Archive for April, 2012


Those of you who have not heard this name recalling for them. Jérôme Kerviel,who became famous in January 2008 as the junior trader who’d lost €4.9 billion at French mega-bank Société Générale.

The Fraud and factors against him :

  • The fraud consisted of the taking by the trader of unauthorized directional positions on equities or futures traded on regulated markets, which he concealed by a series of fictitious transactions having no other aim . These transactions for the purchase or sale of equities or warrants with deferred start dates, futures transactions with a pending counterparty, Continue reading

CREDIT LINK NOTES (CLN)

CLNs are customized credit derivatives in the unregulated over the counter (OTC) market, issued by a bank or financial institution backed special purpose vehicle or trust. They are structured to allow the issuer to transfer a part of the credit risk to investors, who are willing to bear such a risk in return for higher yield. These deals are done outside the country, as OTC derivative contracts have no legal standing in India.This is how a CLN broadly works. A company borrows a certain amount from a bank or makes a convertible offering to that bank. Continue reading

It was hot topic 4°C rise in temperature by 2020 in Rajasthan . Food production may fall by 50% by 2050 another study said.

I was just trying to figure out if the production will fall than “Who will feed India ?” India is loosing its ground where we enjoyed  monopoly now Vietnam is claiming supremacy over India in commodities trading as Ho Chi Minh City continues to look like Southeast Asia’s emerging commodities hub. Already Vietnam is among the leaders in exports of a range of agricultural commodities Continue reading

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. Continue reading

As I have been continuously posting on the Credit derivatives these days thought of sharing a post that  I did early in 2008 when the face of Investment banking completely changed after sub-prime crisis. 

There was an era  when Investment banking (IB) was on the role … hefty packages, luxurious life, dream job for a financial student were some of the features of IB. Over the years evolved as a very big concept coined by the US, In India we use to call that as a merchant banking .

Goldman Sachs, Bear stern, Morgan Stanly, Lehman Brothers and Merrill Lynch were the 5 icons which use to shine at the wall street over the period of time. Continue reading

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