Archive for October 19th, 2011

Trying to revive India’s Interest rate futures market and failing each time

October 19, 2011

This IRF market has been one of the biggest mysteries of India’s financial markets. It just doesn’t kick-off.

It was first started in 2003 and collapsed in a few days of trading. The problem then was that IRF was based on Zero Coupon Yield  curve (ZCYC)  whereas Indian bind market was based on Yield to maturity and no one really understood the famed ZCYC.

The other reason for its failure was earlier IRF products required physical settlement and not cash  settlement. Physical settlement is when people have to give the bond at settlement (or commodities in case of commodity derivatives) where as in cash one adjusts the differences based on cash.

In 2010 (or was it 2009, it was again tried to restart this based on YTM and only for 10 year. Again regulators kept physical settlement and again it failed to pick up.

This time people also said  we need IRF for short-term as well. The hedging was improper etc.  As a result 91 day T-Bill IRF was started  but trading has become zilch again. There was some euphoria after 91 day T-bill launch  but nothing as of now.

BS in an article said SEBI planning to start IRF in 2-year and 3-year bonds. They will be cash settled and not physical settlement:


ECB staff grading Jean Claude Trichet

October 19, 2011

IPSO or International and European Public Services Organisation is trade union of ECB.There are currently 1502 employees in ECB and around 40% are IPSO members (around 600).

It ran a survey to assess and grade outgoing ECB President – Jean Claude Trichet’s performance in the eyes of IPSO members.  The survey findings were released. 507 people answered the survey:


10 Athletes Who Desperately Need Financial Counseling

October 19, 2011

Jena Ellis of sends this superb link on the topic:

Athletes make more money than they know what to do with. As soon as they sign that million or multi-million dollar contract, all self control goes out the window. Before they know it, they’ve got mansions, luxury cars, fine jewelry and other extravagant items in their name. Of course this isn’t true for all athletes, but most struggle to spend and save wisely. With a little dose of reality and some professional financial counseling, these 10 athletes can finally get their money in check.

The 10 athletes listed are:


A prize to propose a plan for orderly exit of a Eurozone member state

October 19, 2011

THis will not amuse the EMU leaders one bit.

UK’s Charles Wolfson Charitable Trust has announced a plan (FT write-up as well for the subscribers). The plan is for academic economists who can draw a plan which will help EMU economies exit from the Eurozone without much pains! The prize is worth 250,000 GBP and is the second highest prize money to an academic economist after Nobel Prize.

Policy Exchange, an independent think-tank will manage this prize:


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