Book Description
Published for the very first time ever. Over 850 practical, easy-to-use historical probabilities on the most commonly traded market scenarios!
For years, traders and investors have been using unproven assumptions about popular patterns such as breakouts, momentum, new highs, new lows, market breadth, put/call ratios and more without knowing if there is a statistical edge.
Have you ever wondered the following...
Do these patterns actually make you money? Read on and you'll be surprised by what 15 years of new, previously unpublished research reveals.
Is there a radically different, better way to trade these patterns and indicators that somehow has escaped the awareness of traders and investors? You'll find the answers below...
The answers to both of these questions and much more is contained in Larry Connors' new book, How Markets Really Work. Through new research, much of which has never before been published, you will be able to clearly see which of nearly 850 meticulously researched patterns and indicators have an edge -- and which do not. Best of all, you will be able to apply this information whenever you trade.
Here's how you can use How Markets Really Work in your trading every day. Learn how to focus on trades that have the best edge and stop trading setups that have zero edge. Every time you trade, just look up the current market action in the book so that you can potentially maximize your winning trades while weeding out the losing ones.
Gain an edge that many traders and professional traders do not have. Most traders will continue to operate according to incorrect conventional wisdom because much of it "seems to make sense." But by using How Markets Really Work as your daily reference guide, you will be able to take advantage of market behaviors that consistently repeated themselves over and over again in the past.
Use it to better time your entries and exits into stocks and ETFs. Many times the trading system or methodology you are using will tell you to enter or exit a trade into price action that matches one of the patterns listed in How Markets Really Work. When this occurs, it's a great opportunity for you to fine tune your actions so that statistical probabilities are working in your favor and not against you.
The knowledge contained in How Markets Really Work can be used in developing your very own systems and strategies. Whether you are a system developer or you just want to improve your existing trading strategy, you can use the core knowledge in this book to stimulate your own research and create new systems.
Impact your trading with never-before-seen research on put/call ratios, price movement, breadth indicators, large one-day moves, volume and much, much more. Whether you use these indicators or not, you will finally be able to make informed decisions about their true value to your trading. Each Chapter Of How Markets Really Work Is Backed By Up To 15 Years Of Historical Results!
Customer Reviews:
A good investment for stock traders.......2006-11-30
I have to laugh at the people who gripe about the price of this book, or any other one for that matter. Point blank, books like this one should be considered investments. If they provide you with information to increase your trading profitability or minimize your losses, then the investment has paid off.
How Markets Really Work is definitely a concise text. I, for one, am happy for that. It is a research report which presents a significant proposition and provides considerable evidence to support it. This book does that efficiently with no extra prose and loads of visual support making it a quick read and one that definitely makes the point it seeks to make.
If you are a stock market trader, especially one focused on the indices, How Markets Really Work is a very good investment. It could very well alter the way you approach your trading.
Contrarian argument.......2006-06-04
This book is a quick argument for short-term contrarian trading in the stock market, backed by a zillion pages of data (that nobody is going to do more than flip through and glance at a page here and there). It does makes a good argument, however.
To follow the conclusion in your own trading you will be buying after the market sells off and selling after it rallies. I actually developed and published a simple system based on these principles using Bollinger Bands and betting on reversals when price hits the outer band and stalls the next day (without bursting through it). It works well most of the time, especially in non-trending markets.
The problem with the book is it's failure to follow through with any suggestions for rule-based systems based on it's conclusion. OK, bet on reversals - when do you place a trade? While the market is still moving or after it stalls? How much of a move does it need to be before entering a position? Is it applicable to all time frames? When do you take profits?
Markets move and then correct in waves 95% of the time. Marcel Link concludes in his excellent book "High Probability Trading" that betting on the smaller-wave corrections just isn't worth it in the long run and you are better off betting on waves in the direction of the bigger trend. I tend to agree.
This book is way, way, waaayyyy overpriced for what it is. That being said, it is the best 1-star book I have read.
For me, books are either a 1 star, 3 star, or 5 star. The 5-stars are the classics that are too good to ever remove from your bookshelf, like many of the books I recommend at winningfinancialstrategies.com. The 3-stars get sold on ebay when the bookshelf overflows. The 1-stars go to Salvation Army.
