mortgage-backed

I liked this book because it's useful for people with various levels of structured finance knowledge. The first few chapters explain the thought process behind the rating process and provide an introduction into the structured finance world of thinking. The second half goes into more depth about actual rating processes. The third part addresses asset specific issues (auto, airlines, etc...) While the last few chapters of the book review more advanced methods of analysis.

For people with little or no knowledge of the structured finance field, the first half of the book will provide a good understanding of the subject, the 2nd half of the book will probably required more time and effort to fully appreciate its value.

This intense and well-written book is actually two distinct pieces, appealing to two different audiences. Both are effective, but separate in most cases.

The book's aim is said to be (to show) "that presented with a capital-efficient, unified analytic approach, the market will find.....the motivation to operate at higher standards of precision, making the prospect of real commodity credit risk management is possible " (ref: Preface, (ix)). In Part I, The Contemporary Framework, Part II, Analyzing Structured Securities and Part III, Applications of Numerical Methods to Structured Finance, the authors present a succinct and very readable overview of structured finance, its major elements, risks and analytic tools. In Parts IV and V, Case Studies and Advanced Structural Features, they provide an alternative approach which should permit the desired new "credit risk management" paradigm.

Experienced practitioners will likely skip over the first three parts. To the beginner (like the reviewer), the reading was invaluable. The last two parts are provocative and potentially revolutionary, but require a degree of knowledge and experience which limits their readership to a relatively small group of market practitioners who actually understand the "guts" of their speciality. It is this dichotomy which leads to the proffered description of the book as being two pieces for different audiences.

That having been said, if the reader has the time (or the need) to go from the elementary to the complex, the entire journey of the book can be achieved . In many cases, the authors would help the beginner by including more cases studies or detailed expositions in the appendices and citing references to relevant readings. I took off about six weeks from the book to study the introductory topics in greater detail. And I found there was a sufficient mass of such material that the authors might consider breaking the book into two and expanding the first part into a larger introductory text book. The transition to the second part made me encounter heavier reading and I freely admit to requiring multiple rereads (and not an insignificant number of references to my graduate school quant books). In the end, I did grasp the message the authors intended (I hope).

Overall, I feel that of the literally ten thousand plus pages I have read on this subject in the last 6 months, the four hundred odd pages of "The Analysis of Structured Securities" represent the best investment of my time.

The authors present not only new paradims for people in the security field but introduce ways to make maestros out of simple musicians This book should be in the library not only of securities' analists but of bankers, realtors, mortgage grantors or anyone in the finance business.

Pierre-Emanuel de Gaspe

Yes, put me down for 5 stars. It seems the reviewer below neither read this book (or any of Ms.Tavakoli's other books, since I noticed a non-substantive negative review by the same person on her other book, "Credit Derivatives") nor ever heard Ms. Tavakoli speak.

I've had the opportunity to hear her speak on structured finance (twice) and read both her books. I'm also a former colleague. I like this book's forthright style. It gives important topical information, but it also clearly explains critical fundamentals of structured finance. It is in explaining the nuts and bolts that this book excels. Tavakoli explains structures that do not give fair value, but she also explains which structures provide fair value so that investors can avoid the pitfalls while enjoying the rewards.

The easy to understand - yet very effective - cash flow analysis allows readers to get a clear grasp of the money flows to more easily understand the explanations of various structures. Tavakoli ranks the various structures for their relative worth, and that is the most valuable part of this book.

This book combines expertise and readability in the style of Tavakoli's "Credit Derivatives". I would expect it to become a classic in this market as is her other book in the credit derivatives market. This book has particularly nice coverage on SPEs. Her explanation of the evolution of CDOs from balance sheet deals to arbitrage deals includes lots of practical examples and clear graphics.

Tavakoli's insights are especially valuable when highlighting caveats introduced by the rapid growth of credit derivatives technology in structured finance. She recommends structural approaches to getting fair value for both structurers and investors. Much of the information on synthetics is new material, and losses that are just now being realized in the market place might have been avoided had this book been available six months ago.

Tavakoli also predicts products that will wane and the products that will experience a growth spurt - such as the secured trust -in the Basel 2 environment.

For investors who need to know more about structured finance including new synthetic securitizations using credit derivatives technology, this book is a great resource.

This is the best introduction, giving a brief yet broad coverage to an important market. In just 144 pages Hu covers the the important points. The Mortgage Backed Security market, at over 2 trillion dollars, will soon exceed the US treasury market as the largest and most liquid bond market. Nevertheless, this market is still viewed as highly specialized due to the complications in security structure and prepayment optionality. Hu explains these complications clearly giving the reader confidence to enter this market.