You'll know what a credit swap is by the time you've finished the book. Be prepared to google some terms at the beginning if you're not a trader. You'll be able to hold forth like a fed chairman or a treasury secretary by the end.

This is a fascinating book and a good read. Mr. Das does a great job of explaining in simple terms how some fairly complex financial instruments work and he does it with style. He is also an entertaining cynic, and he takes the reader through the underside of the banking industry in a very readable way.

In some ways this is absolute comedy, and for a while I was caught up in the amusement of seeing a "Flashman" weaving his way through the world of high finance, but ultimately the tales of mendacity and sheer greed, unaccompanied by any focus on value to customers, tend to wear me down. Many of us knew the risks of these products, but credulous buyers bought the pitch whole.

For a quality book, and this is one, there are a few miscues. Any book that mentions Warren Buffett as often as this one does (nine times in the index) should at least spell his name correctly.

Also, Das does correctly note that the origin of currency swaps and interest rate swaps in the mid 1970's - the basis of modern derivatives --arose out of the parallel loan market (at 34-37), but he gets the first parties and transactions wrong. Starting in early 1976, a series of such agreements was done by Monsanto Company, the first of which was with Imperial Chemical Industries Limited, quickly followed by others with Rank Xerox, Hanson Trust and others. Interestingly, these were invented by a small group of lawyers in a London conference room to solve a legal problem and in fact to reduce risk - with no involvement by investment bankers. Of course, Goldman Sachs, who represented Monsanto (and maybe ICI too), saw a product that it could sell to others, and the market was off and running, leading to all kinds of variations and new risks. How do I know this? I still have a copy of the original swap.[...]

This is a fascinating book and a good read. Mr. Das does a great job of explaining in simple terms how some fairly complex financial instruments work and he does it with style. He is also an entertaining cynic, and he takes the reader through the underside of the banking industry in a very readable way.

In some ways this is absolute comedy, and for a while I was caught up in the amusement of seeing a "Flashman" weaving his way through the world of high finance, but ultimately the tales of mendacity and sheer greed, unaccompanied by any focus on value to customers, tend to wear me down. Many of us knew the risks of these products, but credulous buyers bought the pitch whole.

For a quality book, and this is one, there are a few miscues. Any book that mentions Warren Buffett as often as this one does (nine times in the index) should at least spell his name correctly.

Also, Das does correctly note that the origin of currency swaps and interest rate swaps in the mid 1970's - the basis of modern derivatives --arose out of the parallel loan market (at 34-37), but he gets the first parties and transactions wrong. Starting in early 1976, a series of such agreements was done by Monsanto Company, the first of which was with Imperial Chemical Industries Limited, quickly followed by others with Rank Xerox, Hanson Trust and others. Interestingly, these were invented by a small group of lawyers in a London conference room to solve a legal problem and in fact to reduce risk - with no involvement by investment bankers. Of course, Goldman Sachs, who represented Monsanto (and maybe ICI too), saw a product that it could sell to others, and the market was off and running, leading to all kinds of variations and new risks. How do I know this? I still have a copy of the original swap. See my article on the origin of derivatives at [....].

This book has something for everyone that wants to learn how and why financial meltdown occurred. I have read many opinions but this book goes deeper and beyond most non-traders ability to fully comprehend, and yet it gives clear insight into the thinking of bankers and traders. It is not as necessary to understand how to do the trades,for most, as it is intereting to understand how the ambition, greed, lack of regulations, and intentional neglect of over seers led to this meltdown. I have recommended the book to my friends and colleagues who have all taken a shlacking in the markets to see how the "unknown unknowns" cannot be hedged by investing. The fact we are experiencing the unknown unknown and even Warren Buffet couldn't escape it, says we must take another look at our personal financial security and not get caught up in the reverie.

This is an awesome book for a person who is interested to know the truth in these markets...

