About these ads

Latest Entries »

A Recession Doesn’t Put Everything in Decline

Filed under: Behavioral Finance — Leave a comment
May 21, 2013

Guest post by : Green

The ability to understand and manipulate economic markets for financial gain is a skill that has been watered down over

English: Fijian native trading with white traders.

the years. It seems these days that almost everyone thinks they are an expert in stock and shares, Forex or commodities. The big crash of 2008 and the ensuing volatility in a number of key markets have been refreshing in so much as it really separated the masters from the mice in market trading.

Identifying Trends

Those who have managed to continue to make money during these hard times are the quintessential trend spotters. However in this case they are not so much spotting an individual trend, more the changing methods of how to invest in the stock market. View full article »

About these ads
Tags: , , , , , , ,
Read More & Comment

Market Efficieny : Anomaly from CDS and Loan CDS

Filed under: Efficient Markets — Leave a comment
May 20, 2013

There was a unique study done recently paper titled “MARKET EFFICIENCY AND DEFAULT RISK: EVIDENCE OF AN imagesANOMALY FROM THE CDS AND LOAN CDS MARKETS” by Lawrence Kryzanowski, Stylianos Perrakis and Rui Zhong.

The findings where significantly positive pricing-parity deviations from a simulated portfolio that simultaneously participates in opposite legs of the undervalued and overvalued contracts in the CDS and LCDS markets for exactly the same underlying firm, maturity, currency and restructure clauses. These deviations cannot be accounted for by trading costs, illiquidity or imperfect data about recovery rates in the event of default, suggesting segmentation between CDS and LCDS markets. View full article »

Tags: , , , , , , ,
Read More & Comment

The Dodd Frank Act & Extraterritoriality

Filed under: Financial Crisis — 1 Comment
May 18, 2013

Yesterday CME shared a paper on the famous OTC derivatives and their treatment under Extraterritoriality. Due to the Arole of unregulated over-the-counter (OTC) financial derivatives in the 2008 financial crisis which began in the U.S. but whose influence was felt globally, the G-20 agreed in its Pittsburgh meeting in 2009 that “all standardised OTC derivative contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by end-2012, at the latest. OTC derivative contracts should be reported to trade repositories. Non-centrally cleared contracts should be subject to higher capital requirements.”

The members of the G-20, in varying degrees and at different speeds, have embarked in their own jurisdictions to reform the OTC derivatives market. Given the interconnected nature of these markets, international cooperation has very much been part of crafting derivatives financial regulation.
View full article »

Tags: , , , , , , ,
Read More & Comment

CDS, Bonds and Basis Trade

Filed under: Financial Crisis — 1 Comment
May 17, 2013
The crisis has given the birth to new jargon’s and terminologies in the world of financial market, I had tried to
English: The Broker at the Verizon Centeraccumulate few of them from various sources:

  • [h]ypothecation is when a borrower pledges collateral to secure a debt. The borrower retains ownership of the collateral but is “hypothetically” controlled by the creditor, who has a right to seize possession if the borrower defaults.
In the U.S., this legal right takes the form of a lien and in the UK generally in the form of a legal charge. A simple example of a  is a mortgage, in which a borrower legally owns the home, but the bank holds a right to take possession of the property if the borrower should default. View full article »
Tags: , , , , , , ,
Read More & Comment

The Indian MBA

Filed under: Economies — Leave a comment
May 16, 2013

India produces the maximum no. of MBA’s in the world, graduate students finds it an attractive opportunity and wants Ato join the bandwagon which has been sold through the expensive coaching’s like TIME, Career launcher, PT, PF and so on . But paying huge amount of coaching fees doesn’t guarantee your place in the IIMs or in Tier 1 B schools. Every year the CAT, XAT, SNAP, MAT takers are raising but vice-versa the good B schools intake capacity is not proportional to the candidates.

