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If classic is the description of a work that stands the test of time, Robert Merton’s 700-page Continuous-time Finance is an apt example of unclassic. A mere 18 years after its publication, the book has fallen by the wayside, a colossal Ozymandias statue of ideas that lies in the ruins. At the time of its …
Revisiting Continuous-time Finance (Part 1 of 2) Read More »
The following is an excerpt from the last page of Vol. 3 of Speculative Capital: The Enigma of Options. The book came out in 2006. The lines were written in the late ’05 or early ’06. The role of speculative capital in the creation of the credit derivatives market cannot be overemphasized. Speculative capital is …
Speaking of Harvard, in today’s New York Times William C. Apgar, a “senior scholar” at the impressively named Joint Center for Housing Studies at Harvard University said, “People are beginning to understand that home ownership can be a very risky venture”. The context of this story is the rise in foreclosures and the decline of …
In a front page article today, The New York Times reported that Dr. Joseph Biederman, a world-renowned Harvard child psychiatrist, had received at least $1.6 million from the drug companies in relation with consulting services that involved promoting their antipsychotic medicine. The article went on to say that Dr. Biederman’s work helped to fuel a …
It is about 7:00 am here in New York. I am going to watch the shares of Lehman Brothers. And keep watching in coming days. Let us see how this thing will play out in light of the precarious condition of the broker/dealers that I described in Credit Woes series.
The New York Times informs us that there is a new doctrine in town. It is called the Bernanke Doctrine. The president of the New York Fed described it as “the overpowering use of monetary policies and lending to avert an economic collapse”. On one level, what we have here is the ex post facto …
Ed Koch, a cutting edge lowlife who was made the mayor of New York City in the late 70s – once collapsed in a restaurant from overeating – had a catchphrase. He used to ask, addressing no one in particular, How’m I doing? Not that he gave a damn about the answer, but it was …
A few days ago, AIG reported first-quarter losses of $7.8 billion resulting from the sharp drop in the value of its mortgage securities and credit derivatives. If you were paying attention, you knew that something was in the offing. For some time now, the company’s CEO had been railing against the idea fair value accounting. …
Martin Lipton, an old time Wall Street operative and a founding member of Wachtell Lipton recently blamed Drexel Burnham and, by implication, Michael Milken and his junk bond enterprise, for the current credit/liquidity crisis. “The financial crisis we’re in today stems from the invention by Drexel Burnham Lambert of the junk bond,” he was quoted …
On Junk Bonds, Mike Milken and the Current Crisis Read More »
I read somewhere that about 70% of non-sport content in the US papers is PR generated. The New York Times interview with the former US Treasury secretary Robert Rubin that I mentioned below is the proverbial “Exhibit A” in that regard. Laudatory adjectives abound: “elder statesman”, “Yoda” (the wise ass from the Star Wars), “corporate …
On the Significance of Bob Rubin Being a Citi Consigliere Read More »