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Tag Archive 'Capital (economics)'

Updated Version of Inflation and the Curve: an unfortunate mistake was made in the initial version of “inflation and the curve”. This has now been ammended.

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This is just a quick sneak peak over a trading algorithm I’ve developed in support of an article on equity market momentum factors. Hopefully, the final article should be out later this coming week.

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Inflation is an uneasy issue for most fixed-income enthusiasts, it can be both a cure and an ill to ongoing financing decision: this two-sided blade can have pernicious effects over a security’s yield curve. This post reviews a recent 3 year treasury note auction and potential valuation issues that can occur with an already ‘priced’ in inflation measure.

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This article explores the potential for pure market pricing of minimum banking capitalisation ratios. In particular, it reviews the track-record of existing commodities exchanges calculation methods, such as CME’s SPAN system in determining safe capital adequacy buffers. The post follows through from the recent BSCB announcement on minimum tier-one capitalisation requirements.

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The powers that be of the Basel Committee on Banking Supervision have now decided: seven is the new golden number. That is a 7% tier-one capitalisation ratio to be phased in by 2018. This will have a significant impact both on bank’s operating models and future earning profiles. Tier-One ratios affects as much a bank’s ability to absorb losses as its ability to earn profit and raise new capital.

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The beginning of September marks an old French tradition, much like hay fever in May, the street come alive with the sounds of… No, not music, nor cars or school kids returning to school; think instead union slogans, badly tuned loudspeakers with increased reverb and atrocious feedback – yep, you got it, it’s Manif Season (read demonstration fever), back on the street for another attack at the system, or something.

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From small start-ups, to foreign aid and the housing crisis, absorptive capacity can impact capital allocation decisions in often unpredictable ways. Identifying the issues underlying absorptive capacity can assist us both as individual economic agents and at an aggregate level. This post reviews three examples where absorption capacities can adversely affect economic outcomes and how pragmatic awareness can assist in reaching a better solution.

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