Currencies
Keeping Digital Assets Stable with Stablecoins
Jan 28th, 2021 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Digital currencies
By Andrew Keenan, CAIA, CFA, CBP, Assistant Vice President at Credit Suisse INTRODUCTION The recent stratospheric rise of bitcoin and its compatriot altcoins has generated both intrigue and despair as a handful of big-name digital assets reached new apogees in 2021 with respect to price and market capitalization. In theRead More
Volatility Forecasting Across the Financial Markets
May 12th, 2020 | Filed under: Currencies, Newly Added, Risk management, The Global Economy & Currencies, Risk Management Strategies & Processes
By Mark Caslin, CEO, Alder Capital Uses of volatility forecasting in financial markets Volatility is generally accepted as the best measure of market risk and volatility forecasting is used in many different applications across the industry. These include risk management, VAR, portfolio construction and optimisation, active fund management, risk-parity investing,Read More
Opportunities Emerge in Emerging Markets Debt
Jan 5th, 2020 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Emerging markets, Business News, Economics, The A.I. Industry, MacroeconomicsA new year ushers in new opportunities and 2020 is no different in that respect. Emerging markets debt is one such opportunity, according to the global fixed-income team at Morgan Stanley Investment Management. In its new report, MSIM sees “attractive opportunities in countries displaying disinflationary or stable inflation dynamics andRead More
Setting The Next Stage in Cryptocurrencies
Dec 1st, 2019 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Digital currencies, The A.I. Industry, Emerging Alternative Investments, Other Topics in A.I.Telegram Open Network (TON) is a blockchain project supported by a native utility token called the Gram, created by Pavel and Nikolai Durov, who were behind the Telegram messaging app. TON now faces an existential regulatory threat. The Durovs created TON in response to what they saw as the limitsRead More
What if Cryptos Succeed Only After the US has Locked Itself Out?
Oct 29th, 2019 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Digital currencies, The A.I. Industry, Frontier markets, Emerging Alternative Investments, Other Topics in A.I.Recent developments in cryptocurrency have brought new currencies and more uncertainty about them and some of the underlying investments in this brave new world. Anthony Pompliano, a founder and partner at Morgan Creek Digital, tackles these issues and more relating to the cryptocurrency universe in his blog, Off the Chain.Read More
The Newest New Thing? Initial Exchange Offerings
Sep 11th, 2019 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Digital currencies, The A.I. Industry, Emerging Alternative Investments, Other Topics in A.I.Initial Exchange Offerings, that is, offerings administered by a crypto exchange, on behalf of a startup—where the startup is trying to raise funds with newly issued tokens—has developed as an alternative to an older model, the Initial Coin Offering, where participants make their contributions to a smart contract. Hirander MisraRead More
Equity Differential: A Factor in Currency Returns
Jul 23rd, 2019 | Filed under: Currencies, Newly Added, Forex, The Global Economy & Currencies, The A.I. Industry, CommoditiesA recent publication by two executives of State Street Associates identifies a new factor in currency turns, which it calls the “equity differential.” In effect, it argues for the viability of a trading strategy based on this factor. The paper argues that the differential in trailing equity market performance stronglyRead More
Hedge Funds and the EUR/CHF Trade
Apr 22nd, 2019 | Filed under: Hedge Fund Strategies, Currencies, Equity Hedge Funds, Newly Added, Forex, Event-Driven Hedge Funds, The Global Economy & Currencies, The A.I. Industry, Hedge Funds, MacroeconomicsThree scholars affiliated with JP Morgan Chase have written a paper on hedge fund behavior ahead of meetings of the Swiss National Bank, with the idea of shedding light on the consequences of the timing of central bank announcements more generally. They conclude that the SNB contributed to the volatilityRead More
World Currency: Who Needs a Numeraire?
