J Larsen

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Posts posted by J Larsen


  1. Anybody know if there's a connection between the weirdness on the Russian stock exchanges & our own financial teeteriness?

    Yes. The basic connection is that right now there is an extreme fear of risky assets (what people call a "flight to quality"), hence a massive outflow of capital from Russia's stockmarket. Furthermore, if Russia's banking system is similar to that of others around the globe, its banks have "exposure" to Lehman/whoever or someone who does. It's like a giant ball of yarn, once you pull on one end you may end up unraveling the whole thing.

    Guy

    Ironicly, I can remember a time in the recent past (2000 - 01) when the "fligth to quality" was the explanation for the run up in AIG shares.


  2. AIG might be OK for the moment...

    Stocks rise on report of possible govt. aid to AIG

    A government bailout of AIG is very BAD news.

    Worse than AIG actually going under? Again, I don't profess to know the particulars. I'm reading the posts of those who do with great interest.

    There have been estimates that AIG may be effectively "in the red" by as much as $100 billion, so it could prove to be a very expensive tab for the taxpayers to pick up, even if you gave the bondholders (largely pension/retirement funds) $0.


  3. ... Given how cash-strapped AIG is right now (thanks to CDO investments, the extent of which I cannot believe passed muster with 50 state commissioners), this is a very real risk. Given the fact that the stock touched $3.50 today (95% below where it was less than a year ago), I think it fair to say that many others share this assessment.

    Doubt it's just CDO investments. I've been hearing that AIG trading desks have some seriously underwater/mishedged CDS (credit default swap) positions.

    This may betray my ignorance, but prior to your post I would have considered a CDS to be a type of CDO. Isn't a CDS essentially a firm-specific CDO?


  4. ps How could I forget the rating agencies!!!!!!

    Yeah, thank goodness we had the rating agencies to tell us that we might not want to buy any Lehman securities today...

    The rating agency industry is almost certain to be the next in line for major reform. I'm not sure what form it will take, but I doubt that in 5 years firms will be paying the agencies millions of dollars to rate them. Given all the problems of late, the appearance (at minimum) of conflict of interest is not sustainable.


  5. There's a little more to it than that. Statutory capital requirements for insurance companies are a function of their ratings. Insurance companies can (and have) failed when these capital requirements have increased to an unsustainable level. I have been involved in 11th hour talks with ratings agencies on behalf of clients for this very reason. Given how cash-strapped AIG is right now (thanks to CDO investments, the extent of which I cannot believe passed muster with 50 state commissioners), this is a very real risk. Given the fact that the stock touched $3.50 today (95% below where it was less than a year ago), I think it fair to say that many others share this assessment.

    If they passed muster with supposedly-sophisticated institutional investors, chief risk officers at major financial institutions and all the "smart" people in national policymaking circles, I don't think you can be so harsh on state insurance regulators.

    Guy

    Point taken, unlike the other agents you mention, the role of state insurance commissioners is to ensure that the companies writing in their states have suitably conservative, traditional investments to ensure the solvency of the firm beyond any reasonable doubt. You're typically looking at a portfolio dominated by treasuries, with a smattering of investment grade corporate bonds.


  6. Can anybody here speak to the implications of an AIG belly-up? Obviously it wouldn't be good...

    Any large financial failure is bad, but a credit downgrade does not mean that AIG is in danger of failure. It means that it costs them more to borrow and attract customers. It's not the same thing. Reports today on TV indicated that AIG is not saddled with loads of debt, although I haven't really checked it on the internet or anything.

    There's a little more to it than that. Statutory capital requirements for insurance companies are a function of their ratings. Insurance companies can (and have) failed when these capital requirements have increased to an unsustainable level. I have been involved in 11th hour talks with ratings agencies on behalf of clients for this very reason. Given how cash-strapped AIG is right now (thanks to CDO investments, the extent of which I cannot believe passed muster with 50 state commissioners), this is a very real risk. Given the fact that the stock touched $3.50 today (95% below where it was less than a year ago), I think it fair to say that many others share this assessment.


  7. You're really never out of the woods. At a given energy level, there is essentially a "probability per unit time" of creating a given particle - I don't see why this would not apply to mini black holes as well. So if the probability is 10% per year of creating one, several years of experiments could be conducted before it occurred.


