Financial Origami: How the Wall Street Model Broke (Google eBook)

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John Wiley & Sons, Feb 16, 2011 - Business & Economics - 192 pages
2 Reviews
An in-depth look at the failure of Wall Street's "proven" financial models

Origami is the Japanese art of folding paper into intricate and aesthetically attractive shapes. As such, it is the perfect metaphor for the Wall Street financial engineering model, which ultimately proved to be the underlying cause of the 2008 financial crisis.

In Financial Origami, Brendan Moynihan describes how the Wall Street business model evolved from a method to transfer risk into a method for manufacturing risk. Along the way, this timely book skillfully dissects financial engineering and addresses how it's often a mechanism to evade regulatory constraints, provide institutional investors with customized products, and, of course, generate revenue for financial engineers.

  • Reveals how Wall Street's financial engineering business model morphed into something destructive
  • Highlights how the origami model worked well in the comparatively stable years of the early 2000s, when there was less risk to transfer
  • Discusses how Wall Street began manufacturing risk by creating products that multiplied risk exposures and encouraged subprime lending

With the collapse of Lehman Brother the Wall Street business model effectively broke. But there are many lessons to be learned from what has transpired, and Financial Origami will show you what they are.

  

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Review: Financial Origami: How the Wall Street Model Broke

User Review  - Ben - Goodreads

A fascinating read. Probably the fairest description of the complexities of the recent financial crisis that I have seen. The book does a good job of laying out the array of people, companies ... Read full review

Review: Financial Origami: How the Wall Street Model Broke

User Review  - Ryan Teoh - Goodreads

I like: The simplicity of its narrative. I love: The way the chapters are organised :) Read full review

Contents

Commercial Banks
5
Transferring Risk
12
The Three Derivatives
22
Fold Sides to Center Again
29
Equity
50
Rules Refold Rave Ruin
64
Mortgage Origami
78
Banker Incentives
86
Low Volatility Low Risk
96
Opaque Markets
103
Pull Head to Suitable Angle
109
Whats Wrong with Wall Street?
130
GovernmentSanctioned CreditRating Agencies
137
Epilogue
147
Copyright

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About the author (2011)

Brendan Moynihan is an editor-at-large for Bloomberg News, where he manages the popular column "Chart of the Day" and writes about the economy and Wall Street. He has been with the company since 2006, after spending more than twenty years on Wall Street as a trader and risk manager. Moynihan is the author of Trading on Expectations (Wiley) and coauthor of What I Learned Losing a Million Dollars. He lives in Barrington Hills, Illinois, with his wife and two sons, and is currently writing a book on English grammar.

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