Trying to revive my Blog - I'll probably change it to a Photoblog soon.
Friday, January 02, 2009
I LOVE music - I can play the drums, guitar and keyboard. Only thing I can't do is sing.
If I could, I'd play myself on all four instruments at Guitar Hero: World Tour and win the game on Expert, but I can't.
Inspired by Guitar Hero and Miss Aniela's multiplicity images sans Photoshop.
Photo taken with 1 exposure with lighting provided by my portable table lamp controlled by my big toe. Yes I need a Speedlite.
Day one. It's going to be interesting to see how long I can keep this up for. Most of the others I've seen trying this are working as professional photographers, and I pretty much spend 14 hours a day in the office.
Wish me luck. Inspired by www.flickr.com/photos/stephenpoff/2164458909/
Saturday, October 11, 2008
The final price was 8.625. For non financial folks out there, that means that a CDS protecting $10mm of debt is worth $9.1325mm. The recovery on the Lehman bonds was way under what I expected it to be. In fact, before the auction, the defaulted bonds were trading at 13c to the dollar., indicating that the CDS is worth $8.7 mm.
What does this mean?
This means that whoever has sold protection now has to cough up extra cash in order to settle their obligations. It means that the funding markets will continue to be stressed, and it means that the markets won't recover anytime soon.
Just want to point your attention to the website - in fact, if one looks closely at the auction, you see that the first market midpoint was $9.75. Look closely at Goldman or ML's prices. ML had a 8-10 market, Goldman said 8.875/10.875. For Physical Settlement requests, you can see that GS offered a staggering $1.5bn in bonds to sell @ 9.75. Two things: 1) They thought that the $9.75 price was too high and were trying to drive it down, or 2) they really had $1.5bn in bonds to sell. Anyway, in anycase, everyone seems to think that $9.75 is too high, and the net open interest was a $5bn selling interest after the first round.
What can economics, the study of incentives, tell you about this round of bidding? Looking at the net open interest to sell, one can speculate that the dealers were net BUYERS of Leh protection. (if they were intending to drive the price down - CDS is worth more to them if the recovery is as low as possible), or that the dealers, having bought WAY too many Leh bonds, were trying to offload them in the market at $9.75.
Anyway, what is interesting next are the limit orders. ML posted a buy order at $10.25 for $670mm, which was partially filled. Barclays bought $775mm at $9.75. GS bought $825mm bonds at $9.75 and above. Citi got $500mm @ 9.125. GS got another $270mm at 8.75-9.75. and JPM got $830mm at $8.625 and above.
Anyone who thinks about this auction should see what was coming. Having dealers who had a net interest in BUYING, they indicated to sell a ton at the first phase of the auction in order to drive the price down before getting their orders filled at a much lower price. i.e. Dealers were all net buyers of protection, they needed to deliver cheap bonds, and how they did this was to indicate an interest to sell FIRST, before buying the bonds at a cheap price.
Here's a breakdown
ML - Indic $141mm to sell @ $9.75. Bought: $670mm @ $10.25 WTB $250mm @$8.5
GS - Indic $1.47bn to sell @ $9.75. Bought: $825mm @ @9.75, $270mm @ 8.625-9.75
JPM - Indic $612 to buy @ $9.75. Bought: $830 above $8.625.
Barc - Indic $130 to buy @ 9.75, Bought $775mm @ $9.75
What does this show?
1) GS is smart. They indicated a HUGE SELLING INTEREST, before turning around and buying most of their requirements above the indicative price $9.75.
2) JPM is honest, they wanted to buy at the start, and they bought in the end.
3) ML bought way too high. ML tried to be a GS, indicated huge selling interest (okay just $141mm), and bought their bulk of their orders at $10.25
4) Barc is honest as well.
What does this tell us? A lot of the CDS sellers, got SCREWED. Since this is a one sided market, and dealers were incentivized to push down the price since they were NET protection buyers, folks like AIG/PIMCO who sold massive amounts of protection now either have to cough up a huge amount of cash to settle their CDS obligations, or buy defaulted bonds in order to settle physically. Guess from who? That's right, the dealers.
I have to applaud the market, collectively, they played this poker game to a wonderful ending, and a lot of guys who don't want to do the analysis will accept the results and cough up the money.
Then again, that's why I want to be a trader:).
Monday, March 24, 2008
I'm entering a new phase in life, after graduation, life is just going to get more complicated. I dreaded graduation, because I fear work. But really, what is there to fear? It's a new experience, more excitement, a dream job and a fresh young man ready to take on the world.
Life is a like a trade. It's about managing your risk, controlling your emotions and ultimately, making decisions that are about the future, not about the past.
