Wary Banks Hobble Toxic-Asset Plan - WSJ.com
It was an ill conceived idea for everybody. The realization now starts to sink in and everybody is trying to get out of it in as politically viable a way as is possible.
The best way of implementing that idea was as a market maker on those assets bought/sold at a refined level of granularity.
I have an article coming in the Investment Professional coming out next month that use the BICs framework to show how a lot of what was said was merely smoke and mirrors, including what the "smartest" said. A must read.
http://www.theinvestmentprofessional.com/upcoming-articles.html
Monday, June 29, 2009
Saturday, June 13, 2009
FT.com / Comment / Opinion - Economists clash on shifting sands
FT.com / Comment / Opinion - Economists clash on shifting sands
The neo-classical vs. neo-liberal debate as being framed here between Ferguson and Krugman has always struck by the fact that none of these positions provides clear analytic means for deciding when to decide where government (or central counterparty) action is judicious and when it is not.
While Krugman might be right at this moment, blind acceptance of his prescriptions may lead to trouble at other times.
It it is why I see my piece on the holistic theorem, despite its analytic relative simplicity as crucial in understanding how to decide among these two camps in practical situations such as the present issue of whether or not to adopt centralized clearing of derivatives.
SEE: http://knol.google.com/k/phil-kongtcheu/the-holistic-theorem/24v2kgtuvzk2v/16
The neo-classical vs. neo-liberal debate as being framed here between Ferguson and Krugman has always struck by the fact that none of these positions provides clear analytic means for deciding when to decide where government (or central counterparty) action is judicious and when it is not.
While Krugman might be right at this moment, blind acceptance of his prescriptions may lead to trouble at other times.
It it is why I see my piece on the holistic theorem, despite its analytic relative simplicity as crucial in understanding how to decide among these two camps in practical situations such as the present issue of whether or not to adopt centralized clearing of derivatives.
SEE: http://knol.google.com/k/phil-kongtcheu/the-holistic-theorem/24v2kgtuvzk2v/16
Sunday, June 7, 2009
Editorial - Congress, the Banks and Derivatives - NYTimes.com
See my knol on the "Holistic Theorem"
This editorial makes a painfully & tragically poor traditional liberal argument for derivatives regulation even though the ultimate goal of regulating all derivatives trades is what is needed. It merely re-hashes the March 29,09 editorial piece. See:http://www.nytimes.com/2009/03/29/opinion/29sun1.html
They conclude by saying:
"Senator Tom Harkin has introduced legislation that would require exchange trading for derivatives. Representative Collin Peterson has introduced a bill that would tighten the regulation of derivatives’ clearinghouses. He acknowledges that his bill is not as strong as he would like but that Congressional politics left him no choice, telling The Times, “The banks run the place.”"
and I say: "duh"
In this specific instance, they fail to see that their is a unity of purpose between derivatives trading institutions and advocates of centralized clearing, and that is the most effective argument to be made in order to effect CENTRALIZED CLEARING OF ALL DERIVATIVES TRADES.
Why set yourself up for a fight against a party where the odds of winning are against you when you can simply & persuasively explain to the other party that it is in their best interest to switch to your side of the argument?
See:http://knol.google.com/k/phil-kongtcheu/the-holistic-theorem/24v2kgtuvzk2v/16
Note also that regulated BICs exchanges on different types of underlyings, by creating exchanges that most efficiently trade instruments that all customized derivatives merely combine would eliminate the loopholes of the proposed legislation
This editorial makes a painfully & tragically poor traditional liberal argument for derivatives regulation even though the ultimate goal of regulating all derivatives trades is what is needed. It merely re-hashes the March 29,09 editorial piece. See:http://www.nytimes.com/2009/03/29/opinion/29sun1.html
They conclude by saying:
"Senator Tom Harkin has introduced legislation that would require exchange trading for derivatives. Representative Collin Peterson has introduced a bill that would tighten the regulation of derivatives’ clearinghouses. He acknowledges that his bill is not as strong as he would like but that Congressional politics left him no choice, telling The Times, “The banks run the place.”"
and I say: "duh"
In this specific instance, they fail to see that their is a unity of purpose between derivatives trading institutions and advocates of centralized clearing, and that is the most effective argument to be made in order to effect CENTRALIZED CLEARING OF ALL DERIVATIVES TRADES.
Why set yourself up for a fight against a party where the odds of winning are against you when you can simply & persuasively explain to the other party that it is in their best interest to switch to your side of the argument?
See:http://knol.google.com/k/phil-kongtcheu/the-holistic-theorem/24v2kgtuvzk2v/16
Note also that regulated BICs exchanges on different types of underlyings, by creating exchanges that most efficiently trade instruments that all customized derivatives merely combine would eliminate the loopholes of the proposed legislation
Friday, June 5, 2009
Fair Value Pricing, Government Market Making and PPIP - a knol by Phil Kongtcheu
I have just received notice from Prof. Zia Haqq, Conference Manger that an enhanced version of this paper Fair Value Pricing, Government Market Making and PPIP - a knol by Phil Kongtcheu, which includes the continuation paper http://knol.google.com/k/phil-kongtcheu/estimating-costs-for-ppip-assets-in-a/24v2kgtuvzk2v/4 has been accepted for presentation at the conference "Heterogeneous nations and Globalized Financial Markets: New Challenges" which will be held at Imperial College in London July 9-10,2009. www.worldbizconference.com. I submitted the paper without really thinking too much about it and now I am not sure how I can manage to participate even though I really would like to...
The paper contains a more systematic analysis of the subsidies of the govt plan for investors, as well as the pitfalls of the reasoning systematized under the term "fallacy of expectations based risk management"
The paper contains a more systematic analysis of the subsidies of the govt plan for investors, as well as the pitfalls of the reasoning systematized under the term "fallacy of expectations based risk management"
Tuesday, June 2, 2009
Introduction to Basis Instruments Contracts (BICs) for Mathematics, Finance, and Economics - a knol by Phil Kongtcheu
Introduction to Basis Instruments Contracts (BICs) for Mathematics, Finance, and Economics - a knol by Phil Kongtcheu
I have just received a notice from Ms. Carole Dobson conference manager that this knol "Introduction to Basis Instruments Contracts (BICs) for Mathematics, Finance, and Economics" has been selected for presentation at the "Quantitative Methods in Finance Conference (QMF) 2009" to be held 16-19 December 2009 in Sydney, Australia.
The conference site is at http://www.business.uts.edu.au/qfrc/qmf/index.html
This conference is a leading annual financial mathematics conference and I am pleased to be given this opportunity and really hope to be able to participate.
I have just received a notice from Ms. Carole Dobson conference manager that this knol "Introduction to Basis Instruments Contracts (BICs) for Mathematics, Finance, and Economics" has been selected for presentation at the "Quantitative Methods in Finance Conference (QMF) 2009" to be held 16-19 December 2009 in Sydney, Australia.
The conference site is at http://www.business.uts.edu.au/qfrc/qmf/index.html
This conference is a leading annual financial mathematics conference and I am pleased to be given this opportunity and really hope to be able to participate.
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