Finance

Detailed financial market information wanted

So, Revlon‘s a meme stock now. It’s at $8 a share.

Now, for all I know quite a bit I know near nothing about actual trading of shares. And what I want to do is make a wild-ish out of the money bet against the Revlon stock price. Say it’s at $8 now. I think it will go to zero within a couple of months. Happy to gain leverage by having a strike price on a put at $5 or $6.

But how, exactly, do I find what the price on an out of the money Revlon put option is? How would I trade if I did?

30 years ago you bugged your broker over the phone to organise this for you. Now you don’t – so how do you?

This does rather mean that they’re not stablecoins

“We are currently sitting on a time bomb,” he says. “This is because a lot of money held in stablecoin is not collateralised.

“Some reserves do exist, but existing banking regulations rightly designed to prevent money laundering mean they can be difficult to cash in. Nor are they necessarily backed by real assets.”

Not asset backed? Then not really stable coins, are they?

As for Celsius, bank run anyone? Deposit withdrawal is more liquid than asset liquidation yet again …….

Ponzi!

The lender works like a traditional bank by accepting user deposits, paying interest on them and making loans in cryptocurrencies.

An advert on its website this morning promised 18pc returns on investment, spread through a variety of token trading instruments.

You might be able to earn 18% trading, arbing crypto. I would insist you can’t make that consistently by lending it.

Yeah, yeah, sure, right on

Earlier in the day Binance, the world’s biggest cryptocurrency exchange, blocked users from withdrawing Bitcoin.

The three-hour suspension came after one of the world’s largest cryptocurrency lenders, Celsius, halted all withdrawals in the early hours of Monday morning following “extreme market conditions”.

Celsius, which allows customers to lend their Bitcoin in return for high yield interest, said: “We are taking this necessary action for the benefit of our entire community in order to stabilise liquidity and operations.”

Binance said its halt on Bitcoin trading was because of a “stuck transaction”.

Undoubtedly a stuck transaction and to stabilise liquidity.

Oh Yes.

I think you’ll find it’s none of those

As the storm clouds continue to darken over Britain’s economy, forcing companies and families to cut costs, at least one industry is gearing up for a boom in business.

Insolvency and restructuring specialists are preparing for a flurry of activity as supply chain issues, spiralling energy costs and rising inflation trigger a wave of corporate distress and bankruptcies.

Rising interest rates are going to expose some debt mountains, that’ll do it.

Erm, really?

The Bank of England will take over collapsed “stablecoin” companies to prevent a cryptocurrency crash hitting financial stability, under Treasury plans.

How do you take over something decentralised?

Stablecoin issuers would be placed into special administration by the Bank to protect consumers if they fail, a Government consultation said on Tuesday.

The proposals would mean companies offering stablecoins, cryptocurrencies designed to hold their value, would fall under similar rules as banks and other systemic institutions.

The Treasury plans to recognise stablecoins as a legal form of payment under efforts to make Britain a “crypto hub”.

Presumably that means oversight – at least – of what they’re invested in. Which will be interesting…..

I’m really not sure about this

A further tranche, on bonds that are predominantly US-held, is due next month. If that payment is rendered impossible, Moscow will enter a 30-day grace period, after which it would likely be deemed to have defaulted.

Legal eagles might want to comment. If you’re actively prevented from paying then are you actually in default?

Judge “Why didn’t you pay” “Because they wouldn’t let me”…..seems like a defence to me.

Not wholly sure this actually works

Joe Biden is poised to force Russia into its first international default for a century by making it impossible for the Kremlin to pay bond investors in dollars.

If it’s impossible for you to perform the contract then that’s not default, that’s force majeure.

Hmm, well, not so much a statement as a wild surmise on a surprisingly narrow knowledge base. But logically that would be how I see it. If the law has changed so you can’t do it then you’re not at fault for not doing it, are you?

Not exactly a material number now, is it?

Traders bet £5bn against the pound

Hmm, well. Global FX market turnover is for the order of $5 trillion a day. -Ish, -ish. Perhaps £2 trillion a day in London.

£5 billion being bet the one way on one currency, my that is a Big Boy, isn’t it?

This before we get to zero sum nature of speculative FX markets, there must equally be folk betting £5 billion the other way – for someone’s taken the bet, right?

Not that I understand this Luna/Terra thing

Apparently one Terra should always be one $. Because if it falls below that then more Luna is issued, to the value of $1. Which can be sold for $1 and therefore Terra stays at $1.

Something like that and I’ve still not found a simple explanation which makes logical sense to me. Maybe that’s me being stupid or that there is no explanation which is both simple and makes sense.

This however is nonsense:

Cryptocurrency watchers have suggested that Terra’s sell-off has been caused by a financial attack designed to force its operator, a cryptocurrency group called the Luna Foundation Guard, to sell its Bitcoin reserves, in turn pushing down the price of Bitcoin and allowing traders betting against its value to make a healthy profit.

Not because I know anything about any of those cryptos. But because that’s the sort of language that always gets used when gravity catches up with Wile E Coyote. Even when Polly Peck was nosediving that’s the sort of explanation we got – someone’s got it in for Asil Nadir for nefarious geopolitical reasons. Rather than that the entire edifice was built on running the interest gains through the P&L and the FX losses through the balance sheet.