Das will blow you away. This is insider information from a high-profile player in the shadowy world of the OTC derivatives market. It's a shocking front row seat account, written in a very accessible style. I could not put this book down. You want to know what's been going down in secret on Wall Street and in the global financial MMA cages, read this book. Then read Partnoy's "Infectious Greed." Then pour yourself a drink, and put all your money in CD's.

While I was reading the book I had put my company's money requirement for bidding. Two banks were selected - the bank which was charging me higher interest offered to get the interest down by offering me a 'safe' derivative which would get my effective interest rate down. The safe clause was that my liability would kick-in only if the Japanese Yen fell less than 95 to a US$ (at the time of discussion it was 108 Yen to a US$ - subsequently it did go below 95 Yen). And my company's potential liability was about 200 times the interest it was saving us! After reading this book I knew what questions to ask the banker - he was red-faced and I saved a lot of money for my company. If you don't remember (in this case-read) the past, you are doomed to repeat it.

I picked up this book after finished reading David Roche's New Monetarism. What a GEM!!!! First of all, of all the economic commentators on the scene, nobody, I repeat NOBODY got it right about the cause of the current U.S/W.Europe economic problem (hint: subprime is NOT the cause). David Roche's New Monetarism accurately pointed out "derivatives" which created the asset bubble is the cause of our present economic turmoil. Problem is, David Roche's New Monetarism can be difficult for most reader to follow unless you were part of the "landscape" of the derivative industry. For example, concept like Yen Carry Trade or CDS (Credit Default Swap) were flying in and out in New Monetarism without detailed explanation or definition. Readers may be left behind without truly getting the education they deserved. However, in Guns, Traders... Mr. Das used common English to explain to the readers the basic concept of the complicated derivative industry, he even went on to provide math formulae and swap structures. I am just so thankful to Mr. Das for doing this. The title of this book may give a wrong impression that this is a sexy tabloid writing, less economic and more "National Enquirer" (nothing wrong with National Enquirer as I consider they are a better newspaper than New York Times). This is a serious finance book about capital markets, be prepared to study some maths and financial fundamentals. For capital markets professional, especially those with an experience in derivatives, this book brings you extra joy as you felt like "hey! I was there!!!". For regular reader, this book allows you onto the trading floor, the sale call conference and even place you in front of the computer screens of structuring specialists. If you read David Roche's New Monetarism and did not understand many of the concepts, this book is a must. However, this book is studying derivatives at the ground level, micro economic level. You still need to go back to David Roche's New Monetarism to get an understanding from the Macro, 50,000 feet level.

Finally, allow me to make one political comment. The present economic problem in U.S. has nothing to do with mortgage or subprime. There is nothing the government, federal or local can do. Just like your dying of aging the government cannot do anything to "fix". McCain and Obama may be making a lot of political statements as how to "fix" this economy, the reality is, the economy is way beyond the government's ability and "intellect" can deal with, this book offer the reasons.

I had very high expectation of it because of Frank Partnoy's praise in the back cover. Partnoy's Fiasco "was" the most interesting read of this topic, about how derivatives traders and salesmen reap the face off their customers. I love it so much that I search on Google in order to have a look of the Indian author and to know him more, which I found on the Publisher's site an interview with the author and his photo. Below please find some shortcut for your reference. Hope you like them.

"It's not a technical book. It is part thriller, part expose. It a fun read but it teaches you something about the business. It will show how these markets work. It's also satiric, irreverent and black in its humour...It is a collection of lots of stories. Here's a few:

Story 2

Around 1999, I met an ERM (Enterprise Risk Management) advocate,. Dudley , the head of risk for an investment bank. He wanted to meet me. I had no idea why. I soon discovered that Dudley had reached ERM. It was the "new", best-est thing. It was revolutionary. Dudley was at the forefront. He would give me an example of the problems he was trying to model.

"Let's say our head trader has a complex trading strategy only he understands, yes". I nodded. I didn't think any strategy could be that complex, at least if a trader had put it on. But it was quite likely that no one knew about it. The trader may have not told anyone. "Let's say the trader bicycles to work". I did not think this likely. Traders prefer Porsches. Not wishing to prolong the discussion, I did not disagree.