No Composition.......2006-04-20
Research is expensive but presenting research without composition is worthless. Unfortunately this book presents valuable research without composition and it turns out that the content of this book is to be forgotten right after reading it.
Connors=expensive books for little value.......2006-04-19
all connors books are expensive, very expensive.
a $50 book for a 100 something pages which are all filled with graphs.
i wonder if authors like this can sleep peacefully every night without feeling guilty of ripping people off so much.
i dont mean this book is bad bcoz it is thin, quality cannot be measured with the number pages, John Hull's book is a definite example, with so much quality information contained in a relatively small book. however, all connors books are very expensive in terms of both quality and quantity.
there are many other good and reasonably priced books on a subject like this. Skip Connors.
Larry gives you a fishing pole and some pointers; the rest is up to you.......2005-12-28
This book won't teach you how to fish in the seas of the market. Probably anybody who'd shell $50 for a book like this already has a good theoretical understanding of the dynamics of fishing, and is now onto more sophisticated and practical pusuits like trying to optimize when, where, how they hook their prey.
And if you're in that category, this book will probably meet your needs. For those who are too lazy or computer illiterate to run elaborate backtests themselves (count me into the latter category), messrs Connors and Sen have created a lean volume designed to counter prevailing Wall Street wisdom (that the only way to vast riches is in buying AFTER higher prices, good volume, and good breadth) and extrapolate upon some interesting, reliable setups that the reader can then build his own systems around.
The austerity of the book represents both its major strength and weakness. I would have liked some more analysis of drawdown and risk, but that would be more appropriate for a book on actual trading strategy, not a "data reference" like this. Also, the authors' used essentially the same exit date in each chapter and for each setup, eg, 1-day, 2-days, and 1 week. This is appropriate for many of the short-term traders who would read a book like this, but it would have been interesting if they'd incorporated a few more exit parameters. And lastly, I would have liked a bit more context in terms of where the market itself was on particular dates and during particular setups, but that also exceeded the bounds of this book.
Although "How Markets Work" is a bit pricey for what you get, it's still a good resource and well worth consulting.
Book Description
How to invest using straightforward common sense instead of misleading"hot tips"
While market pundits argue the rational market theory, one theory gets almost universal consensusthat of the irrational investor. Outsmarting the Smart Money outlines where most investors go wrong and explains how to instead approach the markets with intelligence and calm. Filled with hard-hitting insights and useful lessons, it shows how to use market-proven techniques and strategies to overcome biases, myths, and mistakesand beat the pros at their own game. Cunningham presents flexible security analysis guidelines for investors who want to guide their own portfolios, but don't want to devote all of their free time to the effort including:
- How to overcome personal biases, misleading information, and market inefficiencies
- Methods to avoid being cheated by money managers, and identify "spin" reporting
Customer Reviews:
Disorganised and unhelpful writings! I really want a refund!.......2006-08-05
Dont know whether the author had been too keen to show how good he wrote or to publish a new book or what, this book just lacked the substance to be useful on investment or trading. I doubt whether any reader of it can "understand how markets really work and win the wealth game" per book title by the very descriptive and insightless essays in unlinked chapters. I wonder why some referrals could praise it as an excellent Trading/Investment Psychology book. As a pro trader/CFA/trading book lover, I cant tell anything positive about it. So far I had rated less than five books of this category a one star as far as I remember, and this book is one of the minority.
Barron's Is Right: Top Book of 2002.......2003-01-26
I read Cunningham's book based on the review in Barron's rounding up the best investment books of 2002. They were right. The book is a eye-opening intro to the psychology of investing, important to investors and market observers/regulators. (Cunningham's other books have more of the basics for investors--also very good books.)
Great Book (Odd Title).......2002-09-19
Awesome. Cunningham dissects the woes besetting corporate American using lucid, concrete examples, with boundless energy and enthusiasm, endorsed properly on the back cover by those who take behavioralism seriously, including Gary Belsky, who wrote the top-seller "Why Smart People Make Big Money Mistakes" (which is about general habits, not investment philosophy of which Cunningham writes) and Robert Hagstrom, prolific author (who writes about investment philosophy, and sometimes behavioralism). What an astonishing record Cunningham has developed as a writer and expert in invesetment theory and practice! A better title for this book would be Rational Investing in a Hair Brained Environment; the one chosen is unduly flashy for the seriousness of Cunningham's pursuits (he's a professor of law and business!).
