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Extreme Money: The Masters of the Universe and the Cult of Risk



Extreme Money: The Masters of the Universe and the Cult of Risk

Satyajit Das

ISBN: 978-1-118-15372-7 November 2011 484 Pages


A definitive cultural history of high finance from one of the industry's most astute analysts

Written by internationally respected financial expert Satyajit Das, Extreme Money shows how real engineering was replaced by financial engineering in the twentieth century, enabling vast fortunes to be made not from goods produced or services performed, but from supplying and trading money.

Extreme Money focuses on this eviscerated reality—the monetary shadow of real things—and what it means today. The high levels of economic growth and the wealth that inevitably follows, driven by cheap debt, financial engineering, and speculation, were never sustainable, and the last few years have borne this out. The book shows how policy makers and regulators unknowingly underwrote the risks, substantially reducing their ability to control economic outcomes. Extreme money concentrated economic power, wealth, and risk in the hands of a small community of gifted, dynamic financiers largely outside the regulatory purview and the democratic process, and there's no going back.

  • Explains the extreme money games (via private equity, securitization, derivatives, hedge funds, and other means) invented by the elite financiers of last century
  • Raises deeper questions about the nature of the economic structure and assumptions about ongoing financially engineered prosperity that readers, politicians, and financial figures need to be asking
  • The book is timed to coincide with the next phase of the financial crisis, as prospects of recovery diminish and the global economy becomes mired in a Western version of Japan's "Lost Decade"

Ambitious in scope and coverage, the book is the indispensible, in-depth guide to the age of modern money. An age defined by extremes of financial behavior.

Prologue: Hubris 1

Part I: Faith

Chapter 1 Mirror of the Times 21

Chapter 2 Money Changes Everything  38

Chapter 3 Business of Business 52

Chapter 4 Money for Sale  65

Chapter 5 Yellow Brick Road  78

Chapter 6 Money Honey  89

Part II: Fundamentalism

Chapter 7 Los Cee-Ca-Go Boys 101

Chapter 8 False Gods, Fake Prophecies  116

Part III: Alchemy

Chapter 9 Learning to Love Debt  133

Chapter 10 Private Vices  153

Chapter 11 Dice with Debt  168

Chapter 12 The Doomsday Debt Machine 188

Chapter 13 Risk Supermarkets  208

Chapter 14 Financial Arms Race  226

Chapter 15 Woodstock for Hedge Funds  239

Chapter 16 Minsky Machines  253

Part IV: Oligarchy

Chapter 17 War Games  264

Chapter 18 Shell Games  279

Chapter 19 Cult of Risk  294

Chapter 20 Masters of the Universe  307

Chapter 21 Financial Nihilism  321

Part V: Cracks

Chapter 22 Financial Gravity  337

Chapter 23 Unusually Uncertain  348

Epilogue: Nemesis 367

Notes  384

Select Bibliography 420

Index  429