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

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

Origami is the Japanese art of folding paper into intricate andaesthetically attractive shapes. As such, it is the perfectmetaphor for the Wall Street financial engineering model, whichultimately proved to be the underlying cause of the 2008 financialcrisis.

In Financial Origami, Brendan Moynihan describes how the WallStreet business model evolved from a method to transfer risk into amethod for manufacturing risk. Along the way, this timely bookskillfully dissects financial engineering and addresses how it'soften a mechanism to evade regulatory constraints, provideinstitutional investors with customized products, and, of course,generate revenue for financial engineers.

  • Reveals how Wall Street's financial engineering business modelmorphed into something destructive
  • Highlights how the origami model worked well in thecomparatively stable years of the early 2000s, when there was lessrisk to transfer
  • Discusses how Wall Street began manufacturing risk by creatingproducts that multiplied risk exposures and encouraged subprimelending

With the collapse of Lehman Brother the Wall Street businessmodel effectively broke. But there are many lessons to be learnedfrom what has transpired, and Financial Origami will show you whatthey are.

  

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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, wherehe manages the popular column "Chart of the Day" and writes aboutthe economy and Wall Street. He has been with the company since2006, after spending more than twenty years on Wall Street as atrader and risk manager. Moynihan is the author of Trading onExpectations (Wiley) and coauthor of What I Learned Losing aMillion Dollars. He lives in Barrington Hills, Illinois, with hiswife and two sons, and is currently writing a book on Englishgrammar.

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