Tale of two cities..

Businessweek has an article comparing the two heavy-weights of financial domination - amusing!!

troubled subprime markets..

Interesting article in WSJ talks about rising default and deliquency rates in subprime market. Excerpts:

The weak U.S. housing market has cut the value of some homes to below the amount the owners owe on their mortgages, making them prone to default. The risk is showing up in the subprime-mortgage market, which serves borrowers with the worst credit histories. Default rates in this market are rising.

Friday afternoon, the ABX-HE 06-2 index for buying protection on low-rated, or BBB-minus, subprime mortgage bonds stood at 90.34, down from 95.25 at the end of December and 98.2 at the end of November. It was the lowest level since this version of the index began trading in July. A decline signals that sellers of these insurance contracts are demanding larger payments to compensate for what they see as a higher risk of mortgage defaults, which would reduce the value of mortgage securities.

When home prices are rising rapidly, people who fall behind on their loans often can sell their houses for enough money to pay off their debt or else refinance into a less costly loan. In a weak housing market, it becomes harder to sell homes quickly or refinance. More people lose their homes to foreclosure.

week 45.. end of job search!

Yes, it is all over at the job front - have accepted an offer from a reputed I-bank. The work deals with ABS related structured products - so the current class on ABS is of course the most relevant for me. This led me to think about doing a 3-credit project for the "Applied finance project" (one can do a smaller project for 1 credit or a more involved one for 3) - just because I believe one learns more if "forced" to do a project - you read up more on the subject than any course you can do. So goodbye "real options" - I think you are a great technique but it would be a good "option" for me to learn about you later on in life.

In other news, I was saddened to hear that FENEWS has decided to close shop due to production costs issues - comon, you successful FEs (DE Shaw, Jim Simmons) - throw a couple of your spare change (read millions) at this publication - it is indeed an excellent resource on Financial engineering - the fact that it is closing shop doesnt bode well for the field!

weeks 43/44..

week 43 was my last week in NYC.. spent it interviewing as well as sightseeing. But it sure was nice to get back to California.. dont get me wrong.. while I enjoyed NYC, California (esp bay area) has a special feel for me, after all it was home for the past few years!! The sun keep me happy, I guess...

Week 44 - T4
4 courses - I am not taking dynamic asset mgmt..
other are
-ABS (really cool course - very relevant in the job mkt)
- real options
- behavioral finance (nice prof., very interactive class)
- applied finance project

week 42..

- Great article on Quant strategies at BGI.. (courtesy bloomberg)

- Last day of internship.. completed and filed projects and now looking forward to relaxing for a week in NYC and nearby areas.

- Another of my classmates Charles's blog - look out for the cool photos!!