Presented earlier this year on The Trader, Debtocracy, is probably still the best video covering the Greek mess. First they invented Democracy, then Debtocracy.
Spiegel’s take on the Greek exit.
Last week, it looked as though the euro had been saved. Now, in the wake of Greek Prime Minister Papandreou’s announcement of a national referendum on the bailout package for his country, the common currency is even closer to the abyss. Still, say German commentators, it may have been the right move. Full article here.
Nothing new from the Fed today. Time to use this dead cat bounce wisely….
From the Fed. Information received since the Federal Open Market Committee met in September indicates that economic growth strengthened somewhat in the third quarter, reflecting in part a reversal of the temporary factors that had weighed on growth earlier in the year. Nonetheless, recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated. Household spending has increased at a somewhat faster pace in recent months. Business investment in equipment and software has continued to expand, but investment in nonresidential structures is still weak, and the housing sector remains depressed. Inflation appears to have moderated since earlier in the year as prices of energy and some commodities have declined from their peaks. Longer-term inflation expectations have remained stable.
Guest Post by Macro Story.
I found something rather odd on Tuesday. The implied volatility skew was up 4.5% on the session, a decent move but nothing abnormal. The vix was also up 16% at the close and at one point 25.3% intraday. So on their own nothing abnormal.
But when you consider what each value measures then things become interesting. Very simply stated the vix measures implied volatility for options “at the money.” The skew measures implied volatility for options “out of the money.” Again this is a simplified explanation.
So in basic theory if investors see no risk in the market both the vix and the skew will be low as implied volatility for all options is low. As fear begins to creep in you would first see it in the skew where investors begin buying out of the money options as insurance and or speculation against “tail events.”
Australia’s agricultural commodities market resumed trading on Wednesday morning, a day after ASX, the exchange operator, shut it down in the wake of the collapse of MF Global, the FT reports. The exchange had said it took the decision on Tuesday to close the grain and wool markets “until further notice” given the large amount of outstanding contracts held by the US broker,http://ftalphaville.ft.com/thecut/2011/11/02/720671/australia-grain-and-wool-futures-resume-trading/
Regulators should have powers to limit banks’ ability to pay bonuses and dividends if they run into severe financial difficulties, according to the chief executive of HSBC. The FT reports Stuart Gulliver told a panel of parliamentary members that it would be “absolutely reasonable” for the Bank of England’s new financial policy committee to control such payments in extreme circumstances,http://ftalphaville.ft.com/thecut/2011/11/02/720611/hsbc-chief-backs-tighter-regulation/
John Paulson’s investors have signalled confidence in his ability to recover from severe losses in his flagship hedge funds, with the great majority choosing to keep their money with a manager who personally oversees $30bn in investments, http://ftalphaville.ft.com/thecut/2011/11/02/720581/most-investors-sticking-by-paulson/