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.
Ask HN: Book recommendations for understanding financial systems?
31–40 of 211 posts
Re: Ask HN: Book recommendations for understanding financial systems?
#32This 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:
Re: Ask HN: Book recommendations for understanding financial systems?
#33You 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.
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.
Re: Ask HN: Book recommendations for understanding financial systems?
#34Why would you ever read a book on financial systems by someone who isn’t absurdly rich
Why would you ever read a book on aeronautical engineering from someone who isn’t a million miler?
Re: Ask HN: Book recommendations for understanding financial systems?
#35You 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.
The big short is a great book, but not sure it’s a good primer on how the financial system works for someone learning.
Re: Ask HN: Book recommendations for understanding financial systems?
#36Ascent 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.
Re: Ask HN: Book recommendations for understanding financial systems?
#37Earlier quoted context omitted.
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.
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.
> 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.
Re: Ask HN: Book recommendations for understanding financial systems?
#38First, 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.
Re: Ask HN: Book recommendations for understanding financial systems?
#391. 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)
Re: Ask HN: Book recommendations for understanding financial systems?
#40From 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.