Max Dama

CSX’s Hedge Fund Battles: A Cautionary Tale for Pensions?

Dr. Mangiero,

Many of the public investment funds like CalPERS are seen by college graduates as just a springboard to either a hedge fund or private equity. They provide good experience but don't pay nearly as well as a private fund. It doesn't suprise me that they have trouble retaining qualified employees who acually have a lucid understanding of the derivatives they handle. And being a regulator is no more of a highly sought-after career. There is no way they can do the amount of detailed "homework" that is required.

This is just what I can see from my perspective as a student mapping out a career path.

Thanks for the in-depth article,
Max Dama

How Models Caused the Credit Crisis

Salmon,

You seem to think that a revised rating means that the model has failed. A rating represents the likelihood of default assuming normal market conditions. Since conditions are significantly worse than they were during the rating process, we should expect revisions beyond the historic standard deviation of frequency.

The latin root of a word does not signify a deep immutable meaning.

"Models in general" (such as mechanical models of a bridge, or electrical models of a circuit, or economic models of supply and demand) are NOT to "blame". It seems supersticious to even consider.

Regards,
Max Dama

Increases in Dark Pool, Algorithmic Trading Volume

Won't arbitrageurs who are tading advantae of slight price differentials between dark pools and exchanges reflect the activity taking place in those pools? So total volume will be magnified, not just shifted to dark pools.

I'm always surprised how big a deal is made of decimalization. It is such an obvious thing.

Regards,
Max