umarsaeed

Posts Tagged ‘wall street’

Modern Day “Salami Slicing”

In Financial, Fresh on April 1, 2014 at 3:13 PM

My first introduction to “salami slicing” was in Superman 3. Richard Pryor, who played a quirky computer hacker that worked in the processing department of a bank, discovered that there were millions of transactions happening at the bank each day and that all of them required the bank to round amounts to the nearest penny. By accumulating these rounding increments into his own bank account, he became rich. Apparently, Wall Street has a similar scam and is doing this to all of us every day. 60 Minutes has a must-watch piece if you’re interested in how they skim money from your investments.

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Where is My Father’s Money?

In Advice, Criticism, Financial, Fresh, Uncategorized on January 3, 2013 at 1:26 PM

As some of you know, I’ve been working on a book for the last few years. Here is a sneak peak.

The Mystery of “The Man”

In Culture, Financial, Fresh, Personal on April 7, 2012 at 6:04 PM

The Little Red Umbrella posted an essay of mine recently. It’s one of my favourites. Enjoy.

ETFs: Explained and Exposed

In Advice, Criticism, Financial on July 14, 2011 at 1:13 PM

During the “flash crash” of 2010, the Dow dropped 1,000 points in a matter of hours because of a computer glitch. During this crunch, ETFs were impossible to sell unless you were willing to take a devastatingly low price. Why?

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Testing Wall Street Logic

In Criticism, Financial on May 24, 2010 at 1:34 PM
We left off talking about Rating Agencies and how it was their blessing that allowed the public pools of money to invest in anything, from shares in Apple to Mortgage Bonds created by Goldman. We uncovered the junk bond logic that taught us that by pooling a bunch of risky assets together, the sum of those assets are worth more than the individual parts.

But does this logic truly extend to personal loans, like mortgages, credit-lines and credit cards? It is true: by pooling mortgages together, the risk that a handful of people will default is mitigated by the diversity of the pool. But because these are personal loans, there’s a conflicting economic principle that prevents the entire pool being worth more than its individual parts.

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Junk Bond Logic

In Criticism, Financial, Popular Posts on April 19, 2010 at 6:27 PM

Do you remember at the end of the Breakfast Club, when potential Prom Queen Claire started making out with Bender, the high school reject? It’s easy to understand why she did it. They had been cooped up in that library all day, revealing their cigarette burned souls to each other. Plus, if you’re Claire, there’s no better way to piss off your parents than to make out with a guy right in front of their car, as they come to pick you up from detention. Claire was feeling good; she was breaking the rules. But come Monday, you knew it was going to be awkward. How was Claire going to explain this to her friends? She didn’t need this – not in her senior year.

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Goldman on Trial

In Criticism, Financial, Popular Posts on April 18, 2010 at 10:44 AM
Get used to Goldman being in the news for the next little while. According to this NY Times article, Goldman Sachs is being sued for knowingly packaging poor quality mortgages and other loans into a large credit derivatives bundle, and then selling it to the market. More than likely, the lawsuit is sparked by the fact that Goldman has been profitable throughout the financial crisis and it’s really pissing everyone off. News of this lawsuit has triggered banks from other nations to begin investigations to see if they have a similar case. Did Goldman sell them shitty mortgage-backed securities too?

Death Bonds Continued…

In Criticism, Financial on September 13, 2009 at 8:55 AM
I wrote about Death Bonds back in May of this year. No, I didn’t break the story or anything like that. However, I did perform the analysis ahead of everyone else. The New York Times recently did the analysis too, and came up with the same conclusions as me, which is reassuring and disturbing at the same time.

Death Bonds

In Criticism, Financial, Fresh, Popular Posts on May 11, 2009 at 7:46 PM

One evening at the dinner table, my father told me that he would probably die before my mother. He was much older than her, and he explained how he no longer needed to pay premiums on his life insurance now that all of us kids had grown up and made lives of our own. He and my mother would be comfortable for the rest of their retirement without this policy. He said that the insurance companies would refund some of his money, but it’s a rip-off. If you’ve paid ten grand in premiums, they’ll give you back two.

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Accounting Shame

In Criticism, Financial, Popular Posts on April 7, 2009 at 6:24 PM

The Financial Accounting Standard’s Board in the US decided that it would relax the rules on Mark-to-Market accounting. I touched on this concept only briefly in a previous piece (Toxic Plan), but given what has transpired since, it is worth a more in-depth look.

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