We just got a list of Lehman’s coverage universe in anticipation of them dropping names. Research gets smaller and smaller (potentially).
Is financials–banks, life insurance, etc-- still there?
pardon my ignorance but what happened at Lehman. How did this thing start falling apart? any links?
Needhelp, I can sum it up in a nutshell. It all started when Lehman started started using statistics instead of common sense. That was the beginning of the end. You can read about it until your eyes hurt but it will never be clearer than the way I just stated it.
Anyone else considered the irony in the acronym “CPR”? Conditional Prepayment Rate (CPR) - as virginCFAhooker stated: stats and assumptions used in MBS valuations are fine until the model is SHOCKED. Then comes the: Cardio-pulmonary resuscitation (CPR) - (aka the taxpayer)
sounds like what happened to hedge funds - they did what the quants told them instead of making sense of common things.
Well the problem is in “normal times,” when the common sense folks are outperformed by the models, and everyone is telling the common sensers that they’re not really valuable anymore because there are all these other things that are performing better. Common sense guys then say, “hey, there’s all this risk you’re ignoring, so our risk return ratio is better and you should be investing with us.” But after 8 quarters of losing that argument, the common sensers are no longer much in the game. Then the models start to break down, but the common sense guys were sacked long ago.
needhelp Wrote: ------------------------------------------------------- > sounds like what happened to hedge funds - they > did what the quants told them instead of making > sense of common things. BOM for sure…