Title promises, but book doesn't deliver........2002-09-02
Doesn't this book sound like a battle plan for investment success, maybe one filled with value-based accounting lessons? It's not.
In fact, we are spared math, and we are not given practical counsel, either. That was what I looking for, as the title suggests. The title should be How Can The Smart Money Be So Dumb.
Instead, this is an interesting run-through of recent horror stories on Wall Street from the Internet bubble to IPO's to pro forma accounting and Enron. Behavioral finance is discussed here, but Why Smart People Make Big Money Mistakes by Gary Belsky and Thomas Gilovich is far superior.
Or read Buffett: The Making of an American Capitalist by Roger Lowenstein. Or John Neff On Investing instead.
Mr. Cunningham is one of the new wave of Buffett explainers. (Where were you people 15 years ago when there was money to be made buying Berkshire?) And why does someone so incisive, so downhome funny as Mr. Buffett need so much explanation?? (Try Cunningham's The Essays of Warren Buffett: Lessons for Corporate America or the Berkshire Hathaway annual report.)
Unfortunately, the author lets slip his idea of a five-year holding period for stocks. That may turn out to be good advice, but which stocks would he choose to hold? We have no idea. (Tech stocks, big winners 2 years ago, have crashed back down to their 1997 prices. And non-tech Walt Disney is well below its 1997 prices.)
I think Mr. Cunningham is an extremely brave and patient investor.
Mind-field.......2002-06-22
In a perfect investment world the price of a stock embodies its value. And those who believe this 'efficient' market hypothesis will be buying index mutual funds certainly not this book. But those who dismiss this academic construct to profit from the inefficiencies evident in the market still run substantial risks not adequately addressed by most investment books. The minefield of risks that Cunningham guides us through is that the biases of others, the cause of those price vs. value anomalies, are also our own biases and can trigger money-losing investment decisions. Overconfidence and the "pattern seeking" bias to project short term trends into the future are just two examples, but they do so some of the worst damage. They lead to a dangerous reliance on margin borrowing and excessive trading activity. Also, recognize that companies make many of the same behavioral errors. It is the author's "smart" investor who can spot the folly of manic acquisitions by companies acting as if they were on steroids - grasping for growth at a fiscal cost. Cunningham dismisses technical analysis as "hokum" (Here he agrees with the proponents of an efficient market who maintain market movements cannot be predicted accurately). Stay away from IPO's, companies relying on pro-forma accounting, and sector funds. Read analyst reports with caution, but do study closely "management's discussion" of their business in the annual report. Be wary of stock buybacks, stock option programs, stock splits, spin-offs, secondary offerings, and performance-based incentive plans. Any of these programs can be abused and rise out of corporate hubris. Above all: Recognize your biases, your tolerance for risk, be objective, and have criteria to know when to sell your positions. A lot of territory is covered in this book with some of the best material appearing in Chapters 10 and 11. Cunningham builds a persuasive case for adopting a long term, value oriented investment philosophy which is least affected by these biases.
Book Description
For the beginning financial professional and the sophisticated investor, here is a thoroughly updated edition of the classic guide to the inner workings of the stock market.
John M. (Jack) Dalton, formerly with the American Stock Exchange, explains the workings of the securities industry, including the initial public offering, types of stocks, who's who inside the brokerage firm, back-office operations, and investment analysis. This updated edition includes new chapters that cover ongoing changes at the NYSE, the AMEX, and Nasdaq, online trading and the globalization of the stock market. The book is also thoroughly updated to reflect changes that have taken place on Wall Street and in the way securities transactions are conducted since the publication of the second edition in 1993.
In addition, a comprehensive glossary that defines more than 600 financial terms—from “Advance-decline theory” and “Arbitrage” to “market-and-limit order” and “Zero plus tick”—enhances the relevance and accessibility of this book.
Customer Reviews:
Dangerously Inaccurate.......2002-06-19
Prentice-Hall is notorious for sloppy textbooks, and this book is in the company tradition. The text was not edited, proofread, or fact-checked. The glossary entry for wash sales is egregious, but almost any page provides examples. All information in this book is therefore suspect.