"On the way to work, he is hit by a bus. His mobile phone is knocked away from him and damaged. He is unconscious. Assume that simultaneously market prices move due to surprise news. This news is vital to the trader's position. He does not know. Nobody knows what to do with his position". I nodded. "That's not all. Assume simultaneously, there is fraud in another bank". I nodded in real agreement. That was very likely. "This bank goes into bankruptcy. It creates a financial crisis. This of course affects the trader's position. He doesn't know of course. He's unconscious". I was hoping he would get to the point soon.

"At the same time, assume there is an accident at a power plant. There is a blackout. The bank's back-up generator fails. The mechanic forgot to check the fuel tank. The bank's computer system goes down. The trader can't get prices or model the risk on his position". I reminded Dudley that the trader was unconscious, maybe deceased. "Exactly", he replied cheerily. It went on.

Eventually after a tragedy of biblical proportions had been outlined, Dudley reached the end. "I am modeling the probability that such an event could occur". For me, it was one step too far in the search for "holistic risk". Risk management seemed to have completed its transformation into pure entertainment. Dudley seemed the epitome of a risk manager who would drown crossing a river that was 12 inches in depth on average.

Story 3

Nero and I marketed together a fair bit. I provided the technical bits. He smoozed the clients. Nero and I were making a pitch for a new structured product with a portfolio manager from an overseas fund over dinner. Dinner was a 3 martini, 2 bottles of French red wine and cigar and brandy affair. I kept looking for a moment to interject and explain the structure and benefits of the trade. I didn't get a chance.

Towards the end of the evening, the fund manager turned to Nero and said: "The girls are coming up to my room, right?" I looked at Nero surprised. "You didn't forget the stuff, it drives the girls wild?" Nero muttered something and carefully steered the conversation in a different direction. After dinner, Nero and I left the hotel. Nero stopped and drew his hand in a cutting motion across his throat. "Remember IBGYBG," he said. "I be gone, you be gone. Got it kid." A week later the portfolio manager was on the phone. "Been thinking about your deal. Like it a lot. Send me a term sheet. I think we can do something there." We closed a juicy trade for $200 million booking profits of over $2 million.

Years later, one of Nero's boys was pitching a deal to a client. Coincidentally, I happened to be a consultant to the customer. During the presentation, I asked some questions. Nothing personal, I was doing my job. The presentation wasn't going to plan. Eventually, the salesman stood up and said: "The product is unsuitable for you. It is intended for someone less sophisticated." I rang and told Nero. He killed himself laughing. True lies, all of them.

Just enough quantitative stuff to be dangerous, and enough humor and anecdotal info to make this a page turner from start to finish.

For me the world of derivatives are a known unknown and after reading the book, it remains like that. Derivatives are complex indeed if you don't have experience or are involve in it, but this book helps to provide an idea about the mechanics of the financials markets. The author guides you in this book telling real stories, some from his own experience, about how derivatives have evolved since its beginnings, covering the whole range of derivatives from futures, options, swaps and credit.
Reading the newspaper today, it said that some companies had made some good profits from our country currency valuation against the dollar, thanks to swaps and futures operations --- at least now I have an idea on what they are talking about. I liked this book, I laughed in some parts of it, and for sure I am eager to read more about the subject.

For me the world of derivatives are a known unknown and after reading the book, it remains like that. Derivatives are complex indeed if you don't have experience or are involve in it, but this book allows you to know more of the mechanics of the financials markets. The author guide you in this book telling real stories, some from his own experience, based on the whole range of derivatives, from futures, options, swaps and credit.
Reading the newspaper today, it said that some companies had made good profits from our country currency valuation against the dollar, thanks to swaps and futures operations --- at least now I have an idea on what they are talking about. I liked this book, I laughed in some parts of it, and for sure I am eager to read more about the subject.

