LEO MELAMED ON THE MARKETS

TWENTY YEARS OF FINANCIAL HISTORY AS SEEN BY THE MAN WHO REVOLUTIONIZED THE MARKETS

Forty essays and speeches, many dating back to the 1970's, by the ex-chairman of the Chicago Mercantile Exchange (CME). Promotion is what this book really is all about. In Part I, ``The Soul of the Trader,'' Melamed—who began his career in the 1950's as a CME runner for Merrill Lynch—argues that wild and woolly Chicago futures traders, including speculators, are actually business pioneers whose arcane methods are economically sound and whose effects—primarily, he claims, the assumption of future commodities' price-risks—are socially useful. In speeches collected in ``The Birth of a Market—Financial Futures,'' Melamed extends these arguments to trading in futures contracts on foreign currencies, Treasury bills, six-month CDs, and other financial instruments as he successfully lobbies for the creation of a Chicago International Monetary Market (IMM), which became the world's first public financial futures exchange; and he traces the IMM's conceptual history from the Bretton Woods agreement of 1946 through Nixon's abandonment of the gold standard in 1971 to the phenomenal growth of the IMM over the next dozen years, during which it spawned its own federal regulatory agency, the Commodity Futures Trading Commission. ``Futures—Their Role and Potential'' explores the claim of futures' social usefulness in multiple variations, especially concentrating on how futures are really a tool for risk management. ``The 1987 Crash'' defends the futures market against charges that it led to the speculative fever that resulted in the crash, and ``Globalization and the New World Order'' advocates a continuing free market for new futures products and instruments, preferably without the tests of economic viability and social worth that the federal government is inclined to impose. Not a primer in the theory and practice of futures trading, which can be understood only partially by reading between the lines—but full of fascinating historical tidbits lying beneath the promotional blitz.

Pub Date: Jan. 22, 1993

ISBN: 0-471-57524-0

Page Count: 256

Publisher: Wiley

Review Posted Online: May 20, 2010

Kirkus Reviews Issue: Dec. 1, 1992

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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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