Giraffe diving May 6, 2013 at 7:58 pm
It’s a holiday here in the UK so I feel the need to give you something a little lighter than usual. And what could be lighter than giraffes leaping into the air and executing perfect dives?
Category / Fun
Unfair but funny April 6, 2013 at 9:34 am
That most authoritative of news sources, the Daily Mash, has drawn their own conclusions from the HBOS report:
A DAMNING report into former bank bosses has raised the question of whether anyone should be allowed to work in finance.
As the banking standards commission suggested three former HBOS directors should be banned from the industry, experts said the men had been greedy and very bad at their jobs, just like absolutely everyone else who does this kind of thing.
Julian Cook, chief economist at Donnelly-McPartlin, said: “Acres of empty office space. You may as well graze sheep at the foot of the Shard.
I think this is a very bad idea. The Shard is tall, and it will block the sheeps’ light, leading to depressed baa-lambs. Grazing sheep at the top of the Shard is a much better idea.
A typically considered, serious DEM link January 11, 2013 at 2:40 pm
Answers, round 3 December 13, 2012 at 9:43 pm
Here are the answers for the regulation round.
- Yes.
- Probably 100% as there is no ruling in the text, so the default is ‘other’. Whether this was intended or not is unclear.
- Residential mortgages.
- 1 day and either 5 or 10 days depending on whether the swap is cleared. Can we all say `futurisation’?
- 0.56% of market value, i.e. 7% risk weight. Which is shocking.
Happy holidays.
Answers, quotation round December 12, 2012 at 11:27 pm
Simon H did the best job on this round, but many other people did well too.
The answers are:
- The correct answer is the BCBS and IOSCO, as BCBS 226, Margin requirements for non-centrally-cleared derivatives, from which the quote comes is jointly authored by those two bodies (hence the SEC dissent so eloquently rendered in the text).
- The Liikanen report – and quite right too.
- Jamie Dimon, explaining to analysts why changes in JPMorgan’s VAR mean absolutely nothing to anyone not privy to the full details of JP’s (ever-updated) model.
- This foxed all of you, I think. It’s from the Trustees on the Liquidation of MF Global.
- Most of you got this lovely phrase, originally from MacKenzie and Spears’ LRB article, subsequently commented upon across the blogosphere.
- Euro area summit communique promising much, delivering little, as usual.
- This is Mark Carney, soon to be governor of the Bank of England. Interesting.
- No one got this: it was from Markus Ferber, German MEP and member of the ECON committee. One can see his point.
- Comedy line one came from Ron Paul.
- Comedy line two came from the Daily Mash.
Answers, picture round December 11, 2012 at 11:26 pm
The picture round was pretty easy, mostly.
Shot 1 was indeed sunrise over Logan airport, outside Boston.
Shot 2 was the BIS, HypoVereinsbank (now part of Unicredit), and Goldman. Unicredit continues to have a rather low price/book ratio (around 0.35 when I was writing the quiz); Goldman’s ability to keep the lights on during Sandy when others could not generated some comment.
The plaque in shot 3 is at the FDR memorial in Washington DC. The connection with Sandy Weill is Glass Steagall: FDR enacted it, while Sandy recently opined that it would have been better if it had not been repealed (by the Gramm Leach Bliley Act Weill campaigned so hard for).
Light posting – and a quiz to keep you (somewhat) amused December 6, 2012 at 6:16 am
I am trying to finish something, so things will be a little quiet here for a while. I’ll also be travelling, too, so let me leave you with sunrise over the Eastern seaboard* and a few other things besides. The DEM seasonal quiz consists of three rounds.
Picture round.
1. Which airport is this?
(Hint: 071-00-23)
2. Name the banks**.
For extra credit, why is the price/book ratio of the middle one unusual, and what was the controversy concerning the scene depicted in the last picture?
3. Where is this?
For extra credit, what’s the connection with the recent conversion of Sandy Weill?
Quotation round. Identify the sources of the following quotes:
- “While there was broad consensus that re-hypothecation or re-use of initial margin should be
prohibited in order to ensure that property would be readily available to derivative counterparties if the receiving firm failed, the US SEC has raised a question as to whether re-hypothecation or re-use of initial margin should be permissible” - “History has shown that many systemic banking crises resulting in large commitments of public support have originated from excessive lending in real estate markets. This has often been coupled with funding mismatches and over-reliance on wholesale funding. The current levels of RWAs based on banks’ internal models and historical loss data tend to be quite low compared to the losses incurred in past real estate-driven crises. The EBA and the new single euro area supervisory authority should make sure that capital adequacy framework includes sufficient safeguards against substantial property market stress (e.g. via robust floors on the RWAs calculated by internal models).”
