Investment-management

I am not an economist but do have some common sense.I did read the book. I do agree with most of what Ravi Batra has to say about the past, present and the future.But I slightly disagree with respected Mr. Ravi Batra on two of his points. 1)That the market would crash in early 2000 followed by a 2-year-continued depression. 2)The 1990 recession was postponed due to massive borrowings.

Why does he think that the great depression of 1990 was postponed due to massive borrowing. I think great depression of the 1990s was postponed due to the huge software industry US has created in 1990s resulting into low unemployment and huge profitablity. Not to mention increased productivity achieved as a result of using those softwares and application.

The recent surge in stock prices is not simply a bubble that's going to burst.This is the result of huge investment done by foreign individuals as well as institutional investors as they percieve US companies more productive and profitable specially in areas such as Internet, Networking and other patented applications.The access and use of Internet has only facilitated this whole process.For example today its a matter a 5 minutes to open an account with a brokerage and start buying stocks. If you do the same thing in 80s you would end up using a whole month opening an account with a brokerage.And at that time broker's commission were up on the sky.

The recent recession in Asia has caused increased consumption in US. This consumption would come to its level as the Asian market comes back to its previous position. So the US import deficit would gradually decrease or would probably stay where it is.

I read the latest IMF report on world growth that predicts world growth to be more than 2% while they worry about US growth in the next millennium. US must therefore increase its exports to other countries(as Ravi also recommend) and to make it easy for developing countries to import US technology. If done I personally think that the US stock market is going to surge even more.It may probably end up 20000-25000 within 2-3 years.

Most economists agree the objective of capitalistic development is the accumulation of capital. Where the economists differ is in their interpretation if this is a good or bad thing. Ravi Batra belongs to a novel school of thought that thinks this is a good thing at the outset but becomes a bad thing over time. This is because the class of guardians of capital, the owners, builds wealth through sheer prudence, foresight and courage in productive enterprise. Over time, as wealth passes to generations raised in luxury, the virtues degenerate. At the same time, the class of owners becomes a mix of old money and new. Where the new money has some of the old virtues, the old money now has none of it. The social (including work) ethic degenerates over time. At some stage, it doesn't matter HOW one makes and expands a fortune but only that you DO. Part of the transformation of capitalism is its evolution from productive enterprise to financial activities, where unearned gains become the propagating mechanism for the class of wealthy. Speculative bubbles begin to take over in financial markets from time to time. When the bubbles burst, as they inevitably will, the social consensus is challenged. Each burst becomes a bigger challenge to maintain the order. At some state, a class of military leaders wrest control to re-establish order.

As for the bubbles, when share prices surge the wealth of those with capital in the markets expands in relation to the rest who do not own wealth. The amount of wealth becomes more unevenly distributed, even if a middle class has some. The growing divergence accelerates the decline in the social ethic. Also, helping the decline is the faltering social responsibility of employers to their workers, which promotes a feeling of alienation by the HAVE-NOTS to the HAVES.

In short, what Dr. Batra is writing about is a larger historical dynamic or evolution. He is not a technical analyst looking at stock charts for signs of a bullish reversal, or an economist strictly measuring the development in terms of the mix of fiscal and monetary policies. His frame of reference is much bigger than that. He is writing about a historical context based on his interpretation. At the same time, what really makes his work so fascinating, is his deep insight into the larger collective philosophy. He writes about the degeneration in social and environmental conditions associated with a human project based on a materialistic worldview. He proposes a much better framework for human beings, a spiritual framework, based on the ideas of his great mentor, PR Sarkar.

It is in this way that his books should be approached. Exact timing is difficult for all, but at least with Dr. Batra's work it is possible to gain an understanding of the social dynamic behind the developments and to see a positive way forward. Dr. Batra's works are a profound contribution. That said, his predictions have been quite accurate. Just look at a chart of stock prices from 1980 to 2002. It clearly reveals a huge bubble from 1983 to 1999 and a plunge since then. We are seeing the bursting before our very eyes. This is the history he his describing and explaining. That is a great achievement indeed!

Maybe the timing wasn't quite right but Ravi's points are being born out in the market and in the overall economy at this time. While those who acted as though the bubble would never burst are licking their wounds, my husband and I, who took Batra's advice, have not lost a penny but instead have continued to make modest but consistent gains in the value of our portfolio. It is true that we got out of the market a few months too early, but we probably would not have made as much during those months as we would have lost had we been invested when the market plummeted a couple of weeks ago.

We are not economists, but what Batra says makes sense to us. If wages remain relatively unchanged while wealth is being concentrated in the hands of those at the top and if at the same time productivity increases - then how is the economy to sustain itself? Certainly, a collapse can be delayed by borrowing, but that fix is temporary at best and will in the end cause greater misery.

We are grateful for Batra's clarity and foresight, and we only hope that everyone will assess his/her financial condition on August 14th right along with the CEOs of the top 1000.

I dislike this book for a number of reasons. Firstly it is incomprehensible, especially the examples. Some of the concepts are also not well explained. Secondly, it is not user-friendly. The ideas demonstrated are not presented in a coherent manner. Lastly, being basically a compilation from different authors, the chapters are also not well connected to each other. Overall a very poor effort.

About half the chapters are written by various accountants employed by Price Waterhouse. Only 2 out of about 20 chapter authors are recognizable names in the field.

