pdf https://libcom.org/files/__Debt__The_First_5_000_Years.pdf
• totalZero 7y ago
  Oil 101 by Morgan Downey is one of the worst-edited books I've ever read, yet the amount of knowledge contained in that book is astonishing. The petroleum markets are vital to the financial system, as we saw on Monday when oil over-supply catalyzed a downward move in global equity markets.
• SiqingYu 7y ago
  The Economist Guide to Financial Markets by Marc Levinson
• rootsudo 7y ago
  Actually - any college level book. There are tons, they're cheap on ebay, look for pearson or mcgraw hill. If you're creative, you can probably find a epub/pdf. But even the DK Eye Witness have a good idea - how business works, how money works. Financial system, economics, monetary policy become very simple with pictures, and even easier on an spreadsheet. Even more so is how many people don't know how much the government does in collecting statistics to analyze and examine the health of the economy - The BLS https://www.bls.gov/ https://www.bls.gov/ is a great resource and once you have a basic understanding (or know healthy or "safe" numbers) you can explore other country economic numbers and see if they make sense (or not!) e.g. https://psa.gov.ph/ https://psa.gov.ph/ for Philippine Statistics. Contemporary Financial Management is great - Accounting Princicpals are also great (can you read a PL sheet? Do you know GAAP? How about Compliance regulations?) Just "money" is one piece of the puzzle - money is a tool and that tool has been transformed into different pieces that fit what we do finance in life - A basic book would be rich dad, poor dad - it's quite cliche but it's a good introduction to "wealth" and assets vs liability == net worth. --- tl;dr I ranted, I can go on - the DK Eyewitness books are a good starting point and then you can dig deep - but mostly it really runs quite simple for most things and then gatekeeped by interesting vocabulary. How Money Works: The Facts Visually Explained (How Things Work) Hardcover – March 14, 2017 by DK (Author) . How Business Works: A Graphic Guide to Business Success Hardcover – 2015 by Dk (Author) The Economics Book: Big Ideas Simply Explained Paperback – February 6, 2018 The Business Book: Big Ideas Simply Explained Paperback – November 20, 2018 How Business Works: The Facts Visually Explained (How Things Work) Hardcover – April 14, 2015 DK Eyewitness Books: Money: Discover the Fascinating Story of Money from Silver Ingots to Smart Cards Paperback – June 14, 2016
• scirocco 7y ago
  This is a good start, "Money as debt". Saw it in university and since then you will never take financial markets seriously. And all the "stimulus" we see is just pushing the can forward. You will start to see through a lot of lies. https://www.youtube.com/watch?v=2nBPN-MKefA https://www.youtube.com/watch?v=2nBPN-MKefA
• misrab 7y ago
  This is an online course, not a book, but it changed my understanding of finance. I studied Economics (initially) at university, and never found anything close to as useful as this class: https://www.coursera.org/learn/money-banking https://www.coursera.org/learn/money-banking
  • irln 7y ago
    Completely agree, most texts concentrate on teaching outdated fractional reserve based monetary systems. Fractional reserves are no longer the major constraint on an expanding/contracting money supply. This course builds up an understanding of the push/pull factors of modern finance and banking.
  • Merrill 7y ago
    Great course. It deals with the actual financial plumbing and how it has evolved from simple beginnings to the current complexity.
  • mtrycz2 7y ago
    Videos of one year's lectures are available on youtube, with links at here: https://www.ineteconomics.org/education/courses/the-economics-of-money-banking https://www.ineteconomics.org/education/courses/the-economic... I'm halfway through, and I'm really impressed not only by the prof's preparation but methods. Very clear.
  • samvher 7y ago
    Started this course based on your recommendation, and agree that it's very good. A lot of mysterious stuff (repo, LIBOR, fractional reserve banking) is making a lot more sense to me now.
• jayflux 7y ago
  Ascent of Money - Niall Ferguson will start you from the very beginning, and does cover all the subjects you mentioned. Random walk down wall street is good, but the angle is more “so you want to get into investing?” It won’t go into too much detail of underlying systems like fiat currency.
• pembrook 7y ago
  First, arm yourself with the tools to figure out whether what you're reading is bullshit or not (unfortunately a huge issue in the finance space). Read about The Organon by Aristotle, particularly his work around logical fallacies. Then, for a brief overview of the history of money, currency, and markets read the first part of William Bernstein's The Four Pillars of Investing (provides some good historical context). To understand financial market movements in the short term (like what is happening now), read about crowd psychology, behavioral biases (Kahneman), and black swans (Taleb). To understand financial markets over the long term, read anything written by Buffet (his annual reports) or Munger, or their intellectual precursor, Graham and Dodd. To understand the theories and thinking underpinning money and central banking, read about Adam Smith, Milton Friedman, Keynes, and Hayek. Start with a bias toward history and older works, and move towards newer works to understand how the current zeitgeist got here and be able to think more critically about the ideas that are currently en vogue. Also, I agree with the comment that recommends avoiding books by journalists. These are typically compelling narratives in search of supporting facts and theories (the wrong way to approach thinking). You should start your learning from the opposite position. Learn the theories and facts first, then think critically about any good-sounding narratives you see repeated in the wild.
• jokull 7y ago
  1. People’s QE (modern monetary policy, some great explain-to-me-like-I’m 5 sections) 2. Doing Capitalism by Bill Janeway (innovation economy) 3. Crashed by Adam Tooze (some financial history)
• qnt 7y ago
  From someone working in the hedge fund world, “Big Debt Crises” by Ray Dalio is the most useful book I have read on the topic. The language is quite accessible and it describes how various kinds of business cycles have played out through history. The highlight for me is an elaborate, punch-by-punch retelling of how the 3 major financial crises played out (1930s Germany, Great Depression and 2008). Rather than looking backward with the benefit of hindsight as most textbooks do, this gives you a real impression of how the events played out in real-time. There are even newspaper headline clippings in the margins from every week or so, just to show how the popular narrative was evolving as it happened.
