In this perceptive audit, Kaufman exhibits the firm analytic foundation that underlies his position as one of Wall Street's leading indicators. The chief economist at Salomon Brothers, Kaufman is regarded as the authority on interest rates, thanks to an enviably accurate record of predictions on this closely watched barometer of business as well as investment conditions. Here, he offers an informed, elegantly documented status report that affords a less than sanguine overview of the changes overtaking financial/capital markets. Among other things, Kaufman is concerned about the global devaluation of equity and coincident securitization of debt. He's equally disturbed that deregulation, the ascendance of monetarist theory, inflation, and other factors have combined to make ""amorphous giants"" of depository institutions, which, in his opinion, are scanting their fiduciary responsibilities. Sooner or later, he believes, some form of reregulation is unavoidable. Kaufman also casts a cold eye on securities markets where a wealth of available issues, around, the-clock trading, the emergence of proxy instruments (exchange-listed options, index futures, et al.), and the increasing influence of performance-minded professional investors ""create an illusion of liquidity."" These developments can provide great opportunities so long as market overseers remember ""they are not running casinos but rather organizations that should help channel funds to the most productive and efficient economic uses."" About interest rates, Kaufman concludes the secular (as opposed to cyclical) rise that began in 1946 has about run its course. He examines the forces at work as well as advances in forecasting techniques that might permit future generations to track transnational credit flows more precisely. Analysts may need all the help they can get, he suggests, since the aggressive, innovative young adults born after WW II are bound to bring new-fashioned ways to the business world they will shortly inherit. Throughout, Kaufman leavens his critiques and proposals with dry, cautionary wit. In warning against economic judgments based mainly on projections of current conditions, for example, he speculates that prehistoric rating agencies would have ruled dinosaurs the most creditworthy of creatures and downgraded or ignored mammals altogether. In the event, it seems a safe bet that Kaufman's knowing text will stand the test of time for some years to come.