A Dashing Blade
Takes horses to water but can't make donkeys drink
The only bit you've got right there is that gilts pay a semi-annual coupon.
Start here & get back to us.
Global financial system implosion begins
- Thread starter Falcon
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The only bit you've got right there is that gilts pay a semi-annual coupon.
Start here & get back to us.
Well:
I believe that is more or less what I said above. I also qualified my statement saying I thought there was a bi-yearly payment to the BoE however this may be different.
The Bank of England does not issue gilts any more, the DMO does however in May 2006 the BoE declared it would provide sterling finance to the banking system via purchasing gilts.
So in theory the DMO issues government gilts, the BoE buys them up and injects currency into the market place via these purchases. The government then pays the BoE the coupons + the return of the principle when the gilts mature.
TomPaine
I believe that is more or less what I said above. I also qualified my statement saying I thought there was a bi-yearly payment to the BoE however this may be different.
The Bank of England does not issue gilts any more, the DMO does however in May 2006 the BoE declared it would provide sterling finance to the banking system via purchasing gilts.
So in theory the DMO issues government gilts, the BoE buys them up and injects currency into the market place via these purchases. The government then pays the BoE the coupons + the return of the principle when the gilts mature.
TomPaine
A Dashing Blade
Takes horses to water but can't make donkeys drink
Please don't quote a bond definition at me Tom, I've worked on bond trading desks for over 12 years (tho admittedly, Emerging Market bonds are more my specialty).
Look, to finance debt, the Govt issue Gilts through the DMO ok? (You may regard the DMO as performing a sort of back-office or administrative function, nothing more, nothing less)
The price at which Gilts are issued is determined via an auction process. Even you, the private individual, can partake in this auction if you wish (personally I wouldn't for a number of technical reasons)
The above process is known (amongst other things) as the "Primary Market".
Note that gilt auctions are almost always oversubscribed (I can't remember remember an undersubscribed one in the last 22 years)
After the Auction process (ie after the auction has finished and the Gilts allocated and paid for) any and all Gilt trading takes place on the the "secondary market".
Clearly, I hope, transaction events in the secondary market between non-Government institutions have no impact on Govt financing . . .
tbh, you know what? Forget it. Can't be bothered. Go buy any book by a guy called Fabozzi.
No, it's nothing even remotely like what you said above. Sorry, but there it is.
I suspect (as Jazz I think it was did many month ago) that you're confusing the primary with the secondary market.
Look, to finance debt, the Govt issue Gilts through the DMO ok? (You may regard the DMO as performing a sort of back-office or administrative function, nothing more, nothing less)
The price at which Gilts are issued is determined via an auction process. Even you, the private individual, can partake in this auction if you wish (personally I wouldn't for a number of technical reasons)
The above process is known (amongst other things) as the "Primary Market".
Note that gilt auctions are almost always oversubscribed (I can't remember remember an undersubscribed one in the last 22 years)
After the Auction process (ie after the auction has finished and the Gilts allocated and paid for) any and all Gilt trading takes place on the the "secondary market".
Clearly, I hope, transaction events in the secondary market between non-Government institutions have no impact on Govt financing . . .
tbh, you know what? Forget it. Can't be bothered. Go buy any book by a guy called Fabozzi.
hipipol
Peckham Wry
While we're at it, lets look at the Tax Arb opportinities offered currently by Barbuda where a mate of mine has set up his fund..haha!!!
Ah, Mr Blade, Emerging Markets eh? My old clients were the swashbucklers of the globe - sadly I put one guy into a job where he was held prisoner for 10 days by "rebels" when he went to see if the hole in the ground his firm were marketing was really a mine, or just a hole in the gprund - that was in Khazakstan before Khazemi became a pillar of the Footsie - oh my....
Ah, Mr Blade, Emerging Markets eh? My old clients were the swashbucklers of the globe - sadly I put one guy into a job where he was held prisoner for 10 days by "rebels" when he went to see if the hole in the ground his firm were marketing was really a mine, or just a hole in the gprund - that was in Khazakstan before Khazemi became a pillar of the Footsie - oh my....
Barking_Mad
Non sibi sed omnibus
Chomsky on the 'anti-democratic nature of the financial system'.
http://therealnews.com/t/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=2603
http://therealnews.com/t/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=2603
david dissadent
New Member
Link
The rating agencies are under scrutiny by congress. For a great many they are the keystone to what went on. Ok far from being alone the world is full of the guilty, an electorate that repeatedly rewarded shallow politics and neoliberal policies, legislators happy to smooze with the wealthy, an executive and its regulators only looking to look good for the next election, potential homeowners taking on far more than they could afford and engaging in fraud to do so, banks loaning and not giving a fuck about the risks as they could sell them on as securities, mortguage firms using bait and switch tactics and ingnoring any possible flaws in an application, and the list goes on and on and on.