This led a good opportunity for many of the (Master-Mind) punters to have their own colleges. Few of colleges not AICTE approved have proved themselves by quoting the best placements in the country with very high proficient level of standards. But there are colleges which are like a charlatan fooling the students (even the AICTE approved ones) by charging a huge amount of fees. This culture is well versed in the metros. View full article »

Tags: , , , , , , ,
Read More & Comment

Cost Matter in all forms of Efficient Markets

Filed under: Behavioral Finance — Leave a comment
May 15, 2013

John C. Bogle the renowned name in the mutual funds shared some thoughts long back saying Whatever the form of theA EMH, I know of no serious academic, professional money manager, trained security analyst, or intelligent individual investor who would disagree with the thrust of EMH: The stock market itself is a demanding taskmaster. It sets a high hurdle that few investors can leap.

University of Chicago Professor Eugene F. Fama had performed enough analysis of the ever-increasing volume of stock price data to validate this “random walk” hypothesis, rechristened as the efficient market hypothesis (EMH). Today, the intellectual arguments against the EMH religion are few. The church, however, has three different dogmas. Princeton Professor Burton Malkiel describes them: the weak form (stock price changes over time are statistically independent); the semi-strong form (prices quickly reflect new value-changing information); and the strong form (professional managers are unable to accurately forecast the future prices of individual stocks). View full article »

Tags: , , , , , , ,
Read More & Comment

Mutual Funds : The Cost Matter Hypothesis

Filed under: Behavioral Finance — 1 Comment
May 14, 2013

Active investment still has some active defenders, And digging into the reasons for active funds’ persistent problems, itA is easy to see why. Despite the claims of the Efficient Market Hypothesis (EMH) that it is impossible to beat the market other than by luck, it appears that an impressive number of managers do achieve the feat.

The problem is that they do not manage to beat the index by enough to be able to pay themselves and still pass on a decent performance to their clients. In other words, to quote Jack Bogle, the founder of Vanguard and the spiritual father of index investing, the case for passive investing rests on the CMH (Cost Matters Hypothesis), not the EMH. View full article »

Tags: , , , , , , ,
Read More & Comment

Is it the final Quantitative Easing

Filed under: Economies — Leave a comment
May 13, 2013

The Stock Twits did a great job on the never ending Quantitative Easing . As T.S. Eliot said The end is where we start from.A

Below are nine points  believe are the key going forward:

  1. The Fed is not uncomfortable yet with the level of market speculation, complacency and asset price reflation – but it is totally and completely aware of what we’re up to.
  2. The castigating rhetoric of hedge fund managers emanating from both Sohn and SALT, whose tongues loll out of their mouths from their break-neck pursuit of the runaway benchmark indexes, has not been lost on the FOMC. Voting members are not only aware of the effects their policies are having, they are aware of the perceptions surrounding them as well. View full article »
Tags: , , , , , , ,
Read More & Comment

3 Reasons Investors Choose Brand-Name Brokerage Firms – and Why They Shouldn’t

Filed under: Finance Awareness — Leave a comment
May 12, 2013

Guest Post by :  Neda Jafarzadeh

A study from NerdWallet Investing found that 17 million online investors were paying too much for their online

English: MVC Tournament

brokerage accounts. This huge number is due mostly to consumers blindly trusting that brand-name firms such as TD Ameritrade, E-Trade, and Schwab are well-known and expensive because they offer the highest quality experience. While there is nothing wrong with the services that each provide, here are three areas where the pricey brand-names firms don’t outshine the discount brokerages at all:

1. Increased Reliability

 What you might think: A brokerage firm that is a household name is the most reliable and trustworthy place to keep your money. Anything less won’t measure up to that same standard. View full article »

Tags: , , , , , , ,
Read More & Comment

Risk Arbitrageur

Filed under: Trending Brokers — Leave a comment
May 12, 2013

Takeover Target

Talking about Arbitrage – drama film directed by Nicholas Jarecki and starring Richard Gere. A troubled hedge fund magnate desperate to complete the sale of his trading empire makes an error that forces him to turn to an unlikely person for help.

It is well-known that risk arbitrageur play an important role in the market for corporate control. After a tender offer, the trading volume increases dramatically in large part because of risk arbitrageurs activity.They take long positions in the target stock, in the hope that the takeover will go through. They are also usually hedged by taking short positions in the acquirer’s stock. View full article »

Tags: , , , , , , ,
Read More & Comment
%d bloggers like this: