Do Financial Regulations Decrease Financial Literacy?

Ask the average person about her smartphone, and the odds are better than even that she’ll be able to recite the make, model, and salient features such as battery life and camera quality. She may even be in a position to rank the phone relative to other handsets and to make a recommendation as to whether it offers good value for money. Continue reading “Do Financial Regulations Decrease Financial Literacy?”

Ready To Risk It All Part I, Options Pricing

Imagine what your life could be like if for any situation you could enjoy the upside without suffering any of the downside. Say you love the color yellow, but it totally washes out your skin tone. Or, perhaps you really want to Keep Up With The Kardashians but unfortunately there aren’t enough hours in the day to follow the entire family’s Instagram accounts. It seems like all choices we have in life have a downside, but what if I told you that in financial markets there are contracts with no downside? No, I’m not trying to sell you timeshares. I’m talking about options pricing. Continue reading “Ready To Risk It All Part I, Options Pricing”

Is Financial Regulation the Answer?

The Good Ole Days

The financial crisis of 2008 was a scary time in the U.S. Although the early half of Gen-Y had a hard time getting a job after graduation, a large portion of millennials didn’t really suffer feelings of despair, since most were still in their teens and early 20s. We didn’t have to experience first-hand our asset values melting like soft-serve on a hot, sunny day. As for bankruptcy, job loss, and car repossessions — not our style, not our time.

In order to correct the mistakes that precipitated the financial crisis of the Great Recession, the government passed the Dodd–Frank Wall Street Reform and Consumer Protection Act, effectively appointing referees to call out the banks when they step out of bounds or commit a foul against the consumer. In the five years since the Dodd-Frank Act became law, financial stability has increased, but the effects of heavy regulation are starting to seep through the cracks. Unfortunately, those unintended consequences may hinder economic growth, which has been harder to find of late than a politically correct statement from a billionaire real estate mogul with a combover — but I’m not naming names.

Continue reading “Is Financial Regulation the Answer?”