Category Archives: Investment management

Rajiv Sethi: Information, Beliefs, and Trading

Yves here. This is a terrific post, and I think readers who are in the unfortunate position of having to invest in the markets will relate to Sethi’s analysis (personally, I hate trading, I wish it were possible to be a long-term investor, but that’s become an awful lot like driving a Model T on a Nascar track). The use of Intrade data and discussing Obama v. Romney-biased speculators is both clever and makes the discussion accessible. And I must confess to being very attached to my “priors” and too willing to fight the tape!

Wall Street and Unions Have Knives Out Against Spitzer’s NYC Comptroller Run

Nothing like the prospect of someone with a high profile and a track record of going toe to toe with powerful interests and rich enough not to be beholden to party machinery to bring out all sorts of hacks and score-settlers.

Even Harsh Frontline Program on Retirement Investments Understates How Bad They Are

Wall Street must get indigestion every time Frontline rolls out another program showing the depths of its chicanery. The only problem is the industry deserves much worse punishment.

More Washington Sleaze: Lobbyist Tip Stoked Health Care Stock Jump

Yesterday, we featured an important article by Noam Scheiber on how Obama insiders cash out on their connections once they leave the fold. Today, in the Wall Street Journal, we read of the Congressional version in terms of how a tip by a lobbyist (and former Congressional aide) connected to an investment research firm led to a Congressional decision being leaked to investors before it was announced officially.

Fiduciary Duty to Cheat? Jim Chanos Reveals the Perverse New Mindset of Financial Fraudsters (by Lynn Parramore)

By Lynn Parramore, a senior editor at Alternet. Cross posted from Alternet

Editor's note: This article is the first in a new AlterNet series, "The Age of Fraud."

Hustlers. Cheaters. Crooks. American business has always had them, and sometimes they’ve been punished. But today, those who cheat and put the rest of us at risk are often getting off scot-free. The recent admission of Attorney General Eric Holder that systemically dangerous megabanks may escape prosecution because of their size has opened a new chapter in fraud history. If you know your company won’t be prosecuted, a perverse logic says that you should cheat and make as much money for shareholders as you can.

Yes, Virginia, HFT and Liquidity are Not All They Are Cracked Up to Be

You may have seen a big outbreak in the academic literature and business media of defenses of liquidity for liquidity’s sake, evidently prompted by increased interest in and in the EU, implementation of transaction taxes as a way to tame speculation and secondarily raise revenues.

Mirabile Dictu! More Executive Pay Revolt as Swiss Impose Curbs

It isn’t clear how effective the pushback against stratospheric top-level compensation will be, but the howls in the European media suggests that the corporate overlords really are concerned.

Credit Ratings Agencies Are Pimps of Wall Street – It’s Time to Ban Them!

By Marshall Auerback, a market analyst and commentator. Cross posted from Alternet.

Is Eric Holder’s “See No Evil, Hear No Evil” Department of Justice finally getting serious about investigating fraud on Wall Street?

Occupy the SEC Weighs in on Nomination of Mary Jo White to Head the SEC

Occupy the SEC has released one of its characteristically well-though-out and documented letters, in the form of questions it would like to see raised during the Senate hearings on the nomination of Mary Jo White to head the SEC.

The Grey Lady Voices Some Skepticism About IPO of Single Family Rental Player Silver Lake

This site refrains from talking about individual stocks, since we don’t give investment advice. However, a potential sea-change is underway, as a large portion of the inventory of foreclosed homes is being converted to rentals. Private equity firms are pursuing this opportunity eagerly, as the combination of low financing costs and tight rental markets in the US means that, at least on paper, investor believe they can earn attractive income, with potential for appreciation, either by eventually selling the houses to individuals or by taking the company public.

Given all the excitement over this conversion (it was voted the best opportunity over the next 12 months at a real estate conference I attended in the fall), it was interesting to detect a fair bit in the way of reservations in an article in the New York Times on the first IPO in this space, Silver Lake.

Can Open Source Ratings Break the Ratings Agency Oligopoly?

By Professor Krassimir Petrov, who has taught economics and finance in the U.S., Ireland, Bulgaria, Saudi Arabia, Bahrain, Taiwan, and Macau

The current credit-ratings system is a complete farce that has caused damage in the trillions. It needs to be completely reformed into a more transparent, competitive system. An open-source approach presents a perfect solution.

Hugh Hendry: ‘We’re in the death spiral of mercantilism’

You have to give a fund manager points for admitting to having a “history of contentious posturing.” Hugh You have to give a fund manager points for admitting to having a “history of contentious posturing.” Hugh Hendry’s also a reformed gold bug, which shows an unusual flexibility of thinking (once people join the gold cult, they seldom leave). Even if you don’t necessarily agree, his talk will serve as a useful grist for thought (hat tip Ian Fraser). Hendry discusses the end of an broadly adopted national strategy, mercantilism, and what he sees as the implications.

On the Decline and (Maybe) Fall of Venture Capital

Roughly eight years ago, I had lunch with an ex-McKinsey colleague who had started a venture capital firm. His partners were raising a second fund. He was leaving. I wish I had taken notes, but his message was that the industry did not work.

The False Dodd-Frank Narrative: Occupy Wall Street Attacks Huge Hot Money Loophole in the Law

Matt Stoller is a fellow at the Roosevelt Institute. You can follow him at http://www.twitter.com/matthewstoller.

Proponents of Dodd-Frank have an incentive to argue the law is a tough crack-down on Wall Street. It’s a core part of Barack Obama’s narrative, that he bailed out the banks, but then did what FDR did in the 1930s with a series of tight regulations. Of course, it was immediately obvious that Dodd-Frank was an afterthought of the Bush/Obama administrations, that the real policy framework involved three key fights – the Fannie/Freddie bailouts under the Housing and Economic Recovery Act of 2008 (the so-called bazooka law), TARP, and the reappointment of Ben Bernanke. These fights were supplemented by Eric Holder’s decision to give legal forbearance to Wall Street executives, to not prosecute for rigging the CDO market or any number of illegalities in the foreclosure space.

After this radical consolidation of banking power in the hands of bailed out Too Big To Fail institutions, the Obama administration went to work on Dodd-Frank, which was essentially a 2000 page mash note to regulators saying “please don’t let that crisis happen again, it was awkward’. And now the evidence is beginning to trickle out that Dodd-Frank is a nothingburger.