Comments on: Don’t Fear the Brain Drain http://www.bearishnews.com/post/310 Tue, 07 Sep 2010 12:41:09 +0000 hourly 1 By: Government Not Allowing Finance to Heal Itself | Reaction Radio http://www.bearishnews.com/post/310/comment-page-1#comment-1249 Government Not Allowing Finance to Heal Itself | Reaction Radio Mon, 26 Oct 2009 10:41:16 +0000 http://www.bearishnews.com/?p=310#comment-1249 [...] Wall Street ‘talent’ leaves?. It looked an awful lot like something I wrote in April, Don’t Fear the Brain Drain. The dozen or so readers I had at the time may remember [...] [...] Wall Street ‘talent’ leaves?. It looked an awful lot like something I wrote in April, Don’t Fear the Brain Drain. The dozen or so readers I had at the time may remember [...]

]]> By: CNN Ripped Me Off http://www.bearishnews.com/post/310/comment-page-1#comment-1243 CNN Ripped Me Off Sat, 24 Oct 2009 18:05:20 +0000 http://www.bearishnews.com/?p=310#comment-1243 [...] Wall Street ‘talent’ leaves?. It looked an awful lot like something I wrote in April, Don’t Fear the Brain Drain. The dozen or so readers I had at the time may remember [...] [...] Wall Street ‘talent’ leaves?. It looked an awful lot like something I wrote in April, Don’t Fear the Brain Drain. The dozen or so readers I had at the time may remember [...]

]]> By: Letting "Too Big to Fail" Banks Fail http://www.bearishnews.com/post/310/comment-page-1#comment-949 Letting "Too Big to Fail" Banks Fail Tue, 22 Sep 2009 04:52:59 +0000 http://www.bearishnews.com/?p=310#comment-949 [...] Bank activity is currently a net-negative in the U.S. Responsible lending, the sort that actually provides value to economies, makes up an increasingly small part of the banking sector. The vast majority of banks’ “financial innovation” has a parasitic effect on the economy: derivatives, selling swaps to naive investors, flash-trading, usury-level CC interest rates, front-running, bonus-madness, etc. Also see Don’t Fear the Brain Drain. [...] [...] Bank activity is currently a net-negative in the U.S. Responsible lending, the sort that actually provides value to economies, makes up an increasingly small part of the banking sector. The vast majority of banks’ “financial innovation” has a parasitic effect on the economy: derivatives, selling swaps to naive investors, flash-trading, usury-level CC interest rates, front-running, bonus-madness, etc. Also see Don’t Fear the Brain Drain. [...]

]]> By: Impact of Share Buybacks on Corporate Balance Sheets http://www.bearishnews.com/post/310/comment-page-1#comment-134 Impact of Share Buybacks on Corporate Balance Sheets Wed, 29 Apr 2009 06:00:11 +0000 http://www.bearishnews.com/?p=310#comment-134 [...] much of the damage from this collapse, they created more than their fair share, in my opinion. See this post for more on that [...] [...] much of the damage from this collapse, they created more than their fair share, in my opinion. See this post for more on that [...]

]]> By: Adam http://www.bearishnews.com/post/310/comment-page-1#comment-106 Adam Wed, 15 Apr 2009 23:07:04 +0000 http://www.bearishnews.com/?p=310#comment-106 Hi Matt, Could you explain more about what Summers has done, specifically, to merit the immense praise he constantly receives? I'm not trying to be a jerk, am honestly curious. What's impressive? His time at Harvard? Any papers that were really impressive? What about his time at DE Shaw impressed you? I'm not saying they're not a great firm, but you have to admit they may have hired him because of his political connections. He might be a genius, but I just haven't seen proof of it yet. That's all. He has a Greenspan-like aura to him, but before Greenspan's bubble popped. I would love to be wrong here, and read a fantastic paper he wrote. But I keep coming back to this statement of his about derivatives: “The parties to these kinds of contracts are largely sophisticated financial institutions that would appear to be eminently capable of protecting themselves from fraud and counterparty insolvencies.” http://www.bearishnews.com/post/271 Hi Matt,

Could you explain more about what Summers has done, specifically, to merit the immense praise he constantly receives? I’m not trying to be a jerk, am honestly curious.

What’s impressive? His time at Harvard? Any papers that were really impressive? What about his time at DE Shaw impressed you? I’m not saying they’re not a great firm, but you have to admit they may have hired him because of his political connections.

