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Showing posts from May, 2016

Funny Story

I will not name names but...

In the early 1990s the then CEO of a large Canadian company (Aerospace) was having dinner with his bankers, one of the banker CEOs complained; he was unhappy with his exposure to the company, and that his credit group though the borrower was too risky.

The next morning, his entire loan was repaid, and all relationships was terminated.  The company CEO refused to pay penalties (that the bank was asking) stating that the bank's CEO's comment was deemed to be a notice of termination (he did say this in front of several bemused bank CEOs).  Then bank, which until that time was the company's #1 bank saw 100% of its activities cut:

lending
Trade Finance
F/x
Payroll
Client financing referral

My friend who worked at the bank told me that in those days the cost of terminating the relationship had cost the bank nearly $5 million in annual revenues.  The bank was never re-invited to any syndicate nor were they able to buy the company's debt in the sec…

Greece: Episode...who cares anymore since i've now lost my bet

Well it now looks like I will lose my bet, Greece, the IMF (although they changed their mind this morning) and the ECB (aka Germany) have agreed to release a further Euro 10 + 7 billion bailing out Greece on more time, so now Greece should be Ok for the summer.
There will "apparently" be debt forgiveness... well maybe, well we don't know, but well we will decide something in 2018 (in political speak that means NEVER!).
But it now paves the way for the ECB to keep on shovelling the BS forward for another two years (hence I've now lost my bet), Greece will not be out of the European area until well after the drop dead date of my bet come by!!!!
Now lets be clear, things are unchanged in Greece, the economy continues to not grow in any meaningful way, the IMF and ECB are still disagreeing on what do to; ECB aka Germany is still on the no debt forgiveness (hence the delay until 2018 before any conversation occurs -- see comment above) because fundamentally Greece made a…

Its not only the assembly line where robots rule!

For years we have been told that many blue collar jobs have disappeared; replaced by the assembly line robot.




Well the financial world is seeing the same thing.



A long long time ago, when I started in finance an order was written by hand (badly) on a ticket -- there was the counterpart, the amount and the price and time of trade.  This was then shipped to middle and back office for confirmation and booking.
For many many years the paper tickets have been replaced (although you still see the occasional dusty time punch...in the trading rooms).  Over the years more and more of the back and middle office functions have been replaced by computers -- reconciliation and confirmation is a lot easier. As I was leaving the capital markets an increasingly large portion of trading (stocks & bonds) was done by machines with little human intervention.  F/X was one of the last bastions and even there products such as Autobahn from DB was showing the future of no human intervention.
Now for a …

How Cheap? 2.99 US cents per kw/h -- that's how cheap

Solar power is now 16% cheaper than coal plants.


In January 2015, the price per w/h for solar was as low as 5.85 cents per watt.  joking aside in the past 18 months the cost of installed solar power has nearly halved!  
We know that there's still a lot of room for improvement of solar cells, just a few weeks ago there cost of watt installed was 4.00 cents per watt.  It needs, according to certain economists, to drop to US$0.005 (that's half a penny BTW) if not even lower.  In the past 18 months the cost has halved -- far ahead of expectation.  
The key now is panel with greater energy transfer, the next step is to improve the panels (as opposed to lower production costs).
Still this is amazing.  Rooftop solar panel will be the next big thing, especially in markets where electricity prices are high -- subsides are no longer needed.

Learning Spanish -- bad journalists...

Ok so because of work, Spanish has become essential, and one of the ways I get this done is that I read articles in Spanish.  They are usually about economics and this is because its easier for me, so although the important thing is the language I cannot resist really reading the article.

This particular article was about a new accord so that labour contracts would now be registered with the central government, and that the minimum wages would be increased by 12%, 5% earlier this year and another 6% at the end of the year (trust me on that -- it adds up to nearly 12%...).  My teacher though the article was very boring and pointless, for me I though what was interesting was what was not said.

Why a 12% minimum wage hike -- the first since 2012, why registering the labor contracts?  The issue is really rather different; in fact the idea of registration is that the government will know who earns what, its a way of tracking the workers...and their wages. Mexico is going through a difficu…