Phriday Photo XIV

While the mini-somnambulists were in town we had a very fruitful discussion on the subject of being careful about who you talk to on t'Internet. Hopefully they are now a little bit more aware about the fact that people you meet online may not always be who they claim to be, or what they seem...

Caution advised when replying to adverts on SuperFitRussianBabes.com...

...or InternetMillionaireBachelors.org

Negativity Fatigue

Markets took a big bounce yesterday across the board. I have no idea whether this signals the base and it's the beginning of the turnaround, or whether it'll be a brief respite before another wave of asset value destruction. The general consensus seems to be that people just got bored of selling everyday and decided to buy, which I heard delightfully described as "negativity fatigue."

What a great phrase. According to TB, our man in Sydney, it's like, OK, we get it. The world is going down the dunny. Whatever. Our stocks are worthless, depression is on the way, the end of the banking industry as we know it, mass unemployment, cats and dogs living together. So, shall I light the barbie? Chuck us one of those cold tinnies, doll, and we'll worry about the rest of it tomorrow....

Had enough of feeling like this every day? Maybe you have "negativity fatigue"

p.s. Happy Birthday to AW... awwww ;-)

World Bog Council

Apparently I have a acceptable bog. Anyway, it's nice to be recognised as a complete member, and more importantly to know that there are people out there who are more deranged than you...

Thank you WBC. I shall try to keep my bog up to the requisite standard.

p.s. happy birthday Sinambulist (for yesterday!)

Temporary Interruption To Service

I apologise for this T.I.... never mind. Blogging briefly sacrificed on the twin altars of mini-somnambulists and Project Dennis.

Normal service will be resumed...soon.

Half-Term

The mini-somnambulists are back! Back in August I predicted that the little sausages would probably return bigger, stronger and smellier. Man was I right.

What I didn't predict was how events would have (or even could have) unfolded in the world since then. Financial crisis, Lehmans failure, the end of the Investment banks, the PRAT package, Gordon Brown's return from the dead, Iceland, Hungary, general asset-price destruction... all in just a few short weeks.

As amazing as the speed and scope of all this is, not everybody's world has been turned upside down. The under-exercised-hairy-one, for instance, couldn't care a jot about all that, and is just over the moon to have his brothers back in town {:op

Crisis! What crisis?

Phriday Photo XIII

As financial markets freeze up and asset prices collapse around the world, many participants are feeling more than a little foolish for buying things they didn't really understand. As exciting as complex, structured derivatives sounded, what a lot of people are noticing is that they were a lot easier to get into than they are to get out of.

An equine tree-hugger learns first hand the value of a clearly defined exit-strategy when committing oneself in unfamiliar territory

p.s. in case your were worried, the gee-gee was set free with the aid of a chainsaw, physically unharmed. Doubts remain over his mental state, however. When the farmer was asked what he was doing in the tree in the first place, he replied simply "barking."

Feeling Hungary?

Hungary is in trouble. Or should I say its markets are in trouble. Money is flooding out of Hungary in a way that it simply couldn't out of Iceland. This is not really a big deal since the Hungarians have been there, and done that, in pretty much every respect, and will take such things fully in their stride. While the rest of the world shudders in the face of financial crises, Hungarians will tweak its nose and dare it to chase them into Transylvania.

However, it did get me thinking about things, other than money, that come out of Hungary. Apart from goulash and a repuation for fearsome freedom fighters, there are only two things I know that come from this fine central European state. One I can recommend heartily, and the other I warn you never to approach.

Dogs are man's best friend and the best dog of them all is a Hungarian Vizsla. These gorgeous, ancient and noble beasts are both highly intelligent, and the most loyal and affectionate of all canines. They are called 'velcro' dogs, because they become so attached to their humans, they will follow them lovingly and longingly from room to room, just to be close...

Hungary's other contribution to the world as I know it is Unicum. This is indisputably the most revolting drink known to mankind. How it came to be a marketable product is a story that is most likely lost in a Communist haze, although I have my suspicions that it was very likely a serious nationwide attempt at mass suicide following the Soviets' crushing of the 1956 revolution. It is a liquid ambush. When it touches your lips there is a very fleeting instant when you are tricked into believing it is imbued with some semblance of palatability. This is a ruse that is swept aside faster than a cold war student protest, and the rest of the experience is rather like one of those horrible vomit-in-the-mouth moments...yet in reverse. The net result is a great deal of retching, interspersed with debilitating stomach convulsions. I'd rather down a shot of mercury.

Somnambulist's advice is this: If someone offers you a Hungarian vizsla puppy, do everything within your mortal power to accept and accomodate this gift, to change your life and enjoy it to the very unexpected full.

