Treasury released an ideologically-driven proposal to change Dodd Frank's resolution authority.
A detailed and well-argued explanation of how the growth in the role of financial markets has become destructive.
5 Rules to Help Avoid Investing Disaster It’s actually not that hard. Bloomberg, February 8, 2018. A basic rule of life is to avoid being a guinea pig in other people’s experiments. This is an inviolable rule of technology: consumers should always leave 1.0 of anything to the early adopters. All car fanatics know that any… Read More The post Terminated: Volatility Products Blow Up appeared first on The Big Picture.
A federal judge denied a hedge fund’s request to stall a debt exchange closing tonight, saying they had provided insufficient evidence of irreparable harm to them or the market. U.S. District Court Judge Laura Taylor Swain denied the preliminary injunction request by Solus Alternative Asset Management in its quest against hedge fund GSO Capital Partners and homebuilder […]
As bitcoin has become a mania, it is also becoming a risk to the real economy.
Dick Fuld has been in the news recently. A profile in the The Financial Times discussed his new asset management firm, as did a news item in Bloomberg News, and a small mention in Crains. Collectively, they suggest he is testing the waters to find out if people have forgotten his priors. Some of us… Read More The post Reminder: Dick Fuld Was a Terrible CEO appeared first on The Big Picture.
Beware of old CDO risk re-imaged as "nonlinear finance".
Trump and the Republicans are moving forward with deregulation plans that serve big bank bottom lines, not the broader economy.
The UK press reacts with unwarranted indignation to an EU move that was sure to happen.
Count on the banks to keep trotting out tired excuses for their too-big-to-faill ways.
Yves here. Remember the explosion of press coverage last year when incoming Minneapolis Fed member and former Goldmanite and Treasury official Neel Kashkari announced his intent to develop a plan to end the “too big to fail” problem. He not only was going to devote Minneapolis Fed researchers to his program, but solicited broad based […]
Sometimes, when you lose a debate, you have to just let it go. That seems to be a problem for those who are unwilling to accept the complex realities of what actually caused the financial crisis. I have been saying for a long time that many elements contributed to the global financial meltdown. From ultralow… Read More The post To Find the Cause of the Crisis, Answer These Questions! appeared first on The Big Picture.
The whinging from entitled Brits over the fact that the EU is playing Brexit hardball is getting annoying.
A Stylized History of Quantitative Finance Emanuel Derman The evolution of a quantitative approach to finance has proceeded through many small but significant steps and occasional large epiphanies. Over the past 70 years financial models have quantified the notion of derivatives, diffusion, risk, diversification, hedging, volatility, replication, and no riskless arbitrage, and… Read More The post A Stylized History of Quantitative Finance appeared first on The Big Picture.
Deutsche Bank isn't likely to have much luck in trying to get a big break on a pending Department of Justice fine.
Bank executives frequently proclaim that Wall Street is vital to the nation’s economy and performs socially valuable services by raising capital, providing liquidity to investors, and ensuring that securities are priced accurately so that money flows to where it will be most productive. There’s just one problem: the Wall Street mantra isn’t true.
Deutsche Bank whistleblower Eric Ben-Artzi makes a huge financial sacrifice to call out corruption in SEC enforcement.
Two of Donald Trump’s economic advisers, Lawrence Kudlow and Stephen Moore, have revived an idea about the source of the financial crisis that really should have been put to rest long ago. In a column published and rebroadcast by many politically sympathetic sites, they lay the blame for the credit crisis and Great Recession on the Community Reinvestment Act, a 1977 law designed in part to prevent banks from engaging in a racially discriminatory lending practice known as redlining. The reality is, of course, that the CRA wasn’t a factor in the crisis. What’s so wonderful about their article, which is an attempted take down of the Clintons, is that they miss the very obvious ways Bill Clinton’s administration did contribute to the financial crisis. But doing that would have been at odds with their anti-regulatory philosophy. Here’s the heart of the Kudlow and Moore case:
Australia and other countries had the opportunity to reduce financial fragility. They may soon discover the cost of doing too little.
Yves here. Steve Waldman wrote a definitive post in 2009, Capital can’t be measured, on a core issue that Black discusses here. A key section: So, for large complex financials, capital cannot be measured precisely enough to distinguish conservatively solvent from insolvent banks, and capital positions are always optimistically padded. Given these facts, and I […]