Nov
14
How to Visualize the Financial Crisis
November 14, 2008 | Leave a Comment
Mint.com has created a diagram of the financial sub-prime crisis. Head on over and take a look. As far as I can tell, it's accurate based on the sources I've read so far. I've been trying to explain this to friends, family and co-workers and this chart makes it much easier. I think this recent [...]
Oct
29
Securitization – Good Idea Gone Bad or What Just Happened
October 29, 2008 | 1 Comment
I used to work for a credit card/finance/mortgage company. I always wonders how they got around the capital requirements I learned about in Money and Banking class. Well know I finally understand the big picture. Most of the expansion in the last 20 years has been a result of securitization. What the Heck is Securitization? [...]
Oct
23
Magical Thinking
October 23, 2008 | 3 Comments
Do you blame your problems on somebody else? The sub-prime mess is either Clinton's, Bush's or Congress's fault depending on who you believe. Most of our problems are caused by magical thinking. Magical thinking is 1 + 1 = 3. Magical thinking says giving poor people houses is a good idea. You need to remove [...]
Jul
28
I believe that you should pay of your mortgage early. I did it and I still consider it one of the best things I've done. However, there are a number of people claiming that paying off your mortgage is foolish. Let's debunk some more of these myths. The blog 7million7Years has an article about why [...]
Jul
18
How Uninformed Investors Keep the Stock Market Moving
July 18, 2008 | Leave a Comment
I used to wonder how the stock market works. After all if everyone trading stocks is rational how can so much money be made and lost? However, so many diverse people and organizations own stock that they are always buying and selling and not necessarily for the best reasons. I was having lunch with a [...]
Jun
7
Nassim Nicholas Taleb got rich on a day when many many people went broke. He predicted the sub-prime fiasco and the crash of 1997. He didn't really predict these events, he just predicted some kind of event, a black swan, could happen. The Times Online has a new interview piece with Taleb. An interesting article. [...]
Apr
2
Top 10 Riskiest Real Estate Markets According to Forbes
April 2, 2008 | 1 Comment
Forbes.com has compiled a list of the 10 real estate markets with the most risk. Are you living in one of these areas right now? What makes these areas so risky? Let’s find out. 10. Atlanta, Georgia At number 10 we have Atlanta, GA. "Hotlanta" is not so hot when it comes to real estate. [...]
Mar
12
Financial Derivatives Still Considered Harmful
March 12, 2008 | 1 Comment
In the five years since Warren Buffet’s warning about long term financial derivatives contracts the volume of such derivatives has increase five times from $100 trillion to $516 trillion. This according to BIS via Paul B. Farrell of CBS Marketwatch.com, implies “a massive new derivatives bubble is driving the domestic and global economies, a bubble [...]