teraflop

More Nortel Balance Sheet Shenanigans

Assets not marked-to-market typically re-valued on transactions. However, Goodwill is an example where you could apply an impairment process to revalue it. Until someone ponies up any value other than $149MM, it remains thus.

Citigroup's Derivatives Reduce Bailout to a Non-Event

Notional amounts can be netted under criteria unique to each Citi-counterparty/coun... parent relationship for credit purposes. In other words, if you want to calculate Notional amounts, you need a grid by counterparty, you can't just add them all up. Credit risk is mitigated through collateral postings at inception and ongoing collateral agreements, which should be included in any determination of outstanding credit risk. Additionally, Notional amounts should not be considered when evaluating Delta-one or Flow Risk in a portfolio because of netting agreements or outright additive nature of equivalent positions - they don't equate to market risk. A good article but throwing around Trillions is a good way to scare unsophisticated readers and garner attention.

Going for Gold? It's Overrated

I cringe thinking of my current gold position with its negative yield. However, I picked it up last year in anticipation of what we have sitting on our plate: (finally) realized/acknowledged inflation expectations along with structural weaknesses that people only can see when it comes to USD FX changes and housing.

My view on inflation back then was: oil is up, real estate was up, gold was already up, commodities were up - why is there "no inflation?" *There* was your inflation. And as in any under-priced/suppresse... process, when it comes to pass, there will be a hockey-stick like move upward. My decision was contrarian, as I am not a Gold Bug (Gold is just one of several assets I have) and only a few economists that I know of were complaining about the traditional measures of inflation.

Looking forward, I agree with you, many expect >$1000 prices which is an indicator in and of itself. As for where we'll go, I would even ask the question, what did Gold do during the Great Depression?