Joel E Lewis

Article on the good and the bad of financial innovation – the cliffs notes version is the one sentence below: Some of these ideas [CDS's, CDO,s, SIV's, etc], as it happens, were reasonable ones, within limits. But limits aren’t something that Wall Street knows much about: in recent years, it has shown an uncanny knack [...]

Rolling stone has a really (really) long, but interesting comparison of recent wall street moves to real world cons and schemes pulled in movies like Goodfellas and The Sting.  Some of the connections are a stretch, but most range between clear cut copies and eerily similar set-ups. I definitely agree that Flash Trading is inherently [...]

Why isn’t financial analysis more probabilistic?  We make all these assumptions and predictions in making a financial analysis or forecast, but for all the thought that goes into that, those assumptions get buried in the model, hidden behind single value variables.  We don’t build ranges right into the model (except in a sensitivity analysis, which [...]

Forget WWIII, the future is a delicate dance over mutually assured financial destruction. The New Republic has a great article (Peking Over Our Shoulder | The New Republic) about the issues and the way the game is playing be played.  It looks increasingly like if the US and CHina ever come to blows, it will [...]

Note: The first publishing of this post was accidentally an unfinished draft.  This the corrected copy. The Wall Street journal asks? Was it surprising to investors that Merrill paid $3.6 billion in bonuses? This figure leaned toward the low end of estimates that had appeared in the press, and it was significantly less than the [...]

A good friend of mine, Amol Kapila, just started his blog back up after a few year’s absence.  Naturally, one of the first things he does is disagree with me about the potential for change in the Finance Industry: The cost of managing $1 billion is not much more than the cost of managing $100 [...]

The Japanese would have a a very different take on the story of the big bad wolf.  Between tsunami’s, typhoons, and earthquakes, natural disaster’s regularly destroyed towns.  Homes weren’t built to withstand anything hurled at them – they were built to work day in and day out, and to be rebuilt quickly after a disaster.  [...]

It seems to me that some of the biggest debates we see in government and politics is how much government needs to protect people from themselves. There are sound examples of problems where left to their own devices, people often make less than ideal choices for the group, which are often clear cases for government [...]

The more things change, the more they stay the same. Of course, if the basic economics of the industry never changed in the first place, why should we expect anything but more of the same.

What’s next for US banks – The McKinsey Quarterly – What’s next for US banks – Financial Services – Banking. McKinsey analysis of what’s happened to banking so far and what’s in store for the future.  The pain may not be over…