This is starting to get a little scary Page 371

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  • mcmonkeyplc 25 Apr 2013 09:44:40 39,406 posts
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    0.3% WOOOOOOOOOOOOOOOOO!

    Party times are back...

    Come and get it cumslingers!

  • ResidentKnievel 25 Apr 2013 17:14:36 6,162 posts
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    Spain up to 27% unemployment

    How is that sustainable?

    [code]Armoured_Bear wrote:
    Unlike yourself, I don't have a weird obsession with any platform.[/code]

  • Bremenacht 25 Apr 2013 22:49:52 17,682 posts
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    mcmonkeyplc wrote:
    0.3% WOOOOOOOOOOOOOOOOO!

    Party times are back...
    Bless George Osbourne! We're saved!
  • lavalant 25 Apr 2013 23:00:13 1,271 posts
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    Bremenacht wrote:
    mcmonkeyplc wrote:
    0.3% WOOOOOOOOOOOOOOOOO!

    Party times are back...
    Bless George Osbourne! We're saved!
    You mean North Sea Oil and Gas.
  • mcmonkeyplc 26 Apr 2013 13:47:45 39,406 posts
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    The US economy grew by 2.5% last quarter.

    That is actually good news if it's true.

    Come and get it cumslingers!

  • cubbymoore 26 Apr 2013 13:51:10 36,473 posts
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    Bremenacht wrote:
    mcmonkeyplc wrote:
    0.3% WOOOOOOOOOOOOOOOOO!

    Party times are back...
    Bless George Osbourne! We're saved!
    Thank god he did all those awful things to bring us back to such high times! We must get some champers to celebrate.
  • Bremenacht 26 Apr 2013 13:54:31 17,682 posts
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    Hmm. I get the impression peeps think I meant that.

    Did all that Thatcher-luvvin' stain me?
  • cubbymoore 26 Apr 2013 13:57:51 36,473 posts
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    Wait, you didn't mean that?
  • Immaterial 28 Apr 2013 09:45:24 1,324 posts
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    More swap rate shenanigans? Apologies if old (and also Rolling Stone link), but I hadn't heard of another fairly complicated financial instrument having its rates set by the people it would most benefit.

    Think I'll just switch everything off.

  • Razz 15 May 2013 15:12:16 60,993 posts
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    "Brits are now poorer than the French, Swiss, Belgians, Swedes, Austrians, Aussies and Canadians"

    Edited by Razz at 15:12:29 15-05-2013

    --------------------------------------------------------------------
    Steam/PSN/XBOX: Razztafarai | 3DS: 1246-9674-8856
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  • Mr_Sleep 15 May 2013 15:13:55 16,920 posts
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    And unemployment has gone up by 15k.

    You are a factory of sadness.

  • Commander-Keen 15 May 2013 15:17:30 806 posts
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    Obviously because the UK is a feckless nation full of shirkers, skivers, and layabouts on benefits. In fact I bet everyone in this thread it lying on the sofa with the curtains drawn, drinking Sunny D.

    And lets not forget the role that immigrants play either. Coming over here and taking our jobs. Apart from when they're not and busy signing on the dole. Errrr. Wait. Are we blaming immigrants for national joblessness this week, or for abusing the welfare state?

    I mean naturally being foreign deviants they manage to do both at the same time.
  • LeoliansBro 15 May 2013 15:17:30 43,631 posts
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    You know the funny thing about the LIBOR scandal?

    It was a moral failing. It has been dressed up as illegal but it wasn't.

    LB, you really are a massive geek.

  • Mr_Sleep 15 May 2013 15:20:12 16,920 posts
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    LeoliansBro wrote:
    You know the funny thing about the LIBOR scandal?

    It was a moral failing. It has been dressed up as illegal but it wasn't.
    Indeed, the BBC's recent documentary about the financial sector did a fairly even handed job and I never got the impression that they were suggesting it was illegal. They prefaced the whole conversation with its origins which sounded like it was a gentleman's agreement rather than anything that had legal oversight.

    Although that does bring up the question of why there was no legal oversight and why the authorities assumed that everyone would be honest but I guess that is a different question.

    You are a factory of sadness.

  • Moot_Point 15 May 2013 15:25:37 3,958 posts
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    mowgli wrote:
    I've been very forgiving and understanding of this government. They have a difficult job to do etc. But this welfare reform, starting from today is beyond unfair and is now just plainly cruel. Coupled with the legal aid cuts the party should be fucking disgusted. All founded on bullshit rhetoric. This is why people will vote for independence, not 'our oil!' Nonsense. Just to get away from this rancid gov and the fools that voted them in.
    The irony of Scotland going independent will be that they'll join the EU.

