Extreme Money

Financial Times
Satyajit Das  
Total pages
August 2011
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Extreme Money
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The human race created money and finance. But our inventions re-create us. Mankind mistook money—a lubricant of society and human well-being—for an end in itself. Finance, the monetary shadow of real things, came to dominate human reality. Extreme Money tells the story of how this happened—and, in so doing, it tells the story of the modern world.

Bestselling author Satyajit Das draws on 33 years of personal experience at the heart of modern global finance to narrate this story. Das reveals the spectacular, dangerous money games that have generated increasingly massive bubbles of fake growth, Ponzi prosperity, sophistication, and wealth—while endangering the jobs, possessions, and futures of virtually everyone outside the financial industry.  Das shows how “extreme money” has become ever more unreal; how “voodoo banking” continues to generate massive phony profits even now; and how a new generation of “Masters of the Universe” has come to dominate the world.


Extreme Money is about:
The new financial fundamentalism: false gods, false prophets - Faith in money, faith in risk, faith in shadows
The cult of risk and the growth engine that isn’t - How financial engineering replaced real engineering and illusions replaced reality
Financial alchemy and the “Doomsday Debt Machine”- The rise of the global financial machine we cannot escape
The new global oligarchy—and the nihilistic games they play - Too smart, too fast, too greedy, too self-absorbed—and far too dangerous


Table of Contents

Prologue: Hubris

Sub-prime dialects

Best in show

The Physical Impossibility of Death in the Mind of Someone Living


Swiss inquisitions

Idea of an investment


Mega presentations

Fording streams

Liquidity and leverage

Democracy of greed

Pick and pay

Black Sea real estate

Life on the margin

Racing days

Dr Doom

Extreme money



Part 1 Faith

1          Mirror of the times

Some kinda money

Trading places

The invention of money

Barbarous relic

The real thing

The Hotel New Hampshire


Money machines

Debt clock

Money is nothing

The mirrored room


2          Money changes everything

Mrs Watanabe goes to Wall Street

FX Beauties Club


Trickling down, trading up

I shop, therefore I must be!

Spend it like Beckham!

Golden years

Tax avoidance

Japanese curse

The god of our time


3          Business of business

Limited consciences

A brilliant daring speculation

Dirty tricks

Marriages and separations

The house that Jack built

Capital ideas

WWJD – watch what Jack did!

Business dealings


4          Money for sale

It’s a wonderful bank!

Pass the parcel

Loan frenzy

Plastic fantastic money

Casino banking

Confidence tricks

The Citi of money

Sign of the times


5          Yellow brick road

Monumental money

The battle of the ‘pond’

Cool Britannia

Barbarian invasions

Unlikely centres

El-Dollardo economics

The unbalanced bicycle

Foreign treasure

Fool’s gold

Liquidity vortex


6          Money honey

Printing it

Column inches

Video money

Studs, starlets

Financial porn

Speedy money

Literary money

Money for all



Part 2 Fundamentalism

7          Los Cee-Ca-Go boys

Dismal science

Chicago Interpretation

Economic politics

Academic warfare

The Gipper and the Iron Lady

Political economy

New old deal

The monetary lens

Unstable stability?