If someone offers you Unicum, resist all adventurous impulses and do everything within your mortal power to put hundreds of kilometres between this vile substance and your sensitive internal organs. You have been notified...

Another Day At A Medium-Sized International Bank III

If you have ever wondered why the banking industry is in such a pickle, it’s because the kind of dialogue recorded below goes on day in, day out, everywhere. Much time is spent passing pseudo-information with no ultimate objective, value or resolution.

A typical exchange at a Medium-Sized International Bank between a trading desk and an unidentified administration department…

Opening email:

Dear UDH Boy,

A few minutes ago I spoke to someone else and they told me to ask you.
--> Do you know the reason that the product "foreign exchange/foreign currency/FX-Derivates" is depressed by OCB?
Is it the current Market situation, smaler Tickets or no dealing with MSIB.....?

Looking forward to your answer.
Thanks in advance

Kind regards

Mrs N.


Response:

Hi

I am not entirely sure I understand the question here... do you mean why has turnover declined between MSIB and this entity (it being the Ostrich Central Bank, I think?)? Why has the question come up?

As it stands, without more information, I am afraid I have no idea. I never knew that we ever dealt with them. I have certainly never seen them trade with my desk in the last two and a half years. I do not even know who would be the sales person or trader speaking with the Ostrich CB on FX products to be honest, as we do not have a dedicated Ornithological Counterparties sales desk or person.

Please let me know more about the query and I will try to assist more.

UDH


Ensuing phone call:

Mrs N.: “Hello, UDH Boy, can you tell me why we are doing less business with OCB?”

UDH: “Hello, as I said in my mail, I don’t think we have ever dealt with them in the 2 and a half years I have been here, and Schadenfreude Boy, who has been here a lot longer than the Euro, has never seen them either.”

Mrs N.: “Hmm. Why do you think we are doing less with them?”

UDH: “Less than zero? (pause for effect)… Errr not sure. Why do you need to know? What is the nature of the question, where does it come from and why?”

Mrs N.: “I am not sure. It is because we have to prepare for a first round vote.”

UDH: “Who does?”

Mrs N.: “Not sure.”

UDH: “Well, what for then? A credit limit change?”

Mrs N.: “I think so.”

UDH: “Increase or decrease? Who is seeking it?”

Mrs N.: “I don’t know.”

UDH: “Well I definitely don’t either. Let’s just say OCB is depressed – diagnosis, inconclusive.”

Mrs N.: “Thanks very much.”

UDH: “You’re welcome.”

Educating Trywalker II

Last week I decided it was time to inform young Trywalker, who knows much about economics and markets, about some of the more important aspects of life.

I have no idea where Lorzweiler is, or whether it is locally renowned for cheesy comestibles. Wherever it is, it's unlikely to be as smelly as its more prestigious twin-town.

This is where cheese comes from.

Calm Before The Storm

I had a very non-PC weekend. Sadly, there's nothing beguiling or insalubrious to report.. I just didn't get near the computer.

This was an entirely intentional moment of attention diversion, since balls are about to start rolling all over the place. As pieces begin slotting into place, it's like a pause in a game of Kerplunk! when you know that the next player to withdraw a straw is going to kick it all off...

In the meantime, back to the groundhog dayjob. Come on the proud Pound!

Which of these two guys hates their job more?

Phriday Photo XII

To Americans antiquity comes pretty much immediately after the expiration of a sell-by date, which makes me think that US tourists are most likely to be the target market for this particular small business...

You can't buy authenticity. Or maybe you can.

Happy birthday to both dadnambulist & SK :-)

Number Puzzle

The number series puzzle in this post a couple of weeks ago seemed to interest a few of you, so I thought I would post another one.

Trywalker, try to restrain yourself, and don't give the answer away on the comments page.

Answer to dan (at) atigerinafrica (dot) com, brainboxes will be listed in the hall of brain below...

What's the next number in the series?

7, 13, 23, 41, 75,...


List of Brainboxes
------------------
Trywalker - will turn it up a notch for you next time...
orangepeel - (or was it headteach ?! ;-)
sparklyaph - up early in the emerald isle :-)
TC - painting by numbers? :-D
UDentistH Boy - by mental subtraction, perhaps?
lazy - (after a good night's sleep)
TB - Took a few days off to move house...and figure out the answer :-)

Educating Trywalker

Our young friend knows a lot of stuff about a lot of things. However, I am going to help fill in some of the small gaps...

