Everything Gold Is New Again

By Shayne McGuire
Newsweek, New York
Wednesday, December 29, 2010

http://www.newsweek.com/2010/12/29/everything-gold-is-new-again.html

In stormy times, investors look for something solid to hang onto—something like gold. The World Bank president himself, Robert Zoellick, suggested in November that the world’s economies could use the old reliable metal to help stabilize their currencies. For these and many other reasons, professional gold-fund manager Shayne McGuire argues that gold has nowhere to go but up. The following essay is adapted from McGuire’s latest book, Hard Money: Taking Gold to a Higher Investment Level.

Solution for the sovereign debt crisis - Tax the rich

Extracted from Version 2.0: A kinder brand of capitalism
by Teh Hooi Ling

Published March 26-27 2011 on The Business Times Weekend

Are the rich of the world so rich that combined they would actually have enough stashed away to help solve their country's debts?According to Forbes list of world's billionaires, there are 1,210 billionaires in the world now. Their combined wealth , is about US$4.5 trillion. That's more than the GDP of Brazil, India, Indonesia and Thailand combined.

The United States has the most number of billionaires, at 412. It is followed by China and Russia - ironically two countries which used to subscribe to the Marxist philosophy but have since made some drastic ideological changes. China has 115 billionaires and Russia has 101. But the billionaires in Russia are far richer than those in China. Their combined wealth is US$433 billion, compared with China's US$230 billion.

India's billionaires (with combined wealth of US$247 billion), meanwhile can fund nearly two years of the country's estimated budget deficit of US$131 billion last year. The billionaires in the US can help trim their government's net debt by 16 per cent, Brazil's by 18 per cent and Mexico by 31 per cent. 

Meanwhile, Hong Kong's 36 billionaires have wealth amounting to a staggering 70 per cent of their economy's GDP last year.

Currencies are not the problem

Published March 11, 2011 on The Business Times

By RAGHURAM GRAJAN

Professor of finance at the Booth School of Business at the University of Chicago and the author of 'Fault Lines: How Hidden Fractures Still Threaten the World Economy'. 

LAST November, the US Federal Reserve embarked on a second round of a type of monetary stimulus known as quantitative easing. The central bank declared that it would buy US$600 billion in long-term Treasury bonds in an attempt to push down long-term interest rates. Immediately after the move, the rest of the world accused the United States of deliberately attempting to depreciate the US dollar.

However, Washington was not alone in apparently trying to influence its currency's value. China has continued to hold the yuan relatively stable against the US dollar, even though many economists believe that the fair value of the Chinese currency is considerably higher.

Why demonise the credit default swaps?

I came across this interesting article about widely discussed financial tool - Credit Default Swaps, CDS few weeks ago in The Business Times, so would like to share with you about this financial tool.

By Luigi Zingales

Professor of entrepreneurship and finance at University of Chicago Graduate School of Business, and co-author, with Raghuram G Rajan, of 'Saving Capitalism from the Capitalists'

[CHICAGO] The lawsuit filed by the US Securities and Exchange Commission (SEC) against Goldman Sachs Group for securities fraud, charging the bank with misrepresenting the way a collateralised debt obligations (CDO) had been formed, has revived public disgust at credit default swaps (CDS), the instrument used to bet against these CDOs.

Before the 2008 financial crisis, CDSs were an esoteric product, known only to a restricted number of sophisticated investors and specialised academics. Today, they are a household name, synonymous with unruly speculation, boundless greed, and ultimately, systemic instability.

High Frequency Trading

Last weekend, I was searching the software development positions at the website eFinanceCareers.com. I realized that there are big demands in the low latency, high frequency development specialists. Out of curiousity, I did a search for software development in this area. From my understanding, this is about developing a trading system that require the knowledge in communication protocols like TCP, UDP and RPC.

Then I found this interesting article about how the hedge funds and big investments  banks gained their trading profit through this high speed trading system. The picture below taken from The New York Times, explaining how these traders gained the profit.

For those who interested, go to this link and read the details:

http://www.nytimes.com/2009/07/24/business/24trading.html?_r=1