Walking through Trafalgar Square in London last Wednesday, the day before the G20 protests, I watched this guy start to assemble this with copper coins. I came back an hour or so later and it was clear he really wanted to emphasise the word ‘crime’. I wonder what would have happened if someone just kicked it over?
Other protest gems that stuck out:
- Man dressed in suit waving placard that read ‘MARK TO MARKET’.
- Another inspired/ignorant banner.
Looking at this table’s perspective (equity per share, discounted valuation, current price) implies ~40% probability of survival for RBS, BARC and LLOY.
i.e. not a great chance of avoiding wipeout of equity holders through nationalisation.
And this is before this morning’s down-slide!
…along with £75bn of quantitative easing which is expected to increase M4 money supply by 3.5%.
And so it begins.
Here’s a nice table from Dresdner:
“But just as deleveraging has created domino effects in numerous other asset classes, there are signs that volatility in the foreign exchange markets is starting to affect PRDC trades.”
Yeah, you reckon. And Mrs Watanabe is stuck with 30y jpy zeroes. Also, The Times UK had this to say recently:
“The products, which are known as power reverse dual currency notes (PRDC), were sold to Japanese households as simple products offering higher yields than regular savings but the bonds were in reality hugely complex structures “with 15 moving parts and multiple points of pain”, derivatives experts at RBS in Tokyo said.”
When you see PRDCs mentioned in two different daily broadsheets, it’s time to be worried. Long-dated IR/FX vol, smile, correlation/x-gamma… multiple points of pain indeed.
