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Subject: complexity

Complexity is a term used with reference to Post Modern Security Analysis and collaborative research, indicating the problems that arise from excessive complexity in modern financial markets, including such aspects as ‘too complex to manage’, derivatives, and the myriad products of financial engineering.

Phony financial reform

Dodd-Frank won’t make better markets

Financial markets can be extremely complex, with many areas that can fail and break.

Unfortunately, instead of a ‘game-changing’ confidence-inspiring reform, the Obama administration presented the United States with the Dodd-Frank Act — a legislative miscarriage that has the potential to hold back recovery and impair the position of New York as a world financial center for decades — unless repealed or drastically amended.

Post Modern Security Analysis

Managing complexity

At one time, securities were relatively simple ...

Modern capital markets have become so complex that security analysis methods of the 1930s are no longer adequate.

Excessive, daunting complexity is the reason that security analysts must move now beyond Graham & Dodd.

Complexity is not only in financial information, but in collateral issues such as institutional operations, the interaction of foreign and domestic taxation, and structural risks.

Post Modern Security Analysis

The economics of security analysis

A flood of complex information ...

Total salaries of securities analysts working for financial institutions in 2006 amounted to only 1/100 of one percent of the value of outstanding corporate equities, domestic and foreign corporate bonds, and municipal bonds in the US market.

The exceeding complexity of modern capital markets, combined with too little being spent on investment analysis, has put the savings of millions of Americans at risk.

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Featured articles on inside pages

Stock buybacks

Stock buybacks and dividend equivalency

Corporations have argued that stock buybacks are equivalent to dividends. This article explains why this is not true and why suggesting buyback-dividend equivalency may constitute fraud.
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Securities Analysis

Jeff Skilling explains US corporate ethics

Unfortunately for society, Jeff Skilling of Enron told the truth according to tenets of moral relativism learned at the Harvard Business School and with McKinsey and Company, when, on being sentenced to decades in prison, he said, "That's the way the game is played. You win some, you lose some."
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US Politics

Why Congress won't kill ACORN

Closely connected with President Obama, the ACORN group of "community organizers" has drawn censure from the Democrat-controlled Congress as a result of investigative reporting by James O'Keefe and Hannah Giles. More ...

US equities

GAO favors overly-optimistic projections

In a study of the effect of the retirement of Baby Boomers on the price of equities, the GAO assumed that equities will provide real returns of 7% over the next decades. This figure is often cited in Wall Street promotional literature, but has no scientific basis.
More ...

US Bonds

The collapse of the dollar and US bonds?

The extreme spending of the Obama government, combined with irresponsible bank lending policies promoted by Barney Frank and Chris Dodd, portend rising interest rates, the collapse of the bond market, and the end of dollar supremacy. More ...

World Economy

Working off the US trade deficit

Foreigners hold $16.8 trillion in US financial assets as a result of selling more goods to Americans than they buy from them. Since the 'deficit' is in dollars, the US has no problem in 'paying it off'. More ...

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2010-11-05 15:03