- “VaR models change almost every time we talk”
- “The loss of counterparties and increased haircut demands further exacerbated liquidity strains. In addition, throughout the week, securities that could no longer be funded through third-party repos market were left “in the box” at DTCC, BNYM and JPMC. The excess box collateral, as depicted on the Liquidity Dashboards, increased from $119 million on October 21 to $606 million on October 26. No funding in the market via repos or stock loans (as normally done) was available for these assets… At the same time, during the last weeks of October, the cash created within the repo matched book began to decline because counterparties demanded greater haircuts”
- “A ‘hedge’ is not a self-evident feature of the world, but a contestable cultural category.”
- “We affirm that it is imperative to break the vicious circle between banks and sovereigns.”
- “In particular, we must address, once and for all, the unfairness of a system that privatises gains and socialises losses. By restoring capitalism to the capitalists, discipline in the system will increase and, with time, systemic risks will be reduced. In addition, the knowledge that major firms in markets far away can fail, without meaningful consequences at home, will restore confidence in an open global system.”
- “We had some discussion about this issue, but there was no-one able to explain to me why there should be a totally different approach for FX markets in comparison to other markets. Of course I’ve learnt what the US did during the weekend – they will not include FX swaps in the Dodd-Frank regime. But that is the US approach. For the moment I don’t see any need to have another approach for FX at the European level.”
- “The Federal Reserve should be abolished because it is immoral, unconstitutional, impractical, promotes bad economics, and undermines liberty.”
- “Credit rating agency Standard & Poor’s has upgraded itself to Triple-A Plus Super Fantastic”
Regulation round.
- Under the Basel III capital rules, if I buy CDS to hedge my CVA from a counterparty with whom I have no collateral agreement, does the hedge attract CVA capital?
- Under the Basel III liquidity rules, what is the RSF for derivatives assets in the NSFR?
- Which asset class showed the largest reduction in capital requirements in the move from Basel I to Basel II?
- What is the margin period of risk for futures in the US? For swaps? Given this difference, what could possibly go wrong?
- What is the capital charge for AAA-rated non-granular senior ABS under Basel 2.5, assuming that the security is not a re-securitisation? Given that assets like that caused the biggest financial crisis in two generations, how do you feel about that?
Answers in the comments please. There may be a prize if (a) I can think of something suitable; and (b) the replies are impressive or amusing enough. Google if you want to, but it’s probably more fun to try guessing first.
* You are right, I didn’t say which country this airport is on the Eastern seaboard of. And was the American plane included to further confuse?
**Picture credit for the one on the right, Julia C Reinhart.
Where to find CCP financial resources November 21, 2012 at 6:56 am
As it turns out, a few miles from Belfast:
Best logo for a quantum mechanics course ever November 11, 2012 at 4:37 pm
From Umesh Vazirani’s Quantum Mechanics and Quantum Computation on Coursea:
East London from the air (line) November 4, 2012 at 2:06 pm
Some friends visited yesterday and we tried the Emirates airline for the first time. Interesting views.
One interesting thing about suddenly having hundreds of thousands of tourists passing over them is that it has clearly made some businesses clean up their yards. Look how neat this is:
The drugs do work October 15, 2012 at 6:17 am
The news that Lance Armstrong’s lawyer is calling for lie detector tests in his dispute with USADA makes me wonder if the Texan has found a new pill to beat the test. Or maybe has has just taken so much stuff that his perception of reality is permanently warped. As the Mash so perceptively observes
As the US Anti-Doping Agency presented definitive evidence of Armstrong’s drug use, the legendary cyclist insisted all the words in the report were ‘dancing like little funky pixies’… A spokesman for the USADA said that Armstrong’s response was predictable, but conceded: “He is phenomenal at taking drugs.”
Now this may of course not be entirely accurate reporting, but you have to wonder what impact years of world class drug taking might have on a man…
The Clash on Standard Chartered August 17, 2012 at 12:51 pm
I fought the Lawsky and the Lawsky won.
(HT Jonathan Weil, music video here.)