But the ratings agencies were the one link that could have, should have and was paid too break the whole thing. They were paid to asses the risks, or that was the theory.... they were the ones intrusted to do a professional analysis on the CDO's and analyse them to work out the risks. But instead they got a sort of 'white line fever', a madness for revenue irrespective of the risks. They are the ones who stamped everything Tripple(A)plusgood. For the pension funds and the other institutional investors, no real tears. They have the money to hire people to double check the ratings agencies numbers, they have an obligation to do due dilligence. But the ratings agencies helped fuck over the little investors and the rest of us. Most of us ARE investors even if we dont think of ourselves as such. Other than genuinely being invested in the economy as a part of being in a society (more than a collection of individuals after all), we invest in the big financial firms through our savings, our pensions and our current accounts (not to mention jobs).
Link
Interesting. I had heard that the swaps were so intetangled that people would be cancelling out alot of what they would be paying out but $5 billion seems a bit low. Especialy as more than $5 billion in loses will be emerging from Lehmans. I wonder how that would work
I shall have a poke around.......
A Dashing Blade
Takes horses to water but can't make donkeys drink
Huh? Never saw many private individuals buying CDO's etc?
For the first couple of weeks after Lehmans went tits up everyone was phoning up everyone else looking to see if they had an equal(ish) and opposite position with Lehmans as the counterparty. A LOT of stuff got netted off this way.. . .
Interesting. I had heard that the swaps were so intetangled that people would be cancelling out alot of what they would be paying out but $5 billion seems a bit low. Especialy as more than $5 billion in loses will be emerging from Lehmans. I wonder how that would work
Bear in mind that it was the NPV of the cash-flows rather than the products per-se that were netted. Any financial instrument's is a series of cash-flows right? therefore the net present value (ie the sum of each cash flow discounted buy the it's appropriate discount factor - use the zero curve implied from current swap curve to do that) = current price
Plus, a lot of the CDS exposure was collateralised (Lehmans had a shed-full of debt remember).
david dissadent
New Member
Taleb and Manderbolt go uber-doomer
Link
A ten minute video with Naseem "Black Swan" Taleb and Benoît "Fractal" Mandelbrot on how the complexity of the modern financial world may produce "turbulence". How the systems has been so optimised it may meen that relatively minor distubances may produce outsized problems.
I am really tempted to post this as a thread of its own, but dont know which forum or whether there would be a wide enough interest in it. But it is radical thinking from a a pair of pretty heavy weight and well known thinkers.
Link
A ten minute video with Naseem "Black Swan" Taleb and Benoît "Fractal" Mandelbrot on how the complexity of the modern financial world may produce "turbulence". How the systems has been so optimised it may meen that relatively minor distubances may produce outsized problems.
I am really tempted to post this as a thread of its own, but dont know which forum or whether there would be a wide enough interest in it. But it is radical thinking from a a pair of pretty heavy weight and well known thinkers.
saw it earlier this evening...when Richard n Judy or Fearne n Phil see it....then They'll start to "think" about it.
A Dashing Blade
Takes horses to water but can't make donkeys drink
Taleb's "Black Swan" is one of the most widely owned books in the City, his concepts have been pretty well known for 5-odd years. It's not considered radical. Very very difficult/impossible to mathematically model perhaps, but certainly not radical.
Mandelbrot's dead now a few years, but his last book is an underappreciated classic imo and certainly gave me a few ideas.
david dissadent
New Member
The video is a couple of days old
, he does kinda look a bit re-animated in it tbf.^^^
Here's one to file under 'No Shit, Sherlock...'
Greenspan Concedes to `Flaw' in His Market Ideology
Still, if you've pocketed $8.5 million for your memoirs, I guess the consequences that might result for such 'flawed' thinking aren't of much concern.
Here's an interesting read from iTulip:
Confusion reigns: A crisis-driven global rush to dollar liquidity is not deflation
Here's one to file under 'No Shit, Sherlock...'
Greenspan Concedes to `Flaw' in His Market Ideology
Still, if you've pocketed $8.5 million for your memoirs, I guess the consequences that might result for such 'flawed' thinking aren't of much concern.
Here's an interesting read from iTulip:
Confusion reigns: A crisis-driven global rush to dollar liquidity is not deflation
gosub
~#
Had a "Black Swan" argument a couple of months back when I was moored at Reading (in the daily rounds of two nesting pairs of black swans amusingly enough) with with a woman in compliance at reasonably large investment management co. Was actually more an argument about self/ state regulation and the FSA but the current crisis was tagged a black swan
We have unlikely unknowns in our industry modeling (granted lives literally do depend on our modeling) that is what contingency fuel is there for, to dampen the "it isn't your day effect" (apologies to AAIB but this is the 'one time' that catastrophic chains does n't cut it
). Whether it was a black swan is a separate argument. What I got was an impression of Matrix syndrome -an unhealthy reliance on computer modeling, within the financial sector.
