Category Archives: Risk and risk management

Exploiting the Elderly: Crapification and Long-Term Care Insurance, Genworth as Case Study

Genworth’s flagging long-term insurance business as a window into the challenges facing even the high-functioning elderly.

Artificial Intelligence and the Stability of Markets

AI may revolutionise risk management and financial supervision, but also threatens to destabilise markets and increase systemic risk.

New Potential Credit Risk Bombs: Exotic, ‘Nonlinear’ and Private Transactions

Beware of old CDO risk re-imaged as “nonlinear finance”.

The Wine Country Fires: Is Pacific Gas and Electric (PG&E) a Rogue Utility?

PG&E, tree-trimming, and profit.

CalPERS Doubles Down on Its Illegal Election, Makes “Absurd” Claim That It Is Above the Law

CalPERS refuses to change its election procedures to comply with California law, and has doubled down on ridiculous justifications instead.

From Credit Risk to Pipeline Risk: Why Loan Syndication is a Risky Business

How pipeline risk poses a danger to banks even in an “originate to distribute” business like loan syndication.

Will Big Data Eat Hollywood’s Lunch?

Hollywood relies ever more heavily on repetitive content.
Will firms like Netflix, Facebook, Amazon, and Google swallow it whole?

Public Pension Funds Regain Some Lost Ground in a Good Year, But CalPERS Lags Peers

CalPERS again falls short for its beneficiaries and California taxpayers.

The Two Capitalisms: Electric Batteries as a Case Study in US Magical Thinking vs. Chinese Vertical Integration

Electric vehicle batteries illustrate how the Chinese use control of raw materials and end markets to built vertically integrated industries.

Wolf Richter: Markets, Regulators Ignore Ticking Time Bomb of Shadow Margin Loans

Shadow margin loans are a sign of speculative excess and complacency about risk.

The Real Cause of the Italian Bank Bailouts and Euro Banking Troubles

How a banking union has created deep divisions that undermine the Eurozone’s stability.

“Howard Marks Seems to Read Naked Capitalism” on Private Equity Fund-Level Borrowing That Juice Reported Returns While Increasing Risks

Storied investor Howard Marks penned a not-very-positive post on private equity subscription lines of credit, echoing our earlier warnings.

Skepticism About Private Equity Fees Going Mainstream: Pew and CalPERS Versus Yale and Industry Stalwarts

Private equity is getting defensive about its fees, and for good reason: its justifications for them are being exposed as hollow.

Business Press Waking Up to Bank Legacy IT Risk

Reuters discusses the challenge of moving off legacy systems. While the piece is a long overdue, it still seems more than a tad optimistic.

Commercial & Residential Real Estate Bubble Again a Risk to Financial Stability; Fed’s Rosengren Worried

Real estate is again looking like a ticking time bomb. At super low interest rates, pray tell what does the Fed do if it blows up again?