The accusations of nefarity and market manipulation being the very signifier that it was a chimera which economic reality has now caught up with.

Whether this is the end of all crypto is also another matter – one I’ve no grand insight into. That opportunity of great profit but no one to know what it is was clearly a scam, everyone knew it was, yet the limited corporation has still proven to be a boon to mankind after all.

Money matters – we can but hope

BlackRock has warned it will vote against most shareholder green activism this year for being too extreme, in a significant u-turn by the world’s biggest money manager.

Fashions and fads, like ESG, may indeed be a method of displaying social virtue. Displaying it with other peoples’ money has its attractions.

And yet one of those grand virtues of markets and capitalism. At some point someone’s going to demand “Show me the money”. Meaning that there’s a limitation on how much of other peoples’ money is going to get pissed away on social willy waving.

Perhaps not as tight a limit as we’d desire, but there is one. Unlike systems that don’t have measurements of reality built into them.

An interesting little problem

So, I’ve got a flat in Bath, bought decades back. Cool.

Inflation and interest rates.

Higher interest rates are going to at least cool the property market. It’s entirely possible that they’ll crash it in fact. And speaking at the level of the economy, the population, they should too. So, now seems like a good time to sell.

On the other hand, property has traditionally at least been a hedge against inflation. And there’s definitely some of that around. Which should mean the nominal price of housing increases.

Further, if I sell and put the money elsewhere then wherever else that is will also still face that protect from inflation problem.

Which all really boils down to is the likely slump in property prices going to be offset by that – nominal – protection against inflation? Which is the course of action that leaves me, at the end, with the greatest sum?

Not that this is really about personal advice. It’s, rather, an interesting conundrum that many do face.

Interest rates at 3 and 5 and 7% – easily possible in this coming cycle – nominal are going to shaft property prices. And yet inflation is going to shaft anyone not in something that normally bears up well under inflation. Which way does the balance go?

Err, yes, well, sorta

Sinking pound pours fuel on the fire of Britain’s runaway prices
Sterling has already dropped 8pc this year, pushing up inflation

8 pc inflation means that the £ is worth 8 pc less. So, compared to other forms of money, the £ should change in price by 8 pc, yes?

OK, obviously, no it doesn’t quite work like that. Other places are also having inflation etc. But in the long term that is the determinant of FX rates – relative inflation rates.

This reads like a briefing here

The SFO:

Court and tribunal documents seen by The Telegraph recount expletive-laden confrontations, unorthodox tactics and a deep mistrust between the two sides, with British officials later claiming they were “betrayed” by US allies.

Sue Hawley, executive director of Spotlight on Corruption, says: “The Unaoil case exposed serious cracks in global anti-bribery enforcement, with the US effectively acting as a bully boy and actively undermining a SFO.

“The result is a fiasco where prosecutions have been overturned and senior executives of the company have yet to face meaningful justice.”

Another reading of the same case is that the American lawyer running the SFO imported American legal tactics in order to try to win this case. Then found that American tactics don’t worth in British courts.

Thus a piece reading like it’s not her fault, it’s all the Americans’.

No, I don’t know this, have no inside information. But that is what this piece reads like and such arguments are indeed carried out in the newspaper pages…..

The Henry Jackson Society can go boil its head

Alan Mendoza, executive director of the Henry Jackson Society, a pro-democracy think tank, said: “Polymetal’s productions of gold and silver is a core source of revenue for the Russian state and its profile means it is a likely target for future rounds of sanctions.

“When its auditor has pulled out of working for the firm after the invasion of Ukraine, it’s irresponsible for the LSE to continue to allow retail investors to jeopardise their savings and capitalise the firm by trading Polymetal stock.”

Fuck off, twat.

Trading in already issued shares doesn’t capitalist the company. And who the fuck are you to tell others what they may, or may not, speculate upon?

Not really, no

Parag Agrawal, Twitter’s chief executive, said that the company refuses to be “held hostage” by the world’s richest man in a call with staff, pledging that “we as employees control what happens”.

This is capitalism – owners determine.

Something one of you lot might know. If a poison pill is launched after the bid is already made then does it still stand up in court? Seems something of a swizz if they are allowed to change the rules mid-game really.

Ms. Lagarde is as with La Pomme de Terre

Christine Lagarde is holding firm in the face of surging eurozone inflation after refusing to hike interest rates to tackle higher prices.

Right, so raising interest rates should be done then. As with some others, Ms. Lagarde is a weathervane – always pointing in the wrong direction. If she’s in favour of a policy, be against it, she’s against, be in favour.

This is fun

Millions of pounds of frozen assets have been released to the sons of the former Egyptian president Hosni Mubarak after Swiss prosecutors dropped an 11-year money-laundering investigation.

No, no, no. Start from the very beginning. Accept all we’re told – it’s very bad that rulers rip off their subjects, tax havens are bad, we must investigate.

OK, but for the law to be in the right place it must be true that some investigations lead to guilt being found, others innocence. Right?