  • markus_zhang 7y ago
    Yeah I always find reading financial history materials, if they are authentic, really helps understanding a lot about the current situation. Guess our generation might have the privilege to go through a financial crisis and a depression. Hopefully not.
• zanezone 7y ago
  Get some conflicting ideas. Two great, short books are The Mystery of Banking by Rothbard (available for free here: https://mises.org/library/mystery-banking https://mises.org/library/mystery-banking) and Economics in One Lesson by Hazlitt (free here: https://fee.org/resources/economics-in-one-lesson/ https://fee.org/resources/economics-in-one-lesson/). They both conflict quite substantially with the mainstream and might open up a whole new line of inquiry for you.
  • alexmingoia 7y ago
    To add to this, Understanding Money Mechanics (https://mises.org/library/understanding-money-mechanics-0 https://mises.org/library/understanding-money-mechanics-0) is a fantastic “comprehensive overview of the theory, history, and practice of money and banking, with a focus on the United States.” I highly recommend it, especially because it was written recently so it provides understanding behind contemporary banking procedures, practices, and econometrics.
  • FabHK 7y ago
    And keep in mind that both of these are Austrian/libertarian takes on things - with important insights, no doubt, but then balance it with some more conventional and maybe even some left accounts.
  • PaulDavisThe1st 7y ago
    If you're going to read Hazlitt, do us the favor of reading John Quiggin's recent followup "Economics in Two Lessons": https://www.amazon.com/Economics-Two-Lessons-Markets-Badly-ebook/dp/B07JQ676JQ https://www.amazon.com/Economics-Two-Lessons-Markets-Badly-e... "Since 1946, Henry Hazlitt’s bestselling Economics in One Lesson has popularized the belief that economics can be boiled down to one simple lesson: market prices represent the true cost of everything. But one-lesson economics tells only half the story. It can explain why markets often work so well, but it can’t explain why they often fail so badly—or what we should do when they stumble. As Nobel Prize–winning economist Paul Samuelson quipped, “When someone preaches ‘Economics in one lesson,’ I advise: Go back for the second lesson.” In Economics in Two Lessons, John Quiggin teaches both lessons, offering a masterful introduction to the key ideas behind the successes—and failures—of free markets."
• montalbano 7y ago
  Some more heterodox takes on economics/finance: https://www.goodreads.com/book/show/17836526-killing-the-host https://www.goodreads.com/book/show/17836526-killing-the-hos... https://www.goodreads.com/book/show/42515482-and-forgive-them-their-debts https://www.goodreads.com/book/show/42515482-and-forgive-the... https://www.goodreads.com/book/show/20655234-freakonomics-superfreakonomics https://www.goodreads.com/book/show/20655234-freakonomics-su... https://www.goodreads.com/book/show/6304389-the-spirit-level https://www.goodreads.com/book/show/6304389-the-spirit-level https://www.goodreads.com/book/show/17368973-the-heretic-s-guide-to-global-finance https://www.goodreads.com/book/show/17368973-the-heretic-s-g... More conventional investment perspectives, particularly useful if you want to invest: https://www.goodreads.com/zh-TW/book/show/11645917-a-random-walk-down-wall-street https://www.goodreads.com/zh-TW/book/show/11645917-a-random-... https://www.goodreads.com/book/show/106835.The_Intelligent_Investor https://www.goodreads.com/book/show/106835.The_Intelligent_I... https://www.goodreads.com/book/show/25574.Common_Stocks_and_Uncommon_Profits_and_Other_Writings https://www.goodreads.com/book/show/25574.Common_Stocks_and_...
• polskibus 7y ago
  This is the best online course I've ever taken: https://www.coursera.org/learn/money-banking https://www.coursera.org/learn/money-banking The professor explain the financial system very well using fairly recent and historic events.
• nabla9 7y ago
  For learning I strongly recommend against almost all books mentioned in this thread. They don't really teach how financial systems work in the society or the underlying principles. They give you just a viewpoint. Some of them are good read after you know the basics. You need to pick up real college textbook (or online course) and read the parts that interest you and skim other parts. Example: Introduction to Finance: Markets, Investments, and Financial Management by Melicher and Norton You can also pick up introductory undergraduate college textbook in economics and read the parts that interest you. Greg Mankiw's books are good but the price is off the charts, so maybe don't buy them. (Macroeconomics & Financial Systems could be cheap if bought used) After that some light reading for general audience with interesting viewpoints and lessons: - A Random Walk Down Wall Street by Malkiel - Common Sense on Mutual Funds by John Bogle - The Alchemy of Finance by George Soros (Sorosls theory of reflexivity in finance, nontechnical take on nonlinear dynamics in the markets)
  • soVeryTired 7y ago
    I recommend against Mankiw, and to be honest, macroeconomics as a whole. But particularly undergrad macroeconomics. Undergrad macro textbooks are more or less designed to teach you how to work a model, and how to prove theorems about a model. But when all is said and done, macro tends not to go the distance and demonstrate how the model relates to the real world. They also get important details wrong. Most of the west doesn’t work on a fractional reserve system anymore, and the main constraint for money creation is not the reserve ratio. Honestly you’d be better off learning very basic accounting, then learning about bank balance sheets, then learning about basic financial plumbing like the repo market, money market funds, and the fed’s operations. I like Bruce Tuckman’s book ‘fixed income securities’ for the latter. It’s very practical, without any of the theoretical nonsense you sometimes encounter in advanced texts.
    • magicroot75 7y ago
      How is Tyler Cowen's textbook? I figured that'd be better.