Good introduction to the mechanics of the market.......2000-05-08
Rather than providing any sort of investment advice, this book explains the actual workings of the stock market. How a trade flows from a customer, through a broker, to the floor, and on to the various settlement engines. It's good background for anyone who invests in the market, and especially useful to anyone who works in (or with) the financial IT industry.
As other reviewers have noted, the poor copy-editing is embarassing. But even with all the typos, the information presented is very useful.
A fairly good over view for me.......1999-10-18
I am just beginning to learn about the stock market, and all the other dimensions that go along with it. I found this book quite informative, I have read it two times now. I use this as a text book to study from. I am also reading other books on the subject to make sure the information I learn is correct.
Good general overview for beginners.......1999-08-24
As a beginner, I found the book to give a good overview of the stock market functionning. It is quite thorough and explains all the fundamental mechanisms. I would also recommend 'What you need to know before you invest' from Rod Davis
Another money maker! . . . just not yours........1999-06-11
Very few people will really tell you how the stock market actually works. If they did, it wouldn't. After you read the basics about placing orders and some technical indicators and patterns they hope you'll jump right in and lose your money. Do yourself a favor, study the market from a social history/military/control mechanism point of view by utilizing free library books. By the time you get it, you'll have saved more start-up capital and you won't go broke. Or, find somebody that will tell you the real deal -- and when you do, listen! Be prepared for a real shock, and then a huge sigh of relief!
Customer Reviews:
What makes the STOCK MARKET "tick!".......2007-03-07
The evolution of the stock market, its "why's" and "wherefores", all in layman's terms -- not just for "kiddies" but for all ages!
NOTE: another noteworthy book which is part of this series: Allman, Barbara
BANKING.
(originally attempted to review this when the book first came out, but unfortunately the template did not "take.")
Amazon.com
By outlining and explaining the enigmatic terms and concepts used to track and ultimately determine stock movements, The Math Behind Wall Street: How the Market Works and How to Make it Work for You, by Bentley College mathematics professor Nicholas Teebagy, is designed to provide average investors with financial tools that usually are the province of professionals. Intimidated by the likes of ARCH/GARCH models and neural networks? Don't be. Teebagy begins by describing the basics of probability and risk in order to clarify the way that uncertain future events are taken into account to form a well-reasoned investment analysis. In clear language, and with the welcome assistance of numerous charts and graphs, he then goes on to specify how all this can be used to calculate the potential performance of an entire portfolio. Lastly, he offers an introduction to advanced topics such as the aforementioned ARCH/GARCH models (for tracking periods of continued volatility) and neural networks (which attempt to imitate the way human brains process information). While not for the fiscally faint of heart, this short but information-packed volume will assist serious investors as they try to keep ahead of evolving market trends. --Howard Rothman
Book Description
Expertly written for both the newcomer to Wall Street and the veteran, this title provides information on what makes the markets work. Explanations of covariance, Beta, indexing, neural networks and much more. Charts & graphs. . .
Customer Reviews:
Great reference.......2007-04-24
The value of this book is not as an instructional book (yes, it is too short for that. The bibliography of this book provides excellent direction for further instruction), but as a reference. It is a pretty comprehensive reference for basic finance math. The only thing missing is risk management formulas (VaR, etc). I used this is a constant reference while doing my MBA and found it made my life much easier! Highly recommended.
A good reference for investment formulas.......2005-05-17
This is a great book.
I use it as a reference for putting formulas into my investment spreadsheets.
It would be a good read, if you can reading a mathematics book enjoyable, in order to become familiar with the concepts behind probability, risk, and measuring return on an investment or portfolio. As already stated, I just use it as reference material - but I find myself going to it again and again.
The Best Introduction.......2003-11-16
I am currently on a Financial Markets course that is at Masters Level. I bought this book because of its small size and the basic details it covers. I have many other bigger books that go into more detail about stock pricing. However, this book really does explain the basics better than any other I have read. It explains in very simple and statistical terms areas such as the Simple Index Model (SIM), CAPM , Measuring performance of a portfolio, and Modern Portfolio theory. It also touches the surface of advanced moddelling in ARCH/GARCH.