8          False gods, fake prophecies

Mystery of price

Demon of chance

Corporate M&Ms

Risk taming

Slow and quick money

Corporate practice

Everything is just noise

Perfect worlds

Financial fundamentalism

Fata morgana



Part 3 Alchemy

9          Learning to love debt

Fixed floor coverings

By the bootstraps

Leverage for everything

Cutting to the bone

Professor Jensen goes to Wall Street

Drowning by numbers

Censored loans

High opportunity bonds

Fallen angels

Junk people

Milken’s mobsters

The sweet envy of bankers

Thank you for borrowing

One bridge too far

National treasure


10        Private vices

Excess returns

Sexy private equity

Inflight entertainment

Selling the family silver

Holey dollar

Money for nothing

Public squalor, private profits

Locust plagues

Vain capital

Amateur hour



11        Dice with debt

Securitisation recipes

Slice and dice

Almost as safe as houses

Synthetic stuff

Get copula-ed

Sticky mess

Several houses of one’s own

Cheaper cuts of mortgage

ARMs race

Heroes for one day


12        The doomsday debt machine

Alpha-debt soup

In the shadow of debt

Virtual loans

Counting on the abacus

Intellectual masturbation

Used to be smart

Chain reaction

Phase transition

Terra icognito


13        Risk supermarkets

Mind your derivatives

Particle finance

Hedging your bets

Sewer bonds

Harvard case studies

The Italian job

Betting your hedge

TARDIS trades

I will kill you later

First to lose

Toxic municipal siblings

Playing swaps and robbers

The Greek job

Madman’s games


14        Financial arms race


Evil Kerviel

Soldier monks

Mystère Kerviel

Risk is our business

Free money

Credit’s fatal attraction

Post-modern contradictions

Derivative deconstruction

Piñata parties


15        Woodstock for hedge funds

Keeping up with the Joneses

In search of Moby Dick

Style gurus

Magic wand

Lucky man

Sharpe practice


In the long run, we are all dead

The game

The more things change



16        Minsky machines

Affinities and curses

Crowded hours

Crime without punishment

Fast cars, slow hedge funds

Fast cornering

Children of privilege

Make money not war



Part 4 Oligarchy

17        War games

Borrowed times

Liquidity factory

Six degrees of separation

Paper chains

Toxic pathologies

Relying on the Zohar

Blind capital

Rent collectors

Best in best possible world


18        Shell games

Central bank republics

Games of old maid

Protection rackets

Stockholm syndrome

Free speech

No accounting for values

Mark to make believe

Out of sight

Creeping crumble

Management by neglect

Directing traffic


19        Cult of risk

Growth for all season

Financial groupthink

Celebrity central banking

Dealing with dissent


Je ne regrette rien!

Last supper


20        Masters of the Universe

Money illusions

Factories for unhappy people

War versus money

Shop floors

Smiling and killing

Pay grades

Much more than this


Bonus season


Tipping points


21        Financial nihilism

Cosmetic consumption

The physical impossibility of spending the amount earned by someone living

Celebrity finance

Manque not monkey

Wizard and muggles

In the midnight hour

Last rites

Safe as

Snuff movies

Financial nihilism



Part 5 Cracks

22        Financial gravity

Air pockets

Mass extinction


This is not a seminar!


Country for sale

Crying games

Financial gravity


23        Unusually uncertain

Botox economics

China syndrome

Regulatory dialectic

Patient zero

Nowhere to run, nowhere to hide

Built to fall

End of Ponzi prosperity?

Losing the commanding heights

Zen finance

Unusually uncertain



Epilogue: Nemesis


Widows and orphans


Crunch porn, crash lit

Economic rock stars


Meta money

Economic trivialities

This time, it is no different!

Suicide is painless

The turning world



Select bibliography





Back Cover

'A true insider’s devastating analysis of the financial alchemy of the last 30 years and its destructive consequences.  With his intimate first-hand knowledge, Das takes a knife to global finance and financiers to reveal its inner workings without fear or favor.'

-Nouriel Roubini, Professor of Economics at NYU Stern School of Business and Chairman of Roubini Global Economics


'Das describes the causes of the financial crisis with the insight and understanding of a financial wizard, the candor and objectivity of an impartial observer, and a wry sense of humor that reveals the folly in it all.'

Brooksley Born, former chairperson of the U.S. Commodity Futures Trading Commission (CFTC)


Once upon a time human society built things. We engineered beautiful objects and created authentic goods. Now this real industrial engineering has been replaced by financial engineering: shuffling money in an endless process of debt, trading and speculation. It’s enabled vast fortunes to be made for a few, while the risk was borne by ordinary people – the 'privatisation of gain' and 'socialisation of losses'.


