When I discussed the basis trade opportunity, the conclusion was that arbitrage in the secondary (and by extension primary) market exists due to significant dislocations in liquidity. Sure, one can argue that immediate culprits for the arbitrage have to do with counterparty risk and funding costs, which makes sense, but those are merely derivatives of the liquidity disconnects between different brokers, their accounts, and any permutations thereof. The problem with the basis trade, as Merrill a

The First Home Owner Deposit Trap Posted By : John Hacking Property investment is a great way to build wealth. There are, however, traps for the unwary. One of those traps is blowing your deposit. Some first-time buyers think they have bought when they haven’t. In a competitive market it’s easy to be gazumped by someone prepared to pay more. Even if the vendor has verbally accepted your offer, and you have signed a contract, there is no deal until the vendor also signs and contracts

Two young men, traders on John ­Paulson’s staff, come into his hedge fund’s office seeking advice on whether to buy a certain debt security. Sitting just a few feet away, I have no idea what Paulson tells them. His slightly high-pitched voice is so soft that on the rare occasions he is forced to speak in public, he’s easily drowned out by the rustling of papers or the clearing of throats. When he appeared before a U.S. House committee in November to try to explain how he had lavishly profited wh

Genentech Inc., developer of the cancer drug Avastin, told its shareholders to ignore a hostile .50-a-share acquisition bid from Roche Holding AG that was lower than the Swiss drugmaker made six months ago. Roche’s offer goes directly to shareholders, replacing an -a-share bid previously rejected by the Genentech board, Roche said today in a statement. Genentech, based in South San Francisco, California, urged shareholders to “take no action,” and said it will respond to Roche within

Jump to CommentsANYONE who’s ever watched Dragon’s Den on BBC America knows the world is full of people with ridiculous ideas for making money. “Yes, Duncan. I’ve invented a pair of underpants which, at the touch of a button, can be turned into a food blender.” Next . . . “Thank you, Duncan. I need a million dollars to market a special tape which can tell whether the peanuts on a bar counter have too much urine on them because people touch them without washing their hands.” Next . . . Things ar

January 31 2009 - Preventing foreclosures has become a top priority of politicians, economists and regulators. In fact, allowing foreclosures to happen has merit as a free-market solution to the crisis. If the intent is to help homeowners, then foreclosure is undoubtedly the best solution. Household balance sheets have been destroyed by taking on too much debt via the purchase of inflated assets. With so little savings, a household with negative equity almost implies negative net worth. Walkin

Credit card companies can change the terms of your account at any time. One of our readers, Jack, asked this question about consumer rights: Hello, I had a few things I wanted to inquire regarding Michael’s question. I know people are being taken advantage of everyday over the phone and with refinancing due to the “We reserve the right” fine print, are there ways to fight these transfers or agreements due to being misconstrued, unlawfulness, or being misinterpreted? Would there be any reas

Top Russian officials dropped their upbeat public rhetoric and warned in stark terms that Russia is in for tough times.

In these troubling times, the story lately has been one of huge bonuses for those who failed, and then got bailed. And now, the backlash: An angry U.S. senator introduced legislation Friday to cap compensation for employees of any company that accepts federal bailout money. Under the terms of a bill introduced by Sen. Claire McCaskill, D-Missouri, no employee would be allowed to make more than the president of the United States. “We have a bunch of idiots on Wall Street that are kicking sand in

By Neville BennettThe year 2008 was one of the most important in history. It severely wounded capitalism and created an on-going turbulence that bewilders us all. No one is entirely sure what is happening now, for “credit crunch”, “slump’ or “global recession” etc. do not quite fit. The future is an enigma. I have never been so perplexed about the future.Having read frantically over the summer without much enlightenment, I was alerted by a perceptive reader to the World Economic Forum’s release

BNP agreed to give up control of the insurance activities of Fortis, potentially paving the way for a banking deal and the creation of a Belgium-based international insurance player.

Stimulous package includes bank subsidies From NYT. "One provision, which was sought by the student lending industry and went unmentioned in early Congressional summaries of the stimulus package, would temporarily increase subsidies to banks in the guaranteed student loan program by tying them to a new index, partly because recent federal intervention in the credit markets has invalidated the previous index. A spokesman for Sallie Mae, one of the largest student lenders, said the change was