Category: Derivatives
The news items published under this category are as follows.
Friday, May 15, 2009
The New Economic Threat From Credit Default Swaps / Economics / Derivatives
By: Money_Morning
Shah Gilani writes: While the entire U.S. housing market was on the verge of collapse and corporate America was being systemically undermined, regulators purposely looked the other way.
Why would they do this?
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Sunday, January 11, 2009
Fair-Value and Mark to Market...The Most Expensive Scam in History? / Stock-Markets / Derivatives
By: Andrew_Butter
Time for "Surprise-Free" Valuation Standards? - Once upon a time accountants used to count beans. But then they realized (a) that's not very complicated and (b) you don't get paid much for jobs that are not very complicated (particularly after "out-sourcing").
So they decided to be management consultants. That can be as complicated as you want it to be, so it's very difficult to see if you did the job properly or not. Which is why there was (is) much more money in it, because if the punter doesn't have a clue what he's buying you can charge him a lot of money...if you get your branding right.
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Thursday, November 06, 2008
Financially Deluded Gambling Hedge Funds Explode / Stock-Markets / Derivatives
By: Adrian_Ash
"... The ideal hedge-fund manager was only just out of college when the Asian Crisis hit. He was smoking blunts behind the school bike-shed on Black Monday 1987. He was still in diapers when the S&P lost half its value in '73-74..."
The INVESTMENT TRUST MANUAL for 1928 "was a little book," reports Robert L.Smitley in his Popular Financial Delusions .
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Sunday, October 12, 2008
The Crushing Potential of Financial Derivatives / Stock-Markets / Derivatives
By: David_Haas
George Soros, one of the world's foremost investor-speculators, has said many times that he stays away from financial derivatives because “no one understands them”. In the world of finance, derivatives might be comparable to the theoretical study of linear particle acceleration in nuclear physics. Such theories appear to be “understood” mainly based on current assumptions accepted in academic circles, often with little provable working knowledge of how such currently-held theories might ultimately manifest themselves over the long run in the real world. The problem with assumptions is that they generally change…often sooner than we think.
Sunday, September 21, 2008
Lehman's Bankruptcy and the Hidden $138 Billion Bailout of JP Morgan / Companies / Derivatives
By: Rob_Kirby
We are living in heady times. On Monday morning, something VERY strange occurred:
$138 Billion Post-Bankruptcy JP Morgan Advance to Lehman; At Least $87 B Repaid by Fed
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Wednesday, April 30, 2008
The Mysterious Case of the Commodity Conundrum, Securitization of Commodities, and Systemic Concerns (Part 3) / Commodities / Derivatives
By: Mack_Frankfurter
Part 1 , Part 2
"The theories which I have expressed there, and which appear to you to be so chimerical, are really extremely practical—so practical that I depend upon them for my bread and cheese." — Sherlock Holmes, A Study in Scarlet (1888)
The mysterious case of the commodity conundrum is sure to elicit passionate debate on either side of the equation—is the commodity boom due to speculation or fundamentals? By the time you read this, a battle in this dispute will have taken place on April 22, 2008 with the CFTC roundtable on agricultural markets.
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Wednesday, April 23, 2008
The Mysterious Case of the Commodity Conundrum, Securitization of Commodities and Systemic Concerns (Part 2) / Commodities / Derivatives
By: Mack_Frankfurter
Part 1
"The theories which I have expressed there, and which appear to you to be so chimerical, are really extremely practical—so practical that I depend upon them for my bread and cheese." — Sherlock Holmes, A Study in Scarlet (1888)
The mysterious case of the commodity conundrum is sure to elicit passionate debate on either side of the equation—is the commodity boom due to speculation or fundamentals? By the time you read this, a battle in this dispute will have taken place on April 22, 2008 with the CFTC roundtable on agricultural markets.
Read full article... Read full article...
Tuesday, April 22, 2008
The Mysterious Case of the Commodity Conundrum, Securitization of Commodities and Systemic Concerns- Part 1 / Commodities / Derivatives
By: Mack_Frankfurter
"The theories which I have expressed there, and which appear to you to be so chimerical, are really extremely practical—so practical that I depend upon them for my bread and cheese." — Sherlock Holmes, A Study in Scarlet (1888)
The mysterious case of the commodity conundrum is sure to elicit passionate debate on either side of the equation—is the commodity boom due to speculation or fundamentals? By the time you read this, a battle in this dispute will have taken place on April 22, 2008 with the CFTC roundtable on agricultural markets.
