Book review: Boombustology

For those who have read the Aleph for years my Blog, this book will provide little that is new.  However, you receive a set of arguments in an integrated package of slim.

I liked this book.  The author took a broad view of bubbles and developed five lenses through which to analyze:

MicroeconomicsMacroeconomicsPsychologyPoliticsBiological ratios (contagion)

This is the increase in short-term debt, the alignment of long-term incentives, crowd behavior, imitation, agreed with booms, shows the finger during busts, etc.

This book encapsulates the ideas of Keynes, Minsky, Austrian economists, Soros (reflexivity) and others.  The author was very willing to interact with the view of those who may not fully agree with him, and displays all the areas where they agree.

And the author of five lenses tests in five bubbles:

The great bubbleThe Tulip DepressionJapan late 80sThe Asian crisis in the housing crisis 1997The MAS 2006-?

Not surprisingly the crises chosen supports the theory.  It would be interesting to see what the author would like to say about other bubbles, such as the South Sea bubble, the Tech bubble, etc.

And so the author sums up the case, and I think it is not good. But then takes a step further, and effectively saying, "well, there is an obvious bubble to say today?"  And so our China highlights.  Debts, handling, malinvestment, evil motives, etc.  You can read for yourself and draw your own conclusions.

My main verdict for this book is that it provides a solid basis for the evaluation of the bubble.  Can I place the back "Manias, panics and crashes" and "Devil take the Hindmost," but not by much.  Author: great work.

Sophistry

I disagree with the idea that the booms and busts are a phenomenon of the capitalist.  -And-command economies have booms and busts — the great leap forward, it was an explosion followed by a huge bust.  An attempt to plant cotton in the Soviet Union was short-lived, leads to a reduction of yields and the destruction of the ecology of the sea of Aral Sea.  There are more examples of this. at least, capitalism blossoming yields some decent rewards.

Who will benefit from this Book:

Anyone who wants a better understanding of the boom-bust cycle will benefit from this book.  The author has nailed it for me.  This book will help you properly skeptical next unsustainable boom and minimize your exposure to bust once.

If you want to do, you can buy it here: Boombustology: festive period financial bubbles before they burst.

Full disclosure: I asked the Publisher for the book, and sent them to me.

If you enter Amazon through my site, and you can buy anything, I get a small Commission.  This is the main source of income for my blog.  I prefer a "Tip jar" because I want to get anything you want, instead of simply gives me a tip.  Book reviews take time, particularly in reading, which most reviewers, not book fully, and usually do. (If not, mention that I scanned the book.  Also, never use the data we will send the PR flacks.)

Most people buy on Amazon does not enter through a Web page that contains references.  So Amazon creates an extra 1-3% on the prices to all buyers to compensate for supplies given to minority derived through referring sites.  If you can buy on Amazon directly or enter through my site, don't change your values.

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GlobeOp Hedge Fund Indices offer first independent, time window on liquidity and investor sentiments

GlobeOp financial services (LSE: GO.) will offer an independent monthly window into hedge fund capital flows launch next week, the first in a planned series of GlobeOp hedge fund volume index.

-It is a real lack of independently confirmed industry data against which hedge fund managers and investors can compare their allocations and performance, says Hans hufschmid, Executive Director, GlobeOp financial services. "GlobeOp is the first Manager to publish data on independent Fund's liquidity and investor sentiment. This transparency has been produced by combining our substantial platform of assets under management with our data project management expertise. As listed companies, we regularly report our assets under management (AuA). We also summarize the total figures for subscription, redemption and performance for our customers ' funds. It was therefore a logical next step is to apply the same RIGOR and controls packaging a subset of the data to the consistent and timely index focused on capital movements for administration clients. Later this year, we expect to add additional indexes, including performance measurement. "

The first two indices will provide monthly reports based on actual and projected capital movement data independently collected from all hedge funds clients for whom GlobeOp provides administration.

While individual fund data are anonymized by aggregation, is based on the same registry data is reconciled Fund data GlobeOp used to produce the Fund's net asset value (NAV) reports. Globeops total assets under management represents around eight to ten percent of the estimated assets are currently invested in the hedge fund. The funds in the indices of investment strategies span a representative industry selection.

Eighth business day of each month reporting GlobeOp capital mobility Index for investments or capital movements into and out of hedge funds on GlobeOp administration services platform.

·      Data is based on the actual subscription and independently calculated and confirmed by actual capital movements and published only a few days after they occur

·      GlobeOp capital mobility Index consists of the cumulative monthly deductions for subscription and redemption of hedge funds managed by GlobeOp divided by total assets under management (AuA) for Globeop's administration clients.  The index was set at 100 on December 31, 2005. (See diagram)

·      Data for middle-and back-office administration is also financing the customers clients not in the Index, but is included in the company's results announcement numbers

·      Online data can be divided by a number of gross and monthly flow criteria

·      The first monthly GlobeOp capital mobility Index will be published on April 12, 2011.

the 15th business day of each month will GlobeOp presented redemption indicator report on investor redemption notifications to hedge funds on GlobeOp administration services platform.

