Friday, May 25, 2007

The song remains the same....

From the diary of Samuel Pepys Friday 11 December 1663.

"I to the Coffeehouse and there among others had good discourse with an Iron Merchant, who tells me the great evil of discouraging our natural manufacture of England in that commodity by suffering the Swede to bring in three times more than ever they did and our owne Ironworks be lost, as almost half of them, he says, are already."

Thanks Phil

Wednesday, May 23, 2007

Dark Liquidity

Changes to the buyers of fiancial products are encourging changes to market itself. The rise of hedge funds, algorithermic trading and the increase size of some traditional funds are putting pressure on exchanges to lower costs and reduce market impact. "Consolidation among fund management groups, for example, is giving the buyside pricing power it once did not have. Moreover, the rise of hedge funds and the advent of so-called algorithmic trading is altering the buy-side landscape. As demands from their own customers change, the banks must change with them."

Sunday, May 20, 2007

Cutomer focus pays

Thanks to The Big Picture for the paper showing that firms with the highest customer satisfaction also out-perform the market.

Wednesday, May 16, 2007

The buck stops....

People keep wondering where the risk lies with the packaging and passing of credit risk. this article in the FT points to Credit Derivative Product Companies (CDPC) as being anxious to get hold of the risk.

This nascent industry is still very small, with only four groups in operation. But this year could see a raft of new CDPCs hit the market, all hoping to take a slice of this credit derivatives business and make more of it than banks can.

More than a dozen hopeful firms are in the works, backed by a mixture of private equity, hedge fund and investment bank sponsors.

Sunday, May 13, 2007

Inflation index

Mixing up a chagne in relative prices with inflation.

Wolfgang Munchau:
"The problem was that the official inflation index no longer reflected many people’s personal shopping basket. The index basket is full of manufactured goods largely produced in Asia, while we spend most of our money on services, such as childcare, education, healthcare, transportation, travel and gastronomy."

Monday, May 07, 2007

Insider trading

Some information on the latest activity in the options market compared to the norm.
Paul Kedrosky provides the link.

Thursday, May 03, 2007

Nature or nurture

The purpose of the status system is to enable children to compete successfully with their peers. In order to do this, they must acquire self-knowledge. Children have to discover how they compare with other children along a variety of dimensions. Am I tall or short, strong or weak, pretty or plain, smart or dull? Without answers to these questions, they would have no way of deciding whether to try to dominate others or yield without a fight, to make suggestions or follow the suggestions of others, to turn down potential mates in hopes of doing better or take whatever comes along. Based on their understanding of their own strengths and weaknesses, of the options offered by their environment, and of the particular set of other children with whom they must compete, children work out their own individual strategy of behaviour. "I'm not good in maths," James (the boy whose mother is a poor disciplinarian) admits. But he's popular with his peers. Every child has to find out what he is good at and place his bets on the things that are most likely to pay off. Even identical twins will find different niches to occupy.

Prospect Magazine with a fascinating look at nature vs nurture.