Read full article... Read full article...
Sunday, April 20, 2008
Structured Finance Lecture 2- Credit Derivatives- Part 1 / InvestorEducation / Derivatives
By: Dr_Krassimir_Petrov
Provides a survey of all major credit derivative instruments - credit default swaps, credit default options, indemnity agreements, total return swaps, credit spread forwards, credit spread options, credit spread swaps, basket derivatives, first-to-default baskets and the correlation paradox Read full article... Read full article...
Tuesday, April 08, 2008
Understanding Contracts For Difference (CFD's) / InvestorEducation / Derivatives
By: Christopher_Quigley
ONE of the most innovative financial instruments that has been developed over the last decade or so is the CONTRACT FOR DIFFENCE, better know as a CFD. The explosion in the use of this product is one of the reasons why London , as opposed to New York , is becoming the financial location of preference for many financial managers and hedge traders. CFD's are not allowed in the U.S. due to legal restrictions imposed by the American Regulators.Read full article... Read full article...
Monday, October 01, 2007
Leverage and Liquidity being Thrown at the Global Banking System - The Morgan Legacy / Stock-Markets / Derivatives
By: Captain_Hook
That's the extent of leverage being thrown at the financial system in keeping the Western banking model (he set the stage for way back when) – and better known today as ‘globalization' – afloat. If the bank run in England currently underway is any indication however, in spite of these efforts big changes are now at our doorstep. And if history is a good guide, even exploding derivatives growth and money supply will be unable to prevent the system from collapsing onto its own weight, even though increasing hyperinflation practices will be employed in an attempting to preserve current political regimes and power structures. Why is this the case? Because in the end change is inevitable, where those attempting to model themselves after J.P. Morgan (the bail out king) today will discover it's better to think in these terms at the beginning of a larger cycle (the Fed cycle began with its birth in 1913) than the end.Read full article... Read full article...
Tuesday, September 25, 2007
The Genesis of Over The Counter Interest Rate Derivatives / InvestorEducation / Derivatives
By: Rob_Kirby
Misinformation regarding the origin and genesis of the OTC Interest Rate Derivatives complex abound in the market.
During the 1970's – after President Nixon took the world off the gold standard - the dramatic increase in the price of crude oil led to burgeoning balances of petro dollars [Euro-dollars] in the treasuries of banks involved in international trade. This immediately led to banks bolstering their treasury operations to deal with the influx of ‘inflated dollars'.
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Tuesday, August 14, 2007
Diverse Asset Class Correlation and Leverage / Stock-Markets / Derivatives
By: Paul_L_Kasriel
Fund managers and investors have been puzzled why prices across a wide spectrum of assets moved together last week - namely, down. I think it has everything to do with delevering. What is bringing about delevering? When a fund owns assets that are going down in value for some fundamental reason, say mortgage-backed securities whose underlying collateral are defaulting subprime mortgages, and the fund is levered, its creditors start to make margin calls.
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Thursday, June 21, 2007
Fools Gold - Risk of Shorting Stocks 130/30 / Stock-Markets / Derivatives
By: Paul_Petillo
Risk is an interesting topic for investors. The balance between too much and the right amount are often fraught with problems, not the least of which is cost. But what happens when you openly embrace risk, stepping outside of the norm for the goal of increasing returns?
Pension plans have often found their ability to increase returns for their funds locked behind the rules of buying long. Buying long simply represents the purest marriage of research and instinct. Success was measured against traditional benchmarks such as the S&P 500 and it was against those indexes that fees for running funds were generally compared.
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Wednesday, May 30, 2007
The Bank of Montreal Follies, the Mainstream Media and More.. / Commodities / Derivatives
By: Rob_Kirby
These guys should take this comedy routine on the road. It was just 10 days ago that I penned a piece called, Derivative Disaster: Deriving the Truth , where I commented,Read full article... Read full article...