Janet Tavakoli (born 1953) is an American author and structured finance expert based in Chicago. She has had three books published on credit derivatives, 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 Technology 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.
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 Landesbank 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.
Tavakoli's book Dear Mr. Buffett: What an Investor Learns 1,269 Miles From Wall Street (2009) uses her discussions with Warren Buffett 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.
Her first novel, Archangels: Rise of the Jesuits was published in 2013.
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, 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.
- Credit derivatives: a guide to instruments and applications, Wiley, 1998, ISBN 978-0-471-24656-5
- Credit derivatives & synthetic structures: a guide to instruments and applications, John Wiley and Sons, 2001, ISBN 978-0-471-41266-3
- Collateralized debt obligations and structured finance: new developments in cash and synthetic securitization, John Wiley and Sons, 2003, ISBN 978-0-471-46220-0
- Dear Mr. Buffett: what an investor learns 1,269 miles from Wall Street, John Wiley and Sons, 2008, ISBN 978-0-470-40678-6
- Structured Finance and Collateralized Debt Obligations: New Developments in Cash and Synthetic Securitization, John Wiley & Sons, 2008, ISBN 978-0-470-28894-8
- Archangels: Rise of the Jesuits (2013)
- "The Casandra of Credit Derivatives", Business Week Chicago, January 28, 2008.
- Interview on C-Span Q&A. April 19, 2009.
- Puma, Amy Braverman (May/June 2008). "Structured success". University of Chicago Magazine. Retrieved 2013-02-22.
- Bear Sterns, Salomon, and BOA are mentioned in the Brian Lamb C-Span interview, April 19, 2009.
- "Biography". Tavakoli Structured Finance. Retrieved 2013-02-22.
- Tavakoli, Janet M. (2009). Dear Mr. Buffett: What An Investor Learns 1,269 Miles From Wall Street. Hoboken, N.J.: John Wiley & Sons. p. 2. ISBN 978-0-470-40678-6.
- Tavakoli, Janet (2 February 2013). "Something Funny and Fishy About Goodreads' Giveaways and Amazon". Huffington Post.
- Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism, Kevin Phillips, Penguin Group, 2009, ISBN 978-0-14-311480-2
- "Commentary: What Wall Street owes you", CNN, July 15, 2009
- "Timothy Geithner, I Call Your Bluff", Huffington Post, Janet Tavakoli, January 7, 2010
- "New York Fed’s Secret Choice to Pay for Swaps Hits Taxpayers ", Bloomberg, Richard Teitelbaum and Hugh Son, October 27, 2009
- Tavakoli, Janet (November 22, 2009). "I Retract My Apology and Call for More Regulation of Goldman Sachs" (PDF). Tavakoli Structured Finance. Retrieved 2013-02-22.
- Official website
- BusinessWeek Article
- University of Chicago Magazine Article
- C-SPAN Q&A interview with Tavakoli, April 19, 2009