Current thinking in capital finance - Capco

Capco, a global provider of integrated consulting, technology, and transformation services to the financial services industry, publishes several journals of academic research in the capital markets. In the current issue of its Journal, there are several provocative papers that bear mentioning. These are available as PDF downloads:

 

The future of structured credit, what comes after the credit crunch

Frédérik Arns, Consultant, Capco
Gabriel Schild, Managing Principal, Capco

 

The myth of financial supermarket or why Citi's business model has not and will not work

Kosrow Dehnad, Adjunct Professor of Operational Research and Financial Engineering, Columbia University, and Head of Quantitative Trading, Samba Financial Group

 

Greed, deception, and willing ignorance the anatomy of the asset-backed commercial paper crisis

Edwin H. Neave, Professor Emeritus, Queen’s School of Business
Lewis D. Johnson, Professor of Finance, Queen’s School of Business

American News Project Report: Relief for foreclosed homeowners is slow to arrive

 

ANP Correspondent Garland McLaurin reports on how the bailout of the financial system has provided little relief for homeowners and communities facing foreclosures, while funnelling billions to banks and financial institutions -- who, we might add, have used much of that money to pay executive bonuses and shareholder dividends.

American News Project: Bank Eat Bank: Bailout Encourages Mergers

http://www.americannewsproject.com/videos/181

By Danielle Ivory Lagan Sebert on Nov 21, 2008

With newfound bailout money in their wallets, big banks have been rushing to gobble up smaller ones. At the center of these mergers is the Treasury Department, led by Goldman Sachs alums Henry Paulson and Neel Kashkari. While neglecting struggling homeowners they have created major incentives for widespread bank consolidation, which could lead to a host of new problems. And, as members of Congress recently noted, Treasury officials seem to be making the rules up as they go.

Keywords: bailout, bank of america, Barney Frank, citibank, consolidation, dodd, Economic crisis, Foreclosure, Goldman Sachs, Issa, jp morgan, Kashkari, Kucinich, LaTourette, national city bank, Paulson, pnc, tarp, treasury, United States, wachovia, wells fargo

Technorati Tags: bailout,bank of america,Barney Frank,citibank,consolidation,dodd,Economic crisis,Foreclosure,Goldman Sachs,Issa,jp morgan,Kashkari,Kucinich,LaTourette,national city bank,Paulson,pnc,tarp,treasury,United States,wachovia,wells fargo

 

del.icio.us Tags: bailout,bank of america,Barney Frank,citibank,consolidation,dodd,Economic crisis,Foreclosure,Goldman Sachs,Issa,jp morgan,Kashkari,Kucinich,LaTourette,national city bank,Paulson,pnc,tarp,treasury,United States,wachovia,wells fargo

Mr. Pandit, a question if you please?

Dear Mr. Pandit,

Just wondering if we can make a trade and call things even. You and your predecessors at Citi have very nicely destroyed the entire value of my 2000 retirement fund investment in Citi stock. An equity that was $50 a share when I purchased it is hovering near zero. At this point, US Airways sells for more than Citi, and we all know how great their product is, right?

Here's my idea. How about you forgive the entire balance I owe Citibank for student loans for kids and credit cards, and I'll call it even on the loss of the ability to retire on my Citibank investment.

What do you think, Vikram? Can I call you Vikram?

'Now on PBS' Looks at Rating Agencies

Be sure to check out this episode of "Now on PBS," called Credit and Credibility. It features interviews with Frank Raiter, former managing director at Standard & Poor's, discussing his congressional testimony (Raiter is second from left in green jacket leaning forward) about pressures on rating agency analysts, and for the first time, with former S&P Managing Director Richard "Guido" Gugliada, who wrote an email to Raiter that was displayed as evidence of the financial pressures being put on analysts.

You can view the program online or download an audio podcast on the Now site.

Getting caught up...

Lots going on in the ratings industry and the financial markets in general. That's an understatement, isn't it?

So we decided to ramp up this blog and podcast yet again, and see if we can get any traction out of it. I spent more than a few years in the ratings business, seeing it grow first-hand. Somewhere along the way, the agencies sort of lost their way. Too much worry about leaving money on the table led to some whoppers in the mistake pile.

So the gloves come off. I never liked wearing gloves anyway.

Tom Brakke of TJB Research offers "agents of record," reporting on the rating agency bashing at a recent CFA Institute conference.

What else are you hearing about the rating agencies? Good for the markets, evil influence, or what?

Well, the tux was already rented and the tickets already purchased...

Pay close attention to photo #33 on http://www.nytimes.com/imagepages/2008/11/07/fashion/09evening.ready.html. Isn't that Richard Fuld, lately chairman of the defunct Lehman Brothers, enjoying a night out on the town at the New York Public Library's Young Lions dinner?

Wonder how the unemployed former Lehman associates feel about worrying where the next meal comes from while their former boss is out in tux eating fine food?

What is wrong with these people who think they don't have responsibility for anything they have done?

First Amendment Rights? That only applies to rating agencies, according to McGraw-Hill-owned rating agency's communications department

You'll notice that our rather innocuous item below about a new alumni networking group formed for present and former employees of [rating agency owned by The McGraw-Hill Companies] has been updated.

I received a call today from Ed Sweeney at [rating agency owned by The McGraw-Hill Companies] requesting that I remove the logo of [rating agency owned by The McGraw-Hill Companies] from the posting. When I asked why, he said there were "intellectual property issues."

Look, I don't have time to go to legal war with the world's largest rating agency -- even though they have laid off several highly ranked lawyers at the managing director level. The firm's name and image apparently are not considered fair game for bloggers to mention. So I took down the logo and crossed out their name in the blog post.

But let's talk about this.

Rating agencies had to testify before Congress about their role in this sordid subprime mess, and they protest that hide behind the idea their ratings are really just "opinions" protected under the First Amendment.

So can someone tell me, does the First Amendment not apply to blogging now?

If their protected speech in the form of ratings can help the investment banks bring on the subprime debacle and lead to the collapse of Bear Sterns, Lehman, and the sale of Merrill, why can't bloggers report on factual news about them and use their logo to illustrate the story?

Why don't they want their name connected with a group of people who want to network with their friends and former colleagues?

There are so many people being tossed under the bus at the big three rating agencies right now, networking ought to be an automatic thing that the companies offer the employees they are laying off. Why are they afraid of having their logo associated with people who actually were proud to say they worked there?

Come on, what do you think? Let's have the conversation now!