The finance sector of Western economies is too large and attracts too many of the smartest college graduates. Financialization over the past three decades has created a structure that lacks resilience and supports absurd volumes of trading. The finance sector devotes too little attention to the search for new investment opportunities and the stewardship of existing ones and far too much to secondary-market dealing in existing assets. Regulation has contributed more to the problems than the solutions. Why? What is finance for?
John Kay, with wide practical and academic experience in the world of finance, understands the operation of the financial sector better than most. He believes in good banks and effective asset managers, but good banks and effective asset managers are not what he sees.
In a dazzling and revelatory tour of the financial world as it has emerged from the wreckage of the 2008 crisis, Kay does not flinch in his criticism: We do need some of the things that Citigroup and Goldman Sachs do, but we do not need Citigroup and Goldman to do them. And many of the things done by Citigroup and Goldman do not need to be done at all.
The finance sector needs to be reminded of its primary purpose: to manage other people's money for the benefit of businesses and households. It is an aberration when some of the finest mathematical and scientific minds are tasked with devising algorithms for the sole purpose of exploiting the weakness of other algorithms for computerized trading in securities. To travel further down that road leads to ruin.
©2015 John Kay (P)2015 Gildan Media LLC
"Kay is an admirable debunker of myths and false beliefs - he can see substantial things that others don’t." (Nassim Nicholas Taleb, author of The Black Swan)
"Kay is both a first-class economist and an excellent writer." (Financial Times)
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"Must read to understand the next crisis"
this book details why politicians will not see the next banking disaster we will suffer
"Overall good book!"
This book isn't written for someone that isn't interested in finance. It will also make you think twice about your goals if you are like me and thought about taking your math and computer science skills into this sector... It has boring parts but overall its a good book!
"Listened twice. Everyone must read this."
I never felt like I understood what's actually happening in the finance markets until I read this book.
Kay has a wonderfully grounded approach which asks, what is the good work the financial sector supposed to perform? And, is it performing it?
The answer is largely, scandalously, that most of what the financial sector does offers no service while causing enormous risks for the economy at large.
It was counterintuitive to hear that more regulations don't help. Instead, we need basic, fundamental structural changes in how the finance system works, rather than attempts to monitor every aspect of what bankers do. Laws and regulators can never keep up with the banks, and further complexity only creates greater distortions.
The book includes a whole chapter on clear, specific reforms. Everyone must read this book. That way, we could get the reforms we need.
"Describes, critiques today's financial services"
The focus here is on those structures that face toward the public, and the presence of embedded conflicts and instabilities that pose risks for investors and other counter-parties, and the system as a whole. There is not much focus on details of what finance actually accomplishes, i.e., the part that faces toward projects, businesses, getting things done, which might compensate some for these problems. But this is a good portrayal of the sometimes unreliable and rickety structures that have grown into place in this sector, in recent times. It is also a good introduction to much of the language used in financial services.
"Grab a pillow"
Did a computer narrate this story? The narrator's voice is so monotone, it almost puts me to sleep. There's probably good information in this audiobook, but the narrator kills any desire to pay attention.
"a must hear"
I think that anyone with policy making auctority should read or listen to this book. it's a complete and essencial guide to contemporary economics in a very critical point of view. in a sense, it states the obvious, but saying the obvious is normally the task of a genius.
"useful reading for investors"
all useful information while it questions what the financial system does and provides in way of benefit to society I think it presents what the reader needs to know
"Something wrong with sound"
Narration very mechanical sounding and hard to listen to. Wish had not bought, although I was really looking forward to it
"Thought provoking insight"
Should be read by everybody who is interested in the further development of a sound finance industry and the well being of society in general.
"Thorough Thoughtful Analysis of Great Recession"
Author goes deeper than the "usual suspects" to identify causes of, and to propose principled and workable solutions for, the economic illness that threatened the world.
We ignore the principles and systemic flaws he points out at our peril.
But this is not a casual read. Whether you are conservative, liberal, or libertarian you may experience challenges to your knee jerk explanations of what went wrong and what needs to be done to fix economic and political systems.
"Enjoyable overview of new finance"
Have listened to this 3 times now as it can be enjoyed on different levels . Very entertaining if you are interested in finance but don't really know how or why these mad new financial instruments work.
"Excellent book, excellent performance"
It's the exam period so I won't bother writing a full review.
Even if you're not interested in finance at all, buy this book! You owe it to society as a voter, and you owe it to yourself as a future retiree. The message is very clearly argued, and I daresay you will learn a lot, and enjoy the process, too. All I can say is that I certainly did.
"Great Book. Great content."
Fantastic book.Very informative. However, Walter Dixon is not the best narrator! His tone was boring.
Eye opening, wise, and inspiring of a better world. (No more words needed, even though Audible Review is set up to assume wordiness equates with quality.)
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