This is where white wine comes from

Ewer Fabulous

The artifact pictured below recently sold at auction. It fetched more than 3 million pounds, which attracted my attention. It's nice enough at first glance, if a bit fussy and over-worked for my liking. So why is it worth so much? I read on and the first important fact I noted was that it's around 1,000 years old, originally made for the Fatimid court of Cairo.

Hmm, I thought, well that's definitely a long time for glass to survive... but then I read something that I can't stop thinking about. It is not made of glass at all. The translucent bulb of the pitcher was 'carved from a single piece of flawless rock crystal, which was hollowed out, leaving a surface just 2mm thick.' The level of skill, care and patience to do such a thing, without buggering it up is just mind-boggling. This must have required an attention to detail that is adamantly lacking in today's banking industry.

And then to be preserved all this time in pefect condition... I have never really had an interest in tableware before but this is a masterpiece, and I love it.

a really expensive jug.

Back To The Grindstone

The weekend seemed to zip by like a scolded cat on rollerskates on speed, and it's back to the groundhog grindstone. Still, there should be plenty going, and I guess there are worse things one could be doing to earn a living wage...

My own personal occupational nightmare

Gallows Humour

There's nothing traders like more than a bit of topical humour when tensions are running high. Well, maybe winning trades and a hatful of golden logs perhaps. Jokes, like rumours, spread fast in the market, and these days with everyone on Instant Messenger or Bloomberg Chat, you don't even have to go to the trouble of picking up the phone and wasting time on greetings and small talk - just copy and paste to all your contacts. As a result you will invariably get the same joke from a number of different sources in quick succession. The competitive element comes in by trying to be a source rather than a sink for jokes, which further encourages rapid dissemination.

In order to be properly viral, the joke should be short, witty, topical and poke fun at the financial markets (or rather the people involved in them) at a time of highest stress, like last week. I don't know anyone who has been hanged, but I can imagine how the term 'gallows humour' originated...

My favourite joke from last week was a very brief, simple, fake headline, that at first glance looked just like any other of the thousand newswire entries that we had been nail-bitingly glued to for more than ten hours a day.

REUTERS 10-10-08 09:25:26 - *CENTRAL BANK OF JAMAICA SAYS EVERYONE SHOULD JUST CHILL OUT

Kudos, and thanks for the smile, whoever came up with that one :-)

Phriday Photo XI

Today's photo inspired by those people I have spoken to this week, for whom honesty and humility are not troubling considerations. May our paths diverge exponentially...

An interesting close-up of a pile of sh+t

Previous Phriday Photos

p.s. happy birthday somnambulist

Unidentified Trading Wound

Gathering my thoughts about the state of the world this evening I noticed an injury on the outer knuckles of my right hand. Nothing serious, just a scraping and contusion that could have happened anywhere. Except I haven't been anywhere except the office...



The only conclusion I can come to is that since I am currently sitting to the left of Trywalker, and since he is the only person left in striking distance this week, I must have inadvertently lashed out at him once or twice, during a bout of Clear Market Turbulence. Sorry, mate.

Despite the knuckle injury, I still managed to calculate a 1-month forecast for EUR/ISK...

Thin Iceland

Not so long ago Iceland was, ironically, hot property, the home of hot money. Tempted by the country's high interest rates, investors fell over each other to buy Icelandic assets. The problem is that it's a small place, home to a few decendents of some Vikings who gave up half way to Greenland, with very little to actually put your money into. This means that the investment funds were in total disproportion to the real size of the underlying market. In the recent rush away from rISKy assets, the unwary have learnt what it means when everyone rushes for the exit in a small market. The door is just too narrow and something has to give.

One of the dislocations has been the currency. The Icelandic Krona (ISK) yesterday moved in an almost mindboggling manner. Trading at one point at 350.00 to the Euro, it dropped to 140.00 as the Central Bank decided that the proper rate is 131.00 and declared that is where it shall be. Not so, said the market, which almost instantly started paying up to 200.00. Trywalker only had a half-a-million Euro position, but with prices moving at 10% a quote it caught his attention, I can tell you.

Troubling times for a country that used to be called Beejam...


Update 08/10/08 15.00 CET: The Icelandic Central Bank has just given up on its idea of pegging the Krona at 131.00 to the Euro. This is because the rest of the world thinks it's 280.00-300.00 and denial is never a good status for policy-makers.

Clear Market Turbulence

Clear Air Turbulence, or CAT, is what pilots like to refer to as a 'bit of chop.' You can't see it coming and you don't know how long it will last, so you keep your seatbelt fastened and hope for the best. The financial markets are experiencing a 'bit of chop' at the moment, and for those of us that are airborne and at the controls (as opposed to lolloping around swimming pools) it's a kind of bumpy ride. I was saving this one for Phriday's Photo, but that seems a long way away so it gets an early posting...

