Derivatives

Fukushima and Derivatives Meltdowns

Is it any wonder that the valuation of securitized investments has become so challenging, that mark to market valuation on securitized assets has become meaningless, depressed, or both, and that the securitization market itself has seized up?

An Assistant dialog to simplify calculating derivatives of expressions

In the US, households have a prepayment option on their mortgages should interest rates fall. Moreover, mortgages are usually securitized.

You call them stock, or stock options, derivatives, mortgage backed securities.

Moreover, the issuance and trading of derivatives ought to be at least as strictly regulated as that of stocks. Regulators should insist that traded derivatives are homogenous, standardized, and transparent.

But for derivatives, the analogous efforts are misdirected and won t save us from the financial fire next time. We are rebuilding derivatives and related financial structures atop the same, still active faults.

(c) Specific chemical derivatives of ATS precursors (e.g. esters) which could be converted into controlled precursors.

To reduce the risk of runs in derivatives markets, regulators around the world are poised to require that derivatives trades be carried out through clearinghouses or exchanges. The clearinghouses will have many advantages, but not as many as regulators might think.

This was especially true of over the counter markets for foreign currency, securities, derivatives and repurchase agreements.

You can figure it out by looking at the difference and higher derivatives if you wanted to.

It's not only because we like to drink lots of it, and its marvelous derivatives, beer, wine, etc.

The fundamental question today is who monitors opaque loans, whether of the sub prime or any other variety. Traditionally, the answer was banks in the securitized world, it remains a question.

If big banks have become too complex to regulate, then a workable Volcker Rule is the best way to start simplifying them. And, if the problem is systemically risky derivatives trading in banks and elsewhere, then the priority given to derivatives traders over nearly every creditor ought to be curtailed.

Women make a contribution of 62 per cent to the marketing of milk and its various forms of processed or raw derivatives.

Specifically, problems in the US housing sector have, since summer, undermined confidence in securitized assets. The net result has been to shift global portfolio preferences in ways that have affected some exchange rates significantly.

Even back in the 1990 s, regulators would privately complain of the difficulty of retaining any staff capable of understanding the rapidly evolving derivatives market. Research assistants with one year of experience working on derivatives issues would get bid away by the private sector at salaries five times what the government could pay.

The largest, most sophisticated banks have become expert at remaining one step ahead of regulators constantly creating complex financial products and derivatives that skirt the letter of the rules. In these circumstances, more complicated regulations merely mean more billable hours for lawyers, more income for regulators switching sides, and more profits for derivatives traders.

In July 1996, the Governors of the central banks of the Group of Ten member countries approved a framework for the collection of derivatives market data on a regular basis. See Proposals for improving global derivatives market statistics , Basle, July 1996. The framework is available on the BIS Web site, www.bis.org, as ECSC No. 6.

Or the deposits can be investments in D.E. Shaw s funds and the loans can be the complex derivatives that make up D.E. Shaw s portfolio.

UNDCP continued its research and development of colour tests for amphetamine derivatives, the chemical components of khat (Catha edulis), for possible inclusion in drug identification kits.

The regulators are focusing on an important feature of derivatives contracts that allows the derivatives industry to close out their dealings abruptly with a financially distressed entity, thereby making the institution incapable of recovering. Other creditors typically cannot do that in a US bankruptcy, for example, they must first wait for a court to decide whether the debtor company can be restructured.

PARIS In the early phases of the financial crisis, it was fashionable to argue that the United States system of regulation needed a fundamental structural overhaul. Differences of opinion between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) had obstructed effective oversight of investment banks and derivatives trading (only the US believes that it makes sense to regulate securities and derivatives separately).

The tests were supposed to reveal the true conditions of banks saddled with unaudited toxic assets in housing loans and financial derivatives. The reasoning behind the tests seemed unimpeachable.

America s economy had been supercharged by excessive leveraging now comes the painful process of deleveraging. Excessive leveraging, combined with bad lending and risky derivatives, has caused credit markets to freeze.

It was suggested that developing country Governments could hedge their budget revenue's exposure to commodity price risk by rolling over derivatives instruments available on exchanges and over the counter markets.

For example, in the case of the Iraqi sanctions, the relevant committee authorized, on an exceptional basis, Jordan s request for resumption of imports of oil and oil derivatives from Iraq.

Moreover, defaults on securitized credit card debt and commercial loans to companies that are driven to bankruptcy are still to come. They will continue to deprive the banking system of its equity capital, with little chance of it being recouped in the near future.

It is astonishing that sub prime mortgages and their like were repackaged and resold in securitized form. That these collateralized mortgage obligations (CMOs, or bonds backed by a pool of mortgages) found a ready market, both in the US and abroad, reflects failure on several fronts.

And banks remain non transparent, and thus at risk. We still don t know the full extent of linkages among financial institutions, including those arising from non transparent derivatives and credit default swaps.

Article 18 of the Act prohibits introduction into Jordanian territory of any radioactive derivatives, such as radioactive waste or residue, or their use, processing, transport, storage, licensing or burial in that territory.

Regulators around the world have worked hard to make the financial system safer. With the recent missive to the derivatives industry, they are now starting to deal with bankruptcy and well they should.

If you gamble on the stock market, you are an investor... If you gamble on the derivatives market, you are a trader... If you gamble at the casino, you are a loser... Morality?

Free, non transferable put options could be given to farmers to provide them with price certainty, while in turn Governments should hedge their exposure by selling futures or using over the counter derivatives contracts.

Thus, neo Keynesians have tried to spur more housing investment through rock bottom interest rates, more auto purchases through securitized consumer loans, and more shovel ready infrastructure projects through short term stimulus programs. When investment spending does not budge, they recommend that we turn excess saving into another consumption binge.

Aspiring derivatives traders certainly will be more confident of their career prospects. And other parts of the economy that provide services to the financial sector Porsche dealers and strip clubs, for example will be similarly encouraged.

CAMBRIDGE Financial commentators have likened Japan s earthquake, tsunami, and nuclear catastrophe to derivatives role in the 2008 financial meltdown. The resemblance is clear enough each activity yields big benefits and carries a tiny but explosive risk.

And being naive about the whole field, I kind of thought, Oh, you have cell death in Alzheimer's which is causing the memory deficit, and then you have this compound purine derivatives that are promoting cell growth.

As a result, Greece would be forced to impose capital controls. Some contracts denominated in euros would be subject to Greek law, some to European law, and others for example, derivatives contracts to British or US law.

Through all of this, governments have strengthened bank regulation only slightly, leaving key issues like liquidity creation, exposure to derivatives, and tax avoidance largely unaddressed. Today, 98 of the 750 trillion in global liquidity is in speculative markets.

A brightly colored orchid enlivens my study, and, through the window, I catch a glimpse of my green garden. In short, my life like everyone s is enabled, enriched, and extended by a wide variety of plants and their derivatives.

Perhaps if those securitized packages had been properly rated, the originating institution would be obliged to retain a share to signal to the market that risk was being controlled. And, clearly, the idea that capital requirements were not needed for banks off balance sheet activities (because the banks were not bearing the risk), was simply wrong.

And we should also be very careful about the accounting used for derivatives. On this technical but crucial point, US generally accepted accounting principles (GAAP) are considerably more generous (because they understate potential losses) than International Financial Reporting Standards (IFRS).

Each of these commodities is an important input for major corporations. Surely there is at least as much natural demand for commodity bonds as there is for credit default swaps and some of the bizarrely complicated derivatives that are currently traded!