Stay with me July 31, 2012 at 12:12 pm
Inspired by Jonathan Weil on the breakup (or not) of Bank of America, and with apologies to Ronnie Wood:
In the morning
Don’t say you sex me up
Cause I’ll only kick you out of the doorI know your name is Tom
Cause your losses smelling sweeter
Since when I saw you down on the floor [of the NYSE]Won’t need to much pursuading
I don’t mean to sound degrading
But with a tax loss like that
You got nothing to laugh aboutRed P/L and risk limits
I hear you’re a mean old trader
Lets go up stairs and mark to marketStay with me
Stay with me
For this financial year you’d better stay with me
Jubilee party comment of the week June 2, 2012 at 10:38 am
From, of course, the Daily Mash:
A government spokesman said: “It’s time for everyone to go home. Seriously, before we get the army out.
“Admittedly when you tell a nation of mostly-unemployed drunkards it’s going to be ‘the best party ever’ you might expect it to get a little rowdy. But I’ve just seen Rolf Harris being cooked on a spit by a group of children in Kate Middleton masks.”
Balanced economic analysis May 21, 2012 at 8:57 am
With all the recent gloom on the UK’s economic prospects if the Eurozone goes into meltdown, it is a relief to read a balanced, nuanced analysis. From the Daily Mash:
Britain will be a prehistoric barter economy within two years, the Bank of England has predicted.
The bank’s latest projections show that negative growth and the collapse of the eurozone will create an economic system based on flint axes, chickens and shiny stones.
Is this really much less plausible than some of the Bank’s predictions? Therefore, in the spirit of providing a helpful tail risk hedge, let me present a possible new location for the Bank if things do get really bad. It needs a bit of work, true, what with the missing roof and all, but you could store quite a few shiny stones there.
Buy New England banks, sell the rest May 17, 2012 at 6:53 am
The St. Louis FED map of bank failures clearly suggests buying banks based in New England against shorting those in the rest of the US.
I’m joking of course, but it is interesting – and I am sure this map gave someone in the Boston FED a good day.
Fracking story of the day April 21, 2012 at 10:32 am
From that most reputable of news sources, the Daily Mash:
The chances of shale gas exploration releasing a monstrous denizen of the underworld are less than one in three, experts have claimed.
As the army continues to fight two hundred chittering, horned creatures released during a test extraction in Blackpool, energy companies insist they can keep demonic activity at levels that would be classed as ‘normal’ for a seaside town.
Roy Hobbs, an engineer with Shell, said: “By my calculations the Shadow Lord Cthulhu currently rests nine leagues deeper than the shale gas so I’m sure it’ll be fine.
Funding Greece March 8, 2012 at 7:32 am
Thank you to a good gentlemen for this. Click it, it’s amusing.
@twitmericks March 1, 2012 at 1:24 pm
There once was a very old horse
Who after some years in the force
Was lent to Ms Brooks
Who had cops on the books
A fact unrelated of course
(Yes it is terrible. Rebekah Brooks deserves no better.)
The full Argentina (and other options) February 24, 2012 at 6:40 am
Try playing So, what would your plan for Greece be?; it’s fun and insightful.
I got 52 the first time around, 5 the second. Interestingly reading the comments, those, 53, and 10 seem to be the most popular answers, with the full Argentina leading. My favourite comment though was the suggestion that the game should be called Dungeons and Draghi…
A gift from Hereford for Moody’s February 15, 2012 at 11:25 am
The last post, BTW, was no. 1,500. Thank you wordpress for your sterling service over one and a half thousand posts.
Now to substantive if not entirely serious matters. You see, I was musing given all the furore over Moody’s placing us on negative outlook, shouldn’t we really teach them not to mess with sovereigns? We have those men in Hereford who work for the government, so surely some gentle persuasion can be applied…
Seriously though, does anyone really feel comfortable with the power the agencies still have, despite their manifest failings? As Claire Hill puts it, the history of rating agency reform has not been inspiring. Perhaps it is time to have another go.
The best of #FedValentines February 12, 2012 at 9:23 am
This was amusing…
@justinwolfers: You’re my long-run target; my nominal anchor.
@SFFedReserve: I’m going to extraordinary measures to increase your stimulus
@AtlantaFed: I long for you as the economy longs for its long-run maximum potential
@PhiladelphiaFed: Her deviations are never standard, her probabilities never mean.
@PhiladelphiaFed: My initial projections never forecast someone like you would be in my next quarter.
