Recently Michael Lewis was in news as he wrote a compelling piece on Serge Aleynikov, the former Goldman Sachs computer programmer convicted 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”
Since 2008, quite a lot of people have boldly claimed that they “predicted the crisis”. Usually, the claimants use this “fact” to argue for the superiority of their economic school of thought, modeling approach, investing approach, or personal intuition. But what does it mean to have “predicted the crisis”?
First of all, there are different things that get labeled “the crisis”. These include:
1. The big drop in U.S. housing prices that started in 2006-7.
2. The systemic collapse of the U.S. financial industry that began in 2008.
3. The deep recession and the long stagnation that began in late 2008. Continue reading “Crisis Prediction”
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.
‛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 “Book review : The Greatest Trade Ever : by Gregory Zuckerman”
One of the hedge funds run by John Paulson, whose prescient bets against housing where chronicled in the book “The Greatest Trade Ever,” is on track to be the second worst performer of 2012 among the universe of funds tracked by HSBC.
Last year, it was the worst. Paulson’s Advantage Plus fund, which uses additional leverage than his other funds, is down 19 percent through the end of October, following a 53 percent loss last year. Continue reading “John Paulson – Still got another 19 trading days to turn this thing around”