Extreme Money tells the story of spectacular and dangerous money games and those elite bankers, traders and financiers, the so-called Masters of the Universe, who continue to play them. Written by an insider, Extreme Money will show you how, little by little, we’ve all become slaves to financial alchemy and have been enchanted by our own illusory creation: the cult of global finance.


Satyajit Das is an internationally respected expert in finance with 33 years’ experience. He has worked for the “sell side” (Citicorp Investment Bank and Merrill Lynch), the “buy side” (as Treasurer of the TNT Group), and as a consultant advising banks, investors, corporations, and central banks worldwide. Das is the author of many highly regarded standard reference books on derivatives and risk management. In 2006, he published the international bestseller Traders, Guns & Money, an extraordinary insider’s account of the world of derivatives trading. In Traders and in a series of speeches in 2006 entitled - The Coming Credit Crash, Das anticipated many of the problems that became apparent in the financial crisis and are still affecting the global economy. He was recently featured in Charles Ferguson’s 2010 Oscar®-winning documentary Inside Job and the 2009 BBC documentary Tricks with Risk.

Reader Review(s)

Long listed for Financial Times/ Goldman Sachs Business Book of the Year 2011


Listed in Bloomberg’s Top Business Books of the Year 2011


One of ninemsn.com.au’s best business books of 2011


"…a powerful book…highly readable and informative…Anyone who decodes the ratings of the three major agencies so amusingly – CCC means "Russian roulette with five bullets in the chamber" and D means "scrape your brains off the wall and place in a plastic bag"- demands to be read."
Lindsay Tanner, former Australian Minister of Finance inThe Monthly, August 2011

" While the run-up to the global financial crisis has been well documented, Das provides his own unique insights."
Luke Faulkner, Hedge Funds Review, August 2011

"...virtually in a category of its own – part history, part book of financial quotations, part cautionary tale, part textbook. It contains some of the clearest charts about risk transfer you will find anywhere. ...Others have laid out the dire consequences of financialisation ("the conversion of everything into monetary form", in Das’s phrase), but few have done it with a wider or more entertaining range of references...[Extreme Money] does... reach an important, if worrying, conclusion: financialisation may be too deep-rooted to be torn out. As Das puts it – characteristically borrowing a line from a movie, Inception – "the hardest virus to kill is an idea".  
Andrew Hill "Eclectic Guide to the Excesses of the Crisis" Financial Times, 17 August 2011

“an idiosyncratic yet withering analysis of how 30 years of financial alchemy and excessive credit have plunged us into what feels like a slow-motion depression… addresses, one by one, the overarching themes of the great credit boom and bust of the late 20th century.

Black humor is Das’ natural medium, and he gave me a rueful chuckle every few pages. You know that a writer is hard to pigeonhole when the advance praise compares him to both Candide and Hunter S. Thompson. I prefer to view Das as a modern-day Ishmael with an attitude, a weathered seaman who has witnessed firsthand the crazed hunt of hedge-fund captains for alpha, the great whale of superior investment returns.

… I could only endorse the conclusion. “There is no simple, painless solution” to the fix we’re in, Das writes. “The world has to reduce debt, shrink the financial part of the economy, and change the destructive incentive structures in finance. Individuals in developed countries have to save more and spend less.”
Doomsday Debt Machine Roars as Wizard Das Chides Buffett: Books, By James Pressley, Sep 19 2011

“ a fast paced ride...Das manages to be both an insider and outsider – much of what he covers is based on first hand experience...there’s no of the faux glamour that infuses many otherwise critical books on finance.... this is a thoughtful, interesting and unusual book that deserves to jostle for shelf space alongside classics such as Charles Kindleberger’s Manias, Panics and Crashes and Devil Take The Hindmost by Edward Chancellor. It is well worth a read by anyone seeking to grasp the broader impact of the recent crisis."
Chris Sholto Heaton, Money Week, November 2011


“...Mr Das has a keen eye for an anecdote ....   give[s] the reader plenty of chances to chuckle at the hubris he reveals.. the views of people like Mr Das were consistently ignored in the run-up to the debt crisis..”