After reading this you wont trust a banker/broker ever again (not that you should have before).
The book is written like a set of short stories. They just flow smoothly and along the way you get to learn about how the world of modern finance has become the creature that it is today. Want to know more about how the sub-prime crisis came about? Read the last section. Wonder how Goldman Sachs got out of it without so much of a scratch? The "tone" of the book will let you know. Just a really insightful and pleasurable read if you like the exciting world of high finance.

For anyone who has been in the business since the advent of financial futures each chapter is a wonderful ride down memory lane (a.k.a. Wall Street) - where fear and greed intersect. Each chapter fittingly a gapers block of financial wreckage and black humor brought on by appropriately licensed Wall Street professionals. A must read for anyone who's been on the Street and those aspiring to.

This book is an authoritative explanation and review of a very abstruse subject "derivatives". The author is very knowledgeable although sometimes too technical for the average person to understand. I think he could have explained his subject without the use of so much profanity. Mr. Das uses this colorful language to portray the lowlife that is handling billions of dollars of our investment money. It certainly was effective. A must read if one is concerned about our debt and the greed of our money managers.

This book lacks a general story line, but provides a good general overview of the history of derivatives without getting into the technical aspects or valuation techniques. It is well written and can be quite humorous at times.

Thoroughly enjoyable read into the world of complex financial structures with anonymous introductions to a few of satans sons who peddle the wares to the not-so-innocent buy-side. DAS weaves his tales with a refreshing sense of humor, something that is in painfully short supply in the industry. If your looking for an understandable survey of current, and not-so-current, financial innovations and the havoc they can bear, then this book is for you.

This book is well written, and explains how derivatives work, and how they are traded. The writer has an excellent sense of humor, and clarifies some difficult to understand concepts. This book helps to explain a lot of the problems we've seen in financial markets in the past years, and doesn't make you feel any better about the future of financial markets.

This book offers a great amount of information and is very interesting. Being a derivatives trader myself, it does however strike me as just a tad too cynical.

"Knowns and unknowns in the dazzling world of derivatives" great subtitle and the author really delivers. I love books on finance. Possibly stemming from being dropped on my head as a child. Some are pretty brutal to read but this one is as entertaining as it is educational.

I was familiar with some derivatives like futures contracts and options, before reading this book. Now derivatives like CDO (Collateralized Debt Obligations), CCO (Commodity Collateralized Obligations), currency swaps, interest rate swaps, or even inverse floaters make sense to me. Obviously I am far from being an expert on any of these, but after reading this book I can now understand why Warren Buffet called derivatives "Financial Weapons of Mass Destruction".

The author does a great job educating you in story-like fashion. The book told of numerous investors that ended up getting screwed by some pretty good salespeople at different dealer firms. Buyer beware comes to mind time and time again as I read these episodes. The treasurer of Orange County California got in way over his head because he was making a ton of money. Which he attributed to his financial wisdom. Then when interest rates went against him and his county lost 1.5 billion dollars he changed his tune saying he had some kind of brain defect and could not understand numbers. That would have been handy for the voters of Orange County to know BEFORE they elected him to office.

I guess there are many reasons to use derivatives like avoiding taxes, moving risk from highly regulated areas to less regulated areas, using loans as collateral for even bigger loans, or repackaging bad credit in a way that transfers the risk to someone else. The more I learn, the more I am amazed that supposedly very intelligent people see these as a great way to make money. It just goes to show that most people invest in things they do not understand.

I read an article by the author, Satyajit Das today. In the article he mentioned that "1 dollar supports 20-30 dollars worth of loans" and that the derivatives market at the moment is valued at 485 trillion dollars, or to make that a little more understandable, 8 times the global gross domestic product. 8 times the GDP of the entire planet. Wow.

This book is a great introduction to the world of derivatives and I highly recommend it.

An insight to the somewhat strange world of derivatives trading, the greed, the risk and the people. I cant say I agree with every word of Satyajit, but it is a real page-turner, the kind of book you finish in a day.

