Posts Tagged ‘Long Term Capital Management’
Posted by Larry Doyle on April 28th, 2012 9:17 AM |
This commentary is a little lengthy but a great and absolute MUST READ!! LD
Who really runs America?
The media may actively and aggressively debate the pandering provided by those on both ends of the political spectrum. But to whom do these pols really answer? The American public? I do not think so.
The Washington establishment strikes me as little more than puppets played by the one controlling the money. Who might that be? The all powerful and, all assertions to the contrary, perpetually opaque Federal Reserve.
Let’s navigate deep into the chambers of the New York Federal Reserve. (more…)
Tags: Alan Greenspan, Ben Bernanke, ceteris paribus, Federal reserve history, Federal Reserve policy, fractional reserve system, Friedrich Hayek, history of the Fed, history of the federal reserve, Long Term Capital Management, modern industrial economy, Modigliani, Modigliani and Sutch, Murray Rothbard, My Speech at the New York Federal Reserve, operation twist, Robert Wenzel, Robert Wenzel's speech at the New York Federal Reserve, Ron Paul sound money policy, speech by Robert Wenzel, success of federal reserve policy, The all powerful Federal Reserve, Wenzel on economy and monetary policy, Wenzel on Ludwig von Mises, Wenzel speech, who really runs America
Posted in Federal Reserve, General | 5 Comments »
Posted by Larry Doyle on October 29th, 2009 12:33 PM |
I am humbled when other outlets ask for my opinion and thoughts on financial topics. To that end, I have provided a few guest commentaries for UK-based eFinancial Careers.
On the heels of writing “Fatal Character Flaws Bring Down Wall Street Titans”, a representative of eFinancial Careers asked me to further expound on this topic. I welcomed the opportunity and wrote this guest commentary:
How is it that an individual with untold hundreds of millions of dollars in wealth could put himself in a position of risking it all?
Welcome to the world of Raj Rajaratnam, the owner of the hedge fund Galleon and the major kingpin arrested in the most recent insider trading scandal to rock Wall Street.
Why would Rajaratnam take such professional risks? (more…)
Tags: Bear Stearns, career planning, career planning material, eFinancial Careers, get a mentor, Long Term Capital Management, LTCM, mentoring, monetary vs personal, need for mentors, professional career development, who vs how much
Posted in General | 1 Comment »
Posted by Larry Doyle on October 27th, 2009 9:50 AM |
Are emerging markets now the teacher instead of the student? As such, are recent developments in select emerging markets signaling a turn in our markets? Let’s look closer and navigate this corner of our global economic landscape.
Recall that the global market turmoil of 1998 was precipitated by the devaluation of the Russian ruble. As that domino fell, global markets and economies reacted violently. Here in the United States, the meltdown in the broad market caused the failure of the hedge fund Long Term Capital Management. In hindsight, many believe the Fed-orchestrated takeover of LTCM by Wall Street banks set the table for the massive increase in leverage on Wall Street which led to the current crisis. However, what were the lessons learned in the emerging markets from the 1998 crisis?
Many emerging markets were effectively forced to take support from the IMF as a result of the 1998 economic meltdown. The IMF support came with many strings attached. Those strings were tied to strict controls and onerous burdens imposed on many emerging market governments. Having been forced to live under these burdens once, these governments do not want a visit from the IMF again. As such, they have done a much better job at getting their fiscal houses in order and keeping them in order. Many other governments primarily in the Western hemisphere, including the United States, should have done the same.
How is this playing out currently? (more…)
Tags: 1998 crisis, capital flows, emerging markets, flow of capital, governmetn support in developed economies, Governor Duvvuri Subbarao, IMF, India, india CentraL bank Begins Exit From Monetary Stimulus, inflation in emerging economies, International Monetary Fund, Long Term Capital Management, love of family, love of nation, LTCM, monetary stimulus, Reserve Bank of India, Russian ruble devaluation 1998, sacrifice, thrift, Wall Street, will Norway raise rates, withdrawing monetary stimulus in India
Posted in emerging market economies, General, International Monetary Fund | 1 Comment »
Posted by Larry Doyle on October 20th, 2009 8:49 AM |
Raj Rajaratnam
How is it that an individual with untold hundreds of millions of dollars in wealth could put himself in a position of risking it all?
Welcome to the world of Raj Rajaratnam, the owner of the hedge fund Galleon and the major kingpin arrested in the most recent insider trading scandal to rock Wall Street.
Who is Raj Rajaratnam and why would he take such professional risks? We learn about Rajaratnam from a London based financial site, Here Is The City:
He was born in Sri Lanka, attended S. Thomas’ Preparatory School, Kollupitiya, then moved to England to complete his schooling, and studied engineering at the University of Sussex. Rajaratnam earned an MBA from Wharton in 1983. He is married with three children.
