Monetary-policy

Working in the banking industry I was turned on to this book by a colleague and what a colossal waste of time reading this was. The vast majority of this book's models are outdated and if Mr. Saunders was trying to write a historical piece he has accomplished that in spades. Nothing in this book is relevant and it is obvious the esteemed Mr. Saunders lent his name to a very poor book that he probably should have glanced through if not read. Linda Allen should probably get some real world experience because she is wasting people's time with her research.

This book reviews concepts that have been around for more than 10 years and well published in articles. Perhaps it pulls it all together in book form, but even so, it is dated. It is light on credit derivatives and the exploding market in synthetic securitizations driven by credit derivatives. These products introduce structured credit risk (and hedges) to banks and investors.

The reader will need to buy "Credit Derivatives and Synthetic Structures" by Tavakoli to get insight into these products.

I have a copy of this book. It covers popular credit risk models and things like RAROC, etc. These concepts have been discussed extensively in the industry but I assume this is the first in the book form. The book does a good job in presenting basic ideas. However, if you are looking for technical details, you best bets are still the original technical documentations (CreditMetrics, CreditRisk+, KMV, etc). Nevertheless this book is a useful survey of the current stable of models. Besides, it is not very expensive.

There are no insights to Greenspan or the Fed. No interviews with Fed officials. Its like reading newspaper clippings. He has absolutely zero access to Greenspan and some of his facts are false. I work on Wall Street and for us this book was a joke.

We became familiar with Steven Beckner as reporter on the U.S. economy for National Public Radio. However, reading his most recent book: Back for the Brink: The Greenspan Years the reading public may not be reminded of a voice emanating from the radio as much as reminded of William Greider's wonderful book, Secrets of the Temple.

Published in 1987, Greider's book gave us a brief history of the Federal Reserve System in the United States and carried the survey of its history up to the October 1987 crash of the stock market spending a great deal of the book discussing the administration of Paul Volcker as the chairman of the Federal Reserve Board. That book left the present author wanting more. Steve Beckner's book is the answer to that prayer.

Picking up almost exactly at the time of the October 1987 crash, Beckner brings the story of the Federal Reserve up to September of 1995. The book has already become one of those books which is referred back to even after it has been completely read, spending as little time on the shelf as the dictionary and other reference materials in this house.

Heavily into the subject, Beckner spends little time explaining his terminology. Even for readers with some background in economics this can be distracting as readers break off in the middle of a good read to look up Germany's Bundesbank Lombard rate to understand what Beckner is trying to say.

Still in all, some reviewers may have been unfair to Beckner to state that he fawns over the actions of Alan Greenspan. What may appear as fawning on the surface may actually be the writing style a reporter who has learned to take care in the statements he makes to avoid sending misinterpreted ripples to the markets which have in the past been characterized as "the Beckner effect" by the New York Times as noted in the dust cover of the book. Reading the book in light of this reserve means playing tennis with the net up rather than down. Nonetheless, a careful reading of the book reveals clear criticism of Greenspan for his lack of independence from the policies of the Clinton Administration and for his over reation to the so-called "credit crunch of 1992" a phenomenon whose very existence is still being debated. The book is, therefore, an important addition to every current affairs collection.

Brian Wayne Wells
Attorney at Law
Charleston, West Virginia

We always watch the yield curve and try to unsuccesfully predict how changes in its slope might affect market expectations. Knowing about the person who indirectly draws it makes a lot of sense. Undoubtly, Alan Greenspan will be remembered for many years to come as one of the greatest economic minds of this century. Highly recommended. Not very technical which makes it an easy read...

Starts with the outright lie that the Federal Reserve is a government agency (it is actually a private corporation with government-appointed "decision makers"). Continues with farcical statements such as "the number one goal of the Fed is still to avoid inflation", while conveniently defining inflation as a rise in prices, rather than bloating of the money supply. Like every book and pamphlet ever written by a past or present Fed insider, this book meticulously avoids ever mentioning the Fed's single most important and most frequently abused power - that of creating new money at will out of thin air. Since one of the authors was a vice chairman of the Fed, you can forget journalistic ignorance as the excuse. The most important piece of information about the Fed was omitted purposely, with careful phrasing and organization. An omission this needless and this monstrous can only throw gasoline on the flames of conspiracy theories. One's hopes surge momentarily at noticing a section called "Let's be open" about open market operations. Nothing but varnish. Most Idiot books are OK. This one can serve only as quick primer on the knowledge which is non-essential to John Q. Public. Do yourself a favor. Look deeper.

mrbigbeast obviously disagrees with the purposes of the Federal Reserve, but he seriously misrepresents what is in the book. His political leanings are not unique, but the fact of the matter is that the Federal Reserve System is the central bank of the United States and was created by the Congress with the passage of the Federal Reserve Act in 1913. The Federal Reserve System includes the central governmental agency, the Board of Governors located in Washington DC with responsibilities to report regularly to Congress, and twelve regional Federal Reserve Banks that are corporations whose shares are owned by the member banks. There is an entire chapter explaning the New York Fed and its unique powers, as well as a second chapter explaining the other reserve banks.