      • 7y ago
• kriro 7y ago
  I think the first question that you will face is if you agree with the Efficient Market Hypothesis (EMH) and the random walk. Basically they say that prices reflect all available information and that you cannot "beat" the market (there's a subtle difference between EMH and random walk). The return on an investment is a direct reflection of the risk. Good reading to get an understanding for this are "A Random Walk Down Wall Street" and papers by Eugene Fama (EMH will be covered by any intro to finance book as well). For a good overview of EMH, I like this paper: http://www.cs.ucl.ac.uk/fileadmin/UCL-CS/images/Research_Student_Information/RN_11_04.pdf http://www.cs.ucl.ac.uk/fileadmin/UCL-CS/images/Research_Stu... The investment takeaway is that you should invest in passive index funds with low management cost (typically ETFs). There's different contrasting points of view most notably behavioral finance. The EMH argument is basically the market is an aggregation of all available information. Due to the power of averaging it is going to be correct (if one person overestimates, another will underestimate and it will all cancel out). The behavioral counterargument is that there are certain human biases that lead to all parties being wrong in the same direction (such as risk aversion). Another POV that is aligned with the behavioral view is that the theory of evolution provides a good framework for thinking about markets. I like the book "Adaptive Markets" which also gives a good overview of EMH and behavioral finance so I'll recommend that as a reference. I think together with "A Random Walk Down Wall Street" you're set for "general framework of thought" material. Personally, I am a value investor so I can only recommend books from that school of thought. The basic idea is that you look at the fundamentals of a company and the stock market can misprice them. The holy grail is finding a company where the sum of (current) assets is worth more than the current market valuation via the stock price because in essence that means if the company would be liquidated and everything would be sold off, you'd still walk away with a profit. In essence, you're trying to buy 1$ for < 1$. This is Buffett's philosophy and he has done really well with it. I'd recommend "Value Investing" by Greenwald, Kahn, Sonkin and van Biema as a good intro book that summarizes everything and has some easy to follow examples (because you can't usually just take the assets face value but have to discount them etc.). The classics are "The Intelligent Investor" and "Security Analysis" (more academic but for me this is the gold standard). If you need a quick "how to read balance sheets/income statement/cash flow statements" I'd recommend "Warren Buffett Accounting Book" I think the best essay that describes what markets are good for is "The use of Knowledge in Society" by Hayek. At least it makes sense for me that they serve the function of aggregating local and specialized information. If you're interested, it's also a decent idea to research the different theories of the business cycle. Keynesian, Real Business Cycle, Austrian etc. tl;dr: - A Random Walk Down Wall Street - Adaptive Markets - Value Investing (+ Warren Buffett Accounting Book) Edit: I'm assuming you want a "quick overview". Otherwise, get some mainstream Finance and Behavioral Finance textbooks :D
• matt_fmz 7y ago
  At Finimize, we offer a selection of products designed to help with exactly this: https://www.finimize.com/ https://www.finimize.com/ Disclaimer: I work there! Aside from that, I'd also recommend the previously mentioned Ray Dalio economic machine video, Benjamin Graham's Intelligent Investor (for understanding value investing) and Black Swan (for an alternative insight into tail risks such as the one we're going through)
• auxym 7y ago
  Highly recommend Naked Economics by Charles Wheelan.
• dave333 7y ago
  Elliott Wave Principle by Robert Prechter and A. J Frost https://epdf.pub/queue/elliott-wave-principle-key-to-market-behavior.html https://epdf.pub/queue/elliott-wave-principle-key-to-market-... This is the technical analysis method used by many market traders and it both predicted this week's market plunge as well as described its form, and is currently forecasting a further plunge next week. For economics I would look for any youtube talk by Prof. Steven Keen - he accounts for debt that most mainstream economists ignore.
  • santiagobasulto 7y ago
    Elliot Wave analysis is harmful, do not engage with it. I have friends that have lost a lot of money trying to follow it. It has 0 scientific background, it’s not more than astrology applied to finance. Please don’t spread these things, be responsible.
    • dave333 7y ago
      Do flocks of birds or schools of fish fly or swim in random directions? Or do they swarm together in discernible patterns? At core we share similar brain structures with them.
      • maest 7y ago
        There's a gargantuan step to be made between saying "there are _some_ similarities between human and fish brains" to "the stock market behaves non-randomly like a school of fish". And an even bigger one to saying "The non-random patterns in the stock market can be divined with TA".
  • IndexPointer 7y ago
    I'll wait for next week to see if that's true before adding it to my list.
    • dave333 7y ago
      Forecast is actually for a 3rd of 3rd wave down which is likely to be larger than anything seen so far maybe 15% + over one or two days, and then the midpoint of that should be the halfway point from the Feb 19th top to the eventual first big low point.
• danidiaz 7y ago
  I'm not knowledgeable enough to properly recommend a book on the subject so take this with a grain of salt, but I thought the historical (and opinionated) overview of the evolution of English money in Christine Desan's "Making Money: Coin, Currency, and the Coming of Capitalism" was interesting https://www.goodreads.com/book/show/21492062-making-money https://www.goodreads.com/book/show/21492062-making-money I like this quote about how financial institutions evolved: "It happened improvisationally, indeed probably unintentionally. Participants solved one problem and created others; they reacted as often as they acted affirmatively; they moved by experience and intuition, without an overarching theory; and the whole affair took decades, involved many different actors, and coheres largely in retrospect."
