How abnormal was the stock market in October 2008?

By: Paul De Grauwe, Leonardo Iania, Pablo Rovira Kaltwasser

Last month saw a stock market move with a probability of occurring only once in 73,357,946,799,753,

900,000,000 years. What does this tell us about modern finance?

Fannie and Freddie on the rope

By: Wolfgang Münchau

When house price are expected to decline by 30%, some strange things are happening

"We interrupt regular programming to announce that the United States of America has defaulted …" Part 2

By: Satyajit Das

This is the second and final part of the series.

"We interrupt regular programming to announce that the United States of America has defaulted …" Part 1

By: Satyajit Das

This is the first of a two part series, looking at the solvency of the United States.

Fannie and Freddie on the rope

By: Wolfgang Münchau

When house price are expected to decline by 30%, some strange things are happening

Tales of Leverage

By: Satyajit Das

There are many ways to increase leverage in a financial transaction that is not properly understood, and not recorded in official statistics. This article gives some examples of the use of total return swaps, digital options, and credit leverage in CDOs.