I just finished reading Richard Bookstaber’s well-done Demon of Our Own Design, the subtitle of which is “Markets, Hedge Funds, and the Perils of Financial Innovation”. The gist: Bookstaber argues that financial innovations have markets more volatile and interlinked, not less, and that’s a bad thing.
I have a few bones to pick with the author, but I still recommend it highly.
As a reminder in other recent reading, Peter Bernstein’s Capital Ideas Evolving is also high on my recommended financial reading list.
[Update] Author Bookstaber has a low-frequency, worth-reading blog here.