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A failure of all offices

September 19, 2011

UBS releases further details about their rogue trader, but fail to describe how the fraud was possible.

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Too big to care

September 15, 2011

The revelation that yet another rogue trader has been pulling the levers at a major bank, this time costing UBS $2 billion, makes me wonder about all the rogue traders we're not hearing about -- the ones who aren't big, stupid or aggressive enough to get caught. It raises serious concerns about the level of risk […]

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More on the crash

May 11, 2010

The Big Picture provides an excellent review of the crash-that-must-not-be-named which echoes my thoughts from this weekend: Do you notice how we’re unwittingly restricting our analysis to what the sellers did? The offer side of the trading that saw the S&P 500 lose -5% of its value in the span of about 3 minutes – that […]

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On crashes, briefly

May 9, 2010

Congress will be looking into Thursday's stock market plunge, with the likely outcome that we are forced to admit that we didn't actually learn much from twenty years ago (1987) or two years ago (2008). In all three cases, sudden selling was aggravated by algorithmic trading of one form or another. In only one (2008) […]

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I have the hammer

February 26, 2010

Apologies for the slow posts... but the NYT explains: Wall Street trading is often described as a blood sport. But inside the great investment houses, the sport of the moment is, of all things, curling — that oddball of the Olympics that is sort of like shuffleboard on ice. This slow-poke game, which originated in 16th-century […]

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Another day, another article demonizing CDS

November 28, 2009

Bloomberg has a new article up about how the CDS market is starting to crumble - the sort of piece that looks like it's been sitting on a back burner waiting for an excuse to stoke the flames of derivative fear (thanks, Dubai!). One of the article's chief arguments is that "credit-default swaps tied to Thomson […]

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Stock is more efficient than options are more efficient than stock

November 18, 2009

Investment decisions can hinge on how risk and exposure are defined. Here, the choice determines whether an insider should trade in stock or options.

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More derivative witch hunts

November 17, 2009

Going through the FT's original post on exchange traded currency notes, I saw a couple of sentences that really bothered me. One thing we do not need right now are witch hunt statements without basis (a point especially compounded by the fact that the FT completely misunderstood how these products worked, even as they wrote […]

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Because no one knows commodities like we do

September 22, 2009

Why did a post up titled "How To Play Natural Gas With Small Cap Stocks" pop up in Silicon Alley Insider's RSS feed? A little investigating (elementary, my dear Watson) shows that it's actually from The Money Game - another blog under the Business Insider umbrella. The blogs themselves and current RSS feeds show no […]

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CDS Markets, briefly (or not so briefly)

July 15, 2009

In response to Daniel Indiviglio's call for "someone who understands the derivatives market," I posted the following comment on the Atlantic Business blog - and I reprint it here not just because it turned out a surprisingly complete thought, but because I'm a glutton for blogging laziness: The CDS market works similarly to any other […]

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Trading Twitter

June 24, 2009

Bubble 2.0 datapoint of the day: StreamBase has announced that their CEP (complex event processing) software for algorithmic trading now supports Twitter. One CIO admits in an otherwise Hallelujah-esque article that "traders he has spoken to haven't yet jumped onto the Twitter bandwagon." But here's the clincher (emphasis mine): A key benefit of Twitter is […]

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Yet more reverse convertibles: positive sum games?

June 19, 2009

Did Felix Salmon really just write this in defense of his reverse convertibles stance?? For one thing, stocks generally go up over time: they’re a positive-sum game. ... Retail investors, as a rule, have no business buying instruments with limited upside but 100% downside — I’d even include individual bonds in that, despite the fact that […]

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Explaining MTM

April 17, 2009

I really enjoyed a new post from Rortybomb that includes a great distillation of the mark to market debate: So in the early 1990s, when I was in Junior High, there was a craze about collecting and trading baseball cards. Our classroom would have a corner during lunch where we’d all compare, with our binders […]

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Tragedy in AAPLville

January 14, 2009

This tragic story popped up in red all over my Bloomberg news feeds this afternoon: 16:35 *APPLE SHARES ARE HALTED BY NASD PENDING NEWS           :AAPL US 16:36 *APPLE SAYS JOBS TO TAKE MEDICAL LEAVE UNTIL END OF JUNE 16:36 *APPLE'S JOBS SAYS TIM COOK TO BE RESPONSIBLE FOR DAY TO […]

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