Category Archives: Derivatives

We Have to Consign the Era of Financial Engineering to History

Financial legerdemain is still very much with us, despite the Big One in 2008 and continuing distortions confirming its high cost.

Stock Market Leverage Spikes in Historic Manner: Another WTF Chart of a Zoo that Has Gone Nuts

In an investment environment where nothing matters anymore – until old fasioned worries like leverage suddenly do.

City of London Frets About Life After 2020

The City’s vast financial services sector benefited hugely from the creation of the euro. Now, a large part of that business is at risk.

2020 “Globie”: The Carry Trade

A recent book focuse on the role of the carry trade in increasing financialization and instabilty.

“Savings Glut” Fables and International Trade Theory: An Autopsy

Debunking Bernanke’s pet excuse for the global financial crisis, the savings glut hypothesis, which of course exculpates the Fed.

More on Frank Partnoy’s Misguided Take on Collateralized Loan Obligations

No, collateralized loan obligations are not about to wipe out banks, and Frank Partnoy should have focused on real risks, like destruction of productive capacity.

Universa Debunks CalPERS’ Defense of $1 Billion Tail Hedge Miss; Insider Accounts Expose Additional Misrepresentations

CalPERS efforts to ‘splain away its $1 billion tail hedge fiasco backfire as one of the tail risk managers, Universa, shreds CalPERS’ claims.

Why the Oil and Gas Industry Will Never Be the Same

An overview of the dislocations in the oil market.

The Worst Is Yet To Come for Oil Prices

Collaping oil prices demonstrate the severity of the fall in real economy activity.

Taleb Questions CalPERS Ben Meng’s Competence and Honesty in Defending Missed $1 Billion Hedge Gain; Taleb Estimates CalPERS Net Loss on Meng’s “Alternative Mitigation” Over Two Years at $19 Billion

Nassim Nicholas Taleb calls out one of CalPERS CIO Ben Meng’s Big Lies, and unearths an even bigger one.

Coronavirus: Bracing for the Economic Shockwave

The coronavirus spread is setting up a nasty real economy-financial system contraction.

Foreign Exchange Swaps: Hidden Debt, Lurking Vulnerability

How hidden foreign exchange swaps contribute to financial fragility.

Wolf Richter: How Ratings Agencies Inflate Credit Ratings to Get Deals & Fees

Haven’t we already seen this movie? Race to the bottom in gaming credit ratings agencies for commercial real estate Collateralized Loan Obligation deals.

Why the UK Needs a Financial Transaction Tax

Claims that a financial transaction tax would be difficult to implement and raise little revenue are fake news.

Wall Street Has Been Gambling With Student Loan Debt For Decades

As the student debt crisis continues to mount, major financial institutions are making record profits from student loan asset backed securities.