Hopefully, as I become a better trader, I"ll become a better person and a better son, boyfriend, brother and friend to everyone I know.
Today's Topic is on trading:
1. Trade with an Edge
2. Manage Risk
3. Be Consistent
4. Keep it simple
Easy mantras to live by, but hard to apply in real life. I need to keep my emotions in check - trading is just like a poker game. I made a bad bet that day, but got lucky. Analyzing poker plays according to your hand is the best form of playing, because in the long run, you come out on top. I'm still a novice poker player, but I'll get better as I play more games. Perhaps I should have taken some psychology and behavioral finance.
Good night all, hopefully I"ll blog more often and in a less rambling fashion, once I get my thoughts sorted out. When I'm alone in HK, I'll definitely have more time for self reflection and reading. Lifelong learning, as EOAC has thought me, is definitely an important application that I must instill in my life. Now later, but Now.
Friday, October 05, 2007
Craigslist Meets WallStreet…Classic
What a classic answer…..
THIS APPEARED ON CRAIG’S LIST
What am I doing wrong?
Okay, I’m tired of beating around the bush. I’m a beautiful (spectacularly beautiful) 25 year old girl. I’m articulate and classy.
I’m not from New York . I’m looking to get married to a guy who makes at least half a million a year. I know how that sounds, but keep in mind that a million a year is middle class in New York City, so I don’t think I’m overreaching at all.
Are there any guys who make 500K or more on this board? Any wives? Could you send me some tips? I dated a business man who makes average around 200 - 250. But that’s where I seem to hit a roadblock. 250,000 won’t get me to central park west. I know a woman in my yoga class who was married to an investment banker and lives in Tribeca, and she’s not as pretty as I am, nor is she a great genius. So what is she doing right? How do I get to her level?
Here are my questions specifically:
- Where do you single rich men hang out? Give me specifics- bars, restaurants, gyms
-What are you looking for in a mate? Be honest guys, you won’t hurt my feelings
-Is there an age range I should be targeting (I’m 25)?
- Why are some of the women living lavish lifestyles on the upper east side so plain? I’ve seen really ‘plain jane’ boring types who have nothing to offer married to incredibly wealthy guys. I’ve seen drop dead gorgeous girls in singles bars in the east village. What’s the story there?
- Jobs I should look out for? Everyone knows - lawyer, investment banker, doctor. How much do those guys really make? And where do they hang out? Where do the hedge fund guys hang out?
- How you decide marriage vs. just a girlfriend? I am looking for MARRIAGE ONLY
Please hold your insults - I’m putting myself out there in an honest way. Most beautiful women are superficial; at least I’m being up front about it. I wouldn’t be searching for these kind of guys if I wasn’t able to match them - in looks, culture, sophistication, and keeping a nice home and hearth.
it’s NOT ok to contact this poster with services or other commercial interests
I read your posting with great interest and have thought meaningfully about your dilemma. I offer the following analysis of your predicament.
Firstly, I’m not wasting your time, I qualify as a guy who fits your bill; that is I make more than $500K per year. That said here’s how I see it.
Your offer, from the prospective of a guy like me, is plain and simple a crappy business deal. Here’s why. Cutting through all the B.S., what you suggest is a simple trade: you bring your looks to the party and I bring my money. Fine, simple. But here’s the rub, your looks will fade and my money will likely continue into perpetuity…in fact, it is very likely that my income increases but it is an absolute certainty that you won’t be getting any more beautiful!
So, in economic terms you are a depreciating asset and I am an earning asset. Not only are you a depreciating asset, your depreciation accelerates! Let me explain, you’re 25 now and will likely stay pretty hot for the next 5 years, but less so each year. Then the fade begins in earnest. By 35 stick a fork in you!
So in Wall Street terms, we would call you a trading position, not a buy and hold…hence the rub…marriage. It doesn’t make good business sense to “buy you” (which is what you’re asking) so I’d rather lease. In case you think I’m being cruel, I would say the following. If my money were to go away, so would you, so when your beauty fades I need an out. It’s as simple as that. So a deal that makes sense is dating, not marriage.
Separately, I was taught early in my career about efficient markets. So, I wonder why a girl as “articulate, classy and spectacularly beautiful”
as you has been unable to find your sugar daddy. I find it hard to believe that if you are as gorgeous as you say you are that the $500K hasn’t found you, if not only for a tryout.
By the way, you could always find a way to make your own money and then we wouldn’t need to have this difficult conversation.
With all that said, I must say you’re going about it the right way.
Classic “pump and dump.”
I hope this is helpful, and if you want to enter into some sort of lease, let me know.