Tag: Ajit Jain

Weekend wrap-up: 1/16 to 1/20/12

| January 21, 2012 | 0 Comments

Here’s what you may have missed this past week on the Finance Addict. And, of course, the GIF of the Week after the jump. ‘Cause you deserve it.

  1. Have banks been robosigning credit cards, too? Robosigning has created a mortgage nightmare, are credit cards next?
  2. The ECB is very p.o.’d. The big news out of Europe recently was *not* S&P’s downgrade of 9 countries, including France, but rather something else.
  3. Will high oil prices bring the economy low again? It’s always the unintended consequences that get you in the end. Will this be true for global oil prices?
  4. Has banks’ bonus culture really changed? Short answer is, “No.”
  5. Models behaving badly. Why are the financial models that so many banks and investors depend on so open to manipulation? Continue Reading

Models behaving badly

| January 20, 2012 | 1 Comment

By Photo-Fenix on Flickr

So it’s not just American banks playing fast, loose and fraudulent with figures. There’s a new ProPublica article out that raises serious questions about Deutsche Bank, picking up on a theme that was first reported on by Zero Hedge and by Dealbook, (who dropped it like it was hot), back in 2009.

The article highlights a junior Deutsche Bank analyst who was allegedly told to change the numbers in the financial models used to estimate how much cash would be generated by the mortgage-backed bonds that DB packaging up as CDOs. Ajit Jain was supposedly asked by mid-level management to pretty up the figures so that rating agencies would assign the CDOs a coveted AAA rating, which would allow Deutsche to sell them to a much broader base of investors. Continue Reading