@alanbeattie: I’d like to borrow you overnight and then hold you to maturity
@planetmoney: But, soft! What light through yonder discount window breaks? It is the East, and Ben is the sun.
@sffedreserve: My love is elastic, my commitment too big to fail
@ABWashBureau: You’re a systemic risk… to my heart.
@mckonomy: The sight of you fills me with irrational exuberance…
@CurtNickisch: My love for you is not nominal. It’s real.
@MarkThoma: The non-traditional stimulus was way better than I thought it would be.
Ratings agency comment of the day January 22, 2012 at 10:30 am
Credit rating agency Standard & Poor’s has upgraded itself to Triple-A Plus Super Fantastic.
(I was going to go with Philip Stevens’ somewhat more sober post on a similar theme in the FT, but I can’t resist the Daily Mash’s nuanced, balanced stance.)
Now, before we go, let’s remind ourselves as to what the collateral looked like behind the mortgages in some AAA tranches…
The new Eurozone will be called Bolon Yokte December 3, 2011 at 6:49 am
Let me explain. First, some news from Mayan archaeology:
The end is not quite nigh. At least that is the conclusion of a German expert who says his decoding of a Mayan tablet with a reference to a 2012 date denotes a transition to a new era and not a possible end of the world as others have read it.
The interpretation of the hieroglyphs by Sven Gronemeyer of La Trobe University in Australia was presented for the first time on Wednesday at the archaeological site of Palenque in southern Mexico.
Gronemeyer has been studying the stone tablet, which was found years ago at the archaeological site of Tortuguero in Mexico’s Gulf coast state of Tabasco.
He said the inscription described the return of the mysterious Mayan god Bolon Yokte.
Now, turning to the Eurozone, we have Angela Merkel’s comments yesterday:
Angela Merkel has vowed to create a “fiscal union” across the eurozone with wide-ranging powers to avert catastrophe, saying the process was already under way as part of the “marathon” effort to solve the European debt crisis.
The German chancellor said she was determined to push for treaty changes at next week’s EU summit.
It’s all pretty clear. The new Eurozone will begin in 2012 and, as per the prophecy, it will be a God amongst currency zones, with one bank to rule them all. Now I admit that ‘Bolon Yokte’ is not quite as catchy as the ‘Neues Eurozone’, but it could catch on…
Breaking news November 8, 2011 at 7:02 am
G20 leaders revealed as covert anti-capitalism activists
THE leaders of the G20 nations are undercover anarchists who have deliberately destroyed the West’s capitalist economy, it has emerged.
Suspicions were aroused after key participants of last week’s acutely dysfunctional summit left with dejected facial expressions that looked suspiciously like ham acting.
French customs officials subsequently searched President Obama’s suitcase to discover a Guy Fawkes’ mask, luminous juggling clubs and dog-eared back issues of Class War magazine with notes pencilled in the margins.
Entirely plausible isn’t it?
Spam comment of the week September 29, 2011 at 3:47 pm
My spam blocker diligently stopped this:
This website is certainly relatively useful considering that I’m with the minute making an online floral site…
But deleting such charmingly random (if ungrammatical) spam is a little harsh. Clearly I should try to help.
All too true September 19, 2011 at 6:41 am
From that high quality news source, The Daily Mash, following on from the earlier police raid to free ‘slaves’ in Leighton Buzzard:
As many as 60 million slaves could be living in Britain, it was claimed last night.
Experts said the slaves were being forced to do horrible, demeaning jobs and live in disgusting conditions.
Tom Logan, director of SlaveWatch, said: “We reckon they are being lured from schools and universities and then forced to work for about eight hours a day doing something completely pointless for a wage so small it may as well not exist.
“They are kept in tiny, beige-carpeted rooms, usually near dual carriageways or retail parks. Often these rooms contain little more than a television, a beige sofa and a Wii. It’s just sickening.”
I just have one question. Is this humour or reportage?
Scorecard July 1, 2011 at 3:57 pm
Strauss-Kahn sex assault case ‘close to collapse’. Score 1. (Deus Ex post here.)
French Finance Minister Lagarde chosen to lead IMF. Score 0. (Deus Ex post here.)
Greece Set to Get Aid Payment as Banks, Lawmakers Fall in Line on Crisis. Score 1. (Deus Ex post here.)
Total 2/3: pass but must try harder.
Llama llama llama comedian June 26, 2011 at 2:20 pm
Looking pretty foxy June 25, 2011 at 9:15 pm
