Investment Strategy: How to Make Money in Bill Gross’ “New Normal”

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I re-read a copy of Bill Gross‘s April 2009 Investment Outlook and some things — besides his very consistent world-view and investment philosophy — were refreshed again, especially his parting words: Continue reading “Investment Strategy: How to Make Money in Bill Gross’ “New Normal””

Background: Defining emerging markets: “The 7 per cent Club”

The BRIC Nations

Trust Goldman Sachs and their chief economist Jim O’Neill to come up with a nifty handle like BRIC.  Make no mistake, I like Jim O’Neill, he’s got an earthiness that belies a pretty sharp mind and I’ve always enjoyed listening to him.  Of course, sharp minds are par for the course at Goldy but Jim does have some pretty good strategic thinking brain cells.  At an intellectual level, you can’t argue with the reasoning that leads to this grouping.  But the cynic in me is always left cringeing at the the hype surrounding this bullshit.  What makes it worse is the way the people in the BRIC countries start believing all that guff.  Anyone who’s had to endure “India Shining” (or is it “Rising”?  Hard to tell with the gorge rising in one’s throat) will know what I mean.    Continue reading “Background: Defining emerging markets: “The 7 per cent Club””

Background: Are hedge funds really scams?

As a hedge fund investor, I definitely don’t think so.  Though I have to keep repeating that as a mantra to myself when I am faced with the umpteenth hedge fund (usually at one of those HF marketing conferences put up by a big Prime Broker) that promises to provide more than 20% annual returns with low volatility.  Right, pull the other one.  Anyway, on to this diatribe posted on Business Insider by James Altucher of Formula Capital.  Continue reading “Background: Are hedge funds really scams?”

Page 19901 and the Weird and Wonderful World of Swap Pricing

The FT had a great story today about an obscure corner of international Finance:  how the official “market” price of dollar swaps are posted on Reuters screens (relayed by ICAP on Bloomberg) on page 19901 where prices:

are used as a reference when banks settle options on swaps and underwrite corporate bonds …They are also used to decide what rate of interest will be paid to investors holding structured instruments and for valuing asset portfolios. 19901 is also treated as a benchmark in official derivatives documents created by the International Swaps and Derivatives Association, an industry body.  Until 2002 the page was organised by Telerate, a data group, which posted prices using information supplied by Tullett Prebon, an interdealer broker. When Telerate went bust, Reuters acquired the service and Icap, the world’s largest interdealer broker, supplied swap prices. Continue reading “Page 19901 and the Weird and Wonderful World of Swap Pricing”