Financial News Headlines

Buttonwood: Not so smart

January 20th, 2012

IT IS easy to accept that small investors might be irrational—piling into dotcom stocks in late 1999, for example, or buying half-built Miami condominiums in 2006. But corporate executives are supposed to be “in the know”. That, after all, is why there are such stringent laws against insider dealing.

Take share buy-backs. Investors often see a decision by a company to buy back its own shares as a positive indicator. If the executives think the shares are a bargain, everyone else should.

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But are executives any good at market timing? Not according to the calculations of Andrew Lapthorne, a quantitative strategist at Société Générale. In Januar

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Securities and Exchange Commission

January 6th, 2012

The Securities and Exchange Commission (SEC) is the government agency that is the first line of responsibility for the oversight of the securities industry in the United States. The Securities and Exchange Commission oversees each stock exchange and the options markets. It is the SEC that oversees online trading, the online stock market, and says how much has to be in a margin account for traders to continue day trading. The SEC has been around since 1934 when it was created to oversee the stock market after the market crash in 1929 and the ensuing Great Depression. Read more…

Tags: Commission, Exchange Commission

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Mexico’s plunging peso: ¡Arriba, arriba!

December 10th, 2011

DOLLARS and pesos cross the border between America and Mexico in greater numbers than ever. The $400 billion-worth of trade in 2010 made Mexico America’s biggest trading partner after China and Canada. Greenbacks are so common south of the frontier that in some neighbourhoods peso coins are known as cuoras, a mispronunciation of “quarters”.

Lately the relationship between the currencies has been rocky. Between July and November the peso fell by 19% against the dollar, hitting its lowest level since the 2009 financial crisis. It has since bobbed back a little as prospects across the border have improved a tad. Nonet

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Tags: Peso, Peso ¡arriba

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Derivative Contracts

November 21st, 2011

Derivative contracts are agreements by which a trader gains leverage on investments in underlying financial instruments such as stock shares. Derivative contracts derive their value from the underlying instrument. However, they offer the opportunity for greater profit, the option to buy stock or sell stock at a given price, the possibility of hedging risk, and the possibility of trading where there is no underlying financial instrument. Derivatives contracts include those used in trading options, futures, commodities, foreign exchange trading, interest rates, or credits.

Derivative contracts can be complex (exotic) or they can be simple (vanilla). Read more…

Tags: Contracts, Derivative Contracts

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A Story About Cars, Entitlement, and Values

November 20th, 2011

I was reading a WiseBread article the other day which discussed driving an older car to save money vs. buying a new car (whatever the reason). Ive always been a proponent of using something until it can no longer be used, or it no longer fulfills my needs. I try to get the most value out of an item that I can.  When it comes to cars, safety and reliability are top priorities. The status of the car has less importance to me at this point in my life.

The article got me to thinking about someone I met in college who thought differently.

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Media release: Workers watching their backs as Westpac announces record profit

November 8th, 2011

Workers who helped deliver Westpac’s biggest ever profit should not be the next victims of the cost cutting machine, the Finance Sector Union said today.

Acting FSU National Secretary Chris Gambian said Westpac’s full year net profit of $6.991 billion, a 10% increase on last year’s figure, is a great result that was made possible by the contribution of the of bank’s 30,000-plus workforce.

“It’s incredibly disappointing that the productivity plans announced today mean the same employees that helped deliver this great result are now watching their backs lest they become the next victim of the bank’s cost cutting,” said Mr Gambian.

“Given the bank has just announced its biggest ever profit there is no excuse for cutting costs, cutting jobs or cutting services to customers.”

Westpac has reduced job numbers by over 1,000 in the preceding year, and while the bank says it is pushing ahead with productivity plans that will include “outsourcing of some activities” the bank’s report to investors today does not provide any detail on which operational areas are at risk or which jobs will be targeted. 

“Westpac should come clean about their plans for the coming year and stop fudging the issue with weasel words. The language clearly indicat

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Tags: Profit

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