Rajaratnam, a Tamil self-made billionaire hedge fund manager, is the 236th richest American according to Forbes (2009), with an estimated net worth of $1.8 billion.
The hedge fund manager started his career as an analyst at the investment banking boutique Needham & Co., where his focus was on electronics. In 1991, he became the President of the bank at the age of 34. At the company’s behest, he started a hedge fund, Needham Emerging Growth Partnership in March 1992, which he later bought and renamed ‘Galleon’.
Initially invested in technology stocks and healthcare companies, he says his best ideas come from frequent visits with companies and conversations with executives who invest in his fund.
He has made more than $20 million in charitable donations in the last five years. In September 2009, Rajaratnam pledged to donate $1m to help the Sri Lankan government with the rehabilitation of former LTTE combatants. He has also donated generously to clear land mines in the war-affected areas in Sri Lanka, and was also a contributor to various causes that promoted development in the Indian subcontinent and programs that benefited lower income South Asian youth in the New York area. (more…)
Tags: background of raj rajaratnam, Bear Stearns, character flaws of successful wealthy people, Galleon, insider trading on Wall Street, Long Term Capital Management, LTCM, masters of the universe, money, Needham and Co., professional risk, Raj Rajaratnam, Risk, Wall Street hedge funds, wealth, who is raj rajaratnam
Posted in General, Hedge Funds, insider trading, Wall Street | No Comments »
Posted by Larry Doyle on March 18th, 2009 3:50 PM |
A precursor to the turmoil roiling our economy and markets today occurred on a smaller, but certainly very dramatic, scale in 1998. The meltdown of the hedge fund Long Term Capital Management brought the market to its knees at the time. LTCM was effectively taken over by a consortium of Wall Street banks at the behest of New York Federal Reserve Chairman, William McDonough. The firms injected approximately $3 billion dollars in order to stabilize LTCM and then unwound it in an orderly fashion.
The lessons learned in the LTCM crisis were obviously not learned well enough because we are experiencing them again a multiple hundred fold. The centerpiece of our current fiasco is AIG (known here at Sense on Cents as “Ain’t It Great”).
The dramatic story of Long Term Capital Management is captured in a book I strongly recommend for anybody interested in the history of the financial markets. When Genius Failed, by Roger Lowenstein, is a great read and truly captures the intrigue, egos, and tension of that period. As the current turmoil unwinds I look forward to the books published on this period as well. (more…)
Tags: AIG, Goldman Sachs, Long Term Capital Management, quantitative trading, sub-prime mortgages, Wall Street Banks, When Genius Failed, William McDonough
Posted in American Consumers, Commerce, Credit Risk, Current Affairs, Economic Stimulus, Economy, Employment, Equity Markets, Hedge Funds, Risk, Wall Street | 9 Comments »
Posted by Larry Doyle on December 21st, 2008 4:56 PM |
There remain no shortage of developments in the economy, the markets, and on “the street.” While I could continue to write at length on a number of those topics, I think it is healthy to take a weekend break from the regular hustle and bustle. With a break in the show, perhaps we can take a walk backstage and I can share with you some insights into Wall St. that occurred back in the ’90s but didn’t fully play out until 2008.
Please allow me to set the stage. I joined First Boston (now Credit Suisse) in 1983. I was very fortunate to gain employment at First Boston (FOB) as it was one of, if not, the hottest shops on the Street at the time. FOB was very much a traditional “white shoe” sort of firm. Propriety was important in executing business, although I am sure there were some sort of improprieties that occurred behind the scenes. I was too young to get dragged into anything that pushed the envelope. Although the head of HR threatened to fire me 6 weeks into my tenure (I think she was just trying to scare me), for the most part my 7 year career there was wonderful. I learned the business and developed many great relationships.
I was recruited to join Bear Stearns by an individual for whom I worked with for almost 15 years. I was very hesitant to go to Bear Stearns because it always had a reputation for being an extremely aggressive firm in every regard. That said, the person recruiting me was the most principled individual with whom I ever worked on Wall St. and he and I continue to have a very close relationship. I felt that I was working as much for him, if not even more, than I was working for Bear. I admired and respected his values and integrity. (more…)
Tags: Bear Stearns and AR Baron, Bear Stearns emphasis on profit vs reputation, Bear Stearns reputation, collapse of Bear Stearns, counter-party risk, Credit Risk, Henry Paulson directs Bear to JPM, Jamie Dimon, JP Morgan takeover of Bear Stearns, Larry Doyle career, Larry Doyle experience at Bear Stearns, Long Term Capital Management, LTCM, market risk, prepayment risk, reputation risk
Posted in Banking Institutions, Reputation, Risk, Wall Street | 2 Comments »
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