All eyes on Tokyo and Singapore open to get a sense on trading direction for the US$, precious metals and crude oil. Somewhere over the next six hours we will get a sense of how investors have digested the rating downgrade news from New York
In the long term, if other rating agencies follow suit and challenge credit worthiness of the US, popular opinion suggests that the status of the dollar as the primary reserve currency will come under a fresh challenge. The actual likelihood of this happening is low and no one does a better job of presenting this argument than Professor Pettis at China Watch.
In the short run while US regulators have stated that there will be no regulatory capital impact on holding US treasuries, European and Asian regulators still have to issue an opinion on this event. The most likely reaction given what will happen on Monday is that ECB, Bank of Japan and a host of other regulators are likely to toe the line to avoid further roiling markets and increasing capital requirements for domestic banks
The post market close rating cut on Friday evening should create a very volatile trading environment over the next week. While media coverage so far has downplayed the overall impact on the cost of US debt by comparing the two other extremes (Japan – lower rating, lower rates and Australia – higher rating, higher rates), the rating downgrade will have a significant impact on repo trades, the cost of funding proprietary positions and commodity markets over the next 4 – 12 weeks.
You know that it’s the right time and you have the right idea when you can write 10 pages about your customer’s persona. Then link that persona to a product, service, attribute combination that gives you some idea of the pricing power of (ideally) each feature or at least the product in total.
In 1997, walking on Oxford Street in London I accidently stumbled upon the newly opened Borders book store. It was early summer and a short shower had caught me without any cover against the elements and this store (wasn’t even sure if it was a
Starting up, we need a framework or a mind map to build a task list. The framework shared by Alex and Steve does just that by focusing on the core hypothesis that you need to test, the market product fit you need to confirm and the User/Payer pitch you need to document.
Who is the Hero in your movie/pitch? No it is not you, nor the investor, nor the product. Your pitch is best delivered in third person and the pain your are documenting is the pain of the customer. And the story you really want to tell is the how badly he or she wants this pain to get fixed, addressed, nuked and neutralized. Somewhere in there, maybe towards the end is space for production credits (your profile) and maybe a sexy placement for your product (showing the hero using it in exactly the right context and scene where the audience is aware of the sub text and would love the usage). But all of that comes later; this movie is primarily about your customer.
Once upon a time in a different world, the profitability generated by regional banks in the union of city states known as the Emirates surpassed the combined profitability of the same banks in India, Pakistan, Sri Lanka and Bangladesh.
The year was 2006. I had just stepped into the treasury of one of the largest banks in the Middle East. The treasurer I was meeting was a referred lead. Our conversation started of pleasantly, but then I mentioned that I built and sold risk systems for a living
Agnes recently did a lot of work in putting together a short course on correlations from a risk and trading point of view. Unlike the boring text book stuff, there are some interesting lessons and applications here if you want to track correlations over a
In this post on value at risk we will start off with a data series for the USD-EUR Foreign currency exchange rate and see what a tool like Value at Risk can tell us about both the likely as well as the worst case movement for this exchange rate.