Table Of Content‘A true insider’s devastating analysis of the fi nancial alchemy of the D s at Ya J i t D a s Extreme Money: The Masters of the Universe &
last 30 years and its destructive consequences. With his intimate fi rst- a the Cult of Risk is the story of how fi nance – the
hand knowledge, Das takes a knife to global fi nance and fi nanciers Author of international bestseller, monetary shadow of real things – has come to
s
dominate global society.
to reveal their inner workings without fear or favour.’
Traders, Guns & Money
Nouriel Roubini, Professor of Economics at NYU Stern School of Business
Bestselling author, Satyajit Das, draws on over
and Chairman of Roubini Global Economics
30 years of experience at the heart of modern
fi nance, to narrate the spectacular, lurid and
‘Das describes the causes of the fi nancial crisis with the insight and
dangerous money games that have generated
ABOUT THE AUTHOR
understanding of a fi nancial wizard, the candour and objectivity of fake growth and Ponzi prosperity and wealth,
SATYAJIT DAS is an internationally respected
expert in fi nance with over 30 years’ experience an impartial observer, and a wry sense of humour that reveals the while endangering the jobs, possessions and
in global money markets. He has worked for the folly in it all.’ future of anyone outside the fi nancial industry.
‘sell side’ at Citicorp Investment Bank and Merrill He shows you how virtually everything has
Brooksley Born, former chairperson of the US
Lynch, and the ‘buy side’ as Treasurer of the TNT
become ‘fi nancialised’, how extreme money
Commodity Futures Trading Commission (CFTC)
group. He has also worked as a consultant advising
games have become ever more unreal, and
banks, investors, corporations and central banks
how the fi nancial ‘Masters of the Universe’
worldwide. ‘Like Hunter S. Thompson’s Fear and Loathing in Las Vegas, Extreme
have come to dominate the world.
Money launches you into a fascinating and disturbing alternative
Das is the author of many highly regarded reference
view of reality. This is an informative, entertaining, and deeply scary
books on derivatives and risk management. He is
the author of the international bestseller, Traders, account of Hades’s new realm.’
Guns & Money, an insider’s account of the world of
Simon Johnson is Ronald A. Kurtz Professor of Entrepreneurship at MIT
derivatives trading, which was published by FTPH
Sloan School of Management and author of 13 Bankers: The Wall Street
in 2006 and to renewed success in 2010. He was
Takeover and the Next Financial Meltdown
recently featured in Charles Ferguson’s 2010 Oscar
winning documentary, Inside Job and a 2009 BBC
TV documentary, Tricks with Risk.
Once upon a time human society built things. We engineered beautiful
objects and created authentic goods. Now this real industrial engineering
Before the global fi nancial crisis, in Traders and
has been replaced by fi nancial engineering: shuffl ing money in an endless the masters of
a series of 2006 speeches – ‘The Coming Credit
Crash’ – he provided a highly prescient insight into process of debt, trading and speculation. It’s enabled vast fortunes to
the structure and risk of the world fi nancial system be made for a few, while the risk was carried by ordinary people – the
anticipating the problems that subsequently became ‘privatisation of gain’ and ‘socialisation of losses’. the universe &
apparent.
Extreme Money tells the story of spectacular and dangerous money games
He appears regularly in the media in the US, the cult of risk
Canada, UK, Australia, New Zealand, India and and those elite bankers, traders and fi nanciers, the so-called ‘Masters of
South Africa. His blogs can be found on a number the Universe’, who continue to play them. Written by an insider, Extreme
of on-line fi nancial sites, including: Money will show you how, little by little, we’ve all become slaves to
www.wilmott.com, www.roubini.com,
fi nancial alchemy and have been enchanted by our own illusory creation:
www.minyanville.com, www.eurointelligence.com,
the cult of global fi nance.
www.nakedcapitalism.com and
‘A true insider’s devastating analysis…’
www.prudentbear.com.
FINANCE
Visit our website at
Nouriel Roubini, Chairman of Roubini Global Economics
www.pearson-books.com
Visit our website at
www.pearson-books.com
CVR_DAS3974_01_SE_CVR.indd 1 19/07/2011 12:59
Praise for Extreme Money
‘A true insider’s devastating analysis of the financial alchemy of the last 30
years and its destructive consequences. With his intimate first-hand know-
ledge, Das takes a knife to global finance and financiers to reveal their inner
workings without fear or favour.’
Nouriel Roubini, Professor of Economics at NYU Stern School of Business and
Chairman of Roubini Global Economics
‘Das describes the causes of the financial crisis with the insight and under-
standing of a financial wizard, the candour and objectivity of an impartial
observer, and a wry sense of humour that reveals the folly in it all.’
Brooksley Born, former chairperson of the U.S. Commodity Futures Trading
Commission (CFTC)
‘The best book yet to come out of the financial crisis. Satyajit Das is a
graceful, witty writer, with an unusually broad range of reference. He is also
a long-time master of the arcana of the netherworlds of finance, and nicely
balances historical sweep with illuminating detail. Extreme Money is lively,
scathing, and wise.’
Charles Morris, author of The Two Trillion Dollar Meltdown: Easy Money,
High Rollers, and The Great Credit Crash
‘Like Hunter S. Thompson’s Fear and Loathing in Las Vegas, Extreme
Money launches you into a fascinating and disturbing alternative view of
reality. But now greed predominates, the distorted world of finance is com-
pletely global, and the people making crazy decisions can ruin us all. This
is an informative, entertaining, and deeply scary account of Hades’s new
realm. Read it while you can.’