Mar 10th, 2019 | Filed under: Currencies, Newly Added, Forex, The Global Economy & Currencies, The A.I. Industry, Finance & EconomicsOne startling fact about the new book, How Global Currencies Work: Past Present and Future, is to be found in the index. One would normally expect, from a title and subtitle like that, that there would be a lot of pages enumerated at the index heading “Bretton Woods.” After all,Read More
ISSA Reports on the Crypto-Infrastructure
Dec 12th, 2018 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Digital currencies, The A.I. Industry, Frontier markets, Emerging Alternative Investments, Other Topics in A.I.This has been a terrible year for cryptocurrencies. Bitcoin, the flagship for the asset class, peaked in the middle of December 2017 at a value of above $17,000. By the end of January this year, it was below $10,000. By September BTC had settled into a price range of $6,500.Read More
Cryptocurrency Arbitrage: Two Looks
Sep 27th, 2018 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Digital currencies, The A.I. Industry, Emerging Alternative Investments, Finance & Economics, Other Topics in A.I.Do investors arbitrage cryptocurrencies? Two recent studies offer a “yes” answer, though they in certain other respects differ significantly in their conclusions. Specifically, one study shows that in one respect arbitrage has done its duty and effectively eliminated the opportunities for arb profits, enforcing efficiency. In other situations, though, theRead More
Prepping for an Emerging Market Rebound
Sep 17th, 2018 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Emerging markets, The A.I. Industry, Finance & EconomicsTwo executives at the Neuberger Berman Group have prepared a paper on what they call the “overall case for a recovery in emerging market debts” in the months to come. Investors will want to “be around” for such a rebound, they say. There are obviously now, and there will continueRead More
Are ICOs Encoding Their Governance Promises?
Sep 16th, 2018 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Digital currencies, The A.I. Industry, Emerging Alternative Investments, Finance & Economics, Other Topics in A.I.Scholars affiliated with the University of Pennsylvania recently produced a paper about digital currencies and initial coin offerings, “Coin Operated Capitalism.” The gist of the paper is that the purchase of such tokens may be riskier than investors have thus far been led to expect and may entail more risk thanRead More
Cryptocurrencies: Alpha and Malta
Aug 30th, 2018 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Digital currencies, The A.I. Industry, Other Topics in A.I.Malta was the first jurisdiction within the EU to develop a regulatory system for collective investment schemes that invest in cryptocurrencies. A new paper offering what it calls a “top-down analysis” of hedge funds involved with cryptos details the regulatory framework now in force in Malta, highlighting the set-up andRead More
Centralized Exchanges and Cryptocurrencies
Jul 26th, 2018 | Filed under: Currencies, Investing in Commodities, Financial Economics Theory, Newly Added, The Global Economy & Currencies, Digital currencies, Commodities, Emerging Alternative Investments, Finance & EconomicsCryptocurrencies are increasingly traded on centralized exchanges, such as Gemini and Coinbase. This fact itself has generated some resentment in the crypto world, because the very idea of centralized exchange seems to violate the original anarchic animating spirit of the cryptocurrencies, even of “Satoshi” himself. Vitalik Buterin, who as the creatorRead More
BarclayHedge Numbers Show Cryptocurrency Dive
Jul 19th, 2018 | Filed under: Currencies, CTA, Newly Added, The Global Economy & Currencies, Digital currencies, The A.I. Industry, Macro and Managed Futures Funds, Commodities, Emerging Alternative Investments, Other Topics in A.I.BarclayHedge says that its flash estimate for the Barclay CTA Index shows a 0.05% loss in June, and a 2% loss year to date. More remarkably, the flash estimate shows a 16.23% drop in June and a 45.43% drop YTD for the CryptoCurrency Traders Index. The founder and president ofRead More
The Efficiency of the Markets in Crypto-Currencies
Jun 28th, 2018 | Filed under: Currencies, Financial Economics Theory, Newly Added, The Global Economy & Currencies, Digital currencies, Emerging Alternative Investments, Finance & EconomicsThree scholars affiliated with Johns Hopkins have evaluated cryptocurrency investing, in a new paper available at SSRN, and have concluded that “near-term cryptocurrency markets are semi-strong form efficient.” That bit of finance theorist jargon means that all publicly available information gets discounted quickly into an asset’s price, so that neitherRead More
A Talk on the What and Whys of Cryptocurrencies
Jun 20th, 2018 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Digital currencies, Emerging Alternative Investments, Finance & Economics, Other Topics in A.I.The Battle of the Quants came to New York City on Wednesday, June 20, and the CAIA Association was one of its media sponsors. Much of the event involved cryptocurrencies, including an exchange between John D’Agostino (the global head of investor engagement at DMS Governance) and Nouriel Roubini, Chairman ofRead More
Bitcoin Futures ETFs: SEC Requests Comment
Apr 8th, 2018 | Filed under: Currencies, Financial Economics Theory, Newly Added, The Global Economy & Currencies, Digital currencies, Emerging Alternative Investments, Finance & Economics, Other Topics in A.I.In December last year the NYSE Arca Inc. filed a proposed rule change that would allow for the creation of Exchange Traded Funds investing in Bitcoin futures contracts, and, potentially, in other related Financial Instruments. In January 2018 the U.S. Securities and Exchange Commission extended its review of this proposal.Read More
PE and VC Opportunities in 21st Century India
Feb 13th, 2018 | Filed under: Private Equity, Currencies, Newly Added, Venture capital, Equity Types of Private Equity, The Global Economy & Currencies, Private Investments, Finance & EconomicsARA Law, a firm based in Mumbai and Bangalore, India, has issued a paper on private equity and venture capital in that country. In a foreword, firm founder Rajesh N. Begur observes that there is a positive dynamic now at work in India’s economy, one that in his view “canRead More
What CTAs Think about Bitcoin Futures
Jan 25th, 2018 | Filed under: Currencies, CTA, Newly Added, The Global Economy & Currencies, Digital currencies, Macro and Managed Futures Funds, Commodities, Emerging Alternative Investments, Finance & Economics, Other Topics in A.I.A new BarclayHedge study indicates that the majority of commodity trading advisers surveyed are unenthusiastic about the new Bitcoin futures. Specifically, asked “do you consider Bitcoin futures to be a valuable/useful addition to a diversified futures portfolio?” nearly three quarters (73%) said “no.” The sample for this survey included firmsRead More
CRYPTOCURRENCIES – HOT BUY OR HOT AIR?
