December 28 2023
There is a precipice on either side of you: a precipice of caution and a precipice of overdaring.
Winston Churchill
Posts tagged "finance"
December 28 2023
How did you go bankrupt? Gradually, and then suddenly.
Ernest Hemingway, The Sun Also Rises
December 28 2023
I spent a lot of money on booze, birds, and fast cars. The rest I just squandered.
George Best
November 16 2010
Bloomberg:
A majority of global investors predict Ireland will default on its sovereign debt, showing that weeks of efforts by the government of the onetime Celtic Tiger havent allayed concerns about its creditworthiness.
and from the Sunday Times
FEARS are mounting that Ireland could default on its soaring national debt pile, amid continuing worries about its troubled banking sector.
July 31 2010
From Paul Grahama's "Hackers and Painters" comes a wonderfully insightful essay about contribution and reward. In describing a startup as a place where individuals can be rewarded for their contribution, he identifies the biggest impediment to smart and/or ambitious people in bigger companies: that their contribution is averaged out with all the other dumb or unambitious folks.
According to Graham: to get rich you need to get yourself in a situation with two things, measurement and leverage.
March 05 2010
Robert Shiller thinks the risk of a double dip recession is not great with the exception of the housing market....
"I think there is a definite risk of a turn down again in home prices, if home prices decline 10% or 20% more, we are in big trouble."
February 25 2010
From the New York Times...
Bets by some of the same banks that helped Greece shroud its mounting debts may actually now be pushing the nation closer to the brink of financial ruin.
Further to the post on this blog about the anti-selected use of Credit Default Swaps by Goldman Sachs, the New York Times now reports the latest destructive use of these instruments in betting that Greece will actually default on its debt. In doing so, the escalating price of CDS on Greek sovereign debt increases the likelyhood that this will indeed happen.
This story contains more than a shade of Warren Buffet's famous aphorism about derivatives being "Weapons of financial mass destruction." Except that CDS are not real derivatives. More like dodgy insurance products with an unreliable pricing model.
Fortunately, the US Fed and the Senate Banking Committee appear to have finally awoken to the risk
"We have a situation in which major financial institutions are amplifying a public crisis for what would appear to be for private gain," Dodd said.
Let's hope they've got the balls to actually do something to Goldman this time, rather than rolling over and playing dead as in the AIG debacle.
February 09 2010
Despite major Canadian banks urging caution, neither the Finance Minister nor the governor of the Bank Of Canada are willing to risk the public wrath of forcing property price declines by raising interest rates.
Of course by not doing so, they are deferring a much bigger financial and political problem for the future---precisely the behaviour that led to the global financial crisis in the first place.
February 08 2010
In the days before the housing crisis, the idea of a bank foreclosure filled any homeowner's mind with dread and shame. Now, with so many Americans owing more on their homes than they're worth, some people are taking a whole new approach: essentially saying, "Foreclose on me, please." It's more technically known as a "strategic default."
February 07 2010
If AIG Financial Products had only employed the same simple technique as the rest of their storied organization for evaluating the quality of the risks they were taking on, their implosion could surely have been avoided.