Ok, So the Greece just voted in a landslide to reject further austerity (Good for them). So nobody knows what’s going to happen next. There nothing like a financial crisis to get adrenaline pumping, Might be the chances of Grexit be higher now, but I would not dig in to detail. Would rather move away to the maverick author Nassim Nicolas Taleb who made the points for Bailouts and Prevailing culture in the financial domain
- The main difference between government bailouts and smoking is that in some rare cases the statement “This is my last cigarette “holds true
- The difference between banks and Mafia: banks have better legal regulatory expertise, but Mafia understands the public opinion. Or you can say”Give a man a gun and he can rob a bank. Give a man a bank and he can rob the world”
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The endeavour below is to – explain a very complicated circular trading (round tripping algorithm) nonsense that became a crisis – in a simple way.
MARY is the proprietor of a bar in Dublin. She realises that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronise her bar – she will go broke.
To solve this problem, she comes up with a new marketing plan that allows her customers to drink now, but pay later.
She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).
Word gets around about Mary’s ‘drink now, pay later’ marketing strategy and, as a result, increasing numbers of customers flood into Mary’s bar. View full article »
Life is uncertain and volatility could be best understood by one’s life, sometimes you are on peak sometimes low. Loves, hatred, emotions, excitements, are the various factors that define the volatility of life.
Moving down to markets Volatility is the inherent behavior of the markets that’s the reason trader makes and loses money.
The markets are volatile so does the life. It’s important to curb the volatility and see the things from the long-term horizon. The high tides do not last forever so does the calm sea-shore.
The nastiest thing I’ve ever told anyone (a finance fellow angry with me): “When you have absolute intellectual and more disrespect for someone, the only real compliment you can possible get from his in making him angry” View full article »
So it appears the Eurozone crisis has finally crossed the Rubicon. Greece is going to default on Monday and this likely will put in motion its departure from the currency union. The Eurozone as we know it may soon cease to exist.
Was this breakup inevitable? Many observers would say yes. The Eurozone, after all, is not an optimal currency area and therefore likely to create problems. Martin Feldstein, for example, in 1997 wrote this in Foreign Affairs:
Monnet was mistaken…
If EMU does come into existence, as now seems increasingly likely, it will change the political character of Europe in ways that could lead to conflicts in Europe…What are the reasons for such conflicts? In the beginning there would be important disagreements among the EMU member countries about the goals and methods of monetary policy. View full article »
The only financial magazine that I read is The Economist . As in my previous post we indicated that Greece is not a new story. It all started in 2010, when economist published about Greece as themed cover. Its been 5 years and the visual theme for Economist are appealing .
Published : April 30 2010 : The Sovereign debt crisis spiralled out of control in May 2010
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