Janet Tavakoli
Encyclopedia
Janet Tavakoli is an American author and structured finance
expert based in Chicago. She has had three books published on credit derivative
s, structured finance, and the 2008 global financial crisis.
in 1975, and an M.B.A. in finance from the University of Chicago Graduate School of Business in 1981.
After marrying an Iranian Ph.D. student in college, Tavakoli lived in Iran for over a year during the time the Shah was overthrown, leaving in 1979, three months after Ayatollah Khomeini returned.
in London, the capital markets group for Bank One in Chicago, the Swap (finance)
trading desk and mortgage-backed securities
marketing for Merrill Lynch in New York, and MBS marketing to Japanese clients for PaineWebber (now UBS) in New York. She has also worked for Bear Stearns, Goldman Sachs
, Salomon Brothers and Bank of America.
She taught "Derivatives: Futures, Forwards, Options and Swaps" at the University of Chicago Booth School of Business as adjunct associate professor of finance.
on credit derivatives and structured finance as context for analyzing the global financial meltdown of 2008. The discussions began after Buffett invited her to lunch after receiving a copy of her book Credit Derivatives and Synthetic Structures (1998, 2001). This book, along with her Collateralized Debt Obligations and Structured Finance: New Developments in Cash and Synthetic Securitization (2003, re-published as Structured Finance and Collateralized Debt Obligations: Developments in Cash and Synthetic Securitization in 2008), outlines flaws in the methodology for rating structured financial products.
She has also written articles for The Wall Street Journal
, Financial Times
, Business Week, and other financial publications.
Henry Paulson
, the prime architect of the bailout, was CEO of Goldman Sachs at the time those CDS agreements were entered into. Geithner was later appointed Treasury Secretary by the Obama administration.
Structured finance
Structured finance is a broad term used to describe a sector of finance that was created to help transfer risk and avoid lawsStructured finance is a broad term used to describe a sector of finance that was created to help transfer risk and avoid laws...
expert based in Chicago. She has had three books published on credit derivative
Credit derivative
In finance, a credit derivative is a securitized derivative whose value is derived from the credit risk on an underlying bond, loan or any other financial asset. In this way, the credit risk is on an entity other than the counterparties to the transaction itself...
s, structured finance, and the 2008 global financial crisis.
Education and background
Tavakoli grew up in the south side of Chicago, received a B.S. in chemical engineering from the Illinois Institute of TechnologyIllinois Institute of Technology
Illinois Institute of Technology, commonly called Illinois Tech or IIT, is a private Ph.D.-granting university located in Chicago, Illinois, with programs in engineering, science, psychology, architecture, business, communications, industrial technology, information technology, design, and law...
in 1975, and an M.B.A. in finance from the University of Chicago Graduate School of Business in 1981.
After marrying an Iranian Ph.D. student in college, Tavakoli lived in Iran for over a year during the time the Shah was overthrown, leaving in 1979, three months after Ayatollah Khomeini returned.
Career
Tavakoli has worked in finance since completing her M.B.A. in 1981. She has traded, structured, and sold derivatives and structured products in both New York and London. In addition, she has held senior positions in the global financial markets division at Westdeutsche LandesbankWestLB
WestLB AG is a European commercial bank based in Düsseldorf in Germany which is partly owned by the German state of North Rhine-Westphalia. The letters LB in the name stand for Landesbank. The Landesbanken are a group of state owned banks unique to Germany...
in London, the capital markets group for Bank One in Chicago, the Swap (finance)
Swap (finance)
In finance, a swap is a derivative in which counterparties exchange certain benefits of one party's financial instrument for those of the other party's financial instrument. The benefits in question depend on the type of financial instruments involved...
trading desk and mortgage-backed securities
Mortgage-backed security
A mortgage-backed security is an asset-backed security that represents a claim on the cash flows from mortgage loans through a process known as securitization.-Securitization:...
marketing for Merrill Lynch in New York, and MBS marketing to Japanese clients for PaineWebber (now UBS) in New York. She has also worked for Bear Stearns, Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
, Salomon Brothers and Bank of America.
She taught "Derivatives: Futures, Forwards, Options and Swaps" at the University of Chicago Booth School of Business as adjunct associate professor of finance.
Writing
Tavakoli's book Dear Mr. Buffett: What an Investor Learns 1,269 Miles From Wall Street (2009) uses her discussions with Warren BuffettWarren Buffett
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world. Often introduced as "legendary investor, Warren Buffett", he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is...
on credit derivatives and structured finance as context for analyzing the global financial meltdown of 2008. The discussions began after Buffett invited her to lunch after receiving a copy of her book Credit Derivatives and Synthetic Structures (1998, 2001). This book, along with her Collateralized Debt Obligations and Structured Finance: New Developments in Cash and Synthetic Securitization (2003, re-published as Structured Finance and Collateralized Debt Obligations: Developments in Cash and Synthetic Securitization in 2008), outlines flaws in the methodology for rating structured financial products.
She has also written articles for The Wall Street Journal
The Wall Street Journal
The Wall Street Journal is an American English-language international daily newspaper. It is published in New York City by Dow Jones & Company, a division of News Corporation, along with the Asian and European editions of the Journal....
, Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
, Business Week, and other financial publications.
Criticism of TARP
Tavakoli is an outspoken critic of the 2008 Troubled Asset Relief Program (TARP) for financial institutions. She points out that many decisions made appear to favour companies with connections to government officials making the decisions. In particular, she criticizes the Federal Reserve Bank of New York, headed by Timothy Geithner at the time, for deciding to pay Goldman Sachs and other financial firms 100 cents on the dollar for billions of dollars of troubled AIG credit default swaps, while other bond insurers have settled similar contracts for as little as ten cents on the dollar. AIG had been trying to persuade the banks to settle for a discount of 40 cents on the dollar.Henry Paulson
Henry Paulson
Henry Merritt "Hank" Paulson, Jr. is an American banker who served as the 74th United States Secretary of the Treasury. He previously served as the Chairman and Chief Executive Officer of Goldman Sachs.-Early life and family:...
, the prime architect of the bailout, was CEO of Goldman Sachs at the time those CDS agreements were entered into. Geithner was later appointed Treasury Secretary by the Obama administration.
Works
- Credit derivatives: a guide to instruments and applications, Wiley, 1998, ISBN 9780471246565
- Credit derivatives & synthetic structures: a guide to instruments and applications, John Wiley and Sons, 2001, ISBN 9780471412663
- Collateralized debt obligations and structured finance: new developments in cash and synthetic securitization, John Wiley and Sons, 2003, ISBN 9780471462200
- Dear Mr. Buffett: what an investor learns 1,269 miles from Wall Street, John Wiley and Sons, 2008, ISBN 9780470406786
- Structured Finance and Collateralized Debt Obligations: New Developments in Cash and Synthetic Securitization, John Wiley & Sons, 2008, ISBN 9780470288948