• maest 7y ago
  I have almost 10 years in the finance industry, both buyside and sellside and my take is that, while there are some fundamental principles at play, the world of finance is too messy and complicated for any one book to describe it. An even stronger statement I am willing to make is that no one person correctly and fully understands the financial system. So, once you accept that there is no "correct" answer to how the financial system and how markets work, what's left to do is to follow what's happening in the world and try to build your own mental model. One source I'm a big fan of (and has a bit of a cult following in the financial world) is Matt Levine's "Money Stuff" blog: https://www.bloomberg.com/opinion/authors/ARbTQlRLRjE/matthew-s-levine https://www.bloomberg.com/opinion/authors/ARbTQlRLRjE/matthe... He's engaging, funny, talks about interesting topics and, most importantly, he's _rarely_ wrong. It's a rare thing seeing a journalist talk about your specialty subject and actually being correct. Similar source is Felix Salmon: https://www.felixsalmon.com/ https://www.felixsalmon.com/ Similar league as Levine, but I find him slightly less engaging, for whatever reason.
  • fanzhang 7y ago
    Agreed that Money Stuff generally technically accurate. The only gripe I have about it is that it has a bias in the direction of "everything is so messed up / comical". This is an irreducible bias as it's the job of the journalist to make a topic seem engaging and interesting. However, if you take the theme of Levine's articles too literally/thematically, you'll think that finance is filled with quirky rules that produces comically inefficient outcomes most of the time. You'll think that there are easy system changes that any layperson can see that would make the system run much better. You might even think that finance is clear swamp ready to be drained -- this plays into the confirmation bias of readers who come in already with the thesis that "the system is totally broken". In fact, against this theme, 90% of the time the story is incredibly dry and uninteresting because the system works exactly as intended. 90%+ of the time, stock A + B bundled is worth exactly the sum of it's parts. 90%+ of the time, the regulations do protect investors, are cheap to check off, and causes no weird behavior. 90%+ of IPOs are textbook win-wins and not Adam Neumann playing Softbank or a sell-side banker eating grandma. To be constructive though, what's the solution? Start with skimming over the most classical textbooks (Mankiw or the recommended non-heterodox textbooks from the relevant classes by your local colleges). This is the classical theory of both how things are supposed to work, and how 90% the value generation actually occurs in 90% of the cases.
• fdghfg 7y ago
  This will be overlooked but this is actually the answer to your question - buy some stock. Any stock. Just one stock if you are low on cash. Just buy it. Now. Not tomorrow, today. It will force you to learn about the business you bought, how it is conducting its business but also how the stock market works. Then how the global economy works and how things are interlaced and connected. In few months you will understand more than any school or book could teach you.
• fauria 7y ago
  If you are looking for a shorter read, I would recommend "The money creation paradox" paper published by ING: https://think.ing.com/uploads/reports/Money_paradox2.pdf https://think.ing.com/uploads/reports/Money_paradox2.pdf I find fascinating that, despite the simplicity of the question, not every economist agrees on how this happens.
  • dunk010 7y ago
    The vast majority of money is created by commercial banks. They are, largely, free to do so to whatever degree they deem fit, and the central bank adjusts reserves to match. Almost all money is debt, created by extending loans in this fashion. The textbooks are for the most part wrong. The money multiplier / fractional reserve banking / etc. information is completely wrong. Don't believe me? Believe the Bank of England: https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...
• anticodon 7y ago
  Why there's no suggestions for Karl Marx? He predicted these crises and that they're unavoidable in capitalism and all only get worse with the time.
  • mrpickels 7y ago
    because we live in the real world and deal with real humans. Karl Marx never worked a single day in his life and created an ideology for people who believe in unicorns. His work is a criticism of Adam Smith's theories, not a self-sustainable solution.
    • peisistratos 7y ago
      > His work is a criticism of Adam Smith's theories Marx's work is a continuation of Adam Smith that the subject of inquiry was political economy (not "economics"), that value derived from labor and so on. Modern establishment economics is a criticism of Adam Smith in that value comes from labor, that the study of the economy is political, etc.
    • anticodon 7y ago
      He was the first person to prove that capitalism is not a self-sustainable solution either. Everything he said about capitalism was true and remains true. E.g. the current crisis could be predicted and it will be a super-crisis, because there're no new markets in the world. No more countries left to plunder. There's no way of solving the current crisis without starting a 3rd world war.
      • mrpickels 7y ago
        The capitalism that we have rn is actually a form of socialism :) I don't want to be that pessimistic about 3rd world war, a horrible solution to a big problem. I think humanity has a chance to have abundance, we need to be united and don't trust governments and banks and medical institutions, I can see that a lot of people are going through a healing phase of their mental state, they giving up all of the brainwashings and taking a red pill. Question is - will everybody use his chance on time? We will see. Peace.
• triggercut 7y ago
  If you have the time for a deep deep dive, I would recommend David Harvey's The Limits to Capital New Edition (2006). There's always the recorded version of his course on Reading Marx's Capital[1] which is similar. [1]https://www.youtube.com/user/readingcapital https://www.youtube.com/user/readingcapital
• ryeguy_24 7y ago
  Ray Dalio - How the Economy Works https://youtu.be/PHe0bXAIuk0 https://youtu.be/PHe0bXAIuk0
• known 7y ago
  Internship in a Wall Street Firm is better;
• nodemaker 7y ago
  I recommend a different approach. Start with a little bit of money in the stock market with a portfolio that you are allowed to change every Sunday. Then slowly understand what caused the value of your portfolio to go down or up and how you can hedge against your risks.(Once you lose or gain money you will get the motivation to read fat books dont worry) In the end its all a risk calculation and the faster you get into doing it the better. I am not rich or with a finance background but this is the approach I am following now.
