BROKERS, BAGMEN, AND MOLES

FRAUD AND CORRUPTION IN THE CHICAGO FUTURES MARKETS

Less than two years after federal 'commod' squads obtained indictments against over 40 traders at the Windy City's two principal futures exchanges, volume remains as high as ever. Even so, Greising (a Business Week correspondent) and Morse (a reporter for Knight-Ridder Financial News) leave little doubt in this savvy, if discontinuous, overview that there were—and are—scams and double-dealing aplenty in the pits of the Chicago Board of Trade and Mercantile Exchange. The authors offer an authoritative account of the FBI investigation that sent four undercover agents into the trading rings to collect evidence of illegal practices. In addition to an episodic briefing on the sting from its 1987 inception through the first trial verdicts, Greising and Morse provide institutional histories of the essentially self-regulated CBT and Merc. The futures exchanges furnish the global economy a valuable price- discovery mechanism, but, run as old-boy clubs, they apparently also give floor brokers a license to steal from hedgers and speculators alike. The authors make a generally good job of explaining how venal traders defraud clients as well as the IRS. They also probe the political alliances and payoffs that ensure an anything-goes trading environment, and they don't spare federal prosecutors who inflated the significance of nickel-and-dime cases. The impact of their charges and reform proposals, though, is blunted by a fractured format that arrests the narrative flow to no discernible purpose at critical junctures. Also, the story's a long way from over. While the Chicago office of the US Attorney General can claim upwards of 30 scalps (via plea bargains and convictions), more than a dozen of the accused have been acquitted or given an interim pass by juries that could not reach verdicts. A knowledgeable, albeit less than cohesive, progress report on a consequential scandal.

Pub Date: July 15, 1991

ISBN: 0-471-53057-3

Page Count: 256

Publisher: Wiley

Review Posted Online: May 20, 2010

Kirkus Reviews Issue: June 1, 1991

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Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our...

THINKING, FAST AND SLOW

A psychologist and Nobel Prize winner summarizes and synthesizes the recent decades of research on intuition and systematic thinking.

The author of several scholarly texts, Kahneman (Emeritus Psychology and Public Affairs/Princeton Univ.) now offers general readers not just the findings of psychological research but also a better understanding of how research questions arise and how scholars systematically frame and answer them. He begins with the distinction between System 1 and System 2 mental operations, the former referring to quick, automatic thought, the latter to more effortful, overt thinking. We rely heavily, writes, on System 1, resorting to the higher-energy System 2 only when we need or want to. Kahneman continually refers to System 2 as “lazy”: We don’t want to think rigorously about something. The author then explores the nuances of our two-system minds, showing how they perform in various situations. Psychological experiments have repeatedly revealed that our intuitions are generally wrong, that our assessments are based on biases and that our System 1 hates doubt and despises ambiguity. Kahneman largely avoids jargon; when he does use some (“heuristics,” for example), he argues that such terms really ought to join our everyday vocabulary. He reviews many fundamental concepts in psychology and statistics (regression to the mean, the narrative fallacy, the optimistic bias), showing how they relate to his overall concerns about how we think and why we make the decisions that we do. Some of the later chapters (dealing with risk-taking and statistics and probabilities) are denser than others (some readers may resent such demands on System 2!), but the passages that deal with the economic and political implications of the research are gripping.

Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our minds.

Pub Date: Nov. 1, 2011

ISBN: 978-0-374-27563-1

Page Count: 512

Publisher: Farrar, Straus and Giroux

Review Posted Online: Sept. 4, 2011

Kirkus Reviews Issue: Sept. 15, 2011

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A declaration worth hearing out in a time of growing inequality—and indignity.

ECONOMIC DIGNITY

Noted number cruncher Sperling delivers an economist’s rejoinder to life, liberty, and the pursuit of happiness.

Former director of the National Economic Council in the administrations of Presidents Bill Clinton and Barack Obama, the author has long taken a view of the dismal science that takes economic justice fully into account. Alongside all the metrics and estimates and reckonings of GDP, inflation, and the supply curve, he holds the great goal of economic policy to be the advancement of human dignity, a concept intangible enough to chase the econometricians away. Growth, the sacred mantra of most economic policy, “should never be considered an appropriate ultimate end goal” for it, he counsels. Though 4% is the magic number for annual growth to be considered healthy, it is healthy only if everyone is getting the benefits and not just the ultrawealthy who are making away with the spoils today. Defining dignity, admits Sperling, can be a kind of “I know it when I see it” problem, but it does not exist where people are a paycheck away from homelessness; the fact, however, that people widely share a view of indignity suggests the “intuitive universality” of its opposite. That said, the author identifies three qualifications, one of them the “ability to meaningfully participate in the economy with respect, not domination and humiliation.” Though these latter terms are also essentially unquantifiable, Sperling holds that this respect—lack of abuse, in another phrasing—can be obtained through a tight labor market and monetary and fiscal policy that pushes for full employment. In other words, where management needs to come looking for workers, workers are likely to be better treated than when the opposite holds. In still other words, writes the author, dignity is in part a function of “ ‘take this job and shove it’ power,” which is a power worth fighting for.

A declaration worth hearing out in a time of growing inequality—and indignity.

Pub Date: May 5, 2020

ISBN: 978-1-9848-7987-5

Page Count: 384

Publisher: Penguin Press

Review Posted Online: Feb. 26, 2020

Kirkus Reviews Issue: March 15, 2020

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