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Tag Archive: CREDIT CONTRACTION


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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Understanding JP Morgan Loss

Filed under: Financial Crisis — 6 Comments
May 12, 2012

Leading financial media broke the story on thursday night about the $2bn trading loss on credit derivatives trading, which chief executive Jamie Dimon blamed on errors,sloppiness and bad judgement” and warned “could get worse”.

Well the Centre of loss in non other than bank’s chief investment office (CIO).It is responsible for managing and offsetting the vast amounts of “credit exposure” the bank incurs through its daily View full article »

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Investing , Trading some thoughts from Peter Lynch book

Filed under: Economies, Efficient Markets, Finance Awareness — 2 Comments
March 21, 2012

It’s not mandatory that all good investors are good writers and visa viz that all good finance writers are good investors. It’s the experience of the people who is good or bad that counts . Here again some of the best remarks from Peter Lynch :

  1. When the operas outnumber the football games three to zero, you know there is something wrong with your life.
  2. Gentleman who prefers bonds don’t know what they are missing.
  3. Never invest in any idea you can’t illustrate with a crayon.
  4. You can’t see the future through a rear view mirror
  5. There’s no point paying Yo-Yo Ma to play a radio.
  6. As long as you’re picking a fund, you might as well pick a good one.
  7. The extravagance of any corporate office is directly proportional to management’s reluctance to reward the shareholders.

    8. 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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ISDA Under criticism on GREECE

Filed under: Economies, Financial Crisis, Financial media articles — 7 Comments
March 2, 2012

International Swaps and Derivatives Association is the body corporate to make over the counter (OTC) derivatives market safe and efficient.

It has 815 members from 58 countries including global, international and regional banks, asset managers, energy and commodities firms, government and supranational entities, insurers and diversified financial institutions, corporations, law firms, exchanges, clearinghouse and other service providers.

The Key areas of ISDA are
* Reducing counterparty risk
* Increasing the Transparency
* Improve the OTC operational infrastructure.

The details are provided on the ISDA Brochure

Recently ISDA came under criticism on its decision that based on current evidence the Greek bailout would not prompt payments on the (CDS)credit default swaps. View full article »

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Greece bailout turning out Greek to me :-

Filed under: Economies, Financial Crisis — 92 Comments
February 24, 2012

In an article from FT On an optimistic view, that a deal was struck implies that neither side was ultimately willing to risk a Greek exit because they recognise that no one fully understands all the ramifications of such a decision. Under this scenario, when pressure again builds, the authorities will do the same: let Greece remain in the euro, even if it fails to keep to its adjustment programme. So, the reality of “bail-out II” means that, if the situation becomes critical, there will be a bail-out III. ?????????

The second bailout is already provided We learn that Greece will still need more dough if it meets its target of reducing government debt to GDP to 120% by 2020 (and why is debt to GDP of 120% seen as sustainable then when it is not seen as sustainable now? And leaked documents further note that Greece might not meet its targets (duh!) and its debt to GDP could instead by 160% of GDP, View full article »

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Europe under Fire by Fitch & Facebook All set too Fire

Filed under: Economies, Financial Crisis, Market - Outlook — 11 Comments
January 28, 2012

http://sandyyadav.comThe dark clouds are hanging over Europe, and there are rumors that Greece may Exit Euro. Yesterday Fitch the rating agency dented and downgrades Spain and Italy each by two notches, Belgium by one. Ireland affirmed at BBB+. Luck of the Irish! it was like a bomb but it was already discounted by the market  and market not surprised by Fitch downgrades Euro remained higher against Dollar even after downgrades.

But Fitch was not a news maker, it was non other than Facebook raised the curtains which is ready all set for IPO filing, here is the big estimate whether market will discount this or not.They say $100B now… it will bump up to $115B by time of IPO… then $130B on first day out….
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India joining the bandwagon stands with Japan, China and Russia

Filed under: Economies — 2 Comments
January 23, 2012

Press Trust of India confirmed  that “India and Iran have agreed to settle some of their $12 billion annual oil trade in rupees, resorting to the restricted currency after more than a year of payment problems in the face of fresh, tougher U.S. sanctions.”

This is with response to few weeks when the US and Europe pretended that all is well .For anyone wondering how the abandonment of the dollar reserves status would look like reference, not with a bang, but a whimper or in this case a whole series of bilateral agreements that quietly seeks to remove the US currency as an intermediate.

As it looks prominent the world’s second China and third largest Japan economies will bypass the dollar by engaging them self in the direct currency trade, and few weeks back there was a bilateral contract between China and Russia where they drop dollar as a currency and involved in direct currency trade.
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What’s cooking this Thursday & the Elevator gossips before the Weekend

Filed under: Commodities Markets, Market - Outlook — 2 Comments
January 19, 2012

1) Yesterday Indian aviation and Finance minster allowed 49% FDI and today Kingfisher Air Talks to SC Lowy for Investment After Plane Order Scrapped

2) SOPA Stop Online Piracy Act, as you can view on the top right hand side even I am protesting “Stop Censorship”. Why it matters?

3) Guess what now the IMF requests $500 bn for bailout loans, IMF chairman to ask member countries for on off contributions

4) Greek seems to be in insolvent zone, ISDA will have the final say as Greek debt talks drag on

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OMG are you ready for Vicious Circle of Deflation

Filed under: Financial Crisis — 1 Comment
January 17, 2012

How is the future looks like these days every new morning a ratings cut or downgrade has become fashionable for the Europe.

Guess what now the S&P downgrade EFSF (European Financial Stability Facility) to AA+, looks like the wheels are falling off the wagon.

The billionaire famous for his deal who ones broke the Bank of England quotes ” Europe’s sovereign-debt crisis is “more serious” than the financial crisis of 2008 and that the world faces the prospect of a “vicious circle” of deflation”.

The future looks bit uncertain for the Euro would be interesting to share few scenarios :-

Scenario (1) What if the Peripheral countries leave
Germany and France led move to fiscal union smaller Euro survives = Smaller Euro may raise very sharply.

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