Other chapters include Why Care About the Fed, How We Got a Federal Reserve, Fedspeak: The Secret Language of Money, and The Money Machine's Key Responsibiities. This book is an excellent overview if you want to know how the Fed works and how it impacts your daily life.

I have never been a fan of condensed books for the obvious reason that they leave out content and motivation. This book, however, could be shrunk by 3/4 without any real loss. Yes, there is much in-depth case study information here, but the paper could have been much better used by substituting much of it for some harder, theoretical motivation and analytical discussions. The authors are capable of this. Also, despite the painstaking redundent detail and a few regressions, for me the authors fail to place inflation targeting and inflation targeting countries into the greater context of inflationary policies and countries facing inflation. It surprises me that there is no mention of some of the, especially developing countries, where inflation has been a serious problem and where most battles of the future are likely to be fought.

An easy to read book for people of all levels. It takes the reader through case studies on the various countries which have introduced inflation targeting. This is interesting from a historical perspective, but since inflation targeting really is a very simple concept (announce an inflation target, describe why you aim to hit this target, make it clear how you shall go about achieving this target and at all times be transparent in your pursuit of that target) the book tends to be repetitive. This book simply goes over too many similar regimes and thus cannot help but cover the same points over again. The last chapter is a study of the U.S. (a rare example of a country with very steady inflation which has not introduced an explicit inflation target) with some recommendations on how (and why) it should implement an inflation target. This book is recommended if you want very indepth case studies on the introduction of inflation targeting in countries as different as Sweden, New Zealand, The U.K. and Australia, but if you only need a quick overview of what inflation targeting is then buy a good general Economics textbook and read the section on it.

Henning gives a comprehensive account of the foreign exchange markets in the 1970s and 1980s, covering in depth the developments of the international financial system as it came to terms with the fragmentation of Bretton Woods. As a reference work to refresh the memory on developments (particularly surrounding the Plaza and Louvre periods) it is a useful account.

Aside from the dated nature of the book (analysis ends basically with Clinton's accession to the presidency) there are some other problems. Analysing the US, Germany and Japan in distinct sections means that there is a rather disjointed approach to the work - to get a coherent account of international co-operation in the mid 1980s requires some skipping back and forth in the text, for instance. In addition, the analysis of policy and politics (whatever one thinks of the author's conclusions) comes across more as an afterthought to the chronology.

The detailed accounts of policy making in the 1980s makes this a useful reference book to those studying currency markets, but it should not be thought of as particularly strong when it comes to analytics.

The information presented in this book help anyone to understand the needs of the various communities of people who are blind and those with low vision. This is a well done survey research to choose features that could be used by people who are visually disabled to recognize, denominate, and authenticate banknotes.

It is useful for the investment analysts.

my only concern is that there are supplementals to up grade the publication every quarter

Chown, a practitioner instead of an academic, is wise and pithy, covering a lot of territory from Charlemagne to the end of the 19th century. He wisely gives equal time to coins, paper money, and bank deposits. He knows the academic literature, but writes mainly for educated laypeople. The book is fun to read, but is too short and anecdotal to be a reference. But you will learn that many 20th century controversies in monetary affairs go back to the Middle Ages and Renaissance. See how playing sleight of hand with banks and paper money has proven seductive for generations. The terminology changes, but not the dilemmas and temptations. And wisdom is likewise of long date, namely the work of Richard Cantillon around 1720, David Hume around 1750, and Henry Thornton in 1802.

Better books in this vein include Jim Grant's Money of the Mind", and Glyn Davies's "A History of Money from Ancient Times to the Present Day." Somebody should also bring Lloyd Mints's "History of Banking Theory" back in print.

Chapter 10 of this book contains the best exposition I have found to date regarding contruction of an OAS model for MBS. On the downside, in the process of replicating the model I have not been able to reproduce the interest rate cap prices on page 171 nor the the output of the prepayment model aging function depicted graphically on page 184, figure 6.

On the cap price issue, all inputs to the cap pricing were reproduced exactly, so that the failure to reproduce the prices themselves is a mystery.

Regarding the prepayment aging function it does not appear that the function presented in equation (22) on page 183, using the GNSF model coefficients, produced the output contained in figure 6, on page 184.

I point out these two issues in order to indicate the extent to which replicating the results of this chapter are possible. Finally, I was dissapointed in the willingness of the author to respond to clarifying questions regarding the presented material. I was surprised when I did not receive a response because the author was eager to answer a prior inquiry from me asking about the appicability of his chapter to my MBS modeling interests.

In any event, the chapter provides the best documentation of OAS model construction I have found. For those practitioners wanting to learn how to construct a workable OAS model for MBS fixed rate pass throughs I highly recommend chapter 10 of this book.