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Tag Archives: Volcker Rule

Tumor is still in the system – Nassim Nicholas Taleb part 1 & 2

Wednesday, June 2, 2010

I was a trader for 21 years, and anyone taking markets seriously needs to consider the following… You remember the day when Kervial was liquidated? The SocGen rogue trader… ‘the hero’ in France. They sold $50 billion dollars worth of stock. How much did capitalization drop world-wide, based on that? Markets went down 12 percent! With a $50 billion order, you drop markets by 12%. We lost 7, 8 Trillion. A huge amount. So it tells you, don’t pay attention to stock markets. They’re driven by the marginal buyer. It means nothing. Short term markets mean nothing.

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The Big Short – Michael Lewis – On Wall St. Reform

Saturday, May 1, 2010

And a third thing- it’s very obvious, so obvious you can’t believe it hasn’t happened is- Why on earth are the ratings agencies- Moody’s and Standard and Poor- paid by the people whose bonds they are rating? It’s inevitably going to lead to problems because they’re incentivized to please the people that pay them.

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