Monday, July 6, 2009

Understanding what happened, with Janet Tavakoli

Back in January I got a warm e-mail from accomplished author and President of Tavakoli Structured Finance, Inc., Janet Tavakoli. Although the topics she'd brought up impressed me (as did the depth of her knowledge) I unfairly put her note on the back burner. I occasionally get generic e-mails from folks looking for one thing or another, and despite her personalized e-mail which referenced several subtopics she'd found here, I made the mistake of lumping this note in with the other e-mails.

A month later I saw her pop up on Bloomberg, and I took notice. Then last month I ran into her on the front page of CNBC, where they gave a positive review and included an excerpt from her new book. Janet Tavaokli has written several well received books on credit derivatives, CDSs, and the like. The one on credit derivatives was so liked by Warren Buffett that he invited her to lunch to talk about it. Impressive indeed. That soon led into her latest book, "Dear Mr. Buffett: What An Investor Learns 1,269 Miles From Wall Street."

One of the things I like most about her work is that she is one of the few who points out the simple concept of how much securitization had to do with financial collapse due to the people lending you money no longer being the people being paid back the money. I think this should be the most important take for the layman, yet despite the straigtforward concept, most people don't understand what happened. If you're looking for a straightforward book discussing the crisis - which goes easy on the math and includes direct incite from Warren Buffett - give the book a read.

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