< The Finance Professionals' Post: November 2012

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10 posts from November 2012

11/28/2012

Will Sandy Trigger Our Great Transformation?

We are now a couple of weeks into the aftermath of Super Storm Sandy, and no one has yet improved upon the analysis of Bloomberg Businessweek’s November 1 cover story: “It’s Global Warming, STUPID.”

In 1944, the famous political economist Karl Polanyi explained the root cause of WW II when he wrote in The Great Transformation, “The true nature of the international (economic) system under which we were living was not realized until it failed.” Similarly, mainstream economists and finance theorists still do not get the vital interconnection between the true nature of the (economic) system under which we are living, and healthy ecosystem function. What will it take?

Continue reading "Will Sandy Trigger Our Great Transformation? " »

11/26/2012

If You Want a Post-bonus Job in 2013, Network with These Four Groups before Christmas

EfinancialCareers

As the year draws to a close—with most banks sewing up the loose ends of deals, and budget and headcount numbers getting confirmed—the weeks until mid-December are an opportune “down time” to plan your career.

If you are thinking about moving after bonus payouts in Q1, it is wise to position yourself now and to be in touch with the right people (the overall mood is more relaxed and festive). Here are the main groups you should network with:

Continue reading "If You Want a Post-bonus Job in 2013, Network with These Four Groups before Christmas" »

11/21/2012

Book Review: The Crisis of Crowding

The-crisis-of-crowding

One of the most striking and important books on investing and risk management appears to be something it is not. Upon first glance of The Crisis of Crowding: Quant Copycats, Ugly Models, and the New Crash Normal (Bloomberg) (and not being acquainted with Prof. Ludwig Chincarini’s work), I wondered how a bunch of paper flowers on the wall was related to investing. After closer examination, I quickly learned that these were not paper flowers, but a pile of darts all stacked together on the dart board. At that point, I realized that Prof. Chincarini’s book would be essential reading for me. I wanted to learn how investors would pile into—and out of—the next big thing after the mortgage securities debacle of 2008. This informative narrative was an investigative and methodical look into major financial crises and the demise of Wall Street.

Continue reading "Book Review: The Crisis of Crowding" »

11/19/2012

No Security in Book Value

Limericks Économiques

Said a banker: "The Crisis revealed,
In investments we carried for yield,
How extreme fluctuations Affect valuations,
So better to keep them concealed."

Said investors: "It's better to trust
In the price you could fetch if you must,
And the equity value
Which, hopefully, now you'll,
Accordingly, have to adjust."

Continue reading "No Security in Book Value" »

11/15/2012

A Proposal for the Resolution of Systemically Important Assets and Liabilities: The Case of the Repo Market

ABSTRACT1

One of the several regulatory failures behind the global financial crisis that started in 2007 has been the regulatory focus on individual, rather than systemic, risk of financial institutions. Focusing on systemically important assets and liabilities (SIALs) rather than individual financial institutions, we propose a set of resolution mechanisms, which is not only capable of inducing market discipline and mitigating moral hazard, but also capable of addressing the associated systemic risk, for instance, due to the risk of fire sales of collateral assets. Furthermore, because of our focus on SIALs, our proposed resolution mechanisms would be easier to implement at the global level compared to mechanisms that operate at the level of individual institutional forms. We, then, outline how our approach can be specialized to the repo market and propose a repo resolution authority for reforming this market.

Continue reading "A Proposal for the Resolution of Systemically Important Assets and Liabilities: The Case of the Repo Market" »

11/14/2012

Three Questions with Gregg L. Nelson

With the Securities and Exchange Commission’s (SEC) decision on the possible incorporation of International Financial Reporting Standards (IFRS) into the US system still outstanding, many are wondering about the implications for their work and organizations.

Gregg L. Nelson, vice president of accounting policy and financial reporting for IBM Corporation, shares his thoughts on this important matter. He also explains how accounting and finance professionals might benefit from attending the 18th Annual NYSSA International Financial Reporting Conference & Workshops from Jan. 8-10, 2013 in New York City.

Gregg is one of a number of prestigious speakers who will be sharing their expertise at this important conference, which is presented by IASeminars and the New York Society of Security Analysts (NYSSA). Other conference speakers include senior representatives from the International Accounting Standards Board (IASB), Financial Accounting Standards Board (FASB), SEC, Public Company Accounting Oversight Board (PCAOB), etc.

Continue reading "Three Questions with Gregg L. Nelson" »

11/13/2012

Recent Research: Highlights from November 2012

"The Volume Clock: Insights into the High-Frequency Paradigm"
The Journal of Portfolio Management (Fall 2012)
David Easley, Marcos M. Lopez de Prado, and Maureen O’Hara

Over the last two centuries, technological advantages have allowed some traders to be faster than others. In this article, the authors argue that contrary to popular perception, speed is not the defining characteristic that sets high-frequency trading (HFT) apart. HFT is the natural evolution of a new trading paradigm that is characterized by strategic decisions made in a volume-clock metric. Even if the speed advantage disappears, HFT will evolve to continue exploiting structural weaknesses of low-frequency trading (LFT). LFT practitioners are not defenseless against HFT players, however, and this article offers options that can help them survive and adapt to this new environment.

Continue reading "Recent Research: Highlights from November 2012" »

11/12/2012

What Do Hiring Managers Want?

You’ve been invited to interview for a job. Congratulations! Take a moment to savor this small victory. No matter how well the stock market indices have come up from their crisis lows, it’s still a challenging job in itself to find a good job on Wall Street. In this article I am going to ask that you put aside the jobseeking mindset and concentrate on the interviewer’s perspective. We are going to examine what an interviewer needs (to feel) from you before extending you a job offer.

Continue reading "What Do Hiring Managers Want?" »

11/07/2012

Approaching a Recruiter after Being Out of Work for a Year

EfinancialCareers

You’ve been out of the market for over a year. How do you present yourself to a headhunter, or for that matter, a potential employer?

Continue reading "Approaching a Recruiter after Being Out of Work for a Year" »

11/05/2012

Investment Beliefs

What are your investment beliefs?

Such a simple question—and so hard for most market participants to answer. Go ahead, take a shot at making a list of your beliefs and see what you end up with.

Continue reading "Investment Beliefs" »

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