The gap between this video of Michael Lewis talking about writing, and this article by Emanuel Derman talking about working as a financial engineer, is striking. Here’s Lewis: “The minute I get away from the idea that mainly what I’m supposed to be doing is delivering pleasure to a reader is the minute I get […]
If you have a couple of hours to spare, there are far worse things you can do than to watch the 10-part D&D extravaganza, Acquisitions Incorporated (pt one is here. First, it will raise your nerd cred so high you won’t ever be forgiven by your spouse/students/friends who ever thought that maybe, just maybe, you […]
Part of my talk this coming week is a criticism of the turn from commensuration to quantification. In particular, one of the striking comparisons between (auction) art markets and financial capital markets is the extent to which art specialists decry quantification. As specialists gain more experience, they are more willing to say that their valuations […]
One of the more interesting question post-meltdown (do we even still call it that? we really need a name for the ‘financial events of 2007-2008’) is whether structured finance is, for all intents and purposes, dead. Structured finance is the general term that includes the securitization of debt. These vehicles go by names like Asset-backed […]
From an excellent practical handbook on writing, Howard Becker’s Writing for Social Scientists: Scholars learn to fear the literature in graduate school. I remember Professor Louis Wirth, one of the distinguished members of the Chicago school, putting Erving Goffman, then a fellow graduate student of mine, in his place with the literature gambit. It was […]
Two ways to regulate futures markets are by regulating the organizations that comprise the financial markets, or by regulating the financial activities in which any organization participates. This is an attempt to think about these differences.
I’ve read a few times the editorial by my former colleague Duncan Watts, and despite some interesting discussion, I can’t help thinking that this is a guy who knows a lot about networks and not so much about financial markets. The article is about the problem of size and complexity in financial services organizations. Watts […]
I’m working on a piece that tackles more directly the sociological causes of the financial crisis. Here is a marker in the sand, my overall assessment. Short, probably cryptic, but what I believe is going on. Yes, I think every section needs elaboration. It will eventually be about abstract finance: The financial crisis was driven […]
Once you have securitization under your belt, it’s time to move on to SIV’s, structured investment vehicles. The basic idea is that one way to securitize financial value – whether they be assets, leases, or some other future income stream – is to dump them into a trust created for that purpose.
One basic idea to help understand contemporary finance is securitization. To explain what securitization and how it works, first think about the following: what happens when you and your best friend decide to open a business together. How are you going to divvy up responsibilities, management decisions, profits, and losses? One way is to just […]