The current number one non-fiction best seller, Michael Lewis’ The Big Short: Inside the Doomsday Machine, addresses the question “Who got it right? Who saw the real estate market for the black hole it would become, and eventually made billions from that perception?” It is hailed as meeting the usual Lewis high standards of engaging […]
Read more...It is long overdue, but big institutional investors are finally rebelling against the outsized fees charged by large private equity firms. Since the moneybags are an understated lot, their protest, so far, looks rather tame. But by the standards of this clubby world, this is still a serious move. Originally, when funds were smaller, the […]
Read more...We’ve had (depending on when you define the starting point) at least two decades of a concerted push by the US towards more open capital markets (no doubt based not simply on the belief that the Anglo/Saxon model was superior, but also on the notion that US financial firms would come out on top). Many […]
Read more...By Tom Adams, an attorney and former monoline executive I’m usually cynical about these “genius of Wall Street” articles, but the Vanity Fair article “Larry Fink’s $12 Trillion Shadow” by Suzanna Andrews, about the head of the world’s largest money manager, BlackRock, raises the cliche to another level. My skepticism results both from the disconnect […]
Read more...OK sports fans, I’m old school. When I grew up, the uptick rule was in place, and no one seemed troubled by it. The uptick rule simply means that a short sale can be executed only when the last sale of a stock is at a higher price than the immediately preceding sale. It was […]
Read more...Are we going to finally start seeing some pointed mainstream media coverage of the Administration’s limp wristed, industry-favoring financial “reform” plans? While it has been woefully slow in coming, the answer appears to be yes. One has to wonder whether the more skeptical coverage follows the increasing evidence that things may not be working out […]
Read more...By Satyajit Das, a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives Wall Street Revalued: Imperfect Markets and Inept Central Bankers by Andrew Smithers (2009) The Road to Financial Reformation: Warnings, Consequences, Reforms by Henry Kaufman (2009) In a sense, this crisis is about values […]
Read more...Reader Steve sent this tidbit from the Australian. Sovereign wealth funds not all that long ago were generally seen as sophisticated to at least competent. But so were university endowments, and in many cases, “sophisticated” turned out to be tantamount to “has a higher appetite for risk than most” which in a bull market can […]
Read more...Bloomberg reports that former Harvard Fund Management CEO, now Pimco CEO Mohammed El-Erian does not buy the idea that US is returning to normal any time soon. El-Erian in particular took issue with some of Larry Summers’ sunnier prognostications: El-Erian likened Summers’s view of the economy to a three- stage rocket attempting to escape Earth’s […]
Read more...When Jim Rogers taught classes at Columbia, he liked to tell students that the US had a proud history of implementing capital controls, and warned them against going on the merry assumption that it would ever and always be easy to make cross-border investments. For instance, taxes on foreign securities transactins are a soft form […]
Read more...It isn’t uncommon for a theme or a trend to dominate how investors and analysts view a particular sector. For instance, when barriers to interstate banking were lowered, then dropped, bank consolidation was all anyone seemed able to think about, even though there were other important developments in the industry. During that era, at McKinsey, […]
Read more...We’ve note during the well-warranted furor over the dreadful performance of rating agencies in assigning credit grades to structured credits, a business that was handsomely profitable to them, that it was difficult to limit their impact. Ratings are enshrined in all sorts of regulations, from the Fed’s haircuts on its discount window to its alphabet […]
Read more...Conspiracy theorists will have to wait until the article described in Inside Science is published to determine whether it delivers on its claims. It purports to analyze stock holding across 48 countries and alleges they are held in very few hands. But the work was done by physicists, which means they may not have understood […]
Read more...This was too good to pass up. The key section of an offering at The Reformed Broker (hat tip reader Gonzalo): The Five Stages of Panic Buying! 1. Denial (Late March/ Early April) “Ha, another Bear Market rally…wait til the foreclosure/ new home sales/ confidence data comes in! Right back to 6500, maybe lower…bagholders” “Dude, […]
Read more...Reader John O passed along this Bloomberg chart du jour (click to enlarge) which effectively argues that the consumer has gone down so far she has nowhere to go but up: The related article argues: ….these so-called discretionary goods and services accounted for a smaller percentage of consumer outlays last quarter than at any other […]
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