Category Archives: Science

Think Different, about finance

Two years ago, I switched. And, to better understand my sleek, shiny, beautiful new gadget, I found myself spending more and more time at the Fifth Avenue Apple Store. I discovered Apple was attracting – employing – young people from all walks of life (even Wall Street dropouts) who wanted to share their knowledge with ... Read more

Also posted in Ann Rutledge, Credit Spectrum, Digital Media, Financial Education, Reform, Social Media | Tagged , , , | 1 Comment

“This isn’t right. It isn’t even wrong.” – Wolfgang Pauli

Wolfgang Pauli is the source of this excellent quip. More famously, he is responsible for the Pauli exclusion principle, which asserts that no two electrons can exist in the same quantum state. Were he alive today, maybe Dr. Pauli could help us straighten ourselves out of the financial system crisis by demanding the same high ... Read more

Also posted in Ann Rutledge, Reform | Leave a comment

NY Times: Rutledge’s Warning on Stale Credit Ratings

R&R Consulting’s Ann Rutledge comments on the importance of updating structured security ratings — a service provided by R&R’s patented ABSTRAK technology — in “When Bond Ratings Get Stale” by Gretchen Morgenson, The New York Times, October 10, 2009.

Also posted in Ann Rutledge, CRAs, Cybernetics, Financial Engineering, Risk Measurement, Risk/Value, Valuation | Tagged , | Leave a comment

Shadow Banking System Needs Stick, Not Carrot: Rutledge on Bloomberg

Bloomberg commentator David Reilly quotes R&R’s Ann Rutledge on the next target for regulators in mending the financial crisis: the “shadow banking system” of non-bank lending markets. Rutledge calls for “an exchange-like setting to provide the sort of standardization and rules that help trading of stocks and options,” and operational revamps to produce more accurate ... Read more

Also posted in Ann Rutledge, Consequences, Cybernetics, Financial System, R&R, Reform, Structured Finance/Securitization | Leave a comment

Rethinking Our Inheritance

Recently the Financial Economists Roundtable (FER) posted a summary of their thinking in July 2008 on Reforming the Role of Statistical Rating Organizations [SROs] in the Securitization Process. The FER is a group of senior financial economists who advance the study of finance and frame current policy debates. I read their statement in the Dec. ... Read more

Also posted in Ann Rutledge, CRAs, Financial Education, Sylvain Raynes, Valuation | Tagged , , , | Leave a comment

The Answer is the Question, the Question of the Deal

My recent post on the sorry state of financial engineering seems to have touched a raw nerve in the FE community.I will not attempt to respond to anonymous comments since the US Constitution gives every citizen the right to look his accusers in the eye. People who wish to remain in the dark usually have ... Read more

Also posted in Financial Education, Reform, Sylvain Raynes | 3 Comments

The State of Financial Engineering

We are the CDO makers,and we are the dreamers of dreams.Betting on lone loss triggers,and trading in eclectic teams. Spread losers and yield forsakers,for whom the pale bonus gleams.Yet we are the sole underwriters,of the deals, forever it seems! Fantasia on a Theme by William Blake All over the world, it has become fashionable for ... Read more

Also posted in Financial Education, Reform, Sylvain Raynes | 11 Comments

In the Tranches

Ever wonder what it’d be like to steer a portfolio through today’s turbulent credit market? Now you can!“The Accidental Trader”, an online game developed by New York-based structured finance consultancy R&R Consulting simulates the real-life experience of a risk manager managing the credit risks of a large portfolio. Feel the thrills and chills as your ... Read more

Also posted in Financial Education, Max Rumyantsev, R&R, Reform, Risk Management, Risk Measurement | Tagged | Leave a comment

The Collapse of the Tacoma Narrows Bridge

A cautionary tale about finance The collapse of the Tacoma Narrows Bridge, due to unforeseen resonance effects, is more than a watershed in the history of bridge design and civil engineering. It is an object lesson in the need to fully understand a problem before designing its solution. The Tacoma Narrows Bridge, November 7th 1940 ... Read more

Also posted in Cybernetics, Risk Measurement, Sylvain Raynes | Tagged , , , | Leave a comment
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