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Showing posts from January, 2011

The Ratings Charade Continues: A CLO Investigation, Part I

The role of the ratings agencies in the financial crisis went largely unexamined by the powers that be. That's a crying shame. Because the game hasn't changed: Investment banks fork over big fees for ratings agencies to sign off on phony ratings for complicated products.

Today I'm going toprove it, step by step. I'm not going to show all my work (I don't want this expanding to the length of a Scribd academic paper), but I can separately (in the comments section or in a separate post) for anyone who's interested.

We start with one of Wall Street's darlings of complexity, called a collateralized loan obligation.

If you're going to hang with me here, you have to grasp the basics of how one works. It's like this: An investment bank bundles together say 30 leveraged loans (this is the risky debt that companies take on in leveraged buyouts). Now, recognizing that different investors have different risk appetites, the bank creates "tranches" of secu…

Insurance & We

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The role of of insurance in our life is very important. It's very common that most of the people do insurance in their life because those people want to keep their life in happiness. There are different kinds of insurance in the market for different purpose. In this article you can find out some basic idea about the insurance. We can define insurance as a small amount of money deposited at a premium to protect against a big expense unpredictable ( claim of loss ). So, If we make insurance then we can protect our self against any major expense unpredictable. The following are some example of different kinds of insurance like Life Insurance, Health Insurance, General Insurance and Travel Insurance etc.
Life Insurance is one of the good product in Insurance sector. Every people should do the life insurance because in this insurance you can cover those people who is dependent on you.
Life insurance is an insurance, where the dependent of policy holder receive a cash lump sum if he or she d…

The Architect of the Middle East Peace Turns His Attention to Saving the U.S. Economy

Today, the Financial Times declared the Middle East peace dead. It said it in the heading of its editorial, which read: “Middle East peace hits a dead end”. The lead sentence said: “Any credibility the Middle East peace process retained has been dealt a crippling blow.”

One of the main “architects” of the peace process from the Israeli/U.S. side was a buffoon by the name of Richard Haas. If you google “richard haas + middle east peace”, you will get over 30,000 hits, which is a testimony to the extent of his involvement in the process. Either as a U.S. “official” or a think tank “intellectual”, he was involved in – nay, he planned – every wrong turn in the past 30 years that led to the current dead end. For his services he was made president of the U.S. Council on Foreign Relations.

Now, if after 30 years of constant planning, plotting, intellectualizing, scheming, conspiring, etc., you run the “Middle East peace” into a wall – and the U.S. credibility in the region into a gutter – what…

Time Preference, Kim Kardashian, Quantitative Easing, Good Black Swan – 2 of 2

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Since the beginning of this year, the Financial Times has been all over the case of oil. Its January 5 headline warned:
Oil price ‘enters danger zone’
‘Enters a danger zone’ was in quotes because it came from the chief economist of the “International Energy Agency” who told the FT that “the oil import bills are becoming a threat to the economic recovery.” FT took it from there and surmised that “the warning from the IEA will put pressure on Opec to increase its production.”

Then this past Wednesday, the paper “revealed” that Saudi Arabia had broken ranks with the Opec members and had “increased output quietly in a bid to avoid the impact of price spike”. The Opec secretary general called the rumors of tightness in the oil markets “incorrect”, but no matter. The editorial board of the FT has set its collective mind on doing something about the oil price. To that end, anything would do, whether diffusing disinformation or pumping out a two-man shop with a childishly grandiose name to issu…

Your First Step To Start Small Business

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In this article you will get a basic idea that how to finance any small business. If you want to start a small business, then you should gather all the basic information about the business, which you want to start and run. It is very common that If you want to start a business, then it requires a large amount. There are many types of business you can start and run, but always you should keep in your mind that without money you can not start and run any business.
Capital is big factor to start or run any business so firstly you need to calculate that how much money, you need to start your business. If your requirement of capital is high then you can also share with someone.
You can find a business partner and you can share the financial burden with your partner to start your business, but make sure your business partner should be for long periods of time. There is also an another way to sort your capital problem i.e, business loan. You can approach for business loan. Just contact your l…

Happiness In Your Life With Insurance

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Everyone in their life wants to happy and people do many things for their happiness. We know that a family is form with many relations like parents, spouse and siblings etc. Everyone thinks a lot about their family. We think of them, we care about them and tie a knot for good. This kind of love that happens in a family and always think about their safety, but one thing we must know that anything can happen at any time in our lives. Today, we see that there are many accidents happen in our environment. It is clear that we are aware of and conscious living as possible, instead of this we can make no assurance that we will be safe for all time.
If something bad happens to someone as an accident or illness and type of danger, then it becomes very unfortunate. At that point in time we have to take him or her in the hospital, etc depending on the situation. We don't know that how much money can be require on that point of time. If the casualty is big then may be your saving account is …

Business Bank Loan

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If you want to run any business then you need money. There are many types of business in the market and how much money is required for your business is dependent on the type of business which you want to run. So, if you don't have the money then you can not start your business. But the capital problem can sort out with the help of business bank loan. As you know that if you want to run your business then you need a lot of things like office supplies, fax line, computer, phone systems, printer and so on. These are the basic equipment of your business without these you can not run your business as well as you will need some software for your business.
You need software for your business but the type of software depends on your business which you are going to run and the price of software is expensive. So, this is the list of things which you will require to run your business. But here is one more most important point need to discuss that is your office address. You have to require …

High Frequency Trading and Flash Crash – 4: How the Pieces Fell Into Place

After Black Monday on October 87, there were loud and bitter complaints about the chaos which had prevailed throughout the day at the exchanges. The problems were especially glaring in Nasdaq, which mostly catered to retail investors. Many sell orders there were never acknowledged much less executed.

The chorus of drawn out criticism forced the SEC to act. Finding the path of the least resistance which also answered the greatest number of complaints, it compelled the Nasdaq market markers to create the Simple Order Execution System (SOES). The SOES was a computerized stock trading platform. Market makers had to display in it their best bid/asked prices for all the stocks in which they made market and honor those prices for at least 1000 shares.

As an example, Goldman Sachs displayed its prices for Microsoft as follows: MSFT 1000 24 1/4 x 24 5/8. This meant that Goldman was ready – and obligated – to buy 1000 shares of MSFT for $24 1/4 and sell the same number of shares at $24 5/8.

Since …