But what really sets it apart is that it explains terms not from a purely academic point of view but a much more informative way by looking at how investors should and would approach a problem. If you have some understanding of statistics such as mean and variance (although both are explained in the book) then I would recommend this book to anyone who is thinking about embarking on an investment course of some kind. It is a definite read for any beginner and will make the course easier becasue it explains the fundamentals very well.
Savvy, informative, invaluable reading........2000-06-04
Savvy investors in the stock market need knowledge of the math behind the market, and The Math Behind Wall Street provides it: a slim book masks a wealth of information covering statistics, probability, and other practical applications of business math concepts. From risk factors to annual rates of return, The Math Behind Wall Street will prove invaluable.
Excellent for technical oriented investors.......2000-05-25
This book places heavy emphasis on the technical and mathematical aspect of investing. It is quite excellent but I found the math to be very advanced and therefore it is probably not suitable to most individual investors. Like the previous reviewer, I also found the book to be too brief.
This book definitely has merit, but it isn't right for beginners or the mainstream investment community. The best audience would be investors with highly specialized investing methods.
Customer Reviews:
Reply to previous review.......2002-03-04
The first reviewer of this book obviously did not read it. The book is an extremly well balanced description of the stock market -it shows and explains all the possible pitfalls that can occur when trading. It also dedicates a whole chapter to different methods of investing your money - real estate, antiques, fine wines.... Personally I found the book a great introduction to the stock market and would recommend it to anybody who just wants to understand the business section of their Sunday paper
Another money maker! . . . just not yours........1999-06-15
Very few people will really tell you how the stock market actually works. If they did, it wouldn't. After you read the basics about placing orders and some technical indicators and patterns they hope you'll jump right in and lose your money. Do yourself a favor, study the market from a social history/military/control mechanism point of view by utilizing free library books. By the time you get it, you'll have saved more start-up capital and you won't go broke. Or, find somebody that will tell you the real deal -- and when you do, listen! Be prepared for a real shock, and then a huge sigh of relief!
Book Description
Several years ago, Joel Kurtzman was covering a meeting between a group of Russian economists and politicians and some of America’s best thinkers from business and academia. The Russians were trying to get a handle on exactly who was in charge of the markets and how long the founder of a failed start-up would be sentenced to jail.
It’s easy to see why Joel’s Russian friends were befuddled. But how many of us really understand how the markets work, despite the fact that we live and work in a society that practically worships “the market” as a religion? And when people today are investing more money in mutual funds than in banks, this can be a problem. The markets are big, complex, and completely unforgiving. If you make a major mistake, you risk losing a major amount of money. That’s why it’s vital to peel back the layers of mystery shrouding the markets.
In
How the Markets Really Work, Joel Kurtzman provides a lucid explanation of one of the fundamental forces shaping our lives. In clear, accessible language, Kurtzman explains:
* How markets, which are so vital to the world’s economies, are able to function without any central control
* How they create wealth and spread the risk of the world’s most uncertain, but potentially lucrative, bets
* How markets package and resell debt, connect financial institutions, and set prices
* Why volatility has increased and what this means for the boom and bust of investing
Kurtzman illuminates the musty corners of the markets, showing how the system is both a single network linked together globally and a highly coordinated dance of free-wheeling, unchoreographed dancers that constitutes a massive social mechanism for laying off some of the world’s riskier bets. He explains the kinds of products that traders trade within the network (stocks, bonds, options, etc); how money circulates within the network; and how banks fit into the global network.
This is a book that will help you think strategically about investing. If you understand the markets and the instruments and vehicles that are traded on those markets before thinking about individual stocks and mutual funds, you’ll be a smarter, savvier investor.
The Crown Business Briefings series offers an appealing solution to the dilemma of today’s business audience: how to keep up with the rapid pace of change in knowledge while leading time-crunched lives. The series features short books on important topics of immediate and measurable benefit to today’s broad audience of business readers.
Customer Reviews:
Concise, masterful, sensible.......2007-03-15
I have read many introductions to economics and finance, from lumbering 600-page textbooks to more conversational pop-economics bestsellers, but this little gem is by far the most useful and the most helpful.