  8. Thanks again for all the help. I look forward to meeting you both when I get there.

    Do you have any advice on where to stay in Kyoto? I'm only planning on being there one night. I was thinking maybe the eastern part of the city? Do you know of any Ryokan that would welcome a foreign couple?

    Thanks!


  9. I guess I consider myself to be a rational audiophile, meaning that I am willing to spend more to get better sound, but I am not willing to spend 100 times more for a 10% improvement, and I have no patience for debating claims about equipment that defy the laws of physics or that ignore biological realities about the limits of human audio perception. I'm also not an "upgrader." I plan to get a lot more use out of my B&W/Rotel/NAD set up. That said, someday I might get a consumer turntable to use in place of my Technics 1200.


  10. Thanks a lot! For the maps, I have been studying these two fairly meticulously, and have drawn up some fairly detailed plans based on them:

    http://www.amazon.com/Tokyo-City-Atlas-Bil...d/dp/4770028091

    http://www.amazon.com/Knopf-MapGuide-Tokyo...9633&sr=1-1

    I've also been doing the Pimsleur Conversational Japanese course, but I can't honestly say I've made a lot of progress. Still, we're hoping to be able to try a few different types of restaurants. My girlfriend has a cousin in Tokyo that we may be able to persuade to act as translator for us in exchange for a couple free dinners!

    Time permitting, I'd be happy to translate for you.

    Awesome! Shall we check in as the date approaches?


  11. I would also recommend Shibuya over Roppongi. Better transportation links, great for CD shopping (HMV, Tower, Disc Union, Reco) and plenty of places to eat and drink. I live in Azabu and know Roppongi pretty well, still great for really late drinking options but pretty sleazy these days. Depending when you will be here, would be happy to meet up at that time. Shinjuku is great but is just a few minutes from Shibuya on the Yamanote line.

    Thanks, John. I will be in Tokyo from at least 9/29 to 10/2. We are also planning to go to Kyoto and possibly Nara before heading to Hanoi, but our plans aren't set for that part of the trip yet. Meeting up would be great if the dates work out for you.


  12. Thanks a lot! For the maps, I have been studying these two fairly meticulously, and have drawn up some fairly detailed plans based on them:

    http://www.amazon.com/Tokyo-City-Atlas-Bil...d/dp/4770028091

    http://www.amazon.com/Knopf-MapGuide-Tokyo...9633&sr=1-1

    I've also been doing the Pimsleur Conversational Japanese course, but I can't honestly say I've made a lot of progress. Still, we're hoping to be able to try a few different types of restaurants. My girlfriend has a cousin in Tokyo that we may be able to persuade to act as translator for us in exchange for a couple free dinners!


  13. Thanks to all; Shibuya it is.

    Any recommendations for places to eat? My girlfriend and I are pretty excited about sampling the cuisine.

    Somewhat more obscurely, I am interested in a lot of Japanese photography. If anyone knows of good galleries or even of good bookstores for monographs, I'd be very interested to know. I know of one called A Black Ship.

    I'm also interested in experimental music clubs in Tokyo - free jazz, noise, minimalism, anything along those lines. I think there is one called Super Deluxe in Shibuya, but I have a hunch there are quite a few more.

    Finally, I'd love to know about anything that would be of interest to an architecture/industrial design nut that would be unlikely to be mentioned in a guidebook. For instance, I'm looking forward to visiting hhstyle.com/casa.

    Thanks! A lot of these things are not mentioned in guidebooks and are difficult for a non-Japanese speaker to learn about online.


  14. I'm pretty sure that you'd find Shibuya more interesting. Roppongi is just a clubbers hangout.

    Shinjuku would be my first choice but you don't mention it as an option.

    Roppongi, Shibuya and Shinjuku are not far apart, no more than ten minutes or so my subway.

    If you need any pointers re shops or anything else feel free to ask.

    Thanks - I was just thinking Roppongi because it seems very central (at least on the map, which I know can be misleading) and because it seems like there are a lot of interesting art spaces there.

    I will look into Shinjuku.

    Just for a sense of scale, how long of a walk is it from Shibuya to Roppongi? I'm guessing 20-25 minutes?


  15. The Economist first and foremost. I think it may be the most "important" periodical out there.

    Also The NYer and The Wire.

    Of less general interest but equal personal interest are Science and Nature.

    I'm looking for some good new art magazines. There used to be a few that I liked (e.g. FlashArt), but they all seem to have a tendency to get overly commercial and overrun with uninteresting advertising as time goes on.