Ajay Excellent presentation! not sure if I agree that we dump on the OTC market completely. there is need for a healthy balance b/w exchange-traded stuff and OTC. danger in being too prescriptive Ramesh Ramanathan
On second thoughts, I disagree with some slides...
Slide 38: Rich shareholders are left holding the bag as it should be. Investing in companies is done by and for rich people. On another note, pension funds (CALPERS is a good example) have to have good risk managers if they want to invest in companies.
Slide 39: Banks were giving bad home loans, and then selling off the loans in slices as CDOs to investment banks, all CEOs wanted to show profit and get more bonuses.
Slide 44: Why is public ownership or subsidies needed in the first place, when markets are supposed to work very well? Fannie and Freddie will not get privatized now.
Ajay The piece on OTC is also v good. However, I dont see why we need to see OTCs as fundamentally flawed. Nothing prevents exchanges from introducing new products, so that market partcipants to have a choice on whether they want to trade in OTC products or exchange traded ones. In fact, exchanges should take signals from OTC developments, and watch for the kinds of products that are getting more traction - in this sense, an additional value of OTCs is to act as a kind of incubation space for potential exchange traded products. At the end of the day, we all subscribe to caveat emptor. regards ramesh
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Dear sir,
ReplyDeleteThanks a ton for this link. Probably the best snapshot of the crisis so far. Absolutely fantastic!
Ajay, this should be a paper and not a slideshow.
ReplyDeleteWhen can we expect the summary blog post or better yet, MP3/Youtube of the talk ? :)
ReplyDeleteAjay
ReplyDeleteExcellent presentation!
not sure if I agree that we dump on the OTC market completely. there is need for a healthy balance b/w exchange-traded stuff and OTC. danger in being too prescriptive
Ramesh Ramanathan
I agree, this should be a paper.
ReplyDeleteAjay,
ReplyDeleteOn second thoughts, I disagree with some slides...
Slide 38: Rich shareholders are left holding the bag as it should be. Investing in companies is done by and for rich people. On another note, pension funds (CALPERS is a good example) have to have good risk managers if they want to invest in companies.
Slide 39: Banks were giving bad home loans, and then selling off the loans in slices as CDOs to investment banks, all CEOs wanted to show profit and get more bonuses.
Slide 44: Why is public ownership or subsidies needed in the first place, when markets are supposed to work very well? Fannie and Freddie will not get privatized now.
Slide 46: US GDP is NOT doing well.
Ramesh, is this correctly balanced in your view?
ReplyDeleteAjay
ReplyDeleteThe piece on OTC is also v good. However, I dont see why we need to see OTCs as fundamentally flawed. Nothing prevents exchanges from introducing new products, so that market partcipants to have a choice on whether they want to trade in OTC products or exchange traded ones. In fact, exchanges should take signals from OTC developments, and watch for the kinds of products that are getting more traction - in this sense, an additional value of OTCs is to act as a kind of incubation space for potential exchange traded products. At the end of the day, we all subscribe to caveat emptor.
regards
ramesh