Kurtzman trots through all the basic ingredients of a market-driven economy - cycles, equity, securities, currency, value - but somehow manages to actually EXPLAIN how each one works in an accurate way without any condescension. He uses examples from history and the present day to really get the reader thinking about how markets work, a much better strategy than other books that spend too much time knee-deep in analogies about apples, oranges and cups of coffee.
There are also invaluable references to other economists, investors and strategies, from Hernando de Soto to Warren Buffet, which all serve to deepen the book's scope. I was particularly impressed with Kurtzman's final chapters, in which he makes a brilliant and self-effacing argument in favour of research, education and humility when dealing with markets. Despite his ideological preference for free-market capitalism, he clearly is far more thoughtful about it than many other authors.
The book is not written amazingly well, with overenthusiastic punctuation and mixed metaphors aplenty, but it is very concise and straightforward. I was honestly stunned to find that definitions that took up tens of pages in austere textbooks could be excellently summed up by Kurtzman in a matter of sentences. Great fun, very short and incredibly useful.
Needs to consult a dictionary.......2005-03-02
I lost count how many times the word "myriad" was used inappropriately.
On the good side: This book was extremely light reading and can be finished in about three hours. There is a very approachable treatment of certain things that could be very technically difficult for some readers, such as regression to the mean.
There was a (perhaps too) brief discussion about why Russia failed to thrive under the Communist system. I like brevity, but I could have done with a few more pages (or even a chapter) on why Communism doesn't work. Most people refute it on idelogical grounds, but Kurtzman had a great start in bringing up the technical problems of co-ordinating large amounts of (market-based time scale)information by bureaucracy (which uses a bureaucratic time scale) that he didn't develop at greater length. Finally, someone who understands that this is not a matter of opinion!
Good discussion of initial public offerings of companies, which is something that we all "know" happens, but we often don't know the actors. Good discussion of exactly *what* Michael Milken did that got him into so much trouble. We all knew that he spent about a billion dollars in legal fees and is still worth hundreds of millions of dollars after the fact, but didn't know exactly why.
Kudos to him for his beautiful treatment of the complexity of the market and telling us how many players are involved in even the simplest decision.
It also gave an interesting explanation of something that I've wondered for a long time, which was how David Bowie managed to sell bonds in himself/ his catalog of songs and make so much money.
Succinct and readable.......2003-06-15
One of the things that Joel Kurtzman does very well in this pithy little book is demonstrate why the capitalist market system is superior to the old Soviet system of centralized control, why the decisions made by a decentralized economy work so much better than any top down system. However Kurtzman's enthusiasm for the market is eventually revealed as similar to E. M. Forster's for democracy. One recalls that Forster allowed himself just "Two cheers for democracy...there is no occasion to give it three."
Kurtzman writes on page 148 that "Markets may move to the beat of their dumbest members." He adds, "In my view...markets are not rational." To back up his claims he reports that at the height of the Internet bubble in 1999, Yahoo! with sales of $456 million (that's million with an "m") had a market capitalization of $93-billion which he compares to GM, which at the same time with revenues of $177-billion (billion with a "b"), had a market cap about half that of Yahoo! (p. 147) This observation caused Kurtzman to ask, "Yo, Mr. Market, is anybody home?"
Well, it depends on when you knock on the door. In October of 2002 Yahoo's market capitalization was down around $5-billion or so. The real truth is Mr. Market may be irrational for some period of time--indeed for some EXTENDED period of time, especially when you're holding the bag--but eventually a correction occurs, and for a brief shining moment (not the same moment) every stock is priced at what it's worth. (Of course it could also be pointed out that a stopped clock is exactly right twice a day.)
I very much liked Kurtzman's conversation tone and his obvious acumen and the way he explains the underpinnings of the capital markets with an emphasis on understanding rather than mechanical details. (Although an explanation on how the weekend or overnight buy and sell orders received from Internet traders are reconciled at the New York Stock Exchange and at NASDAQ into an opening price would have been nice.) His championing of Michael Milken as one of the great financial geniuses of our times was tolerable, but did Milken really (as Kurtzman insists on page 144) take "an often bloating and ailing American economy" and make it "lean, mean and resilient"? And, although one does not doubt the genius of Warren Buffet, might Kurtzman have pointed out during his several fawning references to the man, that when you have as much economic clout as he has you might well be able to influence the markets to your advantage and to get information that others cannot, and in a nutshell prove beyond a shadow of doubt that money makes money and big money makes even bigger money? He might even have (to be topical and timely) pointed out that Shari'a law, which does not allow interest to be charged on credit, is not in keeping with the realities of the effect time has on capital.
