In pursuit of cheap sensationalism


In the United States there is not only the developed capital markets. This country is rich and amateurs who consider themselves financial experts. "Sun" published a couple of fine specimens of such thoughts specialist, Adam Hamilton, who calls himself an "independent analyst" and "private investor." "Incriminating" works of Mr. Hamilton could not go unanswered.

The great and terrible

In both his articles Adam Hamilton angrily denounces financial derivatives market and its main "monster" - an American commercial bank JPMorganChase. If the first paper [1], "independent analyst" has led me to the confusion, the second [2] irritated. His first publication of "private investor", which, apparently, in my life had anything to do with derivatives (and if they had, it is likely to lose "in the dust"), begins by debunking the derivatives market as "reckless game of chance. " As evidence, he eagerly lists trouble occurred with the market of financial derivatives and their millions, sometimes billions, loss. In the opinion of A. Hamilton, loss of players are direct evidence of a mystical-hazardous nature of the derivatives market, and not the result of poor risk management.

Zhivopisuya scam Nick Leeson and illiteracy Robert Citron, Hamilton is trying to create in the reader an impression of the derivatives market, as a kind of abyss, sucking in their deadly depth carried away financiers. At the same time, he says nothing about what is really going on in the market as a whole, which are primarily used for financial derivatives.

For him, they are just "cold deck", and that they make a profit (otherwise the market would not grow up so fast), "analyst" closes his eyes. Meanwhile, according to research by the Bank of England, the derivatives have been successfully used not only for speculation, but for the insurance of export revenue, budgeting, access to other markets, fixed yield securities portfolios, central bank intervention. In the world of monsters Hamilton did not exist for him Derivatives - "a pack of hungry sharks, able to devour those who dare to play with them."

The apogee of depravity futures market for Hamilton was a tragic story with a fund Long-Term Capital Management. Hedge fund brings fabulous profits, despite a difficult strategy and derivatives, was insolvent after the Russian crisis of 1998. However, exposing the fund to recklessness, Hamilton became interested and distorted the facts.

First, the fund has been bankrupt, simply because of the lack of liquidity, he was unable to pay its current obligations. Second, Hamilton chides U.S. Fed fund for providing financial assistance. "Where is the free market economy?" - He asked.

In fact, assistance is not at the expense of taxpayers' money, and at private expense. U.S. Federal Reserve will coordinate a group of fourteen major banks and investment companies have agreed to invest in the fund additional capital.

Finally, the most important and most uninteresting for plaintiffs like Hamilton - a hedge fund is not bankrupt! He continued to conduct operations until the end of 1999, when fully paid off the depositors. Banks participating in the additional investment, gained 10% on their investment, and the remaining shareholders - 18% per annum!