Resources
- BNET Author Biography
- Eric Falkenstein is an investment adviser for CapRock Advisers in Minneapolis. He blogs about economics and finance at falkenblog.blogspot.com. He is the author of Finding Alpha, published by Wiley Finance.
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BNET Resources
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- Rubin's Defense of His Position at Citi Suggests He Was Overpaid
- Eric Falkenstein submits: Bob Rubin appears to be a very thoughtful, reasonable guy. As a board member at Citi C, I'm sure he's one of the better ones. But his defense of his role in this crisis seems to be that issues such as leverage, and investing billions of...
- External links 2009-01-12
- Value at Risk: Essential, Yet Also Largely Irrelevant
- Eric Falkenstein submits: I find Value at Risk VaR very useful, mainly so that you know people aren't taking unauthorized bets. If a rogue trader decides to punt on the dollar-yen exchange rate, that will show up, so it is helpful in keeping your traders in line. But it...
- External links 2009-06-11
- Home Buyers: Conspicuously Missing Legislation
- Eric Falkenstein submits: A lot of top-down financial legislation is in arrears, but there is nothing relating to actual home buyers. That is, the quaint 20% down on a home purchase? The income-to-debt levels? In crazy times those things weren't verified, and there were non-profits organizations receiving money from...
- External links 2009-06-25
- Managing Risk and the Importance of Prioritization
- Eric Falkenstein submits: "God grant me the serenity to accept the things I cannot change; courage to change the things I can;and wisdom to know the difference." There is profound wisdom in this statement, because it highlights the importance of prioritization. A mathematician can tell you what is true,...
- External links 2009-06-30
- Goldman Arrest Highlights Problem with IP Law
- Eric Falkenstein submits: Bloomberg reports a computer programmer, Sergey Aleynikov, was arrested July 3 on arriving at the Newark, New Jersey, airport and charged with theft of trade secrets. As someone involved in intellectual property litigation, it brings back nightmares, though I am happy to say I've never been...
- External links 2009-07-06
- Why Goldman Sachs Isn't Evil
- Eric Falkenstein submits: Goldman Sachs GS is one of the most respected private firms in the world. With their astronomical paychecks, and their selective recruitment, they clearly inspire a lot of envy. by Eric Falkenstein
- External links 2009-07-15
- My Problem with Cuomo Going After Ratings Agencies
- Eric Falkenstein submits: Cuomo is suing brokers for selling AAA paper. Attorney General Andrew Cuomo warned that his office plans to sue the largest online brokerage firm for civil fraud over its marketing and sales of auction-rate securities to clients. by Eric Falkenstein
- External links 2009-07-21
- NASDAQ Up Ten Days in a Row - Shocking? Not Really.
- Eric Falkenstein submits: click to enlarge by Eric Falkenstein
- External links 2009-07-22
- Goldman Quant Case Continues
- Eric Falkenstein submits: The Goldman Sachs GS quant case that brought High Frequency Trading into the blogosphere keeps getting interesting. The ex-Goldman quant sure sounds guilty. Why hire a programmer who came to Goldman without financial experience, and worked there only a couple years, for $1.1MM? Whence did he...
- External links 2009-08-27
- Moody's Doomsday Default Scenario Doesn't Play Out
- Eric Falkenstein submits: At the beginning of this year Moody's MCO was taking a lot of heat for missing many financial company blow-ups, as well as the whole Mortgage-backed securities area where the grade AAA was clearly misapplied. So they forecast a scenario where speculative grade BB and B...
- External links 2009-08-31
- Ratings Agencies Lose Free Speech Immunity
- Eric Falkenstein submits: From the WSJ, an important ruling affecting the backlog of lawsuits against Moody's MCO, S&P MHP, and Fitch: U.S. District Judge Shira Scheindlin ruled on Wednesday in a 68-page opinion that the ratings of certain securities -- those that were distributed to a limited number of...
- External links 2009-09-04
- Krugman Puzzled by Housing Asymmetry
- Eric Falkenstein submits: Paul Krugman asks: why, say, a housing boom — which requires shifting resources into housing — doesn’t produce the same kind of unemployment as a housing bust that shifts resources out of housing. by Eric Falkenstein
- External links 2009-10-06
- Bloomberg Magazine's Market Bias
- Eric Falkenstein submits: In the latest Bloomberg Markets Magazine, the cover story is on Research Renegages. As usual, they highlight some individual performers who very recently made very good calls. For example, Dana Telsey had a buy on J. Crew JCG in January, and by September 14 it was...
- External links 2009-10-12
- McDonald's vs. Burger King - The Alpha Hamburger
- Eric Falkenstein submits: I would estimate 90% of all alpha is misrepresented. Anyone in charge of a business line making money is usually too embarrassed by the straightforward nature of their advantage to admit it, so they have to point out some nuance that makes absolutely no difference. Thus,...
- External links 2009-10-27
- RiskMetrics' Going Corporate Is a Sad Affair
- Eric Falkenstein submits: I always have admired RiskMetrics RMG, because they offer straightforward advice about how to measure risk. My career as a risk manager started as an attempt to implement the then-new (1994) RiskMetrics Value-at-Risk methodology to the KeyCorp (KEY( trading operations. Sure, for any nuanced strategy, they...
- External links 2009-11-06
- In Defense of Efficient Markets
- Justin, let me first note that in your book, which I very much enjoyed, you make many gracious acknowledgements to the efficient markets hypothesis EMH, such as the basic implication that it is very, very difficult to outperform the market. To outperform the market is incredibly hard, as evidenced by...
- Blog posts 2009-08-04
- Why Most Market Regulation is Useless And/Or Harmful
- Justin, I think your half-way position represents conventional wisdom on financial regulation: we should do more, but no specific solution is obvious. You are setting yourself up to serve evil! As George Will writes, most regulation is championed by a confluence of Baptists and bootleggers, the first group with high...
- Blog posts 2009-08-06
- A Better Corporate Credit Risk Model Still Not in Sight
- Eric Falkenstein submits: Wired Magazine had an article about some internet geeks and I mean that as a compliment who are trying to set up a better way of measuring corporate credit risk. All well and fine. Their site, freerisk.org, is trying to set up a site where people...
- External links 2009-06-08
- Roubini on Risk Management - And Why I Disagree
- Eric Falkenstein submits: Nouriel Roubini called the recent crisis, and for this his status as a prognosticator has elevated. But his call has been perennial, and the driver anything and everything. In Tuesday's Wall Street Journal, Roubini outlines how he would address the crisis, and he outlines regulations he...
- External links 2009-05-05
- GM Shorts Pay 50% Annual Rate
- Eric Falkenstein submits: Say you short General Motors GM. You are selling it. You get the price in dollars in exchange for the stock you sold, currently about $4.00. Until you buy it back you get interest on that money, usually, Libor - 50 bps or something, currently about...
- External links 2009-01-13
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