Archive for category finance
WSJ on Buffet’s annual letter
WSJ’s Real Time Economics has a great summary of Warren Buffett’s latest letter to his shareholders.
Buffett is anticipating inflation, argues that political effort will be needed to wean cities and states from “the public teat” and asks for better home purchasing practices.
WSJ DealJournal on Neel Kashkari
Dare I say that our profiles overlap?
DealJournal has this article on Neel Kashkari, interim head of the Office of Financial Stability
Quote:
“Kashkari first worked at Goldman Sachs during the summer between his two years at Wharton, and impressed well enough to get a full time job after graduation. Academically, Kashkari was not outstanding, said a person familiar with the matter, but he appealed to Goldman’s recruiters because, as a former engineer, he was different than the usual aspiring investment banker. Kashkari’s head – shaved bald even then – also differentiated him from the reigning Goldman aesthetic, sometimes mockingly referred to as “The Borg” by rivals. “Everyone at Goldman has a full head of hair and went to prep school and Dartmouth and played lacrosse. That’s not Neel,” said an investment banker who knew him.”
Credit crisis basics
As someone not terribly familiar with financial instruments, I had a hard time understanding how mortgages from banks were turned into securities that got traded around between banks. It seems like this was at the heart of the current global credit crisis. Some creative Googling on the subject led me to some great articles on the subject:
- mschy’s response on Reddit entitled How a Mortgage Becomes a Mortgage Backed Security
- Pictorial explanation from Wikipedia
Other interesting finds:
- Biased article on the negative effects of credit default swaps. Quote:
“Insurance companies are regulated by the government, with reserve requirements, statutory limits, and examiners routinely showing up to check the books to make sure the money is there to cover potential claims. CDS are private bets, and the Federal Reserve from the time of Alan Greenspan has insisted that regulators keep hands off”