But Kurtzman is an ambassadorially polite man who saved his barbs for the failed communist system and the recent irrational exuberance in dot com land.
Perhaps the highlight of the book, and maybe the most important part, is Kurtzman's explanation of what money is (not obvious) and how it is created and how it can be made to dissipate. For anyone wanting a kind of Reality Economics 101, Kurtzman's book is an eye-opener. He has a gift for explaining things in a succinct and clear manner that other writers on economics might well emulate.
Book Description
A scathing dissection of the wheeling and dealing in the world's greatest financial center. Spot rates, zero coupons, blue chips, futures, options on futures, indexes, options on indexes. The vocabulary of a financial market can seem arcane, even impenetrable. Yet despite its opacity, financial news and comment is ubiquitous. Major national newspapers devote pages of newsprint to the financial sector and television news invariably features a visit to the market for the latest prices. Does this prodigious flow of information have significance for anyone except the tiny percentage of people who have significant holdings of stocks or bonds? And if it does, can non-specialists ever hope to understand what the markets are up to? To these questions Wall Street answers an emphatic yes. Its author Doug Henwood is a notorious scourge of the stock exchange in the pages of his acerbic publication Left Business Observer. The Newsletter has received wide acclamation from J.K. Galbraith, among others, and occasional less favorable comment. Norman Pearlstine, then executive editor of the Wall Street Journal, lamented, `You are scum ... it's tragic that you exist.' With compelling clarity, Henwood dissects the world's greatest financial center, laying open the intricacies of how, and for whom, the market works. The Wall Street which emerges is not a pretty sight. Hidden from public view, the markets are poorly regulated, badly managed, chronically myopic and often corrupt. And though, as Henwood reveals, their activity contributes almost nothing to the real economy where goods are made and jobs created, they nevertheless wield enormous power. With over a trillion dollars a day crossing the wires between the world's banks, Wall Street and its sister financial centers don't just influence government, effectively they are the government.
Customer Reviews:
Needs an Editor.......2004-03-03
Journalist Doug Henwood has produced an interesting book on U.S. financial markets. Written from a left-wing point of view, Henwood contends that these markets do not raise capital for new investments or improve corporate governance. Instead, he argues that their primary function is to enable manic corporate restructurings that accomplish little besides shifting additional wealth to rentiers who already have plenty of it. Henwood relies mainly on the research of others.
The good news about "Wall Street" is that Henwood is witty and iconoclastic. The bad news is that having these traits doesn't mean that he can put together a good book. His bloated and repetitive text mixes statistics, polemics, anecdotes, biz school research, and potted discussions of Keynes, Marx and Minsky (and Freud!). The mish-mash of data definitely informs and entertains the reader (hence my rating of 4 stars) but never systematically establishes Henwood's core thesis about the parasitism of Wall Street. The book is worth reading but mainly for readers with a background in finance or economics who can separate the wheat from the chaff.
The Truth.......2003-08-26
First a word about the publishing house: Verso Publishing is probably the finest publishing house in the world. When in a bind simply pick up any one of their titles and one cannot go wrong. It's imperative to read at least a few of their books at least once.
Henwood's "Wall Street" blows the lid off high finance like few other works. It's the definitive critical analysis (along with some of William Greider's books) of the high circles of wealthy investors.
Throughout "Wall Street" it rips apart the Federal Reserve Board and exposes its gritty innards. Henwood demonstrates that the Fed is an undemocratic institution that's obsessed with any hints of labor militancy, its biggest fear being wage inflation.
The Monetary School is also dissected by Henwood, being exposed as the fraudulent theory it truly is (or clever ruling class idealogy). He points out that the Monetarist's ostensibly blamed the federal government for the Great Depression. Of course this has the fascinating effect of letting capitalism completely off the hook. The concepts of over productivity and income polarization, which were the defining characteristics of the 1920s, are rarely to be found in their school of thought.
