The Crisis and Response

The recent crisis as lead to unexpected results, Here is what I feel the most unusual lessons…gm_00411 Darwin, Northern Territory Painting 1983

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……

Rogue Trader – Nick Leeson Back

I never thought I’d write these words, but Nick Leeson – the original rogue trader – is back, baby! Well, kinda. It’s not like  Nick Leeson is escorted by three Commercial Affairs Department (CAD) officers from a Singapore Airlines flight from Frankfurt which arrived in Singapore, in this November 23, 1995 file photohe’s slinging SWAPS on Canary Wharf or anything. But the man who famously destroyed Barings Bank and whose iconic SIMEX trading jacket sold for £21,000 in the aftermath is now back in the biz, albeit in a decidedly less prestigious role than he’s used to.

Mr Leeson is joining GDP Partnership to mediate on behalf of distressed borrowers with debts of more than €1m (£850,000) to find “the best possible outcome for both bank and borrower”, said Conor Devine, a chartered surveyor and one of GDP’s founding partners.  Continue reading “Rogue Trader – Nick Leeson Back”

Six new lessons..What ever you know is just forget bout it !!

eaten by creationism

How Big is OTC

Jon, posting at the OTC space, does a nice job of setting out the size of various markets. In particular he uses gross

Westminster and Big Ben in Gold

market value rather than notional for OTCs, which is a (much) more useful measure. The results are interesting:

Scarcely a day goes by without a press article or speech mentioning in its introduction the “more $600+ trillion OTC derivatives market”. Whilst this may liven up the subject, this unnecessarily inflames concern. Here’s why.

What are the figures? The quoted figures come from the Bank for International Settlements (BIS) half yearly reporting on OTC derivatives market activity – published on their website. The latest is: BIS OTC 2012 H1 which notes $639 trillion open notional. Continue reading “How Big is OTC”