Ask HN: Book recommendations for understanding financial systems?

I recommend: ‘The Origins of Economic Disorder’ by Fred Block, and ‘The Vega Factor’ by Kent Moors.

Money Stuff is great, and explains things quite well, generally, but I think for a beginner in the field it presupposes too much. It dwells on the amusing arcana, the esoteric warts of the system often, that you only appreciate once you have a certain base level understanding of the industry.

Lastly, it’s fairly focused on the investment banking side of things (derivatives, capital markets, IPOs, the finance industry), not so much on the monetary system, macro, and institutions.

On banking and banking regulation, making a case for higher capital (=equity) requirements for banks, The Bankers' New Clothes: What's Wrong with Banking and What to Do about It by Anat Admati and Martin Hellwig is a good read [1].

I can’t think of a good book on money and the various theories about - if someone has a recommendation there, would be great.

[1] see here for a flavour of it https://www.jstor.org/stable/j.ctt1r2dn0

I work in fintech and I've been reading Matt Levine for a few months now after seeing his name pop up here on HN several times.

I agree with everything you say.

> 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.

More importantly, on this point, when he is wrong, he freely acknowledges it, embraces it, and then corrects himself in a way that demonstrates he's more interested in truly understanding the topic and updating his cognitive model than in "being right".

Thursday's column is a case in point, where he owns up to two mistakes:

https://www.bloomberg.com/opinion/articles/2020-03-12/the-bu...

He's also the source of one of my favorite quotes on the last tech bubble. From his 8/7/2019 column, on MoviePass, borrowing from Dickens:

Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. Annual income twenty pounds, annual expenditure three hundred million pounds, result unicorn.

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

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.