The endeavour below is to – explain a very complicated circular trading (round tripping algorithm) nonsense that became a crisis – in a simple way.
MARY is the proprietor of a bar in Dublin. She realises that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronise her bar – she will go broke.
To solve this problem, she comes up with a new marketing plan that allows her customers to drink now, but pay later.
She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).
Word gets around about Mary’s ‘drink now, pay later’ marketing strategy and, as a result, increasing numbers of customers flood into Mary’s bar. Continue reading “Greece Crisis in simplified terms”
Recalling a chapter from Traders Guns and money Beautiful lies on sale side how derivatives are misinterpreted or mis-sold, It’s very simple trying to figure out the hierarchy of the trading floor. There are Sales people – they lie to clients. Traders lie to sales and to risk managers. Risk managers ? they lie to people who run the place – a small correction they think they run the place. The people who run the place lie to shareholders and regulators 🙂
The last post that I did Derivatives derivatives soooo many, resembles outstanding derivatives with the top 5 banks of the world, here is some basic background for my non financial market friends about derivatives. Continue reading “Derivatives and on …”