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Tag Archive: LIQUIDITY


Yield Curve Basics

Filed under: Fiscal & Monetary Policies — 1 Comment
May 10, 2012

I do not know why but somebody wanted me to define some basics on Yield spreads, that whether Yield spreads can judge the risk environment in an economy ?

Yield spreads are good tools to judge the risk environment in an economy a lower yield spread means that the issuer of debt is in a situation to demand loans at a lower spread above the yield of government security which in turn shows the presence of ample liquidity.

As far as economic growth is concerned a lower yield spread indicates greater amount of liquidity available for growth 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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Central Clearning Of derivatives & Dodd – Frank continues…

Filed under: Economies — 3 Comments
April 18, 2012

Continuing from my yesterday’s post why Central clearing is one of the solution if we just analyse recent crisis.In the financial crisis of 2008, banks feared that their trading partners might not be able to meet obligations to make good on the credit-default swaps,and on derivatives plus other financial arrangements. The situation set off a chain reaction that paralyzed global markets until governments and central banks provided enormous financial support.

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More on Prop Trader & Emerging-markets

Filed under: Economies, Efficient Markets, Trending Brokers — Leave a comment
April 6, 2012

Takings from my last post  A Prop Trader or Rogue Trader and my past posts on the same topic The Rogue Trader or The Rogue Banks and TO BE A ROGUE TRADER would like to share few more views over them. As I reveled in the past that prop trader don’t trade on behalf of clients but they use institution own money to trade.They speculate and their focus are is emerging markets.

The two principles on which they work :

  •  You need to be dispassionate about your trade, to control your internal hurdles that may attach you to it emotionally.
  • You need to have specific knowledge of the asset you’re trading. You must have contacts in the asset’s country that can supply you with information that is open to anyone else (otherwise it’s insider trading) but that is still extremely valuable.

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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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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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Monday Morning and the Highlight is Greece…..

Filed under: Financial Crisis — 2 Comments
January 30, 2012

This week is going to be fun; With Greece at the end of a gun; Will they resist? And get really pissed? Please wake me up when it’s done….

In the mean time during the weekend A “source in Berlin said Germany’s proposal was aimed not just at Greece but also at other struggling euro zone members”. German Economy Minister Demands Surrender Of Greek Budget Policy, First Of Many Such requests.Roesler statement means Germany will next demand Portuguese fiscal policy hand over. Then Spanish. Then Italian ????

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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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Not flying in good times :- Aviation Sector of India

Filed under: Trending Brokers — 1 Comment
January 11, 2012

How much the aviation industry owe to Indian government guess?? Only two of the major air line Kingfisher and Air India owe a total of  INR 360crores.

The condition looks bizarre and they are burdened by debts and losses.

The only sigh of relief that came yesterday night  when the news broke out that FDI in airlines may get a nod, Kingfisher, Jet Air fly high. But there is one hurdle by the regulator SEBI it might have to make this an exception to save this sector. As per the SEBI norms a 25% stake triggers an open offer. This should be exempted from the aviation sector 26% FDI cap will otherwise be breached due to the open offer.
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