"Derivatives dont kill people, people kill people"

I really enjoyed reading the book Traders, Guns, and Money: Knowns and Unknowns in the Dazzling World of Derivatives by Satyajit Das. It is an interesting book in that it is a fictionalized autobiography of Das. As the book outlines the author's professional life in finance, it describes how he got involved in financial derivatives. The primary purpose of the book is to give a primer on derivatives, how they were created, how they are used, their benefits, and their dangers. The author's use of humor along with the hilarious vignettes of his finance associates (Nero, Clem/Crem, Adewiko, Budi, etc.) and funny anecdotes from his career made the book fun to read.
The book really helped explain what exactly derivatives are (giving me a good review of some of what I was taught in college) and how they are used today. I also appreciated the in-depth analysis of several well-known instances where derivatives were used by investors and companies which really helped to demonstrate their application in the real world as well as the oftentimes hidden dangers of using these financial tools. I found his discussion of the currency swap done by the Walt Disney Company in the 1980's to be of particular interest to me. Despite the fact that I previously read the HBS case study during a Derivatives and Risk Management course which I took as a student at Harvard, Das's explanation of the incident really gave me an even better understanding of how exactly the transaction was structured and how it eventually went wrong. His explanation of why Disney's financial advisors made the deal so complex was also amusing. (You will have to read the book to find out.)
Moreover, Satyajit Das really underscored the complex nature of derivatives and their use in either speculative bets or in hedges. Previously, I had considered these financial tools as an efficient and safe way to hedge. However, the author points out that there are significant risks even when they are only utilized as a hedge.
Hence, I really enjoyed this entertaining and informative book. The author explains complex concepts in a clear, readily understandable, and comical way. I would recommend this book to anyone who wishes to learn more about financial derivatives or the world of finance in general and who does not mind being entertained at the same time.
Thank you for your time.

Satyajit Das has performed a great service to all of us who have heard talk of derivatives and wondered what all the fuss was about. It is both an entertaining and informative read and an indictment of the investment banks that crank these financial products out. He shows first how Wall Street fools its clients by creating incomprehensible products chock full of profits to them as seller but markets them as the financial cure for cancer, without including the long and unwelcome list of potentially deadly side effects in their sales pitch. Second, he shows how Wall Street has fooled itself into believing they understand and have properly hedged their own exposure. The system will inevitably blow up, but the traders will already have moved on with their gigantic bonuses made using other people's money and someone else will be left to hold the bag and clean up the mess.

Laugh out loud funny. Well-known characters on nearly every page, often thinly disguised. Transparent retellings of trade horror stories pad out the material (P&G, Orange County, Metalgeselenshaft AG) which the author had nothing to do with, but his front line tales of bogosity, cretinousness and horrifying stupidity passing as brilliance, only to end in tears is the kind of shadenfreunde this reader cannot deny enjoying. A must read.

As a derivatives trader I've seen many of my colleagues who just enter the field paying hundreds of dollars for thousands of pages of Mr. Das highly unreadable and stupefying compendiums on the subject of structured products. It is impossible to imagine a more serious and devote approach to derivatives than that exuding from his technical volumes. In comparison this new book feels like a gush of fresh air and while demystifying and ridiculing what used to be his bread and butter Mr. Das may look a bit cynical it is an honest book full of interesting and plausible examples and stories. For novices it can be very educational and for experts quite entertaining. It is like a memoir of a spy who turned out to be a double agent on his lifetime in secret services. When a guy knows so much who cares what side he was serving on?

This is not another journalist musing on the financial world. This is not an academic explanation of how financial instruments work. It's something else entirely -- a rare inside glimpse into the world of derivatives by a literate professional who's been a handshake away (or closer) from the major events in the market. Das leavens a series of technical discussions about particular strategies with more entertaining glimpses into the culture the drives the deals. Although I have bones to pick with the book's episodic structure, I can't think of a better way to get a crash course in how the capital markets really work.

If you work in Derivatives, you should read this book. It is quite entertaining. You don't have to agree in public with everything the author puts forth, but there is insight to be gleaned especially for junior people. It is important to hear both sides of a debate, however disenchanted one party becomes. This book is a lively one-way exit interview for a derivatives professional who sugarcoats nothing.