Readers of this blog may know that we broke story in our book ECONNED of the role that the hedge fund Magnetar played in increasing the severity of the subprime bubble through its program of hybrid CDOs (meaning composed of actual tranches of subprime bonds plus credit default swaps). To recap: Magnetar embarked on an […]
Read more...This post appeared as an op-ed in Mint, India’s second largest business newspaper. The financial market upheaval that started in May is a stark reminder that the conditions that produced the global financial crisis of 2007-08 have not been resolved. The sucking sound of deflation emanating from Europe and the creaking of bank balance sheets […]
Read more...A good Washington DC contact told me that a public relations/media push to demonize those who decide to walk away from mortgages they can still afford to pay (aka “strategic defaulters”) is underway. Expect to see a good bit of moral fervor as those who choose to cut their losses are attacked as immoral, irresponsible, […]
Read more...I know the headline above verges on “dog bites man” but the New York Times story, “In Louisville, View of Banks’ Role in the Everyday” is pure financial services industry PR masquerading as Norman Rockwellesque treacle. I know Fridays in the summer are usually slow news days, and the Grey Lady might occasionally have to […]
Read more...By Satyajit Das, a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives – Revised Edition (2010, FT-Prentice Hall). Carmen M. Reinhart & Kenneth Rogoff (2009) This Time is Different: Eight Centuries of Financial Folly; Princeton University Press, London Raghuram G. Rajan (2010) Fault Lines: How […]
Read more...By Bob Goodwin, a medical device entrepreneur Yves here. Bob’s post highlights a shift in attitudes that is entirely logical and is the inevitable result of financial firms, taking an increasingly predatory posture toward their customers. Borrowers are responding in kind, by taking a cold-blooded and legalistic look at their agreements with lenders. Banks may […]
Read more...Hhhm, are investigations disappearing into the night just like FDIC resolutions, Friday night massacres so as not to upset the great unwashed public? Joe Cassano, head of AIG’s Financial Products Group and individual most responsible for the insurer’s collapse, will not be prosecuted. Per the Wall Street Journal: Federal prosecutors will not bring criminal charges […]
Read more...The line of thinking that underlies an investigation by New York attorney general Andrew Cuomo is a challenge to conventional wisdom about the financial crisis. The prevailing view is that since credit ratings were one of the single biggest points of failure in the crisis, the ratings agencies were one of the biggest, if not […]
Read more...Frank Partnoy, derivatives salesman turned law professor, took an ill fated star turn in the Financial Times today. In a comment titled, “Goldman is wrong target for official censure,” he writes (among other things): “Goldman is not to blame for the financial crisis,” a straw man if I ever saw one. I hate to say […]
Read more...Be there or be square! Location: Book Culture, 112th Street between Broadway and Amsterdam Time: Thursday, May 13 @ 7:00 PM. Looking forward to seeing you!
Read more...By Richard Smith, a London-based capital markets IT specialist Here’s someone with his head screwed on, back in April 2007, who proves singlehandedly that “hoocoodanode” was no defense for failing to anticipate the implosion of the shadow banking system (more on this prescient analyst in due course): For several years now, we have marvelled at […]
Read more...Jill has substantial financial market experience (she started out in derivatives and later ran a $700 million fund) and it was a pleasure speaking to a knowledgeable interviewer. Enjoy! First segment here. Second segment here.
Read more...But opacity, leverage, and moral hazard are not accidental byproducts of otherwise salutary innovations; they are the direct intent of the innovations. No one at the major capital markets firms was celebrated for creating markets to connect borrowers and savers transparently and with low risk. After all, efficient markets produce minimal profits. They were instead […]
Read more...One of the things that has been striking as revelation of bad behavior in the collateralized debt market has gotten more press is that a number of commentators who had taken the “nothing to see here, move on” stance have gotten religion. Even more dramatic has been the change in perception of Goldman. The firm […]
Read more...As Goldman and the Senate Committee on Investigations are duking out The Battle of the E-Mails, with each side claiming the other has painted a misleading picture, it is becoming pretty clear that Goldman, contrary to its sanctimonious twattle about putting clients first, actually puts its fees first. This should come as no surprise to […]
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