Good morning
The usual note about signing up to receive these posts by email – you can subscribe at the top of the sidebar→
A newer note of shameless self-promotion: follow me on twitter. My twitter handle is @RollingAlpha
The headlines:
- The Bank of Japan also announces stimulus.
Link: the trend.
So unexpected announcement: Japan unexpectedly increased its asset purchases program by $126 billion. Or by 10 trillion yen.
Although, was it really that unexpected? It’s not like the Japanese economy is in a state of wild inflation:
That, ladies and gentlemen, is the financial version of “chronic depression”. Stable is just another word for “constant”, which is just another word for “chronic”, after all. And, I suppose, the asset purchase program is like trying to treat said chronic depression with adrenalin injections. Or crack cocaine. Or jamming a finger into a plug socket.
Short-term fix or long-term solution?
THAT SAID: I would like to point out that, in the Japanese situation, the episode has been so prolonged that a sneaky dose of electric shock therapy would be no bad thing. After all, even in the medical field, if you’ve been chronically depressed for long enough, you start talking about “marginal improvements” rather than “a cure”. And by “marginal improvements”, what we mean is “any reaction to anything whatsoever at all”.
The Americans and the Europeans, on the other hand, are suffering from a really bad hangover at the end of an undergraduate degree of really bad hangovers. And they’re trying to treat that situation with Irish Coffee. By the flagon.
The presence of caffeine just masks the alcoholic depressants, I would think.
Take an anti-inflammatory, drink some water, and take a long hard look at your life. And make some decisions like “I’m never drinking ever ever again”.
- The iPhone 5 review is glowing.
Link: “screen, sound, camera, speed”
I love glowing reviews.
The only apparent flaw, according to the reviewers, is the new Maps app in iOS6.
Ah well – the real reviews will come on Friday, when the phone hits almost anywhere that’s important.
- Adoboli presents evidence.
Link: the reckless trader at UBS.
So to bring everyone up to speed: Adoboli is the UBS trader that “lost” $2.3 billion through “fraud and false accounting”.
So the accountant that discovered the issue, um, noticed that something was wrong after getting a report of a $3.57 billion discrepancy. At which point, Mr Adoboli said that he’d taken “a shortcut” because he was under pressure for time.
To be clear, a $3.57 billion discrepancy doesn’t sound too bad when your total assets (as per UBS 2011 annual report) amount to $1.4 trillion. But when your profit for the year is around $4.1 billion (in 2011), then a $3.57 billion discrepancy be MASSIVE.
What’s really surprising is how long it took for the discrepancy to appear on the radar…
However, this wasn’t really Adoboli’s fault, because, in his own words:
“We had an annoying client which was taking up half my day, plus we had all these client meetings and the market was going crazy, plus I was like a man or two down pretty much every day”.
Shame man. All those pluses left you with, like, a giant negative, hey? Not to mention the mixing in of your own money with all these bets and stuff.
FlippantFlipping unfortunate, this.
That’s all for now.
Have a good day.
