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Shadow insurance

posted to Deus Ex Macchiato on Fri 14th Jun 13

Matt Levine at Dealbreaker points us to a ‘big angry report‘ (his words) on captive reinsurance, by Benjamin Lawsky and his New York State Department of Financial Services. Matt’s certainly right that Ben has a bone to pick, given the ‘at
Peak HFT?

posted to Deus Ex Macchiato on Thu 13th Jun 13

As Phil Albinus rightly says, if your trading strategy is destroyed by a 5c increase in trading costs, then you may have an issue:And now high-frequency trading is taking a long look at itself in the mirror. In the cold light of day, traders are rethinking
Do high haircuts intensify crash risk?

posted to Deus Ex Macchiato on Wed 12th Jun 13

I heard an interesting idea today. I’m not sure I buy it, but it does have a sheen of plausibility:High collateral haircuts increase the risk of large price falls.Here’s why: after default, the collateral holder has no incentive to liquidate the

George and the giant investment problem

posted to Deus Ex Macchiato on Tue 23rd Aug 11

One of the things that I like about finance is that ideas matter to the investment community. If you might possibly be able to make them some money then be you Tea Partier, Obama loyalist or Communist, they will listen to you. Often they’ll discard what
Unintended profits and the custodians

posted to Deus Ex Macchiato on Thu 2nd Feb 12

The Streetwise Professor pretty much nails one of the big winners in the (regulatory mandated) move to OTC derivatives central clearing:big custodial banks will be even more tightly connected with all major participants in the derivatives trade because of their
Economics a sensible view from a warmer clime

posted to Deus Ex Macchiato on Wed 28th Jul 10

DeLisle Worrell, Governor of the Central Bank of Barbados, had these sensible words to say in a speech recently:Traditional Economics remains trapped in a time warp defined by the concepts that Leon Walras borrowed from the physics he knew at the time of the

Noted for February 26, 2013

posted to Grasping Reality with Both Hands: Economist Brad DeLong's Fair, Balanced, and Reality-Based Semi-Daily Journal on Mon 25th Feb 13

Alex Pareene: Watching the Sunday shows so you dont have to: ABCs This Week with George Stephanopoulos. [W]e had two professional liars, one party hack, one disgraced financier and one old journalist guy, here to discus the issues of the day. Somewhat wonderfully,
Links 12/17/13

posted to naked capitalism on Sun 17th Feb 13

India’s rice revolution Guardian (Lambert). This is really cool. Fewer bees in US a threat to world’s almond supply Associated Press. Lambert: “Bees are not a ‘work force’”.Experts tell flatulent flyers: let rip Medical xPress
Links 1/18/13

posted to naked capitalism on Fri 18th Jan 13

Sydney bakes in hottest day on record as bushfires rage BBC. 46 degrees???“Superomniphobic” nanoscale coating repels almost any liquid GizmagBringing fusion electricity to the grid EureakAlert. Chuck L: “When I was an undergraduate 50+ years