Lighthouse Investment Management

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Month: June 2010

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  • How the Swiss National Bank tried to keep the CHF from appreciating – and failed

    Alexander Gloy

    According to preliminary data foreign currency reserves at the Swiss National Bank (SNB) in May went up to CHF 232bn from 153bn in April. Meaning they intervened with 4bn per work day in May, up from 1bn previously. And now they wasted half of GDP on potentially worthless currencies (Euros, Dollars). Why does the SNB…

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  • Is BP worth a buy after losing 50%?

    Alexander Gloy

    Take a look at CDS (credit default swap) for BP (British Petroleum): because of the possible clean-up costs for the Gulf of Mexico oil spill (especially after a hurricane) insurance costs against bankruptcy today increased by almost 50% to 383bps (basis points). That means it would cost $38,300 annually to insure $1,000,000 of debt against…

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  • A rising TED spread signals red flag for banks

    Alexander Gloy

    Introducing: the TED spread. It’s the difference between (formerly) risk-free 3-months Treasury Bills (hence the “T”) and the 3-months Eurodollar Libor (London Interbank Offered Rate, ticker symbol “ED”). The Libor is an average of interest rates banks charge each other for borrowing money. Currently 3-months Libor is at 0.54%, T-bills at 0.12%, hence difference = 0.42%…

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