• Rerarom 7y ago
  https://www.goodreads.com/book/show/13144133-where-does-money-come-from https://www.goodreads.com/book/show/13144133-where-does-mone... Where does Money come From
• mitchelldeacon9 7y ago
  I studied economics in college, then I worked for a few years as a business journalist before I finally switched careers to IT systems engineering. The following is a list of my favorite books on financial securities, banking and investment theory. These books are generally comprehensible to anyone with an interest in the subject, regardless of their educational background. Arrighi, Giovanni (1994) The Long Twentieth Century: Money, Power and the Origins of Our Times Brealey, Myers, Allen (2011) Principles of Corporate Finance, 10th ed. Bruck, Connie (1988) Predators' Ball: Inside Story of Drexel Burnham and Rise of Junk Bond Raiders Fisher, Philip (2003) Common Stocks and Uncommon Profits and Other Writings, 2nd ed. Fridson, Martin and Fernando Alvarez (2002) Financial Statement Analysis, 3rd ed. Graham, Benjamin, J. Zweig, D. Dodd (2006/08) Intelligent Investor, rev ed; Security Analysis, 6th ed. Greenblatt, Joel (1999) You Can Be a Stock Market Genius Greenwald, Kahn, Sonkin, Biema (2001) Value Investing: From Graham to Buffett and Beyond Henwood, Doug (1997) Wall Street: How It Works and for Whom Levitt, Arthur (2003) Take on the Street: How to Fight for Your Financial Future Lewis, Michael (2010/1989) Big Short; Liar's Poker Lynch, Peter and John Rothchild (2000) One Up on Wall Street, 2nd ed. Mishkin, Frederic (2004) Economics of Money, Banking and Financial Markets, 7th ed. Taleb, Nassim Nicholas (2005/10) Fooled by Randomness, 2nd ed.; Black Swan: Impact of the Highly Improbable, 2nd ed. Vilar, Pierre (1976) A History of Gold and Money: 1450-1920 Tracy, John A. (2009) How to Read a Financial Report: Wringing Vital Signs out of the Numbers, 7th ed.
  • rupert1234 7y ago
    Good list.
• ccarpenterg 7y ago
  Corporate Finance - Stephen Ross
• lordlulent 7y ago
  I have been here before where I actually wanted to find out what is going on with finance. I was amazed that its more about ideology than it was about finance itself. It was more about psychology and the intents of human nature than it was just about transactions and definitions. In as much as books are good, i would urge you to follow certain men as well. Prof. Richard Werner and all his books. Prof. Steve Keen and all his books. List still loading ...
  • qorrect 7y ago
    It's so true, I'd say over half of 'finance/trading' books are almost entirely about psychology and their own personal take, it's really discouraging.
• horsemessiah 7y ago
  Marx's Capital, despite being old, is pretty prescient for the modern day.
• jason_slack 7y ago
  Dr Ernest Chan Ray Dalio Marcos Lopez de Prado These authors are how I started. I'd be happy to list specific books if that is helpful, but I don't want to give you a false sense that if you read books I mention you will have the same understanding that I do.
• jonahbenton 7y ago
  Huge, huge topic. You will have to pick a path through the enormous jungle. The starting point I would recommend is bottom up, through accounting and financial statements. Core knowledge, of both practical and intellectual value. Tons of books here, I particularly like Thomas Ittelson - Financial Statements Accessible, straightforward, friendly. After that, any of the collections of Warren Buffett's Letters to Shareholders are both entertaining and intellectually valuable, and provide great insight. Read forward, eg, from his first letters in the 1960s, to now. One of the realizations in the journey is that there are, and have been, a lot of different kinds of money- credit money and exchange money and asset money and so forth. A relatively abstract/intellectual but immensely useful survey is The Nature of Money - Geoffrey Ingham The concept of an asset is critical to the functioning of the financial system. New kinds of assets are created all the time. One of the best written books I have read recently goes into venture capital and debt asset creation: The Code Of Capital - Katharina Pistor The role of different kinds of money in history, especially US history, is absolutely fascinating. I am in the middle of American Bonds - Sarah Quinn and can recommend. I do not especially recommend the Dalio books or Graeber's Debt or Ferguson's books. They are fine but I did not find them helping me build understanding. Not quite junk food, but definitely not protein. I unfortunately have not found any of the books I have seen about the Federal Reserve to be worthy of recommending. My wife works there and so I have perhaps a unique perspective. But nothing conveys the challenge and the mechanics of what they do. Still looking. The papers the various Fed banks publish, as well as the papers published by the Bank of England, are uniformly outstanding. Finally, some of the bitcoin people have written about money. Tho I am a believer in bitcoin I absolutely recommend against most of them, especially Saifedean Ammous's book. Do not read. Good luck!
  • PaulDavisThe1st 7y ago
    If Graeber's Debt didn't help you build understanding, then I'd respectfully suggest that you weren't trying to build a deep enough understanding. Debt (the book) is not about our contemporary system (much) - it's an incredible work about the most basic elements of "financial systems" and how debt has shaped our cultures, economies and political systems over thousands of years. Put differently, perhaps, it's a book about things the lie beneath what is covered in all the books you've mentioned.
• Merrill 7y ago
  Traders, Guns and Money: Knowns and Unknowns in the Dazzling World of Derivatives by Satyajit Das
• codecamper 7y ago
  What is there to know? Make massively risky bets on things that rarely break, but when they do they break so epically that the government will bail you out.
• jefe_ 7y ago
  Part one of this book really helped with my understanding of monetary policy, very clear examples of how the price of money is expressed through Exchange Rates, Interest Rates, and Aggregate Price Levels and the interplay between these measures: https://www.amazon.com/Concise-Guide-Macroeconomics-Managers-Executives/dp/1422101797 https://www.amazon.com/Concise-Guide-Macroeconomics-Managers... Here is a PDF of a diagram I made to help organize my understanding of this content: https://www.lucidchart.com/publicSegments/view/e1d12ae5-a8a0-47cb-8e35-f9b079b8a2ab https://www.lucidchart.com/publicSegments/view/e1d12ae5-a8a0...
