The Importance Of Luck In Life – Warren Buffet

Was reading an interview Warren Buffett on Bloomberg :

with Warren Buffett

WARREN BUFFETT: Well I came up with that a long, long time ago to describe the situation that – I was lucky. I was born in the United States. The odds were 30 or 40-to-1 against that. I had some lucky genes. I was born at the right time. If I’d been born thousands of years ago I’d be some animal’s lunch because I can’t run very fast or climb trees. So there’s so much chance in how we enter the world.

LIU: And you were always aware to make sure your children and their grandchildren, and your grandchildren would be grounded.  Continue reading “The Importance Of Luck In Life – Warren Buffet”

Collateral and Clearing

A few good articles are up on the topics of collateral and clearing:   images

This article on Bloomberg highlights the fact that banks will be prepared to use the cheapest collateral possible, regardless of quality. That could of course have quite an impact on the objective of “systemic risk reduction”.

Similarly this article in IFR looks at the looming rules on Initial Margin on uncleared trades. If widely applied, it could discourage hedging by end users, thus also negating the desired system risk reduction of the rules.  Continue reading “Collateral and Clearing”

Yes Rupee @60

The unintended consequences of a centrally-planned world continue to peek through at the most unexpected of place, as moments ago imagesthe 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.

A snapshot of events in India currently via Bloomberg:

  • Rupee drops 0.9% to 60.2250 per dollar; touches record 60.26.
  • USD/INR one-month implied volatility falls 32 bps to 11.60%; level suggests there is 68% chance rupee will drop to 62.2976 per dollar in a month (see that story here)
  • USD/INR risk reversal drops for third successive day, falling 17 bps to 1.80%; gauge of investor sentiment reached 2.23% last week, reflecting biggest pessimism on rupee in a year Continue reading “Yes Rupee @60”