·      GlobeOp presented redemption indicator consists of redemption notices from hedge funds managed by GlobeOp, divided by total assets under management (AuA) for Globeop's administration clients

·      Data is based on actual investor redemption requests received.  Investors, and sometimes does, abort the redemption notices. Moreover, it may vary from Fund to fund the establishment and implementation of Exchange messages. Establishing and implementing the redemption notification deadlines may vary from Fund to fund.

·      Data for middle-and back-office administration is also financing the customers clients not in the Index, but is included in the company's results announcement numbers

·      Online data can be divided further by redemption periods, from less than a month to more than three months

·      The first monthly GlobeOp presented redemption indicator will be published on April 21, 2011.

Comment on GlobeOp Hedge Fund Index methodology, Tony glickman, GlobeOp CEO, added, was "the indices positive during the trial of fund managers, asset allocators, fund investors and academics as valuable, independent data points. Because the data is calculated over all our active GlobeOp management customers each month, at the same point in time, and using consistent mathematical methods, eliminated självselektion and self-service reporting systematic for many other indices. In addition, since the data are reported within days of business monthly Close, delay factor in some other indices are eliminated. At the same time protect confidential details about our individual clients, indexes also benefit from the same data processing RIGOR and controls applied we produce regularly portfolio assessments to our customers. This process is included in the Globeops annual ISAE 3402 and SSAE 16 investigations. "

Dr. William fung, visiting research professor in economics, hedge fund Centre, London Business School, said: "Central hedge fund research is the relationship between performance and capital flow.  This relationship is the key to answering important questions as the impact of the liquidity of hedge fund investing and the interplay between capacity and future performance.  Research progress on these important issues have historically been handicapped by the lack of reliable, objective information. I applaud GlobeOp's efforts to create for the objective, reliable source in this area, and look forward to studying GlobeOp capital mobility Index in the near future. "

From 12 April, GlobeOp Hedge Fund Index that will be on www.globeopindex.com, http://funds.us.reuters.com/US/overview.asp or http://funds.uk.reuters.com/UK/overview.asp, or via a link on the home page for www.globeop.com.  Warning and RSS Subscriber options ... available on www.globeop.com. Index Twitter comments: # HFindex.

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SunGard updates the Adaptive Analytics

Source: SunGard, 05 April 2011

SunGard has released a new version of its risk analytics engine, Adaptive Analytics, which provides better performance to help customers manage the development of credit value adjustment (CVA) and around regulations such as Basel III capital requirements.

Adaptive helps customers correctly calculate the cost of credit so that operators can correct price at the same time maximize new business opportunities. It helps customers quickly and effectively manage the computationally intensive computations for active CVA management and new regulatory stress test requirements. As the credit risk management increases in priority to senior executives, Adaptive also contributes to increased transparency in counterparty credit risk.

Tests show that more than 6 times now performs faster than previous releases of a benchmark portfolio in Adaptive Analytics. This increase in performance means that a calculation will run at the same time with only 16% of the hardware required in the past, to reduce the cost of hardware with expensive simulation calculations. Adaptive Analytics fast and accurate calculations help give customers a more accurate reflection and sharing of their credit risk.

Mat Newman, Director of product management for Adaptive Sungards position, risk and operations company, said, "Adaptive Analytics helps customers manage increased volume and complexity of calculations that are now required to carry out pricing and risk management, such as CVA, risk for incremental loading and the potential future exposure calculations. This innovation is part of our ongoing program optimization technology. "

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REG Arb-they may not have it, but it will

In his speech on Tuesday to euro Pariliament Gary Gensler said: "we must continue to work together to get oversight on the swaps market to help prevent the next crisis. Effective reform cannot be carried out by one nation alone. It will require a comprehensive, international reaction. "

(UN?)Fortunately I do not believe that Europeans are listening (or listen). CFTC to all standardized swaps not only cleared centrally, but also pushed to Exchange. But the comments this week by EU lawmakers at the World Congress for Exchange was reported as saying that they do not want to destroy the existing OTC processes. And indeed, in a rare comment letter from the FSA to CFTC in relation to his idea to reduce the capital requirements for membership, the clearinghouse claims that this "mistake" would increase the risk.

Personally I think the Europeans take a more measured approach with a broader remit. CFTC seems to be rushing through Receptacles and demanding that the rest of the world follow suit. EMIR will take longer and (hopefully) more adapted to the needs of the end-user, than Dodd-Frank. But according to a report on regulatory arbitrage JPM released earlier this month, the real winners will be Swiss ....

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Hedge funds upset if naked-CD

Hedge funds upset about naked CDs by Sean Sprackling Wed 09 Mar 2010 16: 08 GMT |  Permanent link |  Cosmos does not come as a surprise, the reaction to ban naked CDs, have been uniformly negative. On Monday voted Economc and Monetary Affairs (see PR here) prohibiting the use of CDs of sovereign debt is detected.