When it comes to Derivative products, pricing, valuation, the markets, and all the other issues, such as rating, documentation, accounting and taxation, you could not get a better mentor than Satyajit DAS, and this book is his best ever. It is a collection of topics and authors who are the leaders and the best in the field. THERE is simply NO other book that can be called a HANDBOOK on Derivatives, for everyone, students, financial professions, and professors, and for beginners, as well as advanced.

A book with ostensibly some structure but lacks any logical lead through. I defy anyone to make sense of his few pages on structured bonds - all he says is that they're risky and those in the know have told him that many people do not understand them. I empathize with this lack of understanding - the author shares it.

The author has a bizarre bullet point writing system - certain sentences are pulled out for emphasis for no good reason. The book is littered with grammatical errors.

A real dud, spare your money.

Do not buy this book. If you own it, don't bother reading it. The information content is negligible. The English is appallingly bad. Material often has nothing to do with the sections to which it pertains. The book is written in a stream-of-consciousness rambling mode with no apparent logic. With 115 books to his credit, Mr. Chorafas is obviously in the business of churning out books on current topics, whether or not (and based on the evidence from this book, it is very much "not") he has any knowledge or experience with the subject. Prentice Hall should be ashamed to be associated as the publisher, and obviously did very little editing before publishing the book.

This is one of the worst books I have ever read. I was lucky to sell it on zShops for half of face value. Clearly, this guy has little or no experience with crederivs, and his weak command of English just makes it worse. While I think Nelken's book is also a little thin on material, and Tavakoli's book represents a somewhat dated view of the market, both are substantially more educational than this one. My own experience suggests that one is far better off to understand bond/loan trading first, plus some structuring and capital allocation. That is enough to figure out how to trade crederivs. All this hype about the insane risk in these things is crap - it's not substantially more risky than bonds, and people have been in that business for a long time. The only essential difference - counterparty risk - is not really addressed in any satisfactory manner anywhere.

This book provides an up-to-date and comprehensive overview of credit derivatives. Tavakoli provides an excellent resource for credit risk managers who specialize in one area of credit risk management, professionals who are new to the field, or for experienced professionals who need the definitive reference of credit derivatives products.
This book is not about is the mathematical and statistical details in credit risk/portfolio modeling, but Tavakoli does a good job of highlighting various aspects of modeling (such as data availability, limitations of different approaches, etc.). For example, Tavakoli's explanation of first-to-default baskets provides a quantitative explanation of boundary conditions and a qualitative explanation of the products.

The clear, qualitative, conceptual explanations are supported by explanations that show a deep understanding of the underlying mathematics. Numerically minded readers will grasp this, but even those who are a bit numbers shy will find the quantitative examples easy to follow. Tavakoli's book enabled me to discuss the assessment and deployment of quantitative models on an even footing with professional risk managers and the rocket scientists developing these models.

I also recommend Phillip Schonbucher's book on credit derivatives for people who need to model credit derivatives. Unfortunately, the resource doesn't exist that can solve the tough problem of estimating correlation between defaults.

The use and misuse of credit derivatives terminology is thoroughly explained in this book. After that, the products applications are introduced. The difference between insurance and credit derivatives is clearly explained. From the insurance perspective, examples of using credit derivatives to change capital structure are very helpful.

The basic structures of synthetic collateralized debt obligations are introduced in this book, but more details and the cash flows are explained in Tavakoli's newer book. This book focuses on the credit derivatives market and the peculiarities of this market.
Tavakoli's book is an excellent credit derivatives guide for both newcomers (who are finance professionals) and insurance/finance professionals who need a thorough overview of the various the products. All of the major structures of credit derivatives are explained. The new indexes aren't included in this edition, but index products of other sorts are included, so the structural form is introduced here.

The qualitative narratives are very helpful in explaining how the products are traded. These are supplemented with deal diagrams and tables of information. The author's firm command of the subject matter makes this book very readable and easy for finance professionals to understand. Professionals who are not looking for a heavy quant book but want a clear understanding of how these products are used and the guideposts for value will enjoy this book.

The documentation shown in this book is especially useful for lawyers and people customizing trades. This is particularly useful if you want to include features that offer greater value to you than "standard" documentation. Tavakoli includes basic documentation for each of the major products.

POSITIVE POINTS: Best indepth book on Credit Derivatives. Very readable. Explains very nicely why this derivatives are so important for banks. Non technical.

NEGATIVE POINTS: Focus on banks with only a little chapter on Credit Derivatives as investment products. No explanation how those derivatives are priced (but hey, there are loads of technical books)

I feel that this book has been the most outstanding work ever done in the financial services sector. I recommend this highly especially for people involved in the financial services business. I have used this book immensely in my business too. My heartiest congratulations to all the four authors of this book. I look forward to another book from them in the future.

It is a superb book which has a total grip of the latest in the financial services sector globally.

A "MUST READ" for all financial services participants and strategists. I have read the book three times over and everytime I read this book I find a new angle which I could apply to my business.

A very useful book describing a variety of approaches to creating value, such as strategy, products, technology, logical and mathematical modeling frameworks for analyzing a firm's strategy, technology, and process choices.

A must read for managers of financial service firms, and consultants as well as researchers who work in the area of strategic planning, technology choice, process design and process re-engineering.