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JohannesBorgen
@jeuasommenulle
, 7 tweets, 1 min read Read on Twitter
STOP EVERYTHING YOU'RE DOING. IT IS HERE.
THE FIRST ZERO COUPON PERPETUAL BOND EVER.
(In case your pricing model breaks done with 0/0 #DIV0 stuff, the current market price is 70% of par.)
Jokes aside, this is actually extremely interesting because this is afaik the first time a coupon formula for a bond gives a negative coupon. Which leads to a fascinating legal question since the different between a bond and a loan is that
A bondholder has no legal commitment/obligation, as opposed to a lender (that's why bonds are easy to transfer.) So if there is no commitment you can't ask for any money so you can't have negative coupons
But this bond's coupon formula should have given a negative rate at the last fixing ! To avoid a legal nightmare, the trustee discreetly decided to floor it at 0. So your floating bond suddenly has embedded derivatives!
Anyway, that was just another day in the world of negative rates madness. end/
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JohannesBorgen
@jeuasommenulle
Thread of the #MiniBOT saga. This will focus on technicalities – others like @SMerler or @LucioMM1 will be more useful if you try to understand the politics of this and the full implications.
First: what are MiniBOT exactly? Still vague ofc but the bulk of the idea is that they are small denomination bearer bonds used to pay the gvt's commercial debts and which can be used to pay taxes.
Every word in that definition is important as we’ll see below.
Read 28 tweets
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JohannesBorgen
@jeuasommenulle
So what is this new decision on bank resolutions all about? It is about state aid when the monies come from the deposit guarantee fund. Those funds are mandatory under EU law and are here to protect depositors in case of bank failure.
Banks have to be members and have to contribute to those funds in the EU.
When a bank fails, it is tempting for the banks and for the government to bailout the failing bank with the money which is in the fund and which, most of the time, is sitting there useless.
Read 19 tweets
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JohannesBorgen
@jeuasommenulle
I already tweeted my main thoughts on a #Deutsche #Commerz deal but since it is now LIVE, a few additional thoughts (thread.)
The social cost is likely to be very high (think 20,000 jobs.) The government must be really desperate about the situation of Deutsche to push for that deal!
Is it a good deal though? German banking M&A is notoriously difficult, there are a few horror stories (Dresdner, HVB…) and even in Excel land, the maths are not great – that’s even if you make bold assumptions on synergies.
Read 18 tweets

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Scott Weinberg
@scottEweinberg
I plan to watch and review every Godzilla movie before the new one comes out. First one's already written cuz I've seen the original several times. They'll be up on my new Patreon page once I write a few more. Should be fun. Cannot wait for Smog Monster. (it's my favorite)
Godzilla is a lot like Freddy Krueger; the first film is super dark and the villain is truly disturbing. Two or three sequels later the tone is entirely different and the villain is being a wise-ass.
btw I do not claim to be any sort of expert on this franchise. But I've only seen a few of the Godzilla movies, and those were probably the Americanized re-dub garbage versions. And I write about genre movies all the time. So there.
Read 83 tweets
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Sanjay Bakshi
@Sanjay__Bakshi
Interesting live case study on herding and precautionary principle. On herding, soon regulators in nations who have not grounded 737 Max (India?) will feel the pressure to conform to the behavior of those who did.
Herding as in "we need to do what everyone else is doing."

Precautionary Principle as in "even if we don't know if technical faults caused the crash but it's better to be safe than sorry."
Additionally, one should observe how different people behave.

1. The airlines who operate 737Max almost exclusively
2. The airlines who have some 737 Max planes
3. The airlines who have no 737 Max planes (key beneficiaries of grounding)
4. Airline Regulators
5. Boeing
6. Airbus
Read 22 tweets
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Subhadip Nandy
@SubhadipNandy
IV - A thread

In financial mathematics, implied volatility of an option contract is
that value of the volatility of the underlying instrument which, when
input in an option pricing model ) will return a theoretical value equal to the current market price of the option (1/n)
Implied volatility, a forward-looking and subjective measure, differs
from historical volatility because the latter is calculated from known
past returns of a security. .
en.wikipedia.org/wiki/Implied_v… (2/n)
To understand where Implied Volatility stands in terms of the underlying, implied volatility rank is used to understand its implied volatility from a one year high and low IV.
traderslounge.in/implied-volati…

tastytrade.com/tt/blog/implie…

(3/n)
Read 21 tweets
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Penny Midas Rollo
@PennyMidasRollo
001/ [article content in this tweet series 001-180 reproduced with permission from Martin Howe QC of Lawyers for Britain @lawyers4britain]
#quote "Leaving the EU on WTO terms: pulling down the barriers to world trade
Introduction: why prices will FALL after Brexit, not rise" /002
002/ #quote "Over the past couple of weeks, the media have been full of lurid scare stories about what will happen if the UK leaves the EU on WTO terms, because negotiations with the EU do not result in a withdrawal agreement." /003
#tariffs #NoDeal #Brexit #WTO #ProjectFear #shortages #food #medicines
003/ #quote "One of the most ridiculous and UNJUSTIFIED of these absurd scare stories is that it will lead to higher prices, and even shortages, of foods and medicines." /004
Read 180 tweets
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Adam Bonin
@adambonin
The 3d Cir opinion on Chaka Fattah et al's corruption convictions is now online. Bottom line: while it overturns certain charges and reinstates others, the number of 10-year concurrent sentences he's still facing means no change in his jail time. www2.ca3.uscourts.gov/opinarch/16439… (1/)
All the convictions relating to the illegal excess campaign loan from Al Lord and the various schemes to repay him and Tom Lindenfeld stand, including RICO. Convictions relating to the phony Porsche sale, for which the trial court judge directed acquittal, are reinstated. (2/)
As to the bribery charges involving Fattah and Vederman, the Court tossed the convictions based on improper jury instructions pre-McDonnell, with remand for potential retrial on those counts. Here's how the Court sums up its ruling. (3/)
Read 7 tweets
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Flood [Bitmex]
@ThinkingUSD
Thread:
What is slippage; how does slippage apply to the Market Makers, the average trader, and Crypto Market Caps?
Slippage is defined as follows:
Slippage refers to the difference between the expected price of a trade and the price at which the trade is actually executed. Slippage often occurs during periods of higher volatility with market orders.
Now slippage is not just for massive orders and "whales"
Due to the inefficiencies of CryptoCurrency exchanges and the LACK of liquidity, whenever you perform a market order, you may encounter slippage.
Read 19 tweets

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