• nknealk 7y ago
  If you’re interested in fiat currency and the fed, I highly recommend the book Lords of Finance. The author does a really good job of showing just what central banks do and how their responses to economic events shape outcomes. The book entirely focuses on the Great Depression and the central banks of the USA/Europe but it’s really well written and really helped me appreciate what the fed does.
  • FabHK 7y ago
    > Lords of Finance Oh, yes, great book! And good read. Two things stuck in my mind: A) How slow things were back then. The British finance minister (“Chancellor and Under-Treasurer of Her Majesty's Exchequer”) would get on a steam ship, incognito, for a month or so to visit his counterpart in the US, then skipper back, and months later respond to the crisis. B) How few people saw things coming. People thought the skirmishes that ended up precipitating WW I would soon be over, Irvin Fisher confidently declaimed just before the 1929 stock market crash that “stock prices have reached what appears to be a permanently high plateau”, people didn’t pay much attention to this obscure Adolf Hitler guy. Every time, by the time the true dimensions became obvious, it was too late to do something (flee, sell, ...). With respect to the current “15 cases going down to zero, we are doing great, we have it under control” flu, draw your own conclusions. Edit: typos
    • nknealk 7y ago
      Those stuck with me but so did the points the author made about gold. There was a depression. Central banks sticking to the gold standard is part of what made it the Great Depression.
      • FabHK 7y ago
        Yes, absolutely. A return to the gold standard would be disastrous for our modern economies, in particular in times of exogenous shocks like now. The solution to bad central banks is not gold, but good central banks.
• unixhero 7y ago
  Any book on International Finance, to start. And then maybe a Banking 101 to understand how banking works. Then Macro Economics, to know how economics of markets and countries work. There's no quick fix to learning this stuff. However you might still want to; so take this biased Internet-clip with a grain of salt and enjoy: https://www.youtube.com/watch?v=mII9NZ8MMVM https://www.youtube.com/watch?v=mII9NZ8MMVM
  • FabHK 7y ago
    There is no quick fix, indeed. International finance is secondary to what the OP is requesting though. I think a history of banking, and the events that led to the current regulatory framework, would be suitable. Can’t think of a good book though (except the Bankers’ New Clothes I recommended below).
• codekilla 7y ago
  I recommend: ‘The Origins of Economic Disorder’ by Fred Block, and ‘The Vega Factor’ by Kent Moors.
  • codekilla 7y ago
    I’ll also add ‘Financial Market Rates and Flows’ by James C. Van Horne’.
• JacobDotVI 7y ago
  House of Morgan - biography of JO Morgan and kin Snowball - biography of Warren Buffet The Good Earth - novel about Chinese farmer Fortune’s Children - the rise and fall of the Vanderbilts
  • FabHK 7y ago
    These might be good books, but I doubt they’ll answer OP’s questions.
• majos 7y ago
  Somewhat meta comment, when I read all the conflicting recommendations here (seriously, for almost all recommendations there’s an anti-recommendation somewhere in this thread), it makes me question the value to me in really trying to understand the financial system. I mean, I’m not completely financially illiterate. I understand compound interest. I stick with sinking most of my money into passive investing, saving x months of expenses in checking for surprises, and not accumulating any debt. Every now and then I think about getting back into value investing (it was fun in high school) which is a little more active, but the effort required to understand this system seems enormous/impossible. There are simplified expositions of how to read a balance sheet, but then I run into weird edge cases of financial trickery that I’d never be aware of. So I figure I can’t compete with pros and passive investing seems like a reasonable enough approximation in the long run. When I compare it to all of the other stuff I could learn or skills I could acquire in the same time, so far “learning about the financial system” is so messy and uncertain to me that I never really pursue it. Has anybody run into this issue? What did you decide?
  • jonahbenton 7y ago
    Yeah, I would make a distinction between learning about the financial system for investment purposes- which as a non-professional in that space I think is pointless- vs learning about to understand what's happening in the world. Whatever domain you're in, whatever interests you have- having something of a model of the financial machinery that basically underlies all human activity, both in the small and in the large, I would argue is super valuable. The space is ENORMOUS and incredibly complex and so one has to have a plan and some kind of motivation for carving a path through it, to be sure. Hard to engage with more specifics without more context, happy to continue the conversation.
    • majos 7y ago
      > Whatever domain you're in, whatever interests you have- having something of a model of the financial machinery that basically underlies all human activity, both in the small and in the large, I would argue is super valuable. What’s strange is I’m generally in favor of “staying informed”. But I typically skip most financial news. For example, looking at last week’s issue of The Economist, there are several articles in the finance section. I summarized these below, but my reaction to most is “yup, sounds like the logic I saw in my first-year econ class”. Maybe my issue is that I rarely feel like I learn anything from these articles; they mostly read as applications of basic theory that might work. In this case, my read on finance is there’s a set of basic principles that explain most of the decisions made and then just beyond that lies an enormous set of more complex but also controversial material. In contrast, I think of other areas as having a lot of “basic information” that I don’t know, with the controversial bits much further out. So if I’m trying to accumulate useful and relatively uncontroversial info, finance is not the best place. (Those summaries: 1. interest rate cuts may not suffice to avert recession, governments may add in spending, tax cuts, and credit to banks to increase liquidity 2. fear has led to price increases for safe haven assets like gold, bonds, and stable currencies and drops for economic activity trackers like oil and copper; share price changes have varied depending on debt levels and how different companies are expected to react to societal slowdowns 3. might be a good idea to pivot between stocks and bonds as market rises or falls; downturns can be opportunities if your horizon is long enough 4. if the economy slows, how should banks deal with reduced payment abilities, especially when they may be legally required to not have too many bad-looking liabilities? 5. something about corporate bond trading [this one was most confusing] 6. some special bonds offer yields to investors with the catch that if some defined disaster strikes the investors will not get money back; these bonds have not yet been useful to covid because of stringent conditions on duration and impact of the disaster before payout, and complications of prevention (countries who respond well may get paid less) 7. covid has particularly hurt commodities markets, and by extension economies that rely on commodities (like Saudi Arabia))
• steve76 7y ago
  The Island of Doctor Moreau THERE IS BUT ONE LAW. ... ... ... THERE IS ... ... NO LAW! TAKE MOREAU TO THE HOUSE OF PAIN! KNIVES!!! SHARP THINGS!!! !!! !!! ... ... ... And after leaving Moreau's island, the greatest horror of them all is I can no longer tell what is beast, and what is human. --- --- --- Sir Gawain and the Green Knight Hello foolish child. I really have to say this now because you are stupid. Just so so stupid. Killing people is bad. I know. I know. But you've been killing people and things your entire life. You have caused so much awful carnage in your wake only to cover it up with adolescent idealism. Welcome to the adult world where things die including the entire world if you are careless little wild flower. --- --- --- Dante Not the validation of the Aristotelian Universe through the advancement of the human mind. Or the celebration of humanity as it is. Not even snitching out medieval Florence with a catalog of evil. The realization of paradise's simplicity as the absence of ambition, murderer, and betrayal at the very bottom of hell.
