Ragu Rajan is a very well respected finance professor at the University of Chicago. He recently wrote a book called "Fault Lines" which details his views on what caused the financial crisis.
In this article he rebuffs many of the criticisms levied against his analysis by Paul Krugman. (Krugman won the Nobel prize for economics in 2008).
Rajan argues that the financial crisis can be attributed to a range of factors coming together to create almost a perfect storm. Not least of which was the encouragement of subprime lending by Fannie and Freddie.
Overall, this is a great read.
Thursday, September 16, 2010
Cash for clunkers...
Reposted from my colleague, Steve Allen's blog.
Cash for clunkers was a dud.
That is unless you were one of the folks who actually traded in a clunker. In that case you got a nice chunk of cash off a car you were probably going to buy anyway.
From the U.S. tax payers: You're welcome.
Cash for clunkers was a dud.
That is unless you were one of the folks who actually traded in a clunker. In that case you got a nice chunk of cash off a car you were probably going to buy anyway.
From the U.S. tax payers: You're welcome.
Wednesday, September 15, 2010
Flash Crash
Fama and French opine on whether high frequency trading caused the flash crash of May 6, 2010.
Stockmapper
From Craig Newmark's blog, Newmark's door, here is a really nice stock market heat map that can be be sorted. Lots of fun to play with, although if you are an indexed like me, it has limited practical use!
Tuesday, September 7, 2010
11 years of a flat market
I was putting together a few numbers for my investments class and in my lecture notes I came across the often quoted figure of 10% as the long term return for large stocks. This figure is based on a very long time period that includes many bull and bear markets. However, the past 11 years have been pretty much flat as far as price growth goes (I'm ignoring dividends). Take a look at this sobering graph which I grabbed from google finance.
In April 1999, the Dow was at about 10,000 which is roughly where it is today.
In April 1999, the Dow was at about 10,000 which is roughly where it is today.
Thursday, September 2, 2010
GM IPO road show to start after the Nov election...
Surprise, surprise, the GM IPO roadshow will commence after the Nov election. A road show is when the investment bankers try to basically pre-sell the IPO to institutional clients. It is an important process that enables the bank to gauge demand for the offering and also provides information for pricing.
Tuesday, August 31, 2010
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