Gudi Padwa, Cheti Chand, , Ugadi – make it a Great day and a Great Year.Happy New year! A very happy new Financial year Year too . Well moving back to the topic : Flash Boys: A Wall Street Revolt is a new book by Michael Lewis to be released today. I have been following Mr Lewis when I first read his best work in “Liar’s Poker” . I have read almost all his books published in the past and found every time fresh things to explore in this financial jungle.
He appeared for an interview day before yesterday before the release of Flash Boys,” is scheduled to be released on Monday, appeared on “60 Minutes” to argue that high-speed trading has ripped off investors not in possession of lightning-fast computers and special cables.
Flash Boys is about a small group of Wall Street guys who figure out that the U.S. stock market has been rigged for the benefit of insiders and that, post–financial crisis, the markets have become not more free but less, and more controlled by the big Wall Street banks. Continue reading “Flash Boys : A Wall Street Revolt”
With all the Ukraine stuff, Missing Malaysia Airlines flight MH370, World’s biggest democracy getting ready for the exaggerate Melodrama and some procrastination from my side , some things got lost in my spindle. Time to catch up 🙂
In the banking sector, which features leveraged institutions operating in a principal capacity, capital requirements are designed with the goal of enhancing safety and soundness, both for individual banks and for the banking system as a whole. Bank capital requirements serve as an important cushion against unexpected losses.
They incentivize banks to operate in a prudent manner by placing the bank owners’ equity at risk in the event of a failure. They serve; in short, to reduce risk and protect against failure and they reduce the potential that taxpayers will be required to backstop the bank in a time of stress.
Continue reading “No Failure Vs Orderly Failure”
Sharing an article from the Streetwise Professor –
Major banks are having major concerns about the risks associated with CCPs in the aftermath of a failure of a Korean brokerage firm that resulted in the mutualization of losses on the KRX. The firm failed due to a fat-finger error (puts? calls? whatever!) and its margins were insufficient to cover its trading losses.
This experience is making CCP member firms re-evaluate the risks of CCPs, the risk controls implemented by CCPs, and the incentives of CCPs to control risk. They realize that CCPs do not eliminate counterparty risk so much as redistribute it. They are concerned about the incentives that CCPs have to manage those risks unless they have substantial exposure to them (“skin in the game”).
But here’s the thing. This particular sequence of events is exactly what CCPs are best suited to handle: the insuring of idiosyncratic risks. In this instance, the idiosyncratic risk was an random operational error at a single brokerage. Continue reading “Clearing houses : The Risk With CCP Failure”
Although Lehman brothers is no more in existence but it has provided many strategies to the Investment banking space that are still in use and may be used more vibrantly in the markets.
One of them is the most famous Straight Line Pitch – “Straight line is an impulse selling at its most aggressive and there have been hundreds of thousands schooled and steeped in its traditions over the years”.
Since its beginning in the water street and madison avenue branches of the Shearson Lehman, the straight line has been taught and retaught a million times during countless boardroom meetings and brokerage firm training sessions. Continue reading “The Lehman Method”
There are certain styles and strategies that simply cannot replicate on by own and clients have exposure to you. As an investment advisor representative at a good-sized shop. So read the brochure of your mutual fund and again and see the various investment styles . Continue reading “The Mutual Fund Manager Styles”