Lending, Risk, and Corporate Governance

Posted in Blog at 1:24 am

Tuesday, I collaborated in a fascinating conference that almost everyone wrapped up in the current financial crisis ignored. It was the third annual conference on securities lending, sponsored by Finadium (formerly Vodia), a small research house which specializes in lending-related issues. With almost everyone in the securities industry glued to their monitors whether they had anything to do or not, only about 50 attended, rather than the 110 of last year. Which was a pity, because, my own humble Read more [...]


Innovation can be Dangerous for your Health

Posted in Blog at 12:58 am

I'm afraid that, while too little innovation can stultify financial markets and retard economic growth, the present market adventure shows that one can have too much of a good thing. The rocket scientists who have kept coming up with ever-more complex instruments in order to cure the investors' various financial ailments have produced a cocktail of 'cures' which have the result of endangering the life of the patient. Not for nothing does the FDA, the regulator in actual charge of the vital industry Read more [...]


The Dangerous Quest for Security

Posted in Blog at 3:26 pm

Self-preservation instincts are usually a good thing to have. The survival of any species usually depends upon the survival of individuals, which is why we have such instincts in the first place. But occasionally, the instinct actually gets in the way of survival. Panic responses—e.g., thrashing wildly when in fear of drowning—are an obvious case in point. But there are subtler ones. Consider the instinct many have to overeat. Biologically, one is storing up fat as a hedge against Read more [...]


Early Conclusions from the Lehman Bankruptcy

Posted in Blog at 6:30 pm

It is dangerous to draw conclusions before the dust has settled from an event. In fact, it may be dangerous to draw conclusions before the dust has settled for many years upon an event. However, since Investment Initiatives is more useful to its clients if it can help them in the foreseeable future rather than in the distant past, I will hazard that the destruction of Lehman Brothers Holdings has underscored the following eternal verities, and that investors may draw upon them to try to avoid getting Read more [...]