• s_r_n 7y ago
  While I haven't read the book, the corresponding multi-part documentary "The Ascent of Money" is a really good introduction to what money is and how it evolved over the past centuries. It's also free on YouTube: https://www.youtube.com/watch?v=JAbVltqySrA https://www.youtube.com/watch?v=JAbVltqySrA
• qorrect 7y ago
  Surprised no one has mentioned "Trading and Exchanges: Market Microstructure for Practitioners". Lots of people recommending Ernie Chan - and he is very big in the space but he uses 100 words when 10 will do its a hard time slogging through it. De Prado is incredibly technical , if there was a De Prado cliff notes Id say read that. And don't forget if you are coding this stuff up, lots of people have but those books into re-usable code on github.
  • FabHK 7y ago
    Harris’ Trading and Exchanges is about types of traders and market microstructure - it has very little to do with what OP asked for (“… how money works in our society. Fiat currency, the federal reserve, the stock market, etc.“)
    • qorrect 7y ago
      i embarrassingly didn’t read the body, and I am also ignorant of those things i’ll be reading this thread again , thank you.
• cheez 7y ago
  Best books to understand why the financial system behaves the way it does are Nassim Taleb's books. Take the principles there, and apply them to finance and it explains 100% of why prices move the way they do.
• cryptozeus 7y ago
  Youtube how economic machine works by ray dalio.
• thulecitizen 7y ago
  The architect of the Euro, Bernard Lietaer, wrote a book called The Future of Money that I’m reading now.
• esie 7y ago
  Capitalism in America: A History by Alan Greenspan https://www.goodreads.com/book/show/38712616-capitalism-in-america https://www.goodreads.com/book/show/38712616-capitalism-in-a...
• avita1 7y ago
  Specifically about the stock market, Flash Boys by Michael Lewis is a fun read and taught me a lot about what the stock market is. It's not the densest book. It's more of a narrative than a teaching tool, but for what it is I found it very informative.
• ozim 7y ago
  Where are the customers yachts? - but basically if you get the title you don't have to read it :)
• INTPenis 7y ago
  Web of Debt by Ellen Hodgson Brown.
• dogman144 7y ago
  Random Walk and Black Swan are two good reads. Even if you end up not agreeing with the two's takes, they'll make you sufficiently skeptical of how well a book claims to explain the industry, which is a good position to approach it from. My bias will show, but the industry routinely blows itself on sometimes small or sometimes very large scales, sometimes or often through devices of its own creation. It's important to know that the system is entirely capable of doing this to itself, and therefore the system, and those in it, may not be able to explain itself well. Edit: another thing worth reading is Too Big to Fail, The Big Short, and Greatest Trade Ever. All are engaging books, and really walk through how 2008 started and ended through different perspectives of the system. TBtF will cover the Fed and Tier 1. BS/GTE cover the sell side. And then when you pair GTE with what happened to it's focus, John Paulson, after 2008, in that he didn't really have a repeat 'win,' it's a good anecdote for what I said above.
• habosa 7y ago
  "The End of Alchemy" by Mervyn King is a great book that explains fiscal/monetary policy and the modern banking system from the ground up. King was the head of the Bank of England during the last recession. This was the book that made me "get it". "When Genius Failed" by Roger Lowenstein is the story of the fall of Long Term Capital Management which was basically the biggest hedge fund failure ever. Teaches you a lot about modern high finance and systemic risk.
• abbadadda 7y ago
  This video by Ray Dalio, "How the Economic Machine Works in 30 Minutes" is an excellent primer on understanding the financial system as a whole: https://youtu.be/PHe0bXAIuk0 https://youtu.be/PHe0bXAIuk0
• apeescape 7y ago
  I wrote my Master's thesis on cryptocurrencies, and had to do some background research on how the monetary system works. I found that Bernard Lietaer's "Money and Sustainability - The Missing Link" was easily approachable and had a lot of good stuff in it. Another of my staples was David Graeber's "Debt: The First 5,000 Years" which has a lot of good and interesting content, but is very very heavy to read.
  • apeescape 7y ago
    Also, this article by Bank of England is a very good introduction on how money is created in practice nowadays https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...
