THE FINTAG NEWSLETTER
@ Wed 11 March 2009 : GMT

FINTAG COMMENT

Risk.

I use a number of risk tools that produce lots of reports. There are two risk systems - one for trading and the other to keep our analysts busy. Most of them are about as useful as smothering butter on the skin to stop sunburn. But as with a lot of life, we want to have the edge on our competitors and so persist in churning out what ifs and sensitivities and complex factors that are not complex but irritating and signals and scenarios and risky business coefficients. We pour over factors and decision trees and correlation and time series analysis and make sure our models have been programmed correctly.

When things go right, we pat ourselves on the back for being really clever. When things go wrong, we shout at the risk reports and complain the data was wrong., the code was wrong and the risk managers were asleep.

Trading is a ludicrous existence. A bit like this blog, sometimes it works and sometimes it doesn't. But the key is to stay detached and unemotional and ensure one is still trading next month.

Yesterday I kicked off the day with a script of nonsense. Or was it nonsense? Beneath the pie charts, candlesticks and barrier creams, there is something staring straight at me saying "look you idiot, it is time sell" or "who cares if the cVAR 97.5 sig level is 50 bips higher than the long term 50 day average when bench marked against the number of times the words "that's for sure" are heard on cnn news?

Subtly is where its at. So when Bernanke and Bandit tell us stuff we want to hear, we lap it up. Ludicrous but inevitable. Bernanke has run out of ideas and is wishing he has solved the worlds problems and Bandit has taken one proozac too many and is beaming that the toxic asset he has created is making money. So what they are really saying is its time to sell even more.

Since when has an academic and a banker ever told the truth?

But that's why its such fun. Lies, gossip and keeping the ladies happy [Editor: Steady]. Today I am in Munich which unfortunately I don't find to be a fun place. So please pray for me.

In today's news not a lot happened. Despite another day of bullish trading as we try to escape the bear trap and the slippery support, life is not as bad after all. With a Bernanke smile and a Pandit dance, we all feel so much better.

RARE BRIGHT DAY FOR FTSE 100 WITH 5PC RALLY

telegraphFintag says
Da de da. The bear rally kicks into action because we all bored of the gloom and doom and my episode of GLGenders brought a sprightly spring into the steps of those still trading and working.

But this cannot be right? The Useless Bank of Switzerland is still holding up our hedge fund industry? Truly shocking.
financial news says " UBS takes top spot among funds of hedge funds"

BERNARD MADOFF FACES 150 YEARS AS HE AGREES TO PLEAD GUILTY TO FRAUD

timesFintag says
Only 150 years? I guess prison is the safest place for him to be.

CHINA HIT BY MASSIVE DROP IN EXPORTS

financial timesFintag says
Are we surprised? Again, the tiger is pacified. Every 10 years it roars and then goes to sleep.

TOP FIRM BOSS SAYS FIRM IS HAVING BEST QUARTER SINCE Q3 2007

here is the cityFintag says
The Bandit gets lucky. I mean he has given away all his toxic stuff to the US government so one would expect him to make some profit. I only we could all dump our crap. The market hysteria is ludicrous.

However, I have to hand it to Citi. They never need to use a PR agency. Bandit writes an email to his staff and leaks it to the media.

HEDGE FUNDS LOST $11 BILLION IN FEBRUARY ON ECONOMY

bloombergFintag says
Its a survey. From the yellow pages of the hedge fund world. Not all hedge funds subscribe and those who do, do not always tell the truth so this USD11 billion is meaningless. [Editor: So it is much bigger then?]