    ================================================================================

    mowgli wrote: I thought the 1 married the .2 and founded Islam?

  • LeoliansBro 15 May 2013 15:30:31 43,631 posts
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    Yeah that Banker doc on the BBC is really quite even handed and well worth a watch.

    LIBOR is just an agreement between banks about interest rates on money they lend to each other. Nobody else would give a shit except that external interest rates banks charge tend to be tied to that rate to form a natural hedge against risk.

    LB, you really are a massive geek.

  • LeoliansBro 15 May 2013 15:31:04 43,631 posts
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    Moot_Point wrote:
    mowgli wrote:
    I've been very forgiving and understanding of this government. They have a difficult job to do etc. But this welfare reform, starting from today is beyond unfair and is now just plainly cruel. Coupled with the legal aid cuts the party should be fucking disgusted. All founded on bullshit rhetoric. This is why people will vote for independence, not 'our oil!' Nonsense. Just to get away from this rancid gov and the fools that voted them in.
    The irony of Scotland going independent will be that they'll join the EU.
    Will they? Just like that?

    LB, you really are a massive geek.

  • Moot_Point 15 May 2013 15:34:30 3,958 posts
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    LeoliansBro wrote:
    Moot_Point wrote:
    mowgli wrote:
    I've been very forgiving and understanding of this government. They have a difficult job to do etc. But this welfare reform, starting from today is beyond unfair and is now just plainly cruel. Coupled with the legal aid cuts the party should be fucking disgusted. All founded on bullshit rhetoric. This is why people will vote for independence, not 'our oil!' Nonsense. Just to get away from this rancid gov and the fools that voted them in.
    The irony of Scotland going independent will be that they'll join the EU.
    Will they? Just like that?
    It is inevitable.

    ================================================================================

    mowgli wrote: I thought the 1 married the .2 and founded Islam?

  • LeoliansBro 15 May 2013 15:43:41 43,631 posts
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    No, I mean will they be allowed?

    LB, you really are a massive geek.

  • Salaman 15 May 2013 15:47:10 18,952 posts
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    So besides the UK having a 0.3% and avoiding recession, Netherlands and France are in recession and Germany managed to avoid it as well.

    Any EU league table available anywhere?
  • Mr_Sleep 15 May 2013 16:10:37 16,920 posts
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    LB, I have a question regarding the lending between banks, I'm a bit confused about why banks need to be lending money to each other. I understand LIBOR was a way of valuing the money that banks could lend each other but I'm a bit confused about the circumstances with which they actually do lend to each other.

    @Salaman Does anyone genuinely believe that the 0.3% growth really means anything? I tend to believe that it was a minor blip in the decreasing circle.

    You are a factory of sadness.

  • LeoliansBro 15 May 2013 16:13:46 43,631 posts
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    To cover their overnight position. To simplify it a bit, Banks have to strike a balance between the amount they take in from borrowings and the amounts they lend out in loans. When you add in the money they are also required to sit on against every loan they make they can find themselves with not enough money at the end of any given day. Rather than attempt to micromanage the millions and millions of transactions they take a view at the end of the day and borrow money to make sure they are covered. The other banks don't care, it's just another loan to them. The idea is tht, in the round, it all nets to zero. Maybe tomorrow the situation is reversed.

    LB, you really are a massive geek.

  • Armoured_Bear 15 May 2013 16:18:14 10,494 posts
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    Razz wrote:
    "Brits are now poorer than the French, Swiss, Belgians, Swedes, Austrians, Aussies and Canadians"
    /Lights cigar with CHF500 note

    XBL : ecosse011172
    PSN : ecosse_011172
    NNID : armoured_bear

  • Mr_Sleep 15 May 2013 16:25:32 16,920 posts
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    LeoliansBro wrote:
    To cover their overnight position. To simplify it a bit, Banks have to strike a balance between the amount they take in from borrowings and the amounts they lend out in loans. When you add in the money they are also required to sit on against every loan they make they can find themselves with not enough money at the end of any given day. Rather than attempt to micromanage the millions and millions of transactions they take a view at the end of the day and borrow money to make sure they are covered. The other banks don't care, it's just another loan to them. The idea is tht, in the round, it all nets to zero. Maybe tomorrow the situation is reversed.
    That's useful knowledge. Cheers. It does make the entire thing sound super fragile though, especially considering the large numbers.

    There's quite an interesting podcast from Radiolab about speed where they talk about trading and the speed of trades. Check it out here from about 21 minutes onwards.

    You are a factory of sadness.

