Posts filed under “Really, really bad calls”

Smackdown! Tavakoli Calls Lewis a GirlieMan

I mentioned earlier how much I liked the 60 Minutes piece with Michael Lewis.

Janet Tavakoli called foul this morning on Lewis assertions, pointing to a Bloomberg column he wrote in 2007, titled “Davos Is for Wimps, Ninnies, Pointless Skeptics.” Tavakoli specifically points to this paragraph:

“None of them seemed to understand that when you create a derivative you don’t add to the sum of total risk in the financial world; you merely create a means for redistributing that risk. They have no evidence that financial risk is being redistributed in ways we should all worry about.”

That statement, as of 2007, was simply wrong. Plenty of people were warning about this, and as his And, the column trashed variant perspectives warning about derivatives and an unhealthy credit market — Lewis, according to Tavakoli is guilty of precisely the sort of groupthink he criticized in both his book and on 60 Minutes.

I’m a big fan of Lewis’s work — I defended his book against some Amazon idiot reviewer trashing it only because the kindle version isn’t out yet — but back in2007, he got derivatives, Sarbox, and risk all wrong.

Score this one for Tavakoli . . .

>

Sources:
Michael Lewis: Junior Salesgirlieman
Janet Tavakoli
Huff Po. March 15, 2010 06:26 AM
http://www.huffingtonpost.com/janet-tavakoli/michael-lewis-junior-sale_b_498781.html

Davos Is for Wimps, Ninnies, Pointless Skeptics
Michael Lewis
Bloomberg, January 30, 2007
http://www.bloomberg.com/apps/news?pid=20601039&sid=aaagOLYMd4yg&

Janet Tavakoli home page
http://www.tavakolistructuredfinance.com/

Michael Lewis Bloomberg Columns
http://www.bloomberg.com/news/commentary/lewis.html

Recent Books

Lewis:
The Big Short: Inside the Doomsday Machine

Moneyball: The Art of Winning an Unfair Game

Tavakoli:
Dear Mr. Buffett: What An Investor Learns 1,269 Miles From Wall Street

Collateralized Debt Obligations and Structured Finance : New Developments in Cash and Synthetic Securitization

Category: Derivatives, Really, really bad calls, Television

Reaching, Once Again, For Yield

“People are starving for yield because rates are at zero. They’re taking more risk than they think.” -Paul Tramontano, Constellation Wealth Advisors, > One of the factors that caused the great credit crisis to spread far and wide was the “reach for yield.” This is one of the most expensive ways a fixed income investor…Read More

Category: Fixed Income/Interest Rates, Really, really bad calls

As previously noted, Verizon has been very obnoxiously spraying unwanted services and icons on my Blackberry desktop.

I am sure somewhere in the unreadable fine print we gave permission for this garbage, but that doesn’t make this any less obnoxious, and it doesn’t make Verizon any less of a giant telecom douchebag for doing this.

At the time we last mentioned this, the solution was to hide the icon. A better solution would be to leave Verizon, but for some of us (NYC), the alternatives are not better.

There seems to be a better solution, found by Ned — simply follow these steps:

1. Go to Options (the wrench on my BlackBerry)
2. Advanced options
3. Service Book
4. Select Bing or Slacker Radio, or whatever
5. Left Click (Blackberry button)
6. Delete

Your phone is now yours — until the next Verizon hijack . . .

Read More

Category: Really, really bad calls, Technology

Revisiting “The Obama Economy”

The rhetoric you use to make your point says a lot about a) the strength of your argument; 2) you personally. There is no better example of this then some of the OpEds about the current and past Presidents. They are rife with bad logic, political animus, and sheer partisanship. I don’t care id they…Read More

Category: Financial Press, Really, really bad calls, Weblogs

CNBC Shoutfest

Its as if Charlie Gasparino never left: Be sure to see the discussion — more of a yelling match — of Predatory Lending on CNBC. My issue isn’t the opinions of the various parties, its the unchecked ignorance that takes arrogant pride in ignoring facts. Its borderline unwatchable. Kudos to Janet Tavakoli for politely explaining…Read More

Category: Financial Press, Really, really bad calls, Television

Harry Markopolos, the Madoff whistleblower whose new book, No One Would Listen is out tomorrow, had a brief interview in the Sunday NYT magazine. This quote leapt out at me: > Q: Where did you learn about finance? A: You don’t learn much in grad school. Half the formulas they teach you are false. It’s…Read More

Category: Really, really bad calls

Treasury Looks to Mandate Foreclosure Abatements, Mortgage Mods

One of the most disappointing policy initiatives of the Administration to date has been the expensive and ineffective attempts to fight foreclosures at all costs. The net impact of this is to artificially prop up home prices and reduce the number of real estate transactions. In the high foreclosures regions (California, South Florida, Arizona, Las…Read More

Category: Credit, Legal, Politics, Really, really bad calls

Deficit Hawks Want New (or double dip) Recession

One of the oddest things to come out of the entire credit crisis, recession and muddling recovery has been the sudden re-emergence of deficit hawks. While a few honest deficit hawks are out there — the Peterson Institute is a good example of a group looking at long term structural issues, not immediate fiscal concerns…Read More

Category: Economy, Really, really bad calls, Taxes and Policy

Officer Barbrady on Ayn Rand

How LOL is this: South Park Studios via Objectless Observations

Category: Humor, Really, really bad calls, Television, Weekend

Dynamite Prize in Economics

I love this: The Dynamite Prize in Economics is to be awarded to the three economists who contributed most to enabling the Global Financial Collapse (GFC), or more figuratively, to the three economists who contributed most to blowing up the global economy. Here’s the short list: Fischer Black and Myron Scholes Eugene Fama Milton Friedman…Read More

Category: Economy, Really, really bad calls