Roughly translated, this sign says: "Spot Monkeys - please try to assume a relaxed position when panicking. Thank you."

D-Day Monday

Today has all the hallmarks of potential carnage, on a number of different fronts. I'm afraid I can't elaborate, except to say this was a perfect week for UDH Boy, VB (and even FVJ) to be off...not.

If Trywalker calls in sick it could be all over. Must dash...

Winter's Coming

There's any icing storm brewing. US Congress approved the PRAT package on Friday, but once the ramifications of this are digested it'll start to dawn on people that this is just clearing the snow off the path of the US financial system for today, at the expense of everyone else in the village.

There'll be a lot more snow and a lot more paths to be cleared before Spring.

Winter's coming. My advice is pack some warm clothes, head for the hills, and go skiing!

Rambling on an Alp last weekend

Same spot this morning (slightly different angle. No dog.)

Another Day At A Medium-Sized International Bank II

Being called off the golf course half way round, when your partner is quite literally having the round of her life, to gather the troops (all of whom were doing equally enjoyable things) and hot-tail it into the office late in the day on a bank holiday in order to conduct a critically important transaction on a New York Friday afternoon, only to find out that nobody of sufficient seniority (board level) can be contacted in order to grant approval to proceed, thereby wasting 4 hours of everybody's life... is just one thing that I won't miss about banking.

Incidentally, the orga-charts that were due out 5 weeks ago have still failed to materialise, meaning that reporting and communication lines remain arbitrary at best.

UDH Boy informed us that last week he had unexpectedly come across an orca-chart, but since we have no immediate use for a killer whale this wasn't especially helpful.

Phriday Photo X

Today, it seems, the future of the financial system is in the hands of the lawmakers. If Congress approve the TARP package, irresponsible banks will be allowed to clean up their houses by dumping large swathes of asset-backed-securities on the US Government's doorstep.

Speaking of huge, steaming piles of toxic crap, while rambling over a mountain last weekend we came across this...

The not-so-under-exercised hairy one uncovers possible evidence of living Apatosaurs on an Alp that time forgot

Previous Phriday Photos

Under Construction

Project Dennis does not yet have a single finished peice of code, so it might be fair to say that we could be getting a little ahead of ourselves with the business plan development. However, we think it's very important to establish the DNA of the organisation at an early stage.

Therefore, in true new-age West Coast iconoclastic style we are devoting a large portion of our resources to establishing a top secret mountain brainstorming retreat, where future employees (and founders) can lollop around on beanbags in a non-stressful environment conducive to lateral thinking. Everyone will be encouraged to entrepreneuralize, ramble and ski, although not necessarily at the same time.

Our accountant tells us we probably won't run out of money for weeks.

A Tiger In Africa offices (Swiss branch) emerging from a hole in the ground

Packages

There's a special feeling you get when waiting for a package. Whether it's a new book from Amazon, the plastic cutlery you bought on Ebay after returning from the pub a bit worse for wear, or, in my case an 8-foot golf swing trainer that I treated myself to last birthday and which now occupies the majority of the study. You get a little excited, a little nervous - the anticipation is palpable.

The financial world is waiting for its own kind of special package, of the rescue variety, from the US government. And boy are the markets all a-jitter. The sums involved are so vast they are basically beyond comprehension, although the general consensus seems to be that it will probably not be enough. More than a few people are unconvinced that the package is actually a good thing, and the US congress has decided it needs repackaging before it gets delivered to all the fidgety bankers. In the meantime, we wait...

While you're waiting for the numbers, here's a little puzzle to keep you thinking (courtesy TC):

What's the next number in this series? 1, 2, 6, 42, 1806, ...

I know Trywalker will probably get this in 3 nanoseconds, so rather than spoiling the game and posting the answer in a comment here, please email the next number to dan (at) atigerinafrica (dot) com, and I'll add the names of any brainboxes to this post. Then I'll pick a winner at random and mail them a $700 billion package (if I can get it through congress).

List of Brainboxes:-
Trywalker - (shock) please read all instructions before solving next time...
Daddy Papersurfer - eats equations for breakfast
UDH Boy - worked it out through the arb
lazy - isn't it past your bedtime?!
tNb - Before coffee no less! Respect...
HeadTeach - No trouble for a brain the size of Richmond. Please explain to orangepeel :-p
Jay - Using the "Depp Effect" ;-)
SparklyAph - With help from the underexercised hairy one {:op );
Bambambam - I'll try to find a harder one next time and you and Trywalker can go head-to-head