Monday, June 4, 2007

The Frontiers of Finance

excerpts from this week's report

“…investment banks have recently changed out of all recognition.”

“We make it impossible for investors and analysts to understand what is going on.”

“A Special Report on International Banking”
The Economist
May 19, 2007

"Next Monday, I will moderate my next Hedge Fund/Alternative Investments seminar for the CFA Society of San Diego. Having conducted numerous such events over the past 4 years, I have a fairly good idea as to one of the main topics to be discussed – risk. Specifically, where does the risk in hedge funds reside? The bottom line answer will almost certainly be (as it has before), “no one knows for sure.” The intermediate answers are complements of the financial engineers at the investment banks – derivatives in all its forms.

At just north of $500 trillion, derivatives are not just staggering in size. They are, more importantly, a black hole of..."

Investment Strategy Implications

"The boundaries of finance are being stretched and tested in ways and on a scale and scope never before seen. The 21st century masters of the universe are producing products designed to satisfy the needs of their clients and the marketplace and, in the process, reaping the rewards for their firms. As long as global conditions remain conducive for growth and stability (liquidity and benign economic conditions), the problems may not..."

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