The End of Alchemy

What Hacker News says

1. habosaAug 2020
   There is a fantastic book that covers this topic called "The End of Alchemy" by Mervyn King who was Governor of the Bank of England during the 2007 crisis: https://www.goodreads.com/book/show/30231791-the-end-of-alch...

   It explains how banks work today in a patient and and accessible way that helps you really "get" it.

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2. abakkerJun 2020
   I think Mervyn King's take in "The end of Alchemy" is a better approach from a practical perspective than Taleb's though. Essentially that we just need to stop kidding ourselves that we can predict the tails, and to build greater buffers into all our assumptions from the beginning. He calls this "Radical Uncertainty" which I think is better as a practical foundation than attempts to model black swan events. Definitely worth considering both, though.
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3. habosaMar 2020
   "The End of Alchemy" by Mervyn King is a great book that explains fiscal/monetary policy and the modern banking system from the ground up. King was the head of the Bank of England during the last recession. This was the book that made me "get it".

   "When Genius Failed" by Roger Lowenstein is the story of the fall of Long Term Capital Management which was basically the biggest hedge fund failure ever. Teaches you a lot about modern high finance and systemic risk.

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4. abakkerMar 2019
   I think two books on this subject are extremely informative. One is _Stress Test_ by Timothy Geithner, the other is _The end of Alchemy_ by Mervyn King.

   Both have to do with the policies discussed in this article and the Lender of Last Resort (LOLR) policies implicit in the role of central banks.

   You are describing the Moral Hazard risks that Geithner mostly dismisses as irrelevant in the moment, and which King believes needs to be removed from the system entirely. The combination of the two works gives a lot to think about.

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5. abakkerFeb 2019
   The end of alchemy, Mervyn King. There are several very interesting points and mental models in there. Eye opening for someone that did undergrad Econ.
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6. habosaFeb 2019
   For those who have worked in bank IT, I have some questions.

   So these days there's very little physical money. Most of my "wealth" is just entries in various digital ledgers. My bank says I have $XXX and my brokerage says I have $YYY and my retirement account says I have $ZZZ.

   Let's go with the bank account case. Is it possible that a catastrophic accident or attack could wipe my balance down to $0 with no way to recover? What if a data center was nuked? What if two data centers were nuked?

   How much redundancy is in the system? Are there third-party agencies that track private bank ledgers? How hard is it to take them out too?

   Ever since I read "The End of Alchemy" (a great book, btw) this thought has haunted me.

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