Readings: Bloomberg sues Fed, Country default risk, Prop trading
Bloomberg News asked a U.S. court today to force the Federal Reserve to disclose securities the central bank is accepting on behalf of American taxpayers as collateral for $1.5 trillion of loans to banks.
The lawsuit is based on the U.S. Freedom of Information Act, which requires federal agencies to make government documents available to the press and the public, according to the complaint.
The Fed staff planned to recommend that Bloomberg’s request be denied under an exemption protecting “confidential commercial information,”.
Now who’s going to sue the RBI? 
- Bespoke: Country Default Risk
- Financial Times: The oil-major prop desks cometh
Prop desks largely depend on four different strategies to outperform the market.
(1) Superior access to information (both from greater proximity to the market and other players, as well as the type of “inside information” that the regulators frown upon but which has proved the lifeblood of markets and impossible to eradicate).
(2) The ability to dominate pricing by running large positions relative to the size of the overall market and therefore move the market in the traders’ own direction (either taking big enough prop positions, or drawing a large volume of customers into reinforcing trades).
(3) The ability to run complementary and reinforcing positions in related markets (eg cash, physical and derivatives) so positions in one can be used to support positions in another.
(4) Using significant leverage to magnify marginal trading advantages on thousands of trades (the strategy of picking up nickels in front of steamrollers).
Related Posts:
