I just finished reading Gregory Zuckerman’s new book The Greatest Trade Ever: The behind the scenes story of how John Paulson defied Wall Street and made financial history. The story is about how JP, a relatively staid merger expert, became intensely bearish on the housing market in 2004. He took a $2 billion in assets […]
I want to talk about dark pools of liquidity, but to do so, I need to first talk about financial markets and how prices work. Bear with me for the background. The dark pools post is coming. Prices in financial markets are not like prices in other kinds of markets. When you buy gas, you […]
First of all, kudos to McClatchy’s news service for running a slew of articles critical of Goldman Sachs during this financial crisis. The firm displays a disastrous combination of connectedness and high prestige on the one hand, and unconscionable financial practices on the other. They are not at all alone, or even the worst, but […]
The current state of the economy, mostly financial, and I’m feeling pretty bleak about it. I’m looking at a few indicators, and I’m not particularly impressed with what I see.
I have written about the experiment going on at Significant Objects before. They buy things at garage sales and thrift stores, make up stories about the objects, and then sell these objects on eBay, with the stories attached as the objects’ descriptions. The premise is that “the object should — according to our hypothesis — […]
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 […]
Congress is starting to ask questions about the ways Goldman Sachs measures risk, considering their supposed switch from an investment bank to a bank holding company. And they should. Plus, I think I was wrong about GS paying its profit-makers.
Three thoughtful posts from Martha, Daniel, and Yuval comment on the NYT article about Goldman Sachs’ high-speed trading unit. The rather critical article suggests that high-speed trading is the latest way to exploit innovation at the expense of everyone else, to the tune of $21 Billion in 2008. This issue is not new as such, […]
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.