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Ask HN: Book recommendations for understanding financial systems?

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Re: Ask HN: Book recommendations for understanding financial systems?

#81

Post by markus_zhang »

qnt wrote: post #40

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…

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.

Re: Ask HN: Book recommendations for understanding financial systems?

#82

Post by luxpir »

dave333 wrote: post #55

Elliott Wave Principle by Robert Prechter and A. J Frost 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…

The best thing I can say about the "waves" woo is that it forces you to wait for pullbacks in trends with the best risk reward ratio. So when it works it seems magical but retracements to fibonacci levels have been disproven time and again, with 50% being the only reliable rule of thumb, statistically speaking.

I get the principle, and it's appealing in theory, but it's far from statistically proven. If you want some other 20th century technical analysis that holds a little more water you can try Wyckoff. The supply and demand basics give a nice overview of how moves are formed and are pretty timeless.

Although there's very little predicting when the Fed will drop several trillion into the market, or when Trump has another tweetrage, so most bets are off for predicting day to day at the moment. Following trends and understanding why the consensus has formed, however, is not a terrible plan.

Perhaps more relevant to OP would be reading Wikipedia pages on money supply, currency pegging and gold backing and the interplay between interest rates and local Vs global economies. I'd guess most of what you need to know is clearly explained on Wikipedia. Given how few economists actually manage to forecast anything I'd be wary of putting much store in any one book.

Re: Ask HN: Book recommendations for understanding financial systems?

#83

Post by motohagiography »

smarri wrote: post #13

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

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)

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.

Re: Ask HN: Book recommendations for understanding financial systems?

#84

Post by mitchelldeacon9 »

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.

Re: Ask HN: Book recommendations for understanding financial systems?

#85

Post by magicroot75 »

soVeryTired wrote: post #72
nabla9 wrote: post #45

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:…

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 wes…

How is Tyler Cowen's textbook? I figured that'd be better.

Re: Ask HN: Book recommendations for understanding financial systems?

#87

Post by soVeryTired »

magicroot75 wrote: post #85
soVeryTired wrote: post #72

Earlier quoted context omitted.

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 wes…

How is Tyler Cowen's textbook? I figured that'd be better.

Jesus fuck I’d stay away from anything that man writes. Honestly my advice is not to bother with academic macro at all. Or if you must, read it like a scientist. Demand evidence for every statement. Ask how one would actually measure whatever quantity is in question (e.g. a supply curve, when most of the time only price is observable).

There are a few financial journos that I have time for though. Matt Levine is good, though he has a particular domain of expertise and tends not to stray from it. Michael Pettis is good on all things China. But as others in the thread have also noted, the industry is so full of bullshit that it’s hard to separate the good from the bad.

Re: Ask HN: Book recommendations for understanding financial systems?

#88

Post by lordlulent »

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.

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Re: Ask HN: Book recommendations for understanding financial systems?

#90

Post by ellius »

maest wrote: post #64

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…

"Money Stuff" is excellent. I also recommend the FT. Their Alphaville section is very good. One of my favorite classic Levine articles is "Regulators Want to Slow Runs on Derivatives."

Some other resources I came across via those and friends:

• "Other People's Money" by Kay

• "Zombie Banks"

• "The Money Problem"

• This NY Fed study of shadow banking: https://www.ft.com/content/1a222bf4-f33d-11df-a4fa-00144feab...

• "All the Devils are Here"

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