  • LeoliansBro 15 May 2013 16:29:06 43,631 posts
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    The really terrifying thing is that there are hedge funds and trading houses out there which rely SOLELY on algorithms and automated responses. If two of these take opposing views and get caught in lockstep the market can distort in a fraction of a second (because they are so fast in their response times and both responding to the other) and they get more and more out of whack. This actually happened in 2011.

    Plus the algorithms are almost universally the basis for portfolio trading and positions. If the algorithm is wrong, or the market changes such that it no longer reflects the model, then the trading decisions are made based on moonshine and hot air and a business can find itself dead as arseholes in a matter of days. This is (in part) what happened to Bear Sterns.

    Go watch Margin Call. Very interesting, very accurate.

    Edited by LeoliansBro at 16:29:54 15-05-2013

    LB, you really are a massive geek.

  • Mr_Sleep 15 May 2013 16:32:38 16,920 posts
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    Aye, that's very much what they talk about in the Radiolab podcast. I'll have to check out Margin Call too.

    You are a factory of sadness.

  • Bremenacht 15 May 2013 17:40:18 17,682 posts
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    Moot_Point wrote:
    LeoliansBro wrote:
    Moot_Point wrote:
    mowgli wrote:
    I've been very forgiving and understanding of this government. They have a difficult job to do etc. But this welfare reform, starting from today is beyond unfair and is now just plainly cruel. Coupled with the legal aid cuts the party should be fucking disgusted. All founded on bullshit rhetoric. This is why people will vote for independence, not 'our oil!' Nonsense. Just to get away from this rancid gov and the fools that voted them in.
    The irony of Scotland going independent will be that they'll join the EU.
    Will they? Just like that?
    It is inevitable.
    So why is Salmond and the SNP talking about retaining the pound?

    Surprise suprise, they've claimed some sort of entitlement.
  • Bremenacht 15 May 2013 17:42:54 17,682 posts
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    The market's been pretty much automated since big bang hasn't it? 1987 was the first computer-directed crash.
  • regularjoe 15 May 2013 19:59:53 7 posts
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    LeoliansBro wrote:

    Plus the algorithms are almost universally the basis for portfolio trading and positions. If the algorithm is wrong, or the market changes such that it no longer reflects the model, then the trading decisions are made based on moonshine and hot air and a business can find itself dead as arseholes in a matter of days. This is (in part) what happened to Bear Sterns.

    Go watch Margin Call. Very interesting, very accurate.
    I am not sure whether trading algorithms had much to do with Bear Stearns's demise. Two of their hedge funds focused on real estate (which didn't trade on algorithms but made illiquid investments) made huge losses. These losses were then taken on by Bear Stearns parent institution itself, in a move to pacify investors in those funds.

    This focused attention on Bear's assets (a lot of which were related to real estate securities) which the market considered overvalued. This meant that market participants started to believe that the aggregate value of Bear's assets were less than its liabilities, making it not very creditworthy.

    Unlike retail banks like JPMorgan and Citi, which have retail deposits as a source of funding for their operations, investments banks (such as Bear and Lehmans) didn't have retail depositors and needed to borrow money daily or weekly from the market (called 'commercial paper' with very short maturities). The major buyers of investment bank commercial papers were other banks and financial institutions, such as JPMorgan, Citi etc., which stopped buying these debt issues.

    This exposed Bear to a cash crunch - it was in danger of running out of cash for its daily operations, which is when the US Federal Reserve stepped in and oversaw the sale of Bear to JPM. Something very similar happened to Lehman. Then to Merril Lynch (which was sold to Bank of America). Then (almost) to Morgan Stanley, following which Goldman Sachs (the only remaining investment bank) would have suffered the same fate. When Goldman started to wobble, the US treasury secretary (himself an ex Goldmanite) swung into action and provided various reliefs to the banking sector. Some argue that Morgan Stanley survived (unlike Bear, Lehman and Merrill) only because its demise would have irreparably threatened the next domino in the investment banking chain, Goldman. The truth of this assertion is unknown.

    Anyway, the investment bank (i.e. non retail bank) model ended as a result. Morgan Stanley and Goldman both converted into bank holding companies (which would allow them to accept retail deposits), not so much as to avail of retail deposits as a source of funding but because retail bank holding companies could get emergency loans from the US Federal Reserve (which means, unlike Bear, Lehman, Merrill etc., they would not face the risk of a liquidity crunch if market participants stopped buying their commercial paper).

    An excellent book on this subject is 'Too Big to Fail', which charts the demise of Lehman, but applies equally to Bear, Merrill etc.

    This is an area of great interest to me, so always happy to discuss further> Back to gaming for now!
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