Jan 17th, 2018 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Digital currencies, Emerging Alternative Investments, Other Topics in A.I.By Diane Harrison With traditional stock markets offering robust gains in 2017 and looking poised to continue their attractiveness in 2018, investors need strong persuasion to shift their equity allocations elsewhere. Enter the latest media darling: cryptocurrencies. The alternatives news feeds are awash in stories extolling the meteoric rise ofRead More
Deloitte on Initial Coins Offerings (ICOs) as IPOs
Dec 10th, 2017 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Digital currencies, Other Issues in Private Investments, Emerging Alternative Investments, Private Investments, Other Topics in A.I.An October 2017 white paper from Deloitte discusses the extent to which the offerings of tokens built upon blockchains have become the new IPOs of the crypto era. There are no binding rules about how to execute an initial coin offering (ICO). Nonetheless, there have been enough of these soRead More
Regulatory Challenges Posed by Crypto Funds
Dec 5th, 2017 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Digital currencies, Hedge Funds, Commodities, Emerging Alternative Investments, Finance & EconomicsA forthcoming paper in the Stanford Journal of Law, Business, and Finance looks at the cryptocurrency markets (bitcoin and its kin), the hedge funds that look to make money from them and the operational issues involved. Two independent scholars collaborated on writing the paper: Edmund Mokhtarian and Alexander Lindgren. AlthoughRead More
The Cryptocurrency Ecosystem: A New Benchmark Study
May 16th, 2017 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Digital currencies, Emerging Alternative Investments, Finance & Economics, Other Topics in A.I.It is clear by now to even the most hardened skeptic that cryptocurrency, the class of assets of which bitcoin is the paradigm, is much more than a passing fad. Yes, the field may once have been too closely associated with survivalists, cranks, and bit players in the story ofRead More
The Case for Bargain Hunting in South Africa
Apr 18th, 2017 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Emerging marketsCharles Roth, of Thornburg Investment Management, has made the case that markets have over-reacted to the recent political shake-up in South Africa, driving asset prices below their underlying value. Thus (although Roth doesn’t put the point quite this bluntly) this could be a time for some bargain hunting. Finance MinistryRead More
Nation-States and Block-Chains: Vying for the Cutting Edge
Mar 21st, 2017 | Filed under: Currencies, Newly Added, Forex, The Global Economy & CurrenciesDeloitte proposes that the Swiss Confederation has a key role to play in the continued development of blockchain. In a new whitepaper, Deloitte makes this case based on Switzerland’s “special position as a global innovation centre.” There are six sides to Switzerland’s position: its FinTech infrastructure; its start-up attractiveness; itsRead More
On the Bitcoin Blockchain: Looking Under the Hood
Jan 19th, 2017 | Filed under: Algorithmic and high-frequency trading, Currencies, Newly Added, The Global Economy & Currencies, Digital currencies, Business News, Emerging Alternative Investments, Finance & EconomicsMore than a year ago, the Capco Institute Journal of Financial Transformation (Journal) ran a “critical assessment,” by Robert Sams, of bitcoin blockchains as a means of distributed clearing. With both bitcoins and blockchains newly in the news, Sams’ informed assessment is worth another look. Two years ago, Nasdaq announcedRead More
Private Equity Placements in China
