Prior to the adoption of the EUR, European equity markets were segmented by country. Since the adoption of the EUR, however, European equity markets became segmented by sector, as the funding costs between countries converged. With the recent rise of country risk and the divergence of funding costs, Europe is trading by country segmentation again. [...]

 
In a simple world, we eat what we kill today, we consumer what we produce today. With trade in its simplest form, barter, we are able to specialize and be more efficient, focusing our talents and gifts on what we have an advantage in. The invention of money, whether gold or fiat currency, allowed us [...]

20% of Nestles business is Europe, 30% in the US, the rest are in emerging markets. 34% of Givaudan’s business in in Europe, 26% is in the US, the rest are in emerging markets. 46% of Swatch’s business in Asia. 30% of LVMH’s business is in emerging markets and Japan. 20% of Carrefour’s business is [...]

The role of ratings agencies has been placed under intense scrutiny in the wake of the 2008 credit crisis.
Clearly the ratings agencies have failed in one glaring respect. The creditworthiness of a borrower is tied not only to its solvency but to its ability to generate cash flow to repay, as well as its ability [...]

Year to date the top performing strategies have been Event Driven, Distress and Fixed Income Arb. The weakest strategies were Global Macro, CTAs, and Market Neutral. Over a 12 month period Convertible Arbitrage continues its strong run, followed by Distress and Emerging Markets. The weakest strategies year to date were also the weakest over a [...]

 
What are UCITS?
UCITS are funds that comply with the European Directive for retail open-ended investment funds, are incorporated and authorised by the regulator in an EEA member state and can be distributed throughout the European Economic Area.
UCITS is a framework to standardise rules for the authorisation, supervision, structure and activities of collective investment undertakings in [...]

Market volatility tends to fade and spike over time. Sharp corrections in financial markets occur more frequently than predicted by statistical theory. How do we explain these phenomena?
It seems to me that as a broad rule, and in particular where risk management is based on Value at Risk, that leverage is a function of underlying [...]

The SEC alleges that:

GS failed to disclose that Paulson was involved in the portfolio construction of ABACUS 2007-AC1.
GS misrepresented to ACA that Paulson was 200m long in the equity of ABACUS 2007-AC1.
GS entered into CDS with Paulson that allowed Paulson to buy protection on tranches of ABACUS 2007-AC1s’ capital structure but did not disclose this [...]

Mr P wishes to place a bet that a certain football club will lose a match. He goes to his local bookie.
 
 

I want to bet that Club X will lose their next match, he says.
Sure, says his bookie, let me see if I can find someone to take that bet.
The bookie makes a few calls [...]

Is investing a zero or constant sum game? In derivative markets, FX, commodities, the game is trivially constant sum. In equities there is some debate.
Some claim that ownership of equity is a claim on future cash flows and is therefore not a zero sum game. The value of equity is therefore sensitive to growth rates [...]