The Chinese authorities’ attempts to stabilize the country’s stock markets have been frantic—and futile. Interest rates have been cut; short-selling capped; IPOs halted; share-buying schemes hatched (backed by central-bank cash).
But the rout continues: the CSI 300 big-company index has fallen by one-third since early June; ChiNext, a would-be NASDAQ, by two-fifths. Trading in over half of Shanghai- and Shenzhen-listed shares has been suspended. Yet the stock market is still small by rich-world standards. Bull or bear, it makes limited difference to the real economy. Its political importance is rather greater. Continue reading “The Chinese Market meltdown:”
Had an interesting conversation – “what is the feeling on Markets? I think further selling will be there. Everything is going against the economy Crude, Rupee, Earnings, Monsoon. Global issues not cooling down, Greece planning to exit Euro, China Production is slow, Saudi might again attack Yemen. Yaa but we had a spectacular run up this year as well as all in anticipation. Macro was improving and micro we were discounting and were giving time, but now Macro is against us and micro will take time to improve. People are booking profits big time I think ….”
To be honest no one knows how market will react, if you are keeping these points in check probably you might do well :-
Lee Cooperman, founder of hedge fund firm Omega Ad-visors, last month gave a presentation entitled, “Observations regarding: life, hedge funds, the investment outlook” at Roger Williams University. Here are some of the highlights:
On Hedge Funds
– If you produce the returns, you’ll grow. What separates the men from the boys is how you do during periods of adversity
– He again detailed his characteristics of an outstanding analyst or portfolio manager
– He tries to make money in 5 ways: market direction, asset allocation (stocks versus bonds), undervalued stocks on the long side, sell stocks short. and macro investing (and he candidly mentioned the egregiously high fee structure that hedge funds use as well) Continue reading “Hedge Funds through the eyes of Lee Cooperman,”
On 15th September 2008, Lehman Brothers declared itself bankrupt. The blog was relatively new,In one of the most dramatic events of the 2007-2008 global financial crisis, the 160-year old institution collapsed due to its exposure to subprime mortgages. After Lehman’s failure, financial markets entered a period of unprecedented volatility and governments spent trillions of dollars attempting to restore confidence in the banking industry. Five years on, how has the banking industry landscape changed?
On the one hand, the risk of another Lehman-style collapse has been reduced because banks are better capitalised than they were before the crisis. For UK banks, for example, Tier 1 capital was 8% of risk-weighted assets in 2008; by 2012 this had risen to 13%. In addition, the market infrastructure is being strengthened by the introduction of central counterparties, Continue reading “The Lehman’s collapse – past 5 years”
The Topic is not new but the confusion still prevails to many, In the past have already done 4 post on it , the short link been shared below the article.
There is much confusion about what shadow banking is. Some equate it with securitisation, others with non-traditional bank activities, and yet others with non-bank lending. Regardless, most think of shadow banking as activities that can create systemic risk. This column proposes to describe
shadow banking as ‘all financial activities, except traditional banking, which require a private or public backstop to operate’.
Backstops can come in the form of franchise value of a bank or insurance company, or a government guarantee. The need for a backstop is a crucial feature of shadow banking, which distinguishes it from the “usual” intermediated capital market activities, such as custodians, hedge funds, leasing companies, etc. Continue reading “Shadow Banking”