Simon Johnson, the Ronald A. Kurtz Professor of Entrepreneurship at MIT
Sloan School of Management and author of 13 Bankers: The Wall Street
Takeover and the Next Financial Meltdown
A01_DAS3974_01_SE_FM.indd 1 24/06/2011 12:23
‘You know when Lewis Carroll, Max Weber, Alan Greenspan, and Sigmund
Freud all appear on the same early page that you are about to read an intel-
lectual tour de force. Satyajit Das is an authoritative and colourful critic of
modern markets, and here he weaves financial history and popular culture
into an entertaining and blistering social critique of how so many people
have come to chase endless financial reflections of the real economy.
Extreme Money speaks truth to power.’
Frank Partnoy, George E. Barrett Professor of Law and Finance at the
University of San Diego and author of F.I.A.S.C.O, Infectious Greed and
The Match King
‘Extreme Money is a highly entertaining, richly detailed account of how
fools and charlatans, masquerading as investment professionals, pillage the
world economy. Satyajit Das is modern finance's Candide: a cool, precise,
globe-trotting observer of decades of delusion and rapacity. The serial rev-
elations of his picaresque tour will amuse, enlighten and enrage both lay
people and market insiders.’
Yves Smith, founder of www.nakedcapitalism.com and author of Econned:
How Unenlightened Self Interest Undermined Democracy and Corrupted
Capitalism
‘A rich analysis told with colour and verve.’
Philip Augar, author of Reckless: The Rise and Fall of the City
‘Most books written about the global financial crisis have been written
by those who only became wise after the event. Satyajit Das is not one
of them. Long before the collapse of Lehman Brothers he warned about
the flaws in modern finance. Extreme Money is his account of what went
wrong. Read it!’
Edward Chancellor, member of GMO’s asset allocation team and author of
Devil Take the Hindmost: A History of Financial Speculation
A01_DAS3974_01_SE_FM.indd 2 24/06/2011 12:23
Praise for Traders, Guns & Money
‘This makes fascinating reading. … Old-fashioned financiers will read it and
weep; today’s MBA students will probably just want to climb aboard this
gravy train. Meanwhile, for anyone else, the book offers a good crib sheet
for how the whole derivatives game words. Better still, there is barely an
equation in sight.’
Financial Times
‘Billed as part thriller, part exposé, it is that true rarity: a derivatives book
that keeps your attention all the way through … Beyond the entertainment
value for those who recognise their friends and colleagues – and perhaps
themselves – in the book, it also offers a good introduction to the world of
derivatives for people in other areas of finance or even the man on the street
who wants to know more.’
FOW
‘The author of this revealing insider’s account has spent over 25 years in
what he calls “the realm of beautiful lies.” He strips bare the workings of
a complex betting game – the book is peppered with cautionary tales. Das
wittily exposes the mechanisms behind the arcane language of yield curves,
option pricing and the rest.’
Director
‘Its spicy gossip about the goings on in the dealing rooms of investment
banks makes for a riveting read – more riveting than yes, The Da Vinci Code.’
The Edge Daily, Malaysia
‘ … filled with examples of naïve investors sucked dry by sophisticated
number crunchers who use smoke and mirrors to point to potential profits
while stuffing the hard cash into their own pockets. … contains more than
investor advice, with plenty of tales of gluttonous excesses and trading-floor
antics gleaned from more than 20 years in the industry.’
South China Morning Post
‘a must read for all CEOs, CFOs, banking and anyone who cares about
what banks are doing with their money.’
Finance Asia
A01_DAS3974_01_SE_FM.indd 3 28/06/2011 13:54
A01_DAS3974_01_SE_FM.indd 4 24/06/2011 12:23
Extreme Money
A01_DAS3974_01_SE_FM.indd 5 24/06/2011 12:23
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be applied whether studying or at work.
To find out more about Pearson Education publications,
or tell us about the books you’d like to find, you can visit
www.pearson.com/uk
A01_DAS3974_01_SE_FM.indd 6 24/06/2011 12:23
Extreme Money
The Masters of the Universe and the Cult of Risk
Satyajit Das
A01_DAS3974_01_SE_FM.indd 7 01/07/2011 09:18
Pearson education Limited
Edinburgh Gate
Harlow CM20 2JE
Tel: +44 (0)1279 623623
Fax: +44 (0)1279 431059
Website: www.pearson.com/uk
First published in Great Britain in 2011
© Satyajit Das 2011
The right of Satyajit Das to be identified as author of this work has been asserted
by him in accordance with the Copyright, Designs and Patents Act 1988.
Pearson Education is not responsible for the content of third party internet sites.
ISBN: 978-0-273-72397-4
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Das, Satyajit.
Extreme money: the masters of the universe and the cult of risk / Satyajit Das. -- 1st ed. p. cm.
ISBN 978-0-273-72397-4 (pbk.)
1. Money. 2. Finance. I. Title.
HG221.D257 2011
332.6--dc23
2011026861
All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system, or transmitted in any form or by any means, electronic, mechanical,
photocopying, recording or otherwise, without either the prior written permission of the
publisher or a licence permitting restricted copying in the United Kingdom issued by the
Copyright Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS.
This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any
form of binding or cover other than that in which it is published, without the prior consent
of the Publishers.
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Typeset in 10pt ITC Galliard by 30
Printed by Ashford Colour Press Ltd., Gosport
A01_DAS3974_01_SE_FM.indd 8 10/09/11 10:54 AM
For Jade Novakovic
without whom there is nothing
A01_DAS3974_01_SE_FM.indd 9 24/06/2011 12:23
