Historical Preamble Around April of 1915, the Western Allies of WWI embarked on a campaign that would quickly turn into one of the costliest mistakes in modern warfare: the Battle of Gallipoli. This fiasco was largely motivated by a legitimate desire on the part of the Western Powers to resupply their ally Russia, as always cut off from the main European theater. Under the leadership of (First Lord of the Admiralty) Winston Churchill, the Allies decided to attack the Gallipoli peninsula on the edge of the Aegean Sea with some of the less capable warships in the British Navy’s then considerable arsenal. However, when combined Anglo-French naval forces proved unable to break through Ottoman defenses lining the Dardanelles, land forces were called in, ultimately with catastrophic results in terms of both material and human losses. This was carnage of hitherto unseen magnitude, whereby casualty rates routinely hovered around 90% on the Allied side. It was also the series of engagements via which Mustafa Kemal, himself a commander at Gallipoli, emerged decisively as the undisputed leader of modern Turkey, and during which he gave what is arguably the most celebrated order in military history: “I do not order you to fight. I order you to die.”

Deals coming up next: Structured Asset Securities Corp. 2005-WF4 (A4) and Countrywide 2005-BC5 (1A) [caption id="attachment_6051" align="alignleft" width="681"] R&R Fair Market Value, Market Price, Moody's and R&R's Ratings since Origination[/caption]   [caption id="attachment_6052" align="alignleft" width="682"] R&R Fair Market Value, Market Price, Moody's and R&R's Ratings since Origination[/caption]    ...

Introduction Have you followed the strange fate of the $14.8 BN merger involving ALCATEL, the French telecommunication conglomerate, and ATT's now-defunct spin-off, Lucent Technologies Inc.? That mythical transaction, which has been shedding red ink ever since it closed, was consummated on December 1, 2006, and with much fanfare, we might add. At last, ALCATEL had a pied ä terre in the USA. What could be better than this? Actually, bankruptcy would have been better. While the deal was effectively a take-over of Lucent by the French giant, it turned out, most likely for political reasons, that the former CEO of Lucent Technologies, the American Patricia Russo, was duly nominated as the first post-merger CEO. She did not last too long, as was to be expected from someone attempting to run a quintessentially French company-cum-government bureaucracy who doesn't speak French. The last happy day for shareholders of the “new” ALCATEL was the day the deal closed. Meanwhile, former Lucent shareholders have been ecstatic ever since. The smartest guy in the room was probably the ALCATEL CEO Serge Tchuruk, who bowed out gracefully after the deal was sealed. He has been thanking God ever since that he wasn't around to see so much value destroyed so quickly, by so few people, without a single shot being fired. During the last quarter of 2012, led by the Dutchman Ben Verwaayen, the company wrote off another $1.9 BN, bringing total write-offs post-merger to a staggering $16 BN. Frankly, weapons of mass destruction couldn’t do any more damage.

Luigi Zingales teaches finance at Chicago Booth. It is not exactly a secret that Glenn Hubbard was his research collaborator in the run up to the presidential election, or that Zingales was positioning himself for an economic advisory role for Romney before he lost the election. Nevertheless, he's a lot smarter than Hubbard, and seems sincere. Right before the election, he went on a speaking tour to promote his book, A Capitalism for the People. I read it after attending one of his speaking events for Booth alums in NYC. In my opinion, it is the best of the worst of Chicago thinking. What is good and true in Zingales’ book is his discussion of how power interests have corrupted our market economy. I particularly liked his analysis of why anti-trust law is important in the chapter “Crony Capitalism American style.” Not that it enforces the laws of micro-economics and keeps marginal pricing competitive, but that it allows firms to grow to be mega firms who can bend the state to their will. His observation is subtle, astute and hits the mark. The poverty of his analysis shows up on p. 156 in his explanation of why competition does not cure predatory lending: most people do not pay attention to their finances, he says. From there, his argument takes a “right turn.”

I am responding to Susan Saulny's article about homelessness and joblessness, a topic very close to my heart. R&R Consulting is willing to teach any jobless college graduate how to do structured finance the right way (ie, to grow jobs and avoid another Crisis) who is...

Our title is but a thinly veiled allusion to the hero of the namesake novel [Герой нашего времени] by the illustrious Russian novelist and poet Mikhail Lermontov who, on the death of the legendary Alexander Pushkin, assumed the role of Russia’s leading poet. The hero in question (Pechorin) is not the kind of heart-throbbing, virile, impeccable stud personified by a fictitious character, like James Bond. On the contrary, Pechorin is a deeply flawed, some would even say amoral, man. It may surprise you that the quintessential hero of 19th Century Russian literature is not someone we would want as Santa Claus.

When an airplane crashes, people always die, which is not normally the case when a car crashes. Compare these outcomes to what happens when a structured deal crashes, a now unremarkable event during which no one has ever died. The point is this. The average intellectual ability that can be reasonably expected of senior executives in any industry is directly proportional to the severity of the empirical consequences of a crash in that industry. The aerospace industry is arguably the most demanding, sophisticated and rigorous of all simply because amateurishness cannot be tolerated there for the same reason it is so commonplace in finance. A case in point is the fate and fiscal health of Ford Motor Company, which of course makes cars. As a CEO, Mulally professes expertise only on the left side of Ford’s balance sheet. By contrast, most of us in attendance that evening claim expertise on the right side. Thanks to his relentless work, Ford’s asset side now seems to be in great shape, but what can be said of its liabilities? According to Wall Street, not much except the perennial and naïve buy recommendation. Much more could be done by research analysts to benefit Ford directly and significantly, at literally no expense to Ford or the investor public.

In the summer of my sophomore and junior years of college, 2010-2011, I interned at R&R Consulting, where I researched and modeled Asset-Backed Security deals. Through building excel models, I familiarized myself with the assets and liabilities accounts of ABS and MBS deals, building the defaults,...