A History of Interest Rates
If interest rates matter to you, and you have an inquiring mind, pick up a copy of Sydney Homer's A History of Interest Rates. (The latest editions were co-authored with Richard Sylla and include more …
Federal Debt Crisis in the United States?
Does the federal government’s huge debt burden threaten an American debt crisis? This is the second post in a series of three about the damage that might be done by our federal budget deficit and …
Goldman Sachs, Synthetic CDOs, and … Fraud?
The Goldman Sachs fraud charges certainly make the company look sleazy, but one key fact seems not to be discussed too much: the securities involved were synthetic CDOs, and I think that makes a big …
Lessons of the Financial Crisis from Bill Dudley
I recommend a recent speech by my old classmate Bill Dudley, now president of the Federal Reserve Bank of New York: More Lessons from the Crisis. The reading is a little … assumptive of some …
Securitization and Economic Incentive to Foreclose or Modify
My blog post with an explanation of securitization has been very popular for over a year now. The website ProPublica has the same concept with a different slant (hat tip to the Big Picture). …
Answers to 401k Questions
Over at abcInvesting.com, I've posted answers to common questions about 401k plans.
Efficient Markets Hypothesis: Does the Theory Survive This Crisis?
The efficient markets hypothesis, the bedrock of modern finance, is under attack due to — get this — irrational behavior. Believe it or not, it appears that some market participants behaved irrationally. So where does …
401k Investment Education
In my spare time I've been working on a start-up business in investment education, initially focusing on helping employees learn about their 401k plans. Our new website is now up and running: www.abcInvesting.com. (Some features …
How to Trust Your Investment Advisor
With the current news about Ponzi schemes and crooked investment managers, people are asking me how they can avoid being Bernie Madoff'ed. I've been in the investment management business (but no more), and I've read …
How the Stock Market Gives Gains
This week the market (as measured by the S&P 500) rose 10 percent. Ten percent is a decent gain for an entire year. (Yes, I know that we have some losses to make up, but …
Credit Default Swaps: A Simple Explanation of CDS
The Wall Street Journal today has an interesting story about how AIG got into hot water by writing a lot of credit default swaps. So I thought it was a good time for a simple …
Maximum Pessimism and the Stock Market Outlook
The great investor John Templeton wrote: "Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the …