• tezza 7y ago
  “How to Read the Financial Pages” is an excellent book. It covers most of Equities and Bonds and is often hilarious. It covers how governments finance themselves by issuing bonds, t-bills etc A fairly straightforward read for any HNer, should be a couple of days easy. https://www.amazon.co.uk/dp/B0054ZBXLG https://www.amazon.co.uk/dp/B0054ZBXLG
• shgidi 7y ago
  I Worked as a quant for a few years, but in a certain point moved to data science and lost interest in stock market. Read many technical and non technical books, and I recommend this one - Berton J Malchiel - A random walk down Wall-Street. Simple but not simplistic, it has some great useful lifelong tips for investment. I follow it's advice for >10 years - from 2008 crisis, until these crazy days.
• formercoder 7y ago
  If you’re interested in valuation, Damodaran’s course is available for free online. Just google Damodaran.
• mroshangara 7y ago
  "A Random Walk Down Wall St" by Malkiel
• pipogld 7y ago
  1.- First, understand that if we are playing head or tails, me having $10 and you having $1,000,000 , who will end up getting the other's money? 2.- Most independents money managers I know, love this book; Extraordinary Popular Delusions and the Madness of Crowds - by Charles Mackay http://www.gutenberg.org/ebooks/24518 http://www.gutenberg.org/ebooks/24518
• PaulDavisThe1st 7y ago
  Got to put in a plug for a book my mother read shortly before she died last year. The author is insanely smart, the book is really good, the message is incredibly important: https://marianamazzucato.com/publications/books/value-of-everything/ https://marianamazzucato.com/publications/books/value-of-eve... Blurb: "Modern economies reward activities that extract value rather than create it. This must change to insure a capitalism that works for us all. In this scathing indictment of our current global financial system, The Value of Everything rigorously scrutinizes the way in which economic value has been determined and reveals how the difference between value creation and value extraction has become increasingly blurry. Mariana Mazzucato argues that this blurriness allowed certain actors in the economy to portray themselves as value creators, while in reality they were just moving existing value around or, even worse, destroying it. The book uses case studies–from Silicon Valley to the financial sector to big pharma–to show how the foggy notions of value create confusion between rents and profits, a difference that distorts the measurements of growth and GDP. "
• neural_thing 7y ago
  If you are looking for somebody who understands markets today - listen to Mike Green. He doesn't write, but sometimes speaks (Hidden Forces, RealVision)
• hogFeast 7y ago
  Stigum's Money Markets will tell you about the financial system specifically. Something like The Economist's Guide to Financial Markets will give you a good general overview. Some of the recommendations on here are truly awful.
• petrocrat 7y ago
  reddit.com/r/mmt_economics Not a book, I know but there are a lot of articles and resources in the sidebar, including a list of academic papers on the inner workings of money/monetary systems. Search for "MMT Foundations" within that subreddit to find those.
• goodcanadian 7y ago
  I think the best way to understand it all is to understand the history of how it came to be. I would start with something like: Money: Whence it Came, Where it Went by John Kenneth Galbraith The Ascent of Money: A Financial History of the World by Niall Ferguson
• anaphor 7y ago
  "Borrow: The American Way of Debt" by Louis Hyman It's basically a historical study of debt in the United States over the past 100 years or so. Very interesting and educational.
• schemathings 7y ago
  I listened to the audiobook version of 3 books by Adam Tooze in the past year and found them to be excellent for understanding how finance works, through 3 separate case studies/examples if you will .. 1. The Deluge: The Great War, America and the Remaking of the Global Order describes how most of the current global financial structures were formed, through the lens of WW1 policy 2. The Wages of Destruction: The Making and Breaking of the Nazi Economy .. moves you forward to WW2/post-depression economy 3. Crashed: How a Decade of Financial Crises Changed the World (recommended elsewhere in this thread) .. brings things up to current times
• tim333 7y ago
  Stuff from Warren Buffet is usually good. You could browse the shareholder letters a bit https://www.berkshirehathaway.com/letters/letters.html https://www.berkshirehathaway.com/letters/letters.html
• adebrincat 7y ago
  Check out the Wiley CFA Book suite, they are broad and explain concepts ranging from debt to economics ; https://www.wiley.com/learn/cfashowcase/ https://www.wiley.com/learn/cfashowcase/
• berkoab 7y ago
  This is a fantastic book. Written for quant wannabes but really good for everyone. https://www.amazon.com/gp/aw/d/0071468293?psc=1&ref=ppx_pop_mob_b_asin_title https://www.amazon.com/gp/aw/d/0071468293?psc=1&ref=ppx_pop_...
• simonebrunozzi 7y ago
  Besides books, read what Patio11 has written in the past. [0] [1] etc. [0]: https://training.kalzumeus.com/newsletters/archive/investing-for-geeks https://training.kalzumeus.com/newsletters/archive/investing... [1]: https://www.kalzumeus.com/2019/6/26/how-brokerages-make-money/ https://www.kalzumeus.com/2019/6/26/how-brokerages-make-mone...
• jmonger 7y ago
  Lords of Finance: The Bankers Who Broke the World https://www.amazon.com/Lords-Finance-Bankers-Broke-World/dp/0143116800 https://www.amazon.com/Lords-Finance-Bankers-Broke-World/dp/...
• pcvarmint 7y ago
  Meltdown by Thomas E. Woods The Great Deformation by David Stockman The Fed Flunks: My Speech at the New York Federal Reserve Bank by Robert Wenzel Economics in One Lesson by Henry Hazlitt
• u40as7 7y ago
  I will offer that 'Where does money come from' By Josh Ryan-Collins, Tony Greenham, Richard Werner, Andrew Jackson. Its a fantastic short book on how money actually works in this system. The follow up to this is Richard Werners study on central banking. A lost century in economics: Three theories of banking and the conclusive evidence https://www.sciencedirect.com/science/article/pii/S1057521915001477 https://www.sciencedirect.com/science/article/pii/S105752191... This is one of the first empirical tests of theories of central banking and how money flows. Anything by Richard Werner I think is lucid. He has lots of youtube videos that goes into the details in the book and this study.