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Creepy Pre-Lehman Déjà Vu

That Creepy Feeling About two weeks ago, as I was making myself a cup of tea at the office, I was suddenly overwhelmed by a feeling of déjà vu. August 2019 felt a lot like the August of 2008. Something in that brew was unnervingly familiar, and I don't mean Earl Grey. It was the combination of faltering economic fundamentals with stubbornly rising US equity market, mixed with the unhurried pace of the day-to-day business in the financial industry that touched a nerve in me. Come to think of it, back in 2008 everyone knew there was a lot of debt out there, even though nobody was sure how much exactly. Bear Sterns had nearly gone belly up and was acquired by J.P. Morgan earlier in spring, so the risks were hardly imaginary. Lehman was still around and its executives were criss-crossing the Pacific courting Korea to prop them up by buying a stake. Yet, economy looked good enough. The FT ran a column called Commodities Boom, emerging markets were growing like crazy. So, the ban...
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Invesment Banking Series: Roadshows

Investment Banking Series Post 7 Roadshows 1. What is it anyway? Roadshow is basically marketing of the firm issuing securities to the potential investors. CFO, CEO and a few more people from senior managers hit the road and make presentations to all kind of investors in both group and one-to-one meetings. The presentation's contents are typically heavily curated by investment bankers to make sure that the equity story is as smooth and persuasive as possible, and they show and tell only the positive sides of their business. There would be an explanation of the existing business, and the expansion plans that will be financed by the proceeds from fund-raising. It is actually also a good opportunity for junior bankers to meet the company that they spend many days and nights to make look good in the pitch book. And the savvy ones would make good use of it to connect with the CEOs and CFOs that in the future may benefit from their investment banking services. 2. Inv...
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[Article Comment] Economists Have a Lot to Learn From the Weather

A comment on Bloomberg View article: http://www.bloomberg.com/news/2012-04-08/economists-have-a-lot-to-learn-from-the-weather.html When I first started studying economics back in college, I was stunned: all consumers perfectly rational? Free markets always lead to maximization of utility? It was in a stark contrast to what I have experienced as someone who saw Soviet Union collapse and embrace the free market theology to the extreme. So I asked my professors: how could something this unrealistic explain all the complexity that actually exists? They told me you had to start with some assumptions to see the gist of it, but you can then relax them to arrive to the more realistic ones. To the best of my knowledge, a model that would really explain the real world of economics is still to be developed. But that doesn't seem to bother most of the economists. Neoliberalism (criticized by some bright minds, Joseph Stiglizt one of them) feels more like a religion than a science. Believed...
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