He might be a genius, but I just haven’t seen proof of it yet. That’s all. He has a Greenspan-like aura to him, but before Greenspan’s bubble popped.

I would love to be wrong here, and read a fantastic paper he wrote. But I keep coming back to this statement of his about derivatives:

“The parties to these kinds of contracts are largely sophisticated financial institutions that would appear to be eminently capable of protecting themselves from fraud and counterparty insolvencies.”

http://www.bearishnews.com/post/271

]]> By: Matt http://www.bearishnews.com/post/310/comment-page-1#comment-105 Matt Wed, 15 Apr 2009 11:04:29 +0000 http://www.bearishnews.com/?p=310#comment-105 I very much agree with your point about the bloat in finance, and how many people who work in finance don't actually bring much to the table. But it really detracts from your point to mention Larry Summers, an incredibly brilliant guy, and his work at D.E. Shaw, one of the most technical and quantitative hedge funds around. He and the rest of the Shaw employees (including the part-time ones) are pretty much guaranteed to be top notch, and are certainly guaranteed not to be the "useless finance salesmen" type. (They don't even hire MBAs!) I very much agree with your point about the bloat in finance, and how many people who work in finance don’t actually bring much to the table. But it really detracts from your point to mention Larry Summers, an incredibly brilliant guy, and his work at D.E. Shaw, one of the most technical and quantitative hedge funds around. He and the rest of the Shaw employees (including the part-time ones) are pretty much guaranteed to be top notch, and are certainly guaranteed not to be the “useless finance salesmen” type. (They don’t even hire MBAs!)

]]> By: Adam http://www.bearishnews.com/post/310/comment-page-1#comment-103 Adam Wed, 15 Apr 2009 02:56:26 +0000 http://www.bearishnews.com/?p=310#comment-103 By the way, I meant no offense to salespeople. I worked in sales for 4 years, almost all of it doing cold-calls (briefly as a Financial Advisor for American Express Financial Advisors). Anyways, I wasn't trying to compare the morals of salesmen with sketchy bankers. There's nothing wrong with Sales People! Sorry if I even associated them with corrupt bankers. Just wanted express that there's no amazingly priceless talent that these guys possess. They just know how to sell and manipulate, yet they get bailed out because of their wealth and political connections. By the way, I meant no offense to salespeople. I worked in sales for 4 years, almost all of it doing cold-calls (briefly as a Financial Advisor for American Express Financial Advisors).

Anyways, I wasn’t trying to compare the morals of salesmen with sketchy bankers. There’s nothing wrong with Sales People! Sorry if I even associated them with corrupt bankers.

Just wanted express that there’s no amazingly priceless talent that these guys possess. They just know how to sell and manipulate, yet they get bailed out because of their wealth and political connections.

]]> By: Deron http://www.bearishnews.com/post/310/comment-page-1#comment-102 Deron Tue, 14 Apr 2009 22:23:12 +0000 http://www.bearishnews.com/?p=310#comment-102 It's true. Wall Street repeats the following patter. Find a product that works and makes sense. There is nothing wrong with the IPO, the mortgage REIT, the CDS, the CDO, M&A, hedge funds, etc. All have their place, and all had a logical start. Here's where the problems set in. Once discovered Wall Street takes the product or service, packages them, and sells them. Large profits are made generating ruinous competition. The media supplies the hype. Once the products or services have been sold to all logical buyers things don't stop. It's the job of Wall Street to keep supplying past the point of where things makes sense. This can be applied throughout the financial services really, and is best summed up with loans. Once you make all the good loans, then you make all the bad ones. Packaging and selling is what they get paid for, sensible restraint is not a goal. It’s true. Wall Street repeats the following patter. Find a product that works and makes sense. There is nothing wrong with the IPO, the mortgage REIT, the CDS, the CDO, M&A, hedge funds, etc. All have their place, and all had a logical start.

Here’s where the problems set in. Once discovered Wall Street takes the product or service, packages them, and sells them. Large profits are made generating ruinous competition. The media supplies the hype.

Once the products or services have been sold to all logical buyers things don’t stop. It’s the job of Wall Street to keep supplying past the point of where things makes sense. This can be applied throughout the financial services really, and is best summed up with loans. Once you make all the good loans, then you make all the bad ones. Packaging and selling is what they get paid for, sensible restraint is not a goal.

]]>