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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. The Post Stock Buyback Era By John Schroy, on April 19th, 2009 |  Leave a comment  The Crash of 2008 signaled a turning point in capital markets. The stock buyback era seemed to have ended. The Efficient Market Hypothesis was discredited. The inability of market experts and major institutions to place a fair value on thousands of securities indicated basic problems in security analysis and the handling of freely available information. This article describes new challenges facing fundamental security analysts in the early 21st century, and the consequent opportunities. April 19th, 2009 | Print Article |  Email Article |  Topics: Auction Market Preferred Shares, Barack Obama, Barings Bank, beta, Bloomberg, Citicorp, common stock legend, complexity, covariance, efficient market hypothesis, Federal Reserve Bank, Fitch, Graham & Dodd, Inflation, Lehman Brothers, Moody's, Morningstar, Nick Leeson, SEC Rule 10b-18, Standard & Poor's, Stock Buybacks, Technical Analysis, Thomson's, US SEC | Category: New Economic Theory | Leave a comment |  Short urlThe McKinsey Heresy By John Schroy, on April 6th, 2009 | 2 comments  The root problem with big banks today is organizational and product line complexity. Excessive complexity in banks can be traced to the reorganization of Citibank in 1956, under Walter Wriston, following the advice of McKinsey and Company. Under the McKinsey structure, banks were transformed into industrial-type marketing institutions with matrix organization by product line. Bank managers were paid to meet budgetary targets, rather than for being prudent bankers. April 6th, 2009 | Print Article | Email Article | Topics: Alfred P. Sloan, Bank of America, Charles Wilson, Chase Manhattan, Citibank, complexity, General Motors, Glass-Steagall Act, matrix organization, McKinsey, nationalization, Peter Drucker, Sandy Weill, systemic risk, Walter Wriston | Category: Financial Market Regulator, featured | 2 comments | Short urlThe decline of Citicorp By John Schroy, on April 5th, 2009 | One comment  It is no secret that Citicorp no longer earns the same respect in financial circles as in days of yore. The problem is excessive complexity. This article describes the simplicity of the Citibank operation in 1956 when the bank was the world’s most powerful financial institution. It will not be easy, maybe not possible, for Citicorp to simplify operations and relearn the principles of sound banking. April 5th, 2009 | Print Article | Email Article | Topics: Bank of England, Citibank, complexity, FDIC, Federal Reserve Bank, Mervyn King, Sheila Bair | Category: Financial Market Regulator, featured | One comment | Short urlFeatured articles on inside pages
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