Dec 8th, 2016 | Filed under: Private Equity, Currencies, Newly Added, Benchmarking & Performance Attribution, The Global Economy & Currencies, Emerging markets, Private Investments, Allocating to A.I.A new paper by G. Nathan Dong and two other scholars investigates private equity placements in China and their consequences for the issuing firms. The study works from a natural experiment that resulted from regulations created by the PRC ten years ago. In 2006, the China Securities Regulatory Commission issuedRead More
Papaconstantinou on ‘Selling the Family Silver’
Oct 2nd, 2016 | Filed under: Currencies, Newly Added, Insolvency, The Global Economy & Currencies, Business NewsA former finance minister of the Republic of Greece has published a book, Game Over, on what it is like to be in the midst of a continent-wide political and financial crisis. This is a volume that might be read with attention by those who seek alpha from distressed sovereignRead More
ESMA’s Greybeards Ponder Blockchains
Sep 11th, 2016 | Filed under: Algorithmic and high-frequency trading, Currencies, Newly Added, The Global Economy & Currencies, Digital currencies, Business News, Emerging Alternative Investments, Finance & Economics, Other Topics in A.I.There has been a flurry in recent days of activity about blockchains among the graybeards of the financial world, those who ponder the Really Big Picture and who have the ear of important regulators. Let us start from the beginning. What is a blockchain? It is a chronological, virtual, andRead More
The Next Crisis: BIS Warns of ‘Financial Vulnerabilities’ in EME/NFCs
Aug 25th, 2016 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Emerging markets, Macroeconomics, Finance & EconomicsIn a recent paper submitted to the G20’s working group on international financial architecture, scholars with the Bank for International Settlements have warned that an accumulation of debt in the years since the global financial crisis has left the emerging market economics (EMEs) vulnerable to capital outflows. The authors ofRead More
NB: China Positions the Yuan for Global Reserve Currency Status
Aug 9th, 2016 | Filed under: Currencies, Newly Added, Forex, The Global Economy & CurrenciesNeuberger Berman, the asset management business spun off from Lehman in late 2008, has produced a new report on foreign access to China’s bond market. China has until now kept its bond market tightly fenced off from the rest of the world, which offers a marked contrast with the behaviorRead More
Volatility Spillover Effects: India, Korea, China
Jul 21st, 2016 | Filed under: Currencies, Investing in Commodities, Newly Added, The Global Economy & Currencies, Commodities, Finance & EconomicsLast year, two scholars writing in the Journal of Alternative Investments looked at the volatility spillover effects in the Chinese stock index futures and spot markets. The question for them was whether there is spillover from spot markets into futures markets and back. I propose to give you their answer,Read More
Brexit and Hedge Fund Strategies
Jun 30th, 2016 | Filed under: Currencies, Equity Hedge Funds, Newly Added, The Global Economy & Currencies, Hedge Funds, Relative Value Hedge Funds, Finance & EconomicsHow well did hedge funds help their investors to hedge potential losses as a consequence of the markets’ immediate reaction to the Brexit vote in the United Kingdom? How well will they hedge the other uncertainties going forward? Thursday, June 23, the UK voted to leave the European Union. TheRead More
Global Focus Capital: Market’s Inflationary Expectations Are Too Low
May 12th, 2016 | Filed under: Currencies, Newly Added, Benchmarking & Performance Attribution, The Global Economy & Currencies, Macroeconomics, Commodities, Allocating to A.I., Finance & EconomicsInvestors can get ahead of events by aligning their portfolios to “a world of lower expected capital market returns and higher forward volatility.” That, at any rate, is the upshot of a thoughtful analysis by Eric J. Wiegel of Global Focus Capital, a Boston based asset allocation advisor. Why doesRead More
Escape to the Internet? Or Build Better Communities?
