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Tag Archive: INTEREST RATE RISK


Analyzing and reading the experts view on the current situation of Deutsche Bank to that of Lehman Brothers in blog2008.  Many of them are emphasizing and argue that 2008 is back.

I will argue that the current situation is the iconic milestone of the clear END of the 2008 crisis. Here is my argument:

What was the Lehman Crisis about? In September 2008, we were facing an under-regulated banking sector and fears of rising interest rates (due to presumed inflation generated by USD 140 oil prices).

What is the current Deutsche Moment about? In September 2016, we are facing an over-regulated banking sector (the US Department of Justice throwing an USD 14bn fine at Deutsche Bank) and fears of never rising quasi-zero (in Germany even negative) interest rates.  Continue reading

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Mutual Funds are subject to market risk. Please read the offer document carefully before investing”. The very blogpurpose of this disclaimer is to meet the statutory requirements. Only very few people would have heard it when it is mentioned in the radio or television as it flashes by at lightning speed. In print media (Newspaper, Magazines) it is published in extremely small font. Only investors who know the statutory requirements would even be aware of the statement because the advertisements, with ‘namesake’ disclaimers, are hardly educative.

So, what is the mystery behind the ‘flash’ statement? The statement means that mutual fund scheme invests the money collected from investors in instruments which are subject to market risk. Every investor of a MF should read the offer document carefully before they invest their money with the fund house. Continue reading

RISK MANAGEMENT

Well, its bit old actually, but it is still good:blog

Safety is a product, not a process.

It is being said in the industrial accident context. I’ll let the Ranter explain! through his blog.

In general, effective safety measures are usually something you do, and scattering costly “devices” around an unchanged process is a classic failure mode. Not least because they might instil a false sense of safety and lead people to take risks… Continue reading

Exactly a month back I did a write-up on Fixed Maturity Plans V/s Fixed Deposits where both the instrument are issued by different authorities i.e banks and mutual funds.

Today’s write is concentrated on Mutual funds schemes, I came across Capital Protection Oriented Schemes (CPOSs). As the name suggests, the mainstay of such schemes is to provide capital protection. Structurally they are similar to another existing mutual fund category called Fixed Maturity Plans (FMPs), which has been around for a while. For investors, the presence of these categories which are structurally similar, yet distinct in terms of positioning can be confusing. Continue reading

I am a big fan of Traders Guns and Money the book written by Satyajit Das, the definitions Knowns and Unknowns revealed by him is the classic work.  The reality is always to make sure that you have a sheat when the music in this game of musical chairs for high stakes stops ( referring to the examples for the  crisis happened in the past). As a result of it some interesting statements the management of the firms make but the intensity is something to thought about :-

Statement: As a Leading dealer with a global platform, we are the major player in the market.

  • Translation: We have spent a fortune to build this business and are now prepared to spend millions more subsidizing your requirements.

Statement: We have one of the most talented teams in this space.

  • Translation: Our staff are vastly overpaid and on huge guaranteed bonuses.

Continue reading

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