What went wrong with finance
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Bill Black: Green Slime Drives Our Financial Crises « naked capitalism
Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City.
Why I Am Leaving Goldman Sachs - NYTimes.com
To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money.When some people think about Wall Street, they conjure up images of traders shouting on the stock exchange, of bankers dining at five star restaurants, of CEO s whispering in the ears of captured Congress members.
Leaving Wall Street
What Happened to Goldman Sachs? - Justin Fox - Harvard Business Review
Greg Smith's resignation op-ed from Goldman Sachs Wednesday raised a zillion questions. What was the back-story ?
A Wall Street Insider's Response To Greg Smith | ZeroHedge
Submitted by ZH reader Sleestak, who sports a 15 year career in the bulge bracket, including GS and the less fortunate Lehman Brothers, as a fixed income trader.Janet Tavakoli On The "Biggest Fraud In The History Of Capital Markets" | ZeroHedge
In the following interview with the WaPo's Ezra Klein , Janet Tavakoli shares some more information on why every bank is about to shut down all foreclosures, in what she calls the "biggest fraud in the history of capital markets."
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Michael Hudson: Banks Weren’t Meant to Be Like This « naked capitalism
By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City and a research associate at the Levy Economics Institute of Bard College
Models. Behaving. Badly.: Why Confusing Illusion with Reality Can Lead to Disaster, on Wall Street and in Life
Emanuel Derman was a quantitative analyst (Quant) at Goldman Sachs, one of the financial engineers whose mathematical models became crucial for Wall Street. The reliance investors put on such quantitative analysis was catastrophic for the economy, setting off the ongoing string of financial crises that began with the mortgage market in 2007 and continues through today. Here Derman looks at why people -- bankers in particular -- still put so much faith in these models, and why it's a terrible mistake to do so.
VaR
Mark Harrison, CFA
James Montier: More Realistic Financial Models Incorporating Illiquidity and Leverage Are Needed | CFA Institute Annual Conference
CAPM
A critical look at the risk measurement tool that has repeatedly hurt the financial world The Number That Killed Us finally tells the "greatest story never told": how a mysterious financial risk measurement model has ruled the world for the past two decades and how it has repeatedly, and severely, caused market, economic, and social turmoil. This model was the key factor behind the unleashing of the cataclysmic credit crisis that erupted in 2007 and which the effects are still being felt around the world.
The Number That Killed Us: A Story of Modern Banking, Flawed Mathematics, and a Big Financial Crisis
A new paper by three economists shows how far finance has come from the days when banks took in deposits and used the money to make loans. Today that same bank might augment those deposits by borrowing on the repo market and by selling credit default swaps, the paper notes. Then it could use the money to buy mortgage-backed securities or Treasuries, make a repo loan to a hedge fund, rehypothecate the repo collateral on the repurchase market, buy a Spanish residential mortgage-backed security denominated in Euros and hedge its Euro exposure.
Economists: Finance needs to be measured in new ways | RepoWatch
I read a New York Times article a while ago on econophysics – the use of the tools of physics in economics – that featured the application of seismology to solve the problems of market crises. I can see the twists of logic that led to this approach: during an earthquake things shake around and fall, and during a market crisis things shake around and fall. Seismology predicts the former, so why not the latter?
Physics Envy in Finance
Washington Doesn't Seem To Find Anything Wrong With Crony Capitalism
On Nov. 29, 2011, Bloomberg magazine's Richard Teitelbaum published an article revealing a secret meeting on July 21, 2008, with then secretary of the treasury and former Goldman Sachs CEO Hank Paulson, and around a dozen hedge-fund managers and Wall Street executives.“Summer” Rerun: Why Big Capital Markets Players Are Unmanageable « naked capitalism
This post first appeared on July 8, 2009 John Kay comes perilously close to nailing a key issue in his current Financial Times comment, “ Our banks are beyond the control of mere mortal” in that he very clearly articulates the problem very well but then draws the wrong conclusion:Banking - curators...
Financial sector reform
"Too Big to Fail"