volatility imageThis recent article from the Upshot over at the NY Times attempts to explain why stock markets across the world have been experiencing so much volatility. Surely some of you have noticed and have even heard reports about how the “fear index” is unusually high right now, how the “VIX has jumped”, how “China is slowing”, how “Commodities are plummeting”, how the “Fed might hold on raising rates”, and so on. Basically, if you pay attention to financial news, it’s clear that something’s amiss and volatility is back. Well, to understand the why, we should first review the what. Continue reading

financial crime fingerprintOn Monday, August 3rd of this year, a single individual was found guilty in London and sentenced to 14 years in prison for profiting off certain fraudulent trades by participating in what many recognize to have been a systemic practice in the banking world of manipulating LIBOR rates. Tom Hayes, a former UBS and Citigroup trader, is more or less the first person to be convicted of financial crime essentially on behalf of the entire financial industry complex worldwide for any criminal activity that the industry has engaged in during this century. The presiding judge, Jeremy Cooke, made no bones about the sentence: “A message needs to be sent to the world of banking.” It’s not enough, though, and it’s not the ideal way to send the message. Continue reading