Fun with lawyers for all the family

An interesting article in the FT on the standardisation of documentation for synthetic CDOs raises an interesting point. Whenever ISDA has standardised documentation before, the article claims, extra liquidity has resulted. Leaving aside the occasions when it took more than one stab to get the docs right — the issues over restructuring and what a […]

Pegged CDS spreads

I was reading Chris Patten’s musings on Hong Kong, East and West,–it’s not bad, but his unquestioning faith in free markets is a little naive,–when it occurred to me to wonder what a market with pegged CDS spreads would be like. Indulge me with this thought experiment. Patten points out quite rightly that one of […]

Trust me, I’m an economist

I’ve just seen an amusing programme on BBC2, ‘Trust me, I’m an economist’. It applies, albeit in a rather trite way, ideas of game theory, strategy and incentive structures to ‘real life’ situations. And it isn’t bad. Really. Considering. Given it is television.

The University of London – a really good idea gone horribly wrong

It seems as if the chances of the University of London breaking up are increasing. Imperial and UCL have been trying to escape for some time, with others not far behind. This is really a great shame, as the University of London is a good thing, and it would be a better one if it […]

Mathematical Finance as a Historical Subject

Reading papers outside your discipline is good, and I’ve just found a corker, The Big, Bad Wolf and the Rational Market: Portfolio Insurance, the 1987 Crash and the Performativity of Economics by Donald MacKenzie in the Sociology Department at Edinburgh. He makes several interesting points. Firstly he suggests treating finance as (a) historically variable in […]