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Tag Archive: AGGREGATE RISK


2012 Mid Year World economy towards the path of Bailouts & Bankruptcies

Filed under: Economies — 1 Comment
June 30, 2012

Well its the last day of the month and the world economy standing in the mid of year 2012. Lets try to pull the events by connecting the dots and see where the world is :
1) After months weeks years of posturing and denial Spain and Cyprus formally requested aid from Europe bailout funds. More so they have officially confessed to their insolvency and the insolvency of their banking system.
Spain 10 year bond yield breached the worst level and it touched the 7% in return many od the Spain bank ratings got junk by Moodys

2) Over in the US, the city of Stockton, California filed for bankruptcy this week… View full article »

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This was Hilarious by some economists

Filed under: Economies — 2 Comments
April 27, 2012

It might be late to post the old tweets but the  tweets by the economists can’t resist the lure of Valentine’s Day, I just thought of sharing as all where directed towards fed :)

@justinwolfers: You’re my long-run target; my nominal anchor.

@SFFedReserve: I’m going to extraordinary measures to increase your stimulus

@AtlantaFed: I long for you as the economy longs for its long-run maximum potential  View full article »

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S&P Rating implications on India :

Filed under: Economies, Efficient Markets — Leave a comment
April 26, 2012

As expected the front page of all the financial news papers covers the story of S&P negative on India . I was just trying to figure out the implications of S&P outlook downgrade to India, The agency retained the rating at BBB-, but said it was changing its outlook from stable to negative. let’s try to figure out the impact :-

  • Well the rating is BBB- S&P just gone to pessimist and revised its outlook for India country rating negative.
  •  BBB- is the last rung in the ratings grade of S&P ,downgrade from here meaning India will be having speculative grade rating. View full article »
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OTC Derivatives Central Clearning & Dodd – Frank

Filed under: Economies, Merchant Banking, Trending Brokers — 9 Comments
April 17, 2012

Ready or Not ? Here it comes

Lot of Hedge funds and Investment banks have started publishing the margin FAQ’s after the Credit crisis. As part of Dodd-Frank, by the end of 2012, all standardised over-the-counter derivatives will have to be cleared through central counterparties.

That’s the biggest challenge for the market as OTC derivatives account for almost 95% of the derivatives markets. In June 2011, the notional value of outstanding OTC derivatives was around $707 trillion or €540 trillion. View full article »

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Back to Europe It’s a huge pile of debt :-

Filed under: Economies, Financial Crisis, Trending Brokers — 3 Comments
April 14, 2012

Here is some bizarre facts the amount of leverage done on the various European economies. The contagion is spreading, was watching an interview yesterday in the night of a  financial consultant from Europe, and he responded to the questions with the context of European economies :-

  • How much does Greece Owe ?
  • 367 billion $
  • Who they owe too ?
  • Mostly to the other European economies

View full article »

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Derivatives Statements made and Translations

Filed under: Economies, Finance Awareness — 3 Comments
March 26, 2012

I am a big fan of Traders Guns and Money the book written by Satyajit Das, the definitions Knowns and Unknowns revealed by him is the classic work.  The reality is always to make sure that you have a sheat when the music in this game of musical chairs for high stakes stops ( referring to the examples for the  crisis happened in the past). As a result of it some interesting statements the management of the firms make but the intensity is something to thought about :-

Statement: As a Leading dealer with a global platform, we are the major player in the market.

  • Translation: We have spent a fortune to build this business and are now prepared to spend millions more subsidizing your requirements.

Statement: We have one of the most talented teams in this space.

  • Translation: Our staff are vastly overpaid and on huge guaranteed bonuses.

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Markets & The Emotions :-

Filed under: Economies — Leave a comment
March 17, 2012

Greed is good !! well that’s the tag line on the wall street but how much that is more dependent on your emotion.In the past I did some stories on it and here is great work by Edward zones on the human emotions  and market cycle..

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Credit Default Swaps & Greece Default Event

Filed under: Economies, Financial Crisis, Trending Brokers — 3 Comments
March 12, 2012

This weekend  financial media was concentrating on the credit event of Greece.Greece has officially defaulted on its debt to private lenders. It was an “orderly” default, negotiated rather than simply announced. This formal default on about $100 billion triggered payment of $3 billion in credit-default swaps.

One of the washington post tried to revealed that Insurance and CDS are different, CDS should never be treated like insurance, as its Mandatory for the insurance company to make reserve against insurance that it has issued on the other hand Credit Default swaps (CDS) is naked gambling. View full article »

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Greek credit event has occurred, CDS payments triggered : source ISDA

Filed under: Economies, Finance Awareness — 3 Comments
March 9, 2012

Was thinking to do the post in the morning but had enough evidence to share it now.
The International Swaps and Derivatives Association, Inc. (ISDA) today announced that its EMEA Credit Derivatives Determinations Committee resolved unanimously that a Restructuring Credit Event has occurred with respect to The Hellenic Republic (Greece).

The EMEA DC resolved that a Restructuring Credit Event has occurred under Section 4.7(a) of the ISDA 2003 Credit Derivatives Definitions (as amended by the July 2009 Supplement) following the exercise by The Hellenic Republic of collective action clauses to amend the terms of Greek law governed bonds issued by The Hellenic Republic such that the right of all holders of the Affected Bonds to receive payments has been reduced. The details are available on ISDA website .

It means there will be a net $3.2bn pay-out on CDS contracts, View full article »

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Financial Jargon’s Simplified :- Hats off to Dravid

Filed under: Economies, Financial Jargons, Trending Brokers — 8 Comments
March 9, 2012

I would like to dedicate today’s post to Rahul Dravid but the time is constraint will write for him soon :- I just don’t like  that  he is retiring, and people are talking about Sachin tendulkar! The Tragedy of his Life.  Few more thing for him If Sachin Tendulkar was the Best thing to happen to Indian Cricket :Rahul Dravid was the Best thing to happen to Sachin tendulkar. ( I think that describes all for him)

The post is  for my juniors, who wanted to have few jargon’s simplifications here you go :-

LEASE -BACK  :  Its an arrangement under which a company, in order to raise cash, sells a piece of equipment, ‘ land, or building on condition. that the buyer will lease it back to the seller for an agreed rental for a fixed term.

LEVERAGED BUYOUT : Taking over a company, using borrowed funds.

LEVERAGED COMPANY : If a company with borrowed funds in its capital structure. if the debt component is more than a third of the capitalization it’s called a highly leveraged company. View full article »

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