To be fair to the Hedgies-they have a point. By FT in the latest debt crisis in Greece were buyers of Greek debt, not CD-Rs, and the increase in spreads, seemed to have come from the banks ' overexposed instead of hedge funds. In the same way, says a report (unpublished) of the EU on sovereign CDs (as you can see here) the fact that "...The empirical study has been conducted ... gives no conclusive evidence that developments in the CDs market causes higher financing costs ... "

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Edhec-Risk Institute warns against banning naked CDs

Edhec-Risk Institute warns against banning naked CDs by Sean Sprackling Fri 11 Mar 2011 15: 26 GMT |  Permanent link |  Kosmos Institute has written an open letter to the European economic and Monetary Affairs Committee to explain why this is counterproductive. You can read the letter here

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Book review: all the Devils are here

Have you ever seen a complex array of dominoes standing, waiting for the first Domino to hit up, starting a chain reaction will occur where amazing tricks?  I remember seeing things like that many times on "the tonight show with Johnny Carson" back when I was a kid.

When the first dominoes hit during the entire event, do not have time to complete — perhaps in a few minutes at most.  But what do I need to set the dominoes?  Take hours of time, perhaps even a whole day or more.  Often those permission setting tiles a few here and there, so that an accident would only spoil a limited part of what is established.

These standing dominoes is an unstable equilibrium.  This is particularly so in the end, when the tiles are added to remove security from having an accident.

Most books about the focus of the economic crisis in the dominoes falling — is astonishing and upset to watch the disaster unfold, as finally revealed the influence of the system to be viable.

This book is different, that focuses on how the dominoes were created.  How did create the leverage?  How many safety ignored?

The beauty of this book is that we are behind the scenes and describes how they created the conditions that led to a huge new bad debt.  I was small and clumsy child.  My friends would tell me during sports, "there are mistakes, but the error was so great that it required skill."

The same applied to this crisis.  There were many people who have carried their own private advantage, using new financial instruments that were fairly harmless in themselves, but lethal as a group.  So, what were the major economic innovations that enabled the crisis?

Creation of Fannie and Freddie, which led to an over-mortgage Securitization issuance., particularly mortgage loans.  This led to a separation between authors and certificateholders. (And servicers, although the book doesn't go into much servicers.)Having parts covering debt, or GSEs, Guaranty Insurers, the Government or credit default swaps [CDS] Loosening regulations on commercial banks, investment banks and S&Ls. Regulatory arbitrage depositary institutions. Loose monetary policy by the Federal Reserve, together with a disdain for regulating credit.  Seen in Mexico and LTCM as successes, and felt that there was any crisis that could not be resolved with additional liquidity at the Poorly rating agency models., and competition among the rating agencies for obtaining business. regulators required the use of rating agencies for the broad capital modeling.informed, bad assumption that real estate prices can only move upwards. creating value-at-risk, a risk management concept has limited usefulness for the true crisis management creating CDOs. that did not care about much more than performance. the development of synthetic CDOs, which allowed the securitization to apply corporate bonds, MBS and ABS trusts. owns the creation of structures, subprime loan, where he was receiving care were performance. create piggyback loans, so that people could put no money for a House.

There are no heroes in this book, apart from the tragic heroes who warned and was kicked aside the hubris of the era.  Goldman Sachs comes out better than most, because they saw the crisis coming, and to protect themselves from investment banks mot.

I learned a lot reading this book, and I've read a dozen books.  I can't find many other books.  In this book, the authors interviewed hundreds of people who were integral to the crisis, and to read a wide variety of sources previously wrote about the crisis.

I found the book is a riveting read and I read cover to cover.  Could not change the scanning mode. was that well written.

This is the best book on the crisis in my opinion, because it gets you behind the scenes.  You'll learn more from this book than any other on the crisis.

Sophistry

Do not take the trouble to rating agency.  There is pressure to get things right in the cycle, and you receive the right to a timely basis.  These two goals conflict with each other, and stresses that the conflict would have enhanced the book.

Who will benefit from this Book:

Anyone willing to read a longish book, could benefit from this book.  Far is the best book on the crisis.

If you want to do, you can buy it here: all the Devils are here: the hidden history of the economic crisis.

Full disclosure: this book was sent to me, because I asked for this.

If you enter Amazon through my site, and you can buy anything, I get a small Commission.  This is the main source of income for my blog.  I prefer a "Tip jar" because I want to get anything you want, instead of simply gives me a tip.  Book reviews take time, particularly in reading, which most reviewers, not book fully, and usually do. (If not, mention that I scanned the book.  Also, never use the data we will send the PR flacks.)

Most people buy on Amazon does not enter through a Web page that contains references.  So Amazon creates an extra 1-3% on the prices to all buyers to compensate for supplies given to minority derived through referring sites.  If you can buy on Amazon directly or enter through my site, don't change your values.

Accounting, banking, book reviews, Fed policy, security, macroeconomics, portfolio management, quantitative methods, real estate and mortgages, stocks, structured products and derivatives, public policy ||

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