I am starting to have an inkling that events could, under different agendas be called "teething problems" under the adoption of the more conservative reserves of BASEL II but that flies in the face of a few things.
A Dashing Blade
Takes horses to water but can't make donkeys drink
I'd go further and say an unhealthy reliance on the normal distribution curve. Introduce kurtosis and the maths get's very tricky.
A Dashing Blade
Takes horses to water but can't make donkeys drink
I'd say timing about right tbh, 4 years down the road (Degree + Masters) and the markets could be well bouyant.
hipipol
Peckham Wry
$1.30 in three weeks
If I could be fucked to open an account with some spread co, actually I'd aim prob around £1.27 thats just a gut feel but last time we neared £/$ parity threat it stuck there - three week, well prob 16/17 days.... I say that as we have already had massive sell offs, and for something to be sold, you need a counterparty, those with the wdge will have spunked it, as these things are volumn weighted, some idiot buy 4/6 million of £ at 126.47 wont drag the whole lot off my target - so there will be a pause in the freefall aspects for at least a few days, may or may not restart in drop like a stone mode - however, ther will be a steady downward drift for Sterling, we know rates are going down, we know we are in recession, we also know Financial Serve is a big part of our GDP and everybody knows they've tanked
As a country it will be less than a laff for a bit
Oh yeah, banking degree, fuck that mate, Engineering, Fluid Dynamics something like that, THEN an MBA and I'll get you some first class meets with some Hedgies - well assuming they are
1 Still going
2 There still are some peeps offering decent Pirme Brokerage
3 Finance isn't made illegal by Dravinian actually getting his revolution and also being in charge of it!
If I could be fucked to open an account with some spread co, actually I'd aim prob around £1.27 thats just a gut feel but last time we neared £/$ parity threat it stuck there - three week, well prob 16/17 days.... I say that as we have already had massive sell offs, and for something to be sold, you need a counterparty, those with the wdge will have spunked it, as these things are volumn weighted, some idiot buy 4/6 million of £ at 126.47 wont drag the whole lot off my target - so there will be a pause in the freefall aspects for at least a few days, may or may not restart in drop like a stone mode - however, ther will be a steady downward drift for Sterling, we know rates are going down, we know we are in recession, we also know Financial Serve is a big part of our GDP and everybody knows they've tanked
As a country it will be less than a laff for a bit
Oh yeah, banking degree, fuck that mate, Engineering, Fluid Dynamics something like that, THEN an MBA and I'll get you some first class meets with some Hedgies - well assuming they are
1 Still going
2 There still are some peeps offering decent Pirme Brokerage
3 Finance isn't made illegal by Dravinian actually getting his revolution and also being in charge of it!
A Dashing Blade
Takes horses to water but can't make donkeys drink
hmmmm, was sure I heard he's dead . . . who the f*ck was I thinking of then . . . ?The video is a couple of days old
Kaka Tim
Half Arsed and Slapdash till I Die
hmmmm, was sure I heard he's dead . . . who the f*ck was I thinking of then . . . ?
Galbraith?
He died recently after a long career exposing the fallacys of the free market whilst being roundly ignored.
Barking_Mad
Non sibi sed omnibus
What's happened with these Credit Default Swaps? Has much of it been worked out or is it still the large elephant that no one will speak of?
A Dashing Blade
Takes horses to water but can't make donkeys drink
the Lehman ones . . . all sorted to the tune of a couple of $bn ish so market breathes a sigh of relief.
Focus on emerging markets and equities and currencies these days (Ukraine 5Year CDS's currently 3500 offered on the broker screens, Russian & Khazak corporate bond quotes with a 10 to 15 point spread not uncommon, USD/JPY up and down like a whore's drawers atm )
Barking_Mad
Non sibi sed omnibus
Barking_Mad
Non sibi sed omnibus
Letter from a hedge fund manager......text below taken from MediaLens post
Full letter here:
http://images.nymag.com/images/2/daily/2008/10/20081017_lahde.pdf
Full letter here:
http://images.nymag.com/images/2/daily/2008/10/20081017_lahde.pdf
kyser_soze
Hawking's Angry Eyebrow
That story was in the Guardian or Observer over the weekend. Part of me thought 'cunt' the other part laughed out loud because of the amount of truth he spaketh...
A Dashing Blade
Takes horses to water but can't make donkeys drink
And this means what? Sorry im a market dummy
Stuff previously regarded as illiquid is now pretty much untradable (ie you can't find a buyer to buy from or a seller to sell to)
Stuff that would be regarded as massively liquid (currencies, Bund futures, S&P/Stoxx futures) are stupidly crazily scaraily volatile (ie moves that would normally take 30 mins are now happening over 30 secs. (timeframes are scalable).
Kanda
Diving wanker
This is killing traders more than them jumping off buildings. Pretty stressy.
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