Dodd-Frank Trade Reporting isn’t coming … it’s here. February 28, 2013 was the date that Major Swap Participants (MSPs) were required to begin reporting equity, foreign exchange and other commodity swaps. And this is just the beginning of a series of milestones in the regulation that was designed to prevent future “too big to fail scenarios,” such as what occurred during the Global Financial Crisis of 2008. But, there is a bigger story here around regulation and compliance and how IT is used to ensure transparency, accuracy and accountability in reporting.
The recent crisis as lead to unexpected results, Here is what I feel the most unusual lessons…
Lesson #1 Government agencies allocate capital better than the private sector
Lesson #2 Central banks should control asset prices and prevent them from falling
Lesson #3 Darwin & Schumpeter were wrong, creationists are right; there is such a thing as a free lunch
Lesson #4 Towards a new orthopraxy
Lesson #5 Wondrous tools used by the clergy to grow GDP
Lesson #6 How to finance infinite needs……
Everyone interested in the world economy should watch Bernanke‘s recent speech and the press conference:
(Switch to full screen, it works well). Here is the base URL which collects together all the materials about the Fed’s announcement. The `exit strategy principles’ are in the June 21-22, 2011 meeting.
The announcement reinforces the sense that the US economy is healing. The US Fed is keen to have inflation of 2% and believes the NAIRU is around 6.5%. Hence, once they come into the range where unemployment has achieved a few strong improvements and is trending to get below 6.5%, while price stability has not been compromised in that inflation expectations are still at 2%, they will start unwinding the extreme expansionary stance of monetary policy that has been in place in recent years. All through, there is no fixed calendar about what the Fed will do when. There is a clear articulation of the decision rules that will be employed, about how future data releases will generate future policy.
The unintended consequences of a centrally-planned world continue to peek through at the most unexpected of place, as moments ago the Indian Rupee just plunged to a new all time record low against the USD, with the USDINR rising over 60 for the first time, triggering stops and overriding any potential USD selling intervention that the RBI may have attempted just below the resistance level which took place 59.985 according to Reuters.
Lets revisit an article I published a couple of months back as we know all valuation classes teach the equity market correlation method so it would be interesting to hear your views.
Equity exists in many forms. In securitization, equity is the tranche that takes the first loss and controls the deal. In a mutual insurer/bank/thrift, etc., the book equity is held by the dividend-receiving policyholders. The real equity is held by management, who actually control the place, because the dividend-receiving policyholders will not vote them out. In a credit tenant lease, there is the guy that owns the property, and typically he puts up a teensy amount of equity, because there is a “credit tenant,” one that has an investment grade rating, and the mortgage is secured by: