Can talk about everything and anything with a modicum of decency, rationality and logical consistency.
Mar 21, 2023 • 120 tweets • 19 min read
Two striking resemblances btw #SVB & former @CreditSuisse.
Both banks did not pay attention to the top 8–20 risks, which every board must.
Either these banks kept their risk desks understaffed or didn't hire key managerial position holders at all.
Need introspection now.
@CreditSuisse It was reported on this forum that #SVB did not have a CRO for some 8 months during the VC Market spiralling.
Also, I read just now that former @CreditSuisse was sacking key MDs in their across their risk desks.
This trend continued since the #Archegos fiasco surfaced after 2019
Mar 20, 2023 • 12 tweets • 3 min read
Russia and China were masterfully wedged by the Nixon Admin and Kissinger with the help of Pakistan, which was then led by Gen Yahya.
Now, history has brought the two Cold War Rivals closer.
This will create new Geopolitical, Geoeconomics and Geostrategic risks for the USA.
The biggest foreign policy and strategic failure of the USA has been that it didn't see the thaw between Iran and KSA coming
The entire Muslim world is now bifurcated into Russian & Chinese Camps
Hardly any Muslim nation will back America if a war breaks out between larger powers
Mar 13, 2023 • 6 tweets • 3 min read
Not every financial company should be structured as a bank, thereby accepting deposits, intermediating funds across markets, and reporting capital adequacy ratios using the @BIS guidelines.
This is the lesson I derive from the #SVBCollapse #SVBCrash@Bis What is the point of pasting SVB CAR and Capital Ratio Metrics?
What sense could one derive from them before the run began?
They didn't reveal the full picture to the creditors, depositors, or shareholders.
CAR is a metric which exemplifies loss absorption capacity
Mar 13, 2023 • 4 tweets • 2 min read
Yes, we have spoken a lot about public failure and the lessons we draw from the Socialist Bloc nations of Eastern Europe during the Cold War and the USSR as their patron-in-chief, which broke up due to state inefficiencies
We are not quick to pontificate about Market Failure #SVB
After GFC and several other frauds and financial failures within the private sector post-2008, it is time we hold corporate white-collar workers accountable for their misdeeds.
Yes, not everything is Fraud or portends to be a Financial Crime.
But, incompetence is a Moral Crime!
Mar 12, 2023 • 16 tweets • 5 min read
Mutual funds do come with lock-in features! Especially if you are investing in a capital-protected product, you are not entitled to early encashment for a certain time.
Redemptions are deterred with the backend load. #Backstops are required in the banking arena beyond penalties
Of course, if you park liquidity in a time deposit liability side product, at a bank, you might have to pay a penalty for early withdrawal.
But, the highest liquidity risk is emanating from the sight deposits pool.
Run-on-the-bank risk is hard to mitigate if assets don't sell
#Incident reporting should follow & precede #riskmanagement?
The two are slightly different areas of specialization
in the office environment.
It is akin to the debate between #reliability and #safety.
Both are contrasting concepts in organizational #resilience studies.
They are certain leading businesses including big banks that have separated incident reporting desks from risk management co-ordination cells.
Actually, incidents are events which require an eye and a taxonomy for recognition.
Coding outcome events into loss database is essential
Jan 30, 2023 • 4 tweets • 2 min read
What makes you wait, bitterly, might not exist at all!
That is the risk of believing in something.
That "something" could be anything. #doubt#disbelief#mysticism#existentialism
Enter into a void as described by #Kierkegaard.
This void needs to be filled in.
This is what humans waste their time on, mostly.
Filling the #void to overcome the crisis of existence.
Jan 26, 2023 • 15 tweets • 3 min read
There is a problem in the financial risk management and financial engineering profession, that #quants tend to overwhelm their customers (in-house staff or external parties) with mathematical informatics.
Big Data science and ML Machine learning dashboard analytics & traditional time series econometrics presented via the system screenshots or PDF sheets attached to emails could be more helpful for the telephone operator mindset traders and dealers, only if appropriately described
Jan 24, 2023 • 5 tweets • 1 min read
The most heartening piece of news to have come out from the South American Continent.
Brazil and Argies have done the right thing by abandoning the use of the American Dollar in bilateral trade exchange conversion and financial payment settlements.
Other nations must follow suit
Nov 29, 2022 • 10 tweets • 2 min read
How much maths is needed in private equity (also when compared to hedge funds or investment banking, for example)? @CAIA_Blog
Private Equity requires a good understanding of Finance and especially sector-specific finance such as Real Estate Finance Investments and so on.
In my opinion, the techniques used to model PE transactions have a lot in common with those that are applied to Listed Equity.
Nov 7, 2022 • 14 tweets • 3 min read
The economic Potential of a nation can only be realized once its #microenterprise and its management make the right decisions, take the right actions based on the right sets of information derived from observations.
This Planning mindset cripples the market's ability to tweak
Some countries still have Planning Commissions, Boards, and whatnot!
Fancy Soviet-style Archetypical Nomenclatures and institutions won't help in the digital age!
Macro-Resource Allocation should not be planned at all.
Price signals should direct the economic dialectic.
Nov 4, 2022 • 5 tweets • 2 min read
The identity crisis in the USA has grown.
What is American?
An Immigrant Society?
The definition is now regarded as inundated.
It's predicted that people of colour, blacks, and Hispanics will overtake the White skin English Speaking People in the next 50 years or so.
This has given rise to white supremacists, evangelical extremism in the bible belts, and narrow nationalism which is now come to be known as Populism;
Nov 3, 2022 • 17 tweets • 2 min read
What maths does finance and risk management require?
Mathematics is the Queen of all Natural Sciences.
However, its applications in Social Sciences and its sub-fields such as Economics and Business Studies are growing all the time.
Finance and Risk operating in conjunction are broadly categorized as subfields of Actuarial Sciences and Microeconomics.
That's my opinion.
I mean no offence to Accountants ;)
Nov 2, 2022 • 5 tweets • 2 min read
The economic growth of the Blair-Brown duo years preceded the trend rate of the past.
The UK economy was largely in equilibrium, the Pound was stable and markets stabilized, avoided the trappings of boom-bust cycles, and the minimum wage helped reduce income inequality a little.
The problem which economists at that time overlooked was that #Brown, who was the architect of the #UK's economic mirage, was based on the "soft touch" approach to financial risk regulation and supervision.
GFC typified how wrong growth models hurt.
Oct 27, 2022 • 6 tweets • 2 min read
Ever heard the old adage? Money goes where it grows.
That is why global capital flows to China and SE+NE Asia have become gargantuan over the last 70 years or so, especially after Deng introduced the Open policy in China in 1979.
It worked for them for multiple reasons, but, the thing which differentiated the Asians from the Europeans was the progressive work ethic that promoted both smart and hard work together.
Oct 26, 2022 • 13 tweets • 3 min read
As a manager, you have to make a choice.
Whether to transfer skills to someone who is not a loyal co-worker, or to adopt avoidant behaviour and let things come to pass.
This is both morally and managerially the most difficult trade-off one makes in a position of responsibility.
Most of the time, we regret training subordinates who are disloyal and backbiters.
I have trained many people in my life who gave negative feedback to HR.
Dealing with such rogue elements in a firm tests the type of leadership and decision-making model employed.
Oct 25, 2022 • 6 tweets • 2 min read
You know that an academic institution is in financial trouble when it goes overboard in selling/ marketing some or all of its pedantic programmes.
Some of the best universities in the world now send two to three emails a day to attract potential students. #Covid has consequences
If you have to make a choice between a lowly ranked UK university and its EU Counterpart, I would prefer the latter against the former!
The standard of education in Continental Europe is superb, and academic institutions have a reservoir of PhDs who are willing to supervise.
Sep 26, 2022 • 4 tweets • 2 min read
The #ERM Crisis still haunts the BOE, which back then was controlled by the HM Treasury and Chancellor of the exchequer.
George Soros's Quantum Fund has now been replaced by countless Quantamenal FX Algo and HFT Funds and Specialized Investment Vehicles, backed up by Ai/ML.
Once the currency and money market decline precipitates, conjointly, then open market mechanisms turn financial markets into a Darwinian jungle dominated by herd instincts and other complex emerging risks which pave the way forward for a Systemic Risk Meltdown. #PoundSterling
Sep 26, 2022 • 9 tweets • 2 min read
What you will not learn at the best business school or university is how to manage people!
Personnel management or people management skills can only be learned at the practical work desk.
That is what will make all the difference btw failure and success.
Good luck with your MBA!
I have seen brilliant Students with a GPA of 3.9/4 failing in the real world.
Degrees, Exams, Diplomas, and Certificates don't make much out of anyone.
They are bureaucratic measures used by policymakers and scholars to delay the supply of labour and as a tool of social closure.
Sep 24, 2022 • 11 tweets • 4 min read
The potential #criminal or perpetrator of protruding any suspicious action or decision based on heinous or harmful activity can be deterred by forcing them to weigh the consequences of mens rea & actus reus against the weight of punishments based on odds. #bankers#roguetraders
Bad bankers are akin to criminals in any other walk of life.
We must broaden the domains of criminology and sociology, including psychology, to understand rogue and kleptomaniac behaviour among money managers in both the public and private sectors. #Fincrime is ubiquitous