Advertisements

Tag Archive: Collateralized debt obligation


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

Advertisements

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

downloadMeaning: Financial products refer to instruments that help you save, invest, get insurance or get a mortgage. These are issued by various banks, financial institutions, stock brokerages, insurance providers, credit card agencies and government sponsored entities.

Definition: A financial product is a contract between two agents stipulating movements of cash now and in the future. A financial product has value, but it is not tangible.

Finance being about promises, it requires powers capable of enforcing them. This is why modern finance and modern money developed in parallel with the emergence, in western Europe, of powerful monarchies, which replaced feudality between 1000 and 1700. Continue reading

Nobody knows has the biggest financial crisis already occurred during the phase of 2008-2009 or it is about to come in the near r-OWS-large570future .Was reading the mess from Jack and Suzy welch, who recall Agatha Christie’s murder on the Orient express. In his novel 12 people were suspected of murder and 12 turned out to be guilty in the same way he represented 12 murderers of the US financial system.

1.   The Federal Reserve Board.  :    The Man behind here is Alan Greens pan Fed governor in 1987-2006 a serious bubble maker. Introduction Continue reading

Oscar Wilde once said that ‚if one cannot enjoy reading a book over and over again, there is no use in reading it at all.download

‛Most of the books of the subprime era were dedicated on the contagion, failures and humongous losses, for Investment banks, Financial institutions and Government agencies.

The Greatest trade ever – by Gregory Zuckerman is a long conversation and co-operation of the person John Paulson, ( whose Hedge fund was in lime light the famous Abacus deal were Goldman Sachs was in trouble). Continue reading

%d bloggers like this: