Monthly Archives: July 2009

Must Read: “Cocksure,” by Malcolm Gladwell

The New Yorker: Cocksure, Banks, Battles and the Psychology of Overconfidence Major points to Jeff Taylor for sending this provocative article.

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To the Speedy Go the Spoils – High-Frequency Trading Strategies

NYT: Stock Traders Find Speed Pays, in Milliseconds High-frequency traders often confound other investors by issuing and then canceling orders almost simultaneously. Loopholes in market rules give high-speed investors an early glance at how others are trading. And their computers … Continue reading

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Wrong Incentives: Income vs. “The Right Thing to Do”

NYT: Lucrative Fees May Deter Efforts to Alter Loans Even when borrowers stop paying, mortgage companies that service the loans collect fees out of the proceeds when homes are ultimately sold in foreclosure. So the longer borrowers remain delinquent, the … Continue reading

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Less Competition from I-Banks = More Profit for Hedge Funds

Hedge Funds' Proprietary Advantage

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Salary Data from Colleges

NYT: Do Elite Colleges Produce the Best Paid Graduates?  

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No Wonder Toxic Assets are Still on the Books

WSJ: Why Toxic Assets Are So Hard to Clean Up Each time these tranches were mixed together with other tranches in a new pool, the securities became more complex. Assume a hypothetical CDO2 held 100 CLOs, each holding 250 corporate … Continue reading

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Are We Surprised By This? Conniving on the way up, conniving on the way down

NYT: Subprime Brokers Resurface as Dubious Loan Fixers By Mr. Soussana‚Äôs own account, his customers fared less happily. He specialized in the exotic mortgages that have proved most prone to sliding into foreclosure, leaving many now scrambling to save their … Continue reading

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Oligarchs on Wall Street

I don't like this article, but he makes some excellent points.  A worthwhile read. The Atlantic: The Quiet Coup The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief … Continue reading

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Behavioral Finance and Incentives — Lottery to make people save

This post belongs on the marketing blog — so clever. WSJ: Using the Lottery Effect to Make People Save But psychologists have long known that people tend to overestimate the odds of rare events. Applying that behavioral insight, finance professor … Continue reading

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Too Big to Save? Europe on the Brink

Download 2009-7-17 John Mauldin – Europe on the Brink And here's the real issue. They have no Paulson and Bernanke. Now some of my Austrian-economist friends will say, "Good, they should all be allowed to die;" but that is a … Continue reading

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