Insights into the Global Financial Crisis

Insights into the Global Financial Crisis By Laurence B. Siegel
Publisher: The Research Foundation of CFA Institute 2009 | 288 Pages | ISBN: 1934667277 | File type: PDF | 1 mb

The global financial crisis of 2007-2009 is unprecedented in modern times. Nevertheless, it can be better understood by taking a long historical perspective that includes crises and crashes from other times and places. A select group of 16 authors or writing teams with extensive experience in the investment management profession have contributed essays to this extraordinary collection.


Contents:
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v
Rodney N. Sullivan, CFA
First Thoughts
A Riskless Society Is “Unattainable and Infinitely Expensive” . . . . . . . . . . 1
Laurence B. Siegel
What Happened?
The Dynamics of a Financial Dislocation: The Panic of 1907 and the
Subprime Crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Robert F. Bruner
Tumbling Tower of Babel: Subprime Securitization and the
Credit Crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Bruce I. Jacobs
Volatility + Leverage = Dynamite. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Howard Marks, CFA
The Seven Lean Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
R. Jeremy Grantham
A Template for Understanding What Is Going On . . . . . . . . . . . . . . . . . . . 94
Ray Dalio
Asset Pricing and Returns
The Limits of Convertible Bond Arbitrage: Evidence from the
Recent Crash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Clifford S. Asness
Adam Berger, CFA
Christopher Palazzolo
The Mark-to-Market Controversy and the Valuation of Financial
Institutions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Edwin T. Burton
This publication qualifies for 5 CE credits under the guidelines
of the CFA Institute Continuing Education Program.
The History and Economics of Stock Market Crashes . . . . . . . . . . . . . . . . . 132
Paul D. Kaplan, CFA
Thomas Idzorek, CFA
Michele Gambera, CFA
Katsunari Yamaguchi
James Xiong, CFA
David M. Blanchett, CFA
Governance and Behavior
Regulating Systemic Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
Robert E. Litan
Not a Failure of Capitalism—A Failure of Government . . . . . . . . . . . . . . . 189
Peter J. Wallison
Of Candor and Conflicts: What Were We Thinking? . . . . . . . . . . . . . . . . . 205
Marianne M. Jennings
How Psychological Pitfalls Generated the Global Financial Crisis . . . . . . . 224
Hersh Shefrin
Economic Theory and Philosophy
The Shadow Banking System and Hyman Minsky’s Economic Journey . . . 257
Paul McCulley
What Went Wrong? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269
John Train
What Can We Really Know about Economics? . . . . . . . . . . . . . . . . . . . . . . 272
Frank J. Fabozzi, CFA
Sergio M. Focardi