Posts filed under “Derivatives”

Are Oil Prices Driven by Speculators?


Fascinating chart above via David Wilson of Bloomberg.

It very much suggests that while Speculators may not have been the prime mover on the 2008 Oil peak, the specs seem to be a very large portion of the current push.

By comparing the net number of contracts owned by non-commercial oil traders (Source: Commodity Futures Trading Commission).

Crude 5.8% the first two days of this week, suggested that speculative demand for oil may be declining.

Category: Derivatives, Energy, Trading

Drawing the Correct Lessons from Lehman Bros

“It wasn’t a mistake to let Lehman fail, it was a mistake to let it live so long.” -Ann Rutledge, a principal with New York-based R&R Consulting and the co-author of two books on structured finance. > I am continually astounded by the many missed opportunities you Humans have to learn valuable life lessons. Perplexingly,…Read More

Category: Bailouts, Corporate Management, Derivatives, Legal, Regulation

Industry Code: IBGYBG

The phrase I was looking for in the last post was “I’ll be gone. You’ll be gone.”

Iain Bryson was the first who suggested it, and I then tracked it down to a few sources, the first of which was Jonathan A. Knee’s “Accidental Investment Banker.

Its also mentioned in this 2009 video:


click for video

Transcript after the jump

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Category: Bailouts, Derivatives, Really, really bad calls, Wages & Income

Gasparino: Spitzer Caused the Financial Crisis

I like Charlie Gasparino. I really do. He used to be a sharp elbowed, hard nosed WSJ reporter that dug for stories. Blood on the Street: The Sensational Inside Story of How Wall Street Analysts Duped a Generation of Investors remains a great read. But like many pundits on the right, he simply has a…Read More

Category: Bailouts, Derivatives

GOP: More Madoffs, Please

Percent Change SEC Staff Workload: 1991 – 2000 Chart sourced via GAO analysis of SEC data > If you can’t stop the legislation, you can defund it. That is what our Chart of the Day shows, the net impact of defunding regulation. As we previously discussed 1 year ago (SEC: Defective by Design?), there has…Read More

Category: Derivatives, Really, really bad calls, Regulation

GM Credit-Default Swaps on Non-Existent Debt

A mere technicality, my good man! WSJ: “Banks and hedge funds are trading credit-default swaps, which make payments to holders of General Motors bonds in the event of a default. But GM canceled $40 billion of debt in bankruptcy and has pledged to cut its remaining $4.6 billion bank loan to the bone this year….Read More

Category: Derivatives

Did Goldman Sachs Kill AIG ?

I have to take issue with William Cohan’s Op-Ed, How Goldman Killed A.I.G. First off, let me start out by saying that these are two bad actors; there are no “good guys” here. Second, let me remind the reader that AIG under-wrote $3 trillion worth of derivatives, a massive high-risk exposure — and collected $3…Read More

Category: Bailouts, Credit, Derivatives, Really, really bad calls

Astroturfing: Study Falsely Claims Economist Affiliations

“This is the first I have heard about it. It’s not a very good report.” -Joseph E. Stiglitz, Nobel-winning economist > Dealbook: “A new study backed by pro-business groups takes a harsh stance on rules intended to bring transparency to the $600 billion derivatives market. The report, published on Monday, claims that proposed regulation could…Read More

Category: Derivatives, Regulation

Traders, Guns & Money

Traders, Guns & Money: Knowns and unknowns in the dazzling world of derivatives by Satyajit Das>

Long before the 2008-09 credit crisis and collapse, one of the strongest warnings about the dangers of derivatives came from Satyajit Das.

I am about halfway thru, and I can tell you it reads more like a crime novel  than a financial book.


“Traders, Guns & Money is very fresh history, just two years old. Das picks apart the new machinery of the mega-trillion-dollar derivatives market, the one economists say might be next to collapse on our heads. And I’m with him, I really am. The guy has a thing for ridiculous puns and also for pitiable characters. We meet a couple of noodle makers who wreck their company on a deal no one but Das seems to understand. But by the end of his book, you’ll get the deal too, I promise.” – All Things Considered, NPR, October 15, 2008

“WHETHER you are an investor, an observer of financial markets, or even an investment professional, Satyajit Das’s Traders, Guns & Money should prove an entertaining, eye-opening read. –The Business Times, Singapore, September 27, 2008

“With the financial crisis tightening its chokehold on global banks, Das’ forewarnings – outlined in his 2006 book Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives – are looking rather timely. Still, some in the industry initially scoffed at his warnings.” – The Toronto Star, September 23, 2008

“The sexier side of finance … at last … a convincing picture of what life is like in today’s modern financial industry. Traders Guns and Money by Satyajit Das not only has a catchy title, it actually manages to entertain, educate and inform.”  Corporate Financier, July 2006

“A must read for all CEOs, CFOs, Bankers and anyone who cares about what banks are doing with their money.” – Finance Asia, May 2006

“… true rarity: a derivatives book that keeps your attention all the way through. ” FOW April 2006

“… a scalpel of a book” – Financial Engineering News, July 2006

“A distincly timely book… This makes fascinating reading…. A good crib sheet for how the whole derivatives game works. ” – Financial Times, May 2006

“Das is especially good on structured products and on the recently fashionable world of structured credit… a diverting read” – Financial World, July 2006

“a worthwhile read for anyone with connection to the financial world” – World Finance, July 2006

“The murky and complex world of finances and derivatives is scrupulously and frantically told in this brilliant narrative. … This is a collection and recollection of exquisite financial tales well worth your time.’ Convergence, September 2006

“…a fascinating and compelling insight into the world of derivatives… [TGM has] a page turning quality more reminiscent of a John Grisham novel than a dissertation on derivatives.” – FINASIA, October 2006

“An absorbing accessible primer… scoots along at a blistering pace” – Wilmott Magazine, December 2006

“part thriller, part expose… will be useful for anyone with connection to finance…will tell you some of the truth of what really does go on.” Society of Business Economists Book Review – Jan 07


NPR Interview:

If the flash audio fails to load, go here


Chapter 2 after the jump

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Category: Books, Derivatives

Who Was Astroturfing Forged Letters Against FinReg?

Q: Why do Burger King Franchisees care about derivatives reform? A: huh ? > NPR discusses what a Bloomberg reporter found: Last summer, one still unnamed company hired a PR firm to launch a “grassroots letter writing campaign” on derivatives reform. The PR firm hired a contractor, who hired a subcontractor in Arkansas. And instead…Read More

Category: Bailouts, Derivatives, Legal, Regulation