May 8th, 2016 | Filed under: Currencies, Newly Added, Technology, Operations, The Global Economy & Currencies, Digital currencies, Risk Management & Operations, Other Topics in A.I.Dissatisfaction with the fiat money issued by or on signals from central bankers will not go away. Talk of “printing press” money seems quaint, as when people of my generation still refer to a keyboard as a “typewriter.” Central banks and their servants (and their servers) around the world engage,Read More
Where We Stand With Blockchains: Bet on the Disruption
Mar 29th, 2016 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Digital currencies, Emerging Alternative Investments, Finance & Economics, Other Topics in A.I.Chris Skinner has a new book out, ValueWeb, which describes in the words of its lengthy subtitle “how FinTech Firms are Using Bitcoin Blockchain and Mobile Technologies to Create the Internet of Value.” It may appear to a cynic that Skinner is simply entering the already crowded sweepstakes for “whoRead More
The ECB’s March Announcements: Some Facts and Some Philosophy
Mar 27th, 2016 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, MacroeconomicsOn March 10, the European Central Bank announced an eagerly awaited new round of stimulus measures. This fell flat, and it has left some people wondering whether the bazookas of the central banks have become pop guns. As Andrew Bosomworth put it, in PIMCO’s blog, the ECB ”ticked all theRead More
Carry Strategies: Beyond Foreign Exchange
Feb 21st, 2016 | Filed under: Currencies, CTA, Newly Added, Forex, The Global Economy & Currencies, Macro and Managed Futures Funds, Hedge Funds, CommoditiesInternational investors borrow money in countries where interest rates are relatively low, and then lend it out in countries where the rates are higher. All they do is “carry” the money, so to speak, from one country to the other.Read More
CFDs and Their Platforms in Germany
Jan 20th, 2016 | Filed under: Currencies, Newly Added, Forex, The Global Economy & CurrenciesFXCM, an online provider of foreign exchange trading related services, announced January 6 that it has entered into a partnership with a German broker, FXFlat, as part of its strategic expansion into the German market. The immediate consequence of the partnership is that FXFlat’s customers can access the FXCM TradingRead More
Nasdaq Puts Its Forex Plans on Hold
Jan 18th, 2016 | Filed under: Currencies, Newly Added, Forex, The Global Economy & Currencies, Finance & EconomicsThere is an ancient principle of prudence, “don’t fix what isn’t broken.” Thomas Jefferson alludes to it in the Declaration of Independence. Prudence dictates that institutions “long established” are not abandoned for “light and transient causes.” It is possible that many of those who trade currencies today believe that theRead More
Emerging Markets in 2016: Making Necessary Distinctions
Jan 3rd, 2016 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Emerging markets, Finance & EconomicsThe present depressed state of commodity prices spells continued trouble for those companies that export said commodities, but also spells opportunity for those that import and make use of them. Some thoughts from Neuberger Berman, with an addendum from BlackRock. Read More
Bitcoin’s Founder: Recent History and 2020 Vision
Dec 17th, 2015 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Entrepreneurs, Digital currencies, Emerging Alternative Investments, Personalities in AI, Finance & EconomicsTwo things happened almost at once recently: Wired told us who actually invented bitcoin, (well, it gave the world the latest hot theory), and officials in Australia raided that same fellow’s home in re a tax investigation. More specifically on the first of those points, Wired (and soon thereafter Gizmodo)Read More
Japan: Richardson makes a Tricky Case
Sep 9th, 2015 | Filed under: Currencies, Institutional Investing, Indexes, ForexThe Japanese economy deserves some credit for having pulled itself out of a recent recession, and it is "beginning to show signs of benefiting from a weaker yen" as a BlackRock strategist tells us. But (there is always a "but"). Read More
Study Says The Gold Bugs are Right
Aug 23rd, 2015 | Filed under: Currencies, Hard metals, Risk management, Forex, GoldGold seems, to a larger extent than silver, and even more so to an extent larger than is true for palladium or platinum, to work as a true financial asset: decoupled from price developments in the commodity markets. It succeeds as a hedge against currency and stock-market trouble.Read More
Eurekahedge: The Markets are Reading the Headlines
Aug 18th, 2015 | Filed under: Commodities, Hedge Fund Strategies, Currencies, CTA, Alpha Strategies, Alpha SeekersIn the three month period that ends with July, Eurekahedge’s Greater China Index (which has 85 constituents) is down 9.39%. That has come about for precisely the reasons that a reader of the pertinent headlines would guess. Read More
Another Southeast Asia Currency Crisis
Aug 17th, 2015 | Filed under: Currencies, Forex, Emerging marketsChina's moves in recent days seem likely to set off a new Southeast Asia currency crisis, which will look a lot like the old Southeast Asia currency crisis. This was clear even on August 11th, when traders in the rest of the world were apparently working on the premise that China's move that day was a one-off. Read More
Commodities & Currencies From May to August: How Much Has Changed
Aug 12th, 2015 | Filed under: Commodities, Currencies, InsolvencyWhat a difference a summer makes! In May of this year it was still taken for granted that the "normalization" of Federal Reserve policy and so of U.S. interest rates approached. Now, that cannot even remotely be taken for granted.Read More
The LIBOR Fixing Scandal Gets a Conviction and a Book
Aug 9th, 2015 | Filed under: Currencies, Derivatives, ForexWhen it all hit the fan, U.S. investigators in particular (the Brits somewhat less so) came to see Hayes as a mastermind behind its digestive generation. But Arvedlund seeks in her new book on the Libor Rigging scandal to place the role Hayes played in context. Read More