Constant pressure by Wall Street for ever higher stock prices is what spurred most of the downsizing during the last decade according to Henwood. He smartly points out that this pressure for quick profit growth can often squelch research and development and investment projects which would benefit society. Because shareholders may very well deem these projects irrelevant to short-term profit growth.
Underlying "Wall Street" throughout Henwood continually pays homage to Karl Marx and some of his incredibly accurate predictions. He also demolishes old shibboleths such as the well worn canard that higher wages automatically translate into reduced employment opportunities, or that rising stock prices always mean a rosy economic picture for the general population. "Wall Street" proves that rising stock prices can often coincide with a poor economy for the masses.
Henwood documents the fraudulent work done by professional money managers who'd be better off throwing darts at a dart board than using their investment "skills" when making investment decisions for clients.
Some of the most important and informative sections deal with the rising consumer debt of the average American citizen. Being leveraged to the hilt, the family unit has basically been turned into a player in a giant Ponzi scheme. Capitalism in the United States desperately relies on credit-financed consumption to stay afloat.
Most books dealing with such an overarching topic give a paltry and dissatisfying "What is to be Done" final chapter. This isn't the case for "Wall Street." Henwood offers up many concrete and plausible solutions. Finally at one point asserting that an authentic financial transformation must be made along with an attack on capitalist social power in general.
Illuminating.......2002-11-24
Critics of America's financial system (capitalism) have pointed to economic deficiencies such as recessions, depressions, unemployment (and underemployment) and so forth as cracks in the system, and with a lot of these cracks popping up recently I've become more interested in the financial system and what's wrong with it. Doug Henwood's book "Wall Street" is very helpful in that respect. We also see a picture of economic history that for some reason we don't see in the news much: over the past thirty years, hours worked have increased, productivity has increased enormously, wealth for the rich has increased enormously but household debt has exploded as hourly wages (inflation-adjusted) have fallen. This is a very interesting trend which I didn't even know about until I read Henwood's book. I guess I'd heard people mention it in passing, but until he lays out the data, where it came from (BLS, Federal Reserve, NBER etc.), puts it on charts etc. it doesn't really hit you as being real as opposed to rhetoric.
Economic books can be dry reading, thus Henwood's wit helps make the reading more enjoyable. Henwood's sympathies also seem to lay with working class people over the rich who the financial markets usually serve, which makes reading easier as well as I don't have to read every passage critically wondering if he is trying to BS me into believing something that's against my interest to believe. This book got me interested in Henwood's other ventures - his newsletter, magazine, radio show, web site, mailing list etc. and they are all interesting as well. I hope every American reads this so they can understand better how this economic system works - after all, the fact that you spend most of your time in life working in order to get money means that *understanding* how money works is one of the more important things in life, right?
An informed view of Wall Street from a leftist perspective.......2001-12-18
I have worked on Wall Street and I have to say this gives a pretty decent macroeconomic view of Wall Street. He explains stocks, bonds, derivatives, currencies, the Federal Reserve, Bretton Woods, the (in)efficiency of markets and many other topics. He then interprets what these things mean from a leftist perspective. The financial world is heavily right wing and accuses the left wing of not understanding how economics work and thus why the right wing is right about economics. This book will demystify acronyms like LIBOR, GDP and CAPM, and explain to you in Wall Street terminology how the rich are robbing the working class in this country (and the world) blind. Henwood's book, like Marx's Capital, is at heart an economic treatise with political ideas sandwiched in between the economic data and analysis. I said at the beginning I have worked on Wall Street and that is the truth - once you see the machine up close, or even become a cog in the machine, you realize how right people like Mr. Henwood really are.
A must-read book on finance!.......2000-08-22
Toward the end of the second Big Bull market of the 20th century U.S. (the first was in the 1920s), it's refreshing to read a book whose author doesn't fall for the hype. Henwood's critical analysis is extremely illuminating even to those who disagree with his political perspective (which is unfashionable left-of-center). His prose is as clear as can be. His focus is all-important: what is the impact of Wall Street's prosperity on the rest of us?
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