The Bloomberg story about Credit Suisse & Gupta is insane. A recap. 1/n
A group of commodity trade finance experts (presumably because they had actually read @BondHack) at CS told management Gupta was doing dodgy deals and blacklisted it.
When you know commodity trade finance, the bar for "dodgy deals" is VERY HIGH. E.g. recently ABN disclosed that 100% of its fraud loss experience was in trade finance. It's almost a normal cost of business.
Despite that, CS continued to lend money to Greensill which fund Gupta. This in itself is already crazy. But it doesn't stop there.
2 years later, the trade finance team discovered the bank was still lending client money to Gupta via Greensill. They alerted management and compliance.
Again, in a big bank like CS, the bar to have one team alert another team in a totally unrelated division is VERY HIGH.
I've been there, believe me, the normal reaction would be "OMG the bunch of morons at the AM division, they lent to Gupta, let's try to find a way to short their fund, maybe the Prime brokerage could do it for us".
But now, they spontaneously went to compliance!!!
When was the last time a team at a big IB went spontaneously to compliance? I might need to check, but I think it was 1792, when the French "governement" tried to sell assignats.
And despite this, management ignored the red flags.
Honestly, this is nuts. It won't end well for them.
It's not a bunch of weirdos sending random alerts, it's the only team in the bank with real knowledge of the market telling management "this guy is a crook, don't touch him"
And the rest of the bank saying "Oh no, don't worry, Greensill has a great machine learning model to find the best clients and invoices, and our good chap Dave is on the board. No worries mate."
Crazy
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About the odious Belarus scheme to arrest political opponents, I'm intrigued. Was it really illegal? I'm not 100% sure. Maybe @piris_jc
, a real expert on this, has a view? persee.fr/doc/afdi_0066-…
And before you jump on me:
- not it's not obvious it's illegal because they didn't endanger the plane - and this is what Chicago convention explicitly prohibits.
(Imagine the same story but traveling in a bus - would it be illegal ? No. Sovereignty is a tricky concept...)
- yes it's important to know if it's illegal, because if it's not, then the treaty might need some changes !
About those bots pushing bad narratives, something strikes me. The other day - for some reason - I read 3 academic papers on fake news, bots etc. All well written and interesting but deep down it's only platitudes: confirmation bias, echo chambers, power law network etc. 1/n
The truth seems to be that no one has a clue how to properly manage this problem. AI far from achieving anything.
My gut feeling (totally speculative) is that we should be more focused on the boundary conditions: where does it stop/start, where do the power laws truncate.
Instead of looking at nodes/links etc we should look at field equations, basically the Faraday revolution of physics (which gave Maxwell, general relativity, quantum field theory etc). In those settings border conditions are crucial to understand and stop physical processes.
"DEFI100 is a Synthetic Index Token that works on the principle of elastic supply and uses rebase function to maintain the equilibrium between its Spot Price and Target price. Our Token is pegged to the total market cap of the Decentralized Finance sector at the ratio of 1:100bn"
As always, the @ecb 's FSR is a treasure trove of information. Here’s a thread with my top 10 charts in the report and why I think they’re interesting. (No special order). 1/13
Investor sentiment on CRE
What’s interesting here is that the last time sentiment was 20% “at through”... the market was actually at a through! But since 2015, “peak” sentiment has been growing, and so have prices.
Regressing bankruptcies rate and GDP: this spectacular chart tells the economic story of Covid better than 1000 words: losses have been “socialized”, banks & SMEs have been shielded. I think we won’t get back to the regression line simply bc losses have already been transferred.
Maybe I'm late here, but I've just realised why Tesla wants to allow crypto payments (Bitcoin or other) and it's definitely NOT because they want to jump on the crypto bandwagon.
Here's the crucial bit in the terms and conditions
1/2
So what you're doing here, is give them a free option on the Crypto. With a basic assumption of 3-month delivery time and the 70% vol we have on #bitcoin, this is worth around 13.5 of the price you pay 🤣
When deliveries are driven by efficient option exercise, it'll be fun.