Shervin Pishevar says volatility indexes are MBS and CDS-style scams

The 2008 financial crisis was one of the worst in the history of the United States. The reasons behind it are numerous, and there is still vigorous debate about the role that various policies, financial vehicles, institutions and people played in bringing about the worst financial catastrophe since the Great Depression.

However, everyone who has studied the 2008 debacle almost universally agrees that certain financial instruments and the extremely loose regulations surrounding them were chief culprits. So-called mortgage-backed securities and credit default swaps were key components in the economic bomb that ultimately exploded, nearly bringing down the entire financial edifice of the United States with it.

Shervin Pishevar, one of the most successful entrepreneurs in Silicon Valley, recently unleashed a flurry of tweets on his account, which is followed by nearly 100,000 people. One of the more provocative ideas that Shervin Pishevar put forth was that some of the same dynamics that led to the 2008 crash are now being repeated, and for much the same reasons. Shervin Pishevar believes that volatility indexes and the funds that are centered around them are essentially scams, fueled by the same base motivations that led to the rise of collateralized debt obligations and credit default swaps.

Pishevar says that the real reason behind the huge popularity of volatility indexes, prior to their momentous crash last February, was the simple fact that many fund managers want to create volatility because that is what they are incentivized to do. Pishevar points out that the way that many fund managers are compensated is equivalent to a classical principal-agent scam. The manager wants to create as much volatility as possible because he is able to participate in the upside without personally assuming any of the downside risk. That means that the more frequently the fund registers huge wins, the more the manager will actually be paid over the long term.

Shervin Pishevar strongly warns that all investors should read and understand a fund’s prospectus before investing. In particular, they need to carefully read and, if need be, go over with a professional the compensation structure of the fund, making sure that the management is not incentivized to run very costly scams with the investors’ money.

https://www.worldaffairs.org/event-calendar/speaker-directory/shervin-pishevar

Ted Bauman, impacting the world of economics through knowledge

Ted Bauman, a resident of Atlanta GA in an editorial director at Bayan Hill publication. He specializes in privacy, asset protection, low risk investment strategies and international migration issues. He has worked as a fund manager in several non-profit organizations that funded housing projects of people earning low incomes. He has always had an interest in helping people to use their resources to achieve financial independence. Today, he gets to do this every day as a contributor to Bayan Hill.

They say experience is the best teacher. But it only teaches those willing to learn from it. Ted Bauman’s success in the world of finance has been dependant on his quick-learning ability. True, his degree from Cape Town University in economics and history gave him the academic training necessary to thrive in his field, but his ability to learn from every position he has been in has seen him acquire invaluable experience.

Even in his youth working minimum wedge jobs at Burger King and MacDonald’s, he picked lessons that helped him in managerial positions. Working in these low income jobs he came to understand that for any organization to stand, it has to equally care about the employee at the lowest level as much as it takes care of the employee at the top most level. This wisdom he applied in every managerial position he held. Visit Stock Twits for more info.

Ted Bauman says his most fulfilling job has been contributing to Bayan Hill Publication. Writing stories for Bayan Hill gives him a chance to educate the masses on issues that matter. However, his challenge has been being able to make matters of finance and economics appealing to readers while at the same time provoking them to think critically. To meet this challenge, he relies on his skills as a writer to make his stories easy to understand and appealing to the reader. He also keeps up with the trends and is constantly on the lookout for any shifts in the market. This makes him an apt analyst and a valuable contributor of the publication.

As the editorial director at Bayan Hill Publishing, Ted says that his greatest achievement is seeing the publication influence people’s thinking about their economy as a country and globally. He says that the stories they publish in the publication have seen readers start to question economic trends. This means that pretty soon there will be no need for another entity to decide on the trend to go with. This kind of critical thinking not only affords people options but also inspires innovation. It is therefore safe to say that Mr Bauman is playing an integral part in changing the world’s economy for the better.

Read:https://www.bloomberg.com/research/stocks/private/person.asp?personId=264684898&privcapId=109183793&previousCapId=109183793&previousTitle=The%20Sovereign%20Society

 

Bitcoin Value Constantly Increasing in the Exchange Market

After a single Bitcoin crossed the $5,000 some months ago, Bitcoin has again cost more than $10,000 in some exchange markets. The price of the Bitcoin has increased due to the increasing numbers of new buyers that have shown interest in the currency form all over the world. The new buyers think of Bitcoin as a competitor of gold that will be effective for storing money away from government and company regulations.

Bitcoin was launched in 2009 by Satoshi Nakamoto and was able to survive hardships in its first seven years. Bitcoin trading started taking place in some parts of Japan and South Korea among investors. Investors in Seoul have gone ahead and developed stores where individuals can buy and sell the currency. The prices of Bitcoin reached $10,000 in South Korean exchange markets. It was valued at $9,700 in the American exchanges.

The American stock exchange market transactions of Bitcoin reached $5 billion last Sunday. Experts in the Bitcoin technology believe that the new currency will soon join bonds, physical commodities, and stocks as an asset that people will invest on. At least 100 hedge funds have seen opportunity in the currency and have invested in it. The hedge funds have also invested in other virtual currencies.

The price of Bitcoin is currently seven times the price it sold at in 2013. Bitcoin companies have increased across the world unlike in 2013 when only one company, Mt. Gox owned them. In 2013 Mt. Gox was in charge of more than 75% of all the Bitcoins that were available. Currently, the companies hosting Bitcoins have only 10 of the currency each. The industry is therefore safe from problems caused by monopolies.

The currency has reached many investors in several countries across the world. The currency’s design is the same in all countries. Their storage and trading are carried out on a network of computers that is not centralized. The trade is also not regulated by any company or government. Its prices are expected to rise in the next few months.