Calculator

Never thought I'd need a manual to learn to use a calculator, but turns out that using a financial calculator can be as easy as 1-2-3, provided you know what buttons to push.

I've recently bought myself a Texas Instruments BA-II Plus Professional financial calculator.

I preferred this over the HP-12C, which uses reverse Polish notation, and I'd rather do things in English, even if the HP-12C is more popular. The HP-12C is only fir serious users and for show-offs. Anybody else who picks up a HP-12C is first going to try a basic 1+2= calculation, which does not work since 1+2= is normal English notation! And of course, nobody will be willing to admit they can't add 2 numbers on a calculator especially when the people around turn around to watch you scratching your head to figure out why the function didn't work. It's also a great calculator to take into an interview, ask an over-confident candidate to calculate NPV, and then give him the calculator and watch the confidence fizzle away.

Anyway, back to my TI BA-II Plus Professional financial calculator (quite a mouthful!)- I like it. I'm using the manual to figure out how to calculate NPV, IRR etc, and big formulae are immediately condensed into a few clicks of the calculator's keypad.

Who's paying for it?

It's been such a crazy time, that wherever I turn, people are talking about which firm's losing money. Today, I read 2 articles on Bloomberg News- one about the IMF helping out Pakistan to avoid it defaulting, and another about a potential default by Argentina for the second time in a decade. Makes one wonder about country risk. If in this global economy, there is relatively freer flow of capital, then eveyry country across the world is invested either directly or indirectly in the sub-prime/ credit crisis. So, while the carry trade was at the peak of being lucrative, firms were borrowing in Japan to invest in high-rish, high-return assets. So, there's a whole lot of money that Japan has lent to non-Japanese debtors. At what point will Japan get up and say, 'okay, party's over; time to repay those pesky borrowings'? Or will Japan have to keep throwing good money after bad to keep firms/countries afloat so that they'll make enough money elsewhere to repay the yen borrowings? What about China- I had heard enough about how China is squeezing the world economy and can potentially bring it to its knees imply by selling some ABS. As I heard it, all these CDOs and CDO^2s were being bought by Chinese investors, who now had leveraged so much that its was in their best interests to keep the markets afloat, until such time as the government decided to squeeze the Western governments. This certainly makes for a lively conspiracy theory, which a lot of people would probably wager on considering the current state of the world economy and how it's the Chinese, Japanese and Singaporean banks that are keeping the market afloat. Conspiracy theory anyone?

Banking humor turning into gallows humor

Last week, with the problems in Iceland, I thought CNBC and Bloomberg TV had gone into overdrive talking about "meltdown in Iceland".

But, reading 'thelondonpaper' on the DLR on the way home, I realised that the wry gallows humor is all around:


Some examples, from thelondonpaper:
How many commodity traders do you need to change a lightbulb?
None- they won't do it. But, the price of darkness will shoot up due to over-supply.

What is the definition of optimism?
A banker ironing five shirts on a Sunday.

Uncertainty in the banking markets in Japan- the Origami bank has folded up, Sumo bank has gone belly up and shares in Kamikaze bank have nosedived.

The Isle of Dogs banking society has gone bust. They're calling in the retrievers.

Masked man holding a gun to a cashier in a bank: "I don't want any money. Just start lending to each other."