Worth Reading, The Big Short by Michael Lewis

Recently Michael Lewis was in news as he wrote a compelling piece on Serge Aleynikov, the former Goldman Sachs computer programmer imagesconvicted of stealing the bank’s secret algorithms, in the Vanity fair. Where he shared one of the famous line from his book Big short There’s a line in The Big Short; one of the characters, who was cynical about the subprime-mortgage market, says,

“When I hear Chinese Wall, I think you’re a f—ing liar.” I feel that way about liquidity. When I hear the word liquidity, I think you’re a f—ing liar. If this is liquidity, we don’t need it.

The book is a fabulous read because of its simplicity. It’s not just for finance geeks, rather the stuff narrated by Michael lewis is easy to digest. Although I still believe Liar’s Poker was one of the best work by Michael, but the Big- short seems to me is one of the best journalism written on the sub prime crisis.

Continue reading “Worth Reading, The Big Short by Michael Lewis”

Indeed CDO’s and CLO’s are Back

It seems like 2005 again when investors couldn’t get their hands on enough collateralized debt obligations better known as CDO’s. That single

English: Lehman Brothers headquarters in New Y...

trade took out Bear Sterns, Lehman Brothers, and almost ended AIG.

In case your memory is blurred by everything that transpired with the CDO’s let me refresh it. The CDO was basically a collection of mortgages that were pooled, rated and then sold to investors. For the most part they were rated “AAA” by all of the rating agencies. The problem started when some of them began to have homeowners that could not meet their obligations.

Continue reading “Indeed CDO’s and CLO’s are Back”

Leverage is good or bad

Sharing one of old article and trying to revisit the era of 2008.images

As I have been continuously posting on the Credit derivatives these days thought of sharing a post that I did early in 2008 when the face of Investment banking completely changed after sub-prime crisis.

There was an era when Investment banking (IB) was on the role … hefty packages, luxurious life, dream job for a financial student were some of the features of IB. Over the years evolved as a very big concept coined by the US, In India we use to call that as a merchant banking . Continue reading “Leverage is good or bad”

When will the crisis bottom out: Euro Crisis

Has the Euro crisis taken a pause or it is just waiting for some reason to make in to the catastrophe. I started writing the blog in the early summers of 2008 with the intension of sharing views on the global financial markets and macroeconomics:- In the autumn of 2008, the banking sector collapsed with remarkable rapidity. It seemed that every weekend something remarkable happened, from the demise of Lehman Brothers, through Continue reading “When will the crisis bottom out: Euro Crisis”

The Rogue Trader or The Rogue Banks

I did post almost a year back, but when I see today the scandals are now more in public compare to last year and the post holds true to the words. They are much more bigger now the Hedging trade of JP Morgan, The LIBOR saga….

It was my Penultimate day on the  visit to Paris Sept 2011, when the news break out UBS took a hit of $2 billion loss by the action of a Rogue Trader.

The Euro zone already under deep crisis and UBS was planning to cut down several jobs, Continue reading “The Rogue Trader or The Rogue Banks”