Fool's Gold: How the Bold Dream of a Small Tribe at J.P. by Gillian Tett

By Gillian Tett

From award-winning Financial Times journalist Gillian Tett, who enraged Wall road leaders together with her newsbreaking warnings of a situation greater than a yr prior to the curve, Fool's Gold tells the superb unknown tale on the center of the 2008 meltdown.

Drawing on specific entry to J.P. Morgan CEO Jamie Dimon and a tightly bonded crew of bankers recognized on Wall road because the "Morgan Mafia," in addition to in-depth interviews with dozens of different key gamers, together with Treasury Secretary Timothy Geithner, Tett brings to existence in gripping element how the Morgan team's daring rules for an entire new form of monetary alchemy helped to ignite a revolution in banking, and the way that revolution escalated wildly out of control.

The deeply pronounced and vigorous narrative takes readers behind the curtain, to the internal sanctums of elite finance and to the secretive reaches of what got here to be referred to as the "shadow banking" global. the tale starts with the serious Morgan brainstorming consultation in 1994 beside a pool in Boca Raton, the place the group cooked up a stunning new thought for the unique monetary product often called credits derivatives. that concept may rip round the banking international, catapult Morgan to the pinnacle of the turbocharged derivatives alternate, and gasoline a unprecedented banking growth that looked as if it would have unleashed banks from ages-old constraints of risk.

But while the Morgan team's derivatives dream collided with the housing increase, and was once perverted — via hubris, fantasy, and sheer greed — via titans of banking that incorporated Citigroup, UBS, Deutsche financial institution, and the thundering herd at Merrill Lynch — at the same time J.P. Morgan itself stayed good clear of the dicy concoctions others have been peddling — disaster undefined. Tett's entry to Dimon and the J.P. Morgan leaders who so skillfully instructed their financial institution clear of the wild excesses of others sheds worthwhile gentle not just at the untold tale of the way they engineered their bank's break out from carnage but in addition on how attainable it used to be for the bigger banking international, regulators, and ranking organisations to have noticed, and heeded, the bad hazards of a meltdown.

A story of blistering brilliance and willfully blind ambition, Fool's Gold is either an extraordinary trip deep contained in the arcane and wildly aggressive international of excessive finance and an essential contribution to knowing how the worst fiscal trouble because the nice melancholy used to be perpetrated.

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Extra resources for Fool's Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe

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In all other cases the payoff is typically programmed on a Monte Carlo simulation engine. Multi-asset structured products significantly expand the payoff possibilities of exotic options. They allow investors to play on correlation and express complex investment views. EXAMPLE Worst-Of Reverse Convertible Note Quanto CHF Issuer: ABC Bank Co. Notional amount: CHF 5,000,000 Issue date: [Today] Maturity date: [Today + 3 years] Underlying indexes: S&P 500 (SPX), EuroStoxx-50 (SX5E), Nikkei 225 (NKY) Payoff: (a) If, between the start and maturity dates, all underlying indexes always trade above the Barrier level, Issuer will pay: )) ( ( SPXfinal SX5Efinal NKYfinal , , Notional × max 120%, min SPXinitial SX5Einitial NKYinitial (Continued) 1 Provided the issuer does not go bankrupt.

Gatheral, Jim. 2004. ” Proceedings of the Global Derivatives and Risk Management 2004 Madrid conference. Gatheral, Jim. 2005. The Implied Volatility Surface: A Practitioner’s Guide. Hoboken, NJ: John Wiley & Sons. Gatheral, Jim, and Antoine Jacquier. 2011. ” Quantitative Finance 11 (8): 1129–1132. Gurrieri, Sébastien. 2011. ” Working paper. 1779463. , Deep Kumar, Andrew L. Lesniewski, and Diana E. Woodward. 2002. ” Wilmott Magazine (September): 84–108. Heston, Stephen L. 1993. ” Review of Financial Studies 6 (2): 327–343.

Gatheral, Jim. 2005. The Implied Volatility Surface: A Practitioner’s Guide. Hoboken, NJ: John Wiley & Sons. Gatheral, Jim, and Antoine Jacquier. 2011. ” Quantitative Finance 11 (8): 1129–1132. Gurrieri, Sébastien. 2011. ” Working paper. 1779463. , Deep Kumar, Andrew L. Lesniewski, and Diana E. Woodward. 2002. ” Wilmott Magazine (September): 84–108. Heston, Stephen L. 1993. ” Review of Financial Studies 6 (2): 327–343. Hodges, Hardy M. 1996. ” Journal of Derivatives (Summer): 23–35. Homescu, Cristian.

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