Posts filed under “Hedge Funds”

Corporate Bailouts Through History

I came across an interesting piece in BusinessWeek from December 2007 on one of my favorite subjects: Corporate Bailouts Through History.

It needs to be updated to include the Bear Stearns Bail Out, all of the Federal Reserve Lending to Financial firms, as well as whatever Housing Bailout the wizards in Washington come up with.

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Sources:
Corporate Bailouts Through History
John Tozzi
http://images.businessweek.com/ss/07/12/1217_bailouts/index_01.htm

Bailouts: Not Just Corporate Welfare
John Tozzi
December 18, 2007, 12:01AM EST
http://www.businessweek.com/investor/content/dec2007/pi20071218_675946.htm

Category: Corporate Management, Credit, Derivatives, Federal Reserve, Hedge Funds

Who is to Blame for Bear Stearn’s Demise?

Category: Corporate Management, Credit, Derivatives, Federal Reserve, Hedge Funds, Inflation, Psychology

New Project(s)

What a crazy week — and the market is the least of it!

We moved from our old space on Park Avenue & 49th (across from
the Waldorf) to larger quarters a few blocks over on 5th Avenue. I have been switching back and forth between Starbux and Bryant Park for internet access (and posting less because I have been out of the office more than in). The
furniture is in, the phones are hooked up, and tomorrow, rumor has it
Verizon will light us up with a big fat pipe, connecting us to that
series of tubes.

But what’s been really odd is that a dozen seperate projects I have been working on for a few years now — some big, some small, all eclectic — have practically all-at-once, simultaneously, lurched towards fruition.

These include:

A major media project

I may join a new BoD

A fun little web project (its potentially very, very funny)

A significant quant application (this is a very powerful tool)

A brand new video venture

Two fascinating blog related advertising concepts

An expansion of an earlier book blogging idea

A new private equity fund 

And that was just this week!

We will discuss more about these in the coming weeks; Just about all of them have a market/stock/economic component to them. I’ll keep you up to speed with these as they develop.

I expect/hope that at least 3 of these 7 close before Halloween. . .

Category: Digital Media, Hedge Funds, M&A, Video, Weblogs

The Fine Line Between Investment Grade and Junk

Category: Credit, Derivatives, Federal Reserve, Financial Press, Hedge Funds, Psychology, Real Estate

Martin Feldstein on the Housing/Credit/Economic Mess

Category: Credit, Derivatives, Federal Reserve, Hedge Funds, Inflation, Psychology, Real Estate

One Way Days: Are the rules different this time ?

Category: Hedge Funds, Investing, Markets, Psychology, Quantitative, Technical Analysis, Trading

A Demon of Our Own Design

I previously mentioned A Demon of Our Own Design in a linkfest a few weeks ago. I enjoyed the book a great deal, and just about finished it over the long weekend.

The opening paragraph just reached out and grabbed me: 

Bookstaberdemon_jacket"While it is not strictly true that I caused the two great financial
crises of the late twentieth century—the 1987 stock market crash and
the Long-Term Capital Management (LTCM) hedge fund debacle 11 years
later—let’s just say I was in the vicinity. If Wall Street is the
economy’s powerhouse, I was definitely one of the guys fiddling with
the controls. My actions seemed insignificant at the time, and
certainly the consequences were unintended. You don’t deliberately
obliterate hundreds of billions of dollars of investor money. And that
is at the heart of this book—it is going to happen again. The financial
markets that we have constructed are now so complex, and the speed of
transactions so fast, that apparently isolated actions and even minor
events can have catastrophic consequences."

Terrific stuff.

Indeed, I enjoyed the rest of the book. Bookstaber was on the scene in the early days of many of derivatives now contributing to market turmoil. He rather deftly makes complex issues readily understandable, regardless of how much advanced mathematics you may have under your belt.

And, he names names. LOTS of names. All the usual suspects come under scrutiny, as well as a lot of folks who probably assumed they were not int he public eye. There will be a lot of people not very happy with his blunt, insider descriptions of the analytical errors made by major players — many of whom are still around today and in positions of authority and power. 

He also accepts a lot of responsibility for many costly errors he himself made.   

Overall, a fun, very informative read.

I was intrigued enough by the book that I contacted Bookstaber (the author) and Wiley (the publisher), and asked for their permission to reproduce the first chapter. They graciously sent me a pdf and text version, which you will find after the jump: All of chapter one, in both text form and PDF. I also included some mainstream media reviews after the chapter. 

I have pretty good relationships with many of the publishing houses — they all want to get a book or two out of me. Anyway, if it turns out you guys like this idea, perhaps we can offer up a book or two that I am reading every month in this same format. Maybe we can have an online reading group club — it could be a good place to have a full discussion. Share your thoughts.

Enjoy chapter one.

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Disclosure:  No, I don’t accept money for this — it was my idea, and I approached the publisher and author about this — not vice versa. Please don’t start bombarding me with offers to promote books I am not already reading. They will be unceremoniously deleted without response.

As noted in our disclosure section, we don’t do payola here (if you click thru and buy it on Amazon, I do see some scratch).

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Read More

Category: Books, Derivatives, Federal Reserve, Hedge Funds, Markets, Psychology

CDO Insiders: “We Knew We Were Buying Time Bombs”

Category: Credit, Derivatives, Hedge Funds, Real Estate

“Dear Investor” — Quant Letters to Clients

Category: Hedge Funds, Psychology, Quantitative, Trading

The Quants Explain Disaster

Category: Credit, Derivatives, Hedge Funds, Psychology, Trading