<t>If you write insurance, you'd expect to price it such that it's profitable on average. This is one reason why on average implied volatility is priced higher than historical volatility. For a specific case like yours, the realised (historical) volatility can be higher or lower than the implied vol...

<t>Some reasons why bank stock prices globally have fallen can seen in context as part of the wider (mainly US) banking crisis of 07/08 through to the ongoing (mainly EU) banking and sovereign crisis. In my opinion, this is all part of the same "Western" banking crisis, hence is relevant to bank sto...

That chart is just hilarious. Surely there is no need to intellectualise something which can only be seen as utter muppetry?

<t>T4A: Yep - and nice use of pari passu in a sentence.Another point to your list:4. The confidence the market has that the writer of the CDS will stay solvent and honour their liabilities will influence the value of the individual OTC CDS ... as with all OTC derivatives (they could be worth 0 regar...

<t>CDS's are like buying insurance on bonds in case the issuer defaults. If the market over time starts to get more and more tetchy about a particular issuer's solvency then it is likely new investors would require a greater yield in order to lend money to the issuer (buy the bond). At the same time...

see you guys in the crosse keys tonight ...

not sure about lexington's advice (!) ... I'd say take the one you think you'll enjoy the most.

That sounds like a load of bull from Cambridge - surely the MSc intake should depend solely upon academic ability? I'd speak to someone else there other than the person you spoke to so far (like one of the profs) if you really want to go.

<t>Recent numbers out are showing more large losses in some cases. As an aside, in one case, I believe we have now seen 4 contiguous years of losses - however, I want to think about / discuss about this on a industry level, not an individual level. On an industry level, we have now had 4 years since...

Yep agreed."O God, I could be bounded in a nutshell, and count myself a king of infinite space - were it not that I have bad dreams."

<r>T4A I guess that's right ... ultimately I guess that's right. Greece will do what it wants to do (e.g. Greece holds the "exit the Euro" card, or hold a snap referendum on an issue, hold an election etc etc) and countries will similarly look to their own electorate. This is why I suspect we now ne...

<t>Ok T4A to the extent that some of what your saying is true, depending upon what we mean by the word "sovereignty" ... then Greece could choose to "not borrow any more money" potentially, as you put it, by balancing its books and defaulting on all / some outstanding debt, but I think we would need...

<t>That's not true t4a - running up debts doesn't violate democracy. They're totally separate things - one can default on one's debts. Democracy is a right to vote on the powers that be, and therefore have some say on the ways things are run. People may think that the main problem Greece has right n...

<t>This thread is truly hilarious. It's like a bunch of folk from different countries inadvertently stepping into a dark alley whilst drunk, having some kind of vaguely intelligible argument about something to do with banking (by virtue of the mention of LIBOR, for example), then some other random p...

<t>Greece defaulting is not the same as leaving the Euro. A default means that the bond holders get some or none of their money back which they lent to the Greek state, holding no collateral in return. As a consequence this means that a disorderly default would also mean that banks in Greece would h...