Posts tagged 'Global Financial Crisis'

Lending Club, securitisations and proper loan due diligence

One of the causes of the global financial crisis — and there were many — was just outright fraud.

Fraud when US subprime mortgages were being written; fraud when those mortgages were being packaged into bonds; and fraud again when those bonds were being sold to investors. Read more

Not all securitisation bankers are evil – some are just slow

This occasional Alphaville contributor just got back from a prolonged reporting stint in Las Vegas.

On the agenda was not one but two securitisation conferences. Some readers may recall that the American Securitization Forum (ASF) has for many years hosted an annual gathering, most often in the pleasant confines of the Aria hotel in Las Vegas. This year, a bitter schism within the securitisation industry meant there were dueling conferences – one organised by the ASF and the other by the break-away Structured Finance Industry Group (SFIG). Read more

On SWFs being paid to borrow

The big story on Friday concerns the terms and structure of Qatar’s life-saving support for Barclays at the peak of the financial crisis in 2008. As Daniel Schäfer, Caroline Binham and Simeon Kerr report, the key issue is whether Barclays lent Qatar the money to buy shares in the bank. Read more

The end of 200 years of expansion?

Tim Morgan of Tullet Prebon has been threatening this tome for a while. And now it has actually appeared…click to read…

 Read more

Look on the bright side of 2012

With so much pessimism heading into 2012, we thought it would be prudent to discuss the possibility of positive surprises.

That’s the festive spirit of the economists at Bank of America Merrill Lynch, writing in a report released on Tuesday. Read more

Warning: transparency in finance may lead to goat-herding

Before the break, FT Alphaville took a look at abstraction and morality in modern finance. This prompted some rather interesting discussion, among which this post from Interfluidity:

Finance has always been complex. More precisely it has always been opaque, and complexity is a means of rationalizing opacity in societies that pretend to transparency. Opacity is absolutely essential to modern finance. It is a feature not a bug until we radically change the way we mobilize economic risk-bearing. The core purpose of status quo finance is to coax people into accepting risks that they would not, if fully informed, consent to bear.

 Read more

Abstractions and morality in modern finance

Over the last three years, modern finance has been bailed out by policymakers and, by extension, taxpayers. But policymakers and financiers are taxpayers too, and hence themselves bear at least some of the costs of the crisis.

Why are we so good at creating complexity in finance? How do we reconcile the bad decisions that we make when we do things like structure single-tranche CDOs, trade the ABX index, or give mortgages to people who can’t afford them? Read more

Aliens to save the global economy

Alternative working title: When Orson Welles meets finance.

We discussed Fantasy Fed options on Wednesday. But here’s one from Paul Krugman, which we definitely overlooked — ironically, possibly the most fantastical of all. Read more