Sudip Bandyopadhyay’s Blog

Financial crisis have, by and large, exhibited a repetitive pattern, demonstrating the inability, or unwillingness, of financial market participants to learn.  Charles Mackay, in his book Extraordinary Popular Delusions and the Madness of the Crowds, says that while episodes of panic and disasters have their own distinctive features, they exhibit a common feature – that [...]

“History demonstrates conclusively that a modern economy cannot grow if its financial system is not operating effectively.” So said Ben Bernanke, Federal Reserve chairman, last  week in London.  It sounds obvious, but it is also fundamental - and for three reasons. First, banks allow people to pay each other easily - without them commerce would [...]

Although volatility in most assets is sharply lower than it was in November, oil price volatility has continued to climb. This rise in volatility, and resulting near $30-a-barrel oil price, is reflecting the same imbalances in the energy market that $147 oil did last summer: namely inadequate investment in basic infrastructure to produce, deliver, store [...]

There’s a joke about a man unable to get to sleep while staying at a hotel in Las Vegas.  He goes down to the roulette table, puts $5 on black and wins. He keeps betting and rides an amazing streak, finally holding well over $1m in chips. Deciding to trust Lady Luck one last time, [...]

Why did we mostly get “it” so sensationally wrong? How did something that looks increasingly like the precursor of a slowdown or slump creep up on almost all of us last year? It is a pretty good question. It is a pretty embarrassing one, too. Perhaps this was more [...]