More luck than judgment, The Economist, 15 October 2011


“...Extreme Money is not about the financial crisis, as such. It is about the history of money and the journey that brought us to 2011. Das writes in a clear, straightforward manner that is approachable to all readers and takes in a diverse range of references from Hollywood movies to mediaeval literature, with plenty of gags and reflections from his career in the industry, which make for an easy read.”

Nick Ferguson  “A history of extreme money”, 21 September 2011, Finance Asia



"…exposes the shambles of a system characterised by bogus and failed economic market theory, a shamelessly rapacious finance industry, and a broad failure by governments to protect either their citizens or their productive industries from a finance industry driven by the most perverse incentives….Das writes colourfully, in short punchy sections, and countless memorable aphorisms…Politicians, please read this book."

Richard Thwaites “Dangerous money games” Canberra Times, 17 September 2011


“Das is a chatty writer, with a style that combines elegance with wit, erudition and a large dollop of cynicism. He is also widely read, given to inventing unusual metaphors and quoting from sources as diverse as Trollope and Groucho Marx. As a result, he has succeeded in producing an entertaining page-turner on a subject considered both numbingly dull as well as frighteningly opaque.”

Devangshu Datta “World money, salted and seasoned” Business Standard, 16 December 2011


“ Extreme Money is about much more than the financial crisis. ... Das is writing about the society that has been built under the suzerainty of finance over the last few decades. He uses the references to highlight, underline and contrast some of the features of this crazy society. At one level, Das gives us the conventional narrative of the crisis. ...At another level, he elaborates on the economic theory that provided the intellectual sustenance for the financial revolution. ... But at a more fundamental level, this book is about the corruption in values caused by what Das terms Extreme Money, by which he means not only the dangerous speculative games played with money, but also the attitudes and culture that have emerged out of casino capitalism. At the deepest level, this book is about hubris and the nemesis that inevitably follows.”

Manas Chakravarty “The money shot:The global society formed by the financial currents of the last few decades” Live Mint , 9 December 2011


“This is probably the finest financial history of the period.... , it tells with great authority the real story of modern finance—how money mutated into a rogue virus— something that finance students will otherwise never know. The book is a mirror of our financial times, a must-read for all.”

Debashis Basu  “Extreme Money: Modern Finance—The Rogue Virus” Moneylife, 24 December 2011


“...Das dons a professorial cap to weave financial history and popular culture into an entertaining and blistering social critique of how so many have come to chase endless financial reflections of the real economy...”

“No loss in the telling” Hindustan Times 23 December 2011


“ Extreme Money is a morality tale of the cascade of massive wealth into the pockets of financial wizards at the cost of the stability of the global financial system.... a cautionary tale from Faust warning what happens to those who trade their souls for lucre."

Andrew Allentuck, Financial Post,5 Noof financial alchemy...  lays bare the investment bankers’ schemes and machinations which culminated in the worldwide financial crisis and Great Recession of 2007 to date.... an illuminating text that has much to teach you about the world of high finance.”

Thomas Herold “An Inside Look Into The Masters of The Financial Sandbox”, 30 August 2011



“Das' irreverent and sardonic wit permeates the book, making it an enjoyable read despite its dark tone.”

Barbara Whelehan “Money books for holiday giving” Bankrate.com, December 16 2011


"...an absolutely brilliant examination of the world of money and finance... a realistic, confronting and amazing critique of the machinations and workings of the global financial industry.. an enlightening dissection of the world of high finance, policy making, and supposed regulation, and reveals how illusory is the ability of central banks and governments to control and manage economies ... The amount and depth of information in this book is amazing. It is essential reading for all those with an interest in the financial markets, delving into areas and subjects that most writers with a vested interest in the markets don't and won't cover.."

Your Trading Edge (May-June 2012)