Author: shyam

Europe to discuss crisis as fear grips

Stamp from Deutsche Post AG from 1998, formati...

Image via Wikipedia

Leaders from European powerhouses Germany and France will hold talks on Friday after a global market rout signalled fear Europe’s debt crisis is spinning out of control and a U.S. recovery is stalling.

In Japan, Finance Minister Yoshihiko Noda said global policymakers needed to confront currency distortions, the debt crises and concerns about the U.S. economy.

Japan and Switzerland are trying to reduce the allure of their markets as safe havens and after gold has more than doubled in price since the global financial crisis, many investors are having second thoughts about seeking refuge in the precious metal.

Investors slashed positions after the European Central Bank failed to include Italy and Spain in a fresh round of bond buying, even though yields on their debt shot above 6%, the highest level since the euro was launched over a decade ago.

Source

Related articles
Enhanced by Zemanta
Categories Tags

DLF continues to be in a quagmire

Residential sales volume was up about 15%, about two-fifths of which came from plotted land sales, which has a shorter sales cycle. Thanks to this, DLF’s revenue grew 21% over a year ago.

Operating margins contracted by about 290 basis points from a year back.

Analysts’ presentation paints a rather grim picture, indicating fewer residential launches and lower commercial leasing volumes compared with previous quarters.

DLF continues to be in a quagmire – livemint.com.

Categories Tags ,

The trouble with Quants

During the week of August 6, 2007, many large and previously successful hedge funds were forced to de-lever their portfolios and liquidate commonly held securities, resulting in simultaneous drawdowns of 30%, 50%, or worse.

After all, the quant funds of 2007 shared the same structural flaws as the highly engineered financial trading strategies that caused the stock market crash in 1987 and the implosion of Long-Term Capital Management in 1998.

At first, the identified predictability in security price movements is reinforced as funds using the quant model, along with similar funds using similar models, begin buying and selling the same securities.

To facilitate the use of leverage, risk models were used to minimize country, sector, and other common factor risks.

Read more here: http://researchaffiliates.com/ideas/pdf/fundamentals/Fundamentals_Aug_2011_The_Trouble_With_Quants.pdf

 

 

Categories Tags

Debt relief replaced with recession fear

In a matter of days, investor relief that the United States avoided default has been replaced by fears Europe’s debt crisis is deepening and the world’s biggest economy may be slipping back into recession.

“The odds of the economy going back into recession are at least one in three if nothing new is done to raise demand and spur growth,” Summers said of the United States in his column.

The bellwether S&P 500 index dropped more than 2.5% on Tuesday to wipe out 2011 gains after data showed U.S. consumer spending fell in June for the first time in nearly two years.

Insight: Debt relief replaced with recession fear | Reuters.

Categories Tags

India’s Software Companies Need a New Model

Over the last few years, software as a service has disrupted the traditional enterprise software industry for most business applications, including accounting, collaboration, customer relationship management, enterprise resource planning, invoicing, human resource management, content management and service desk management. For those who are unfamiliar with the term, software as a service is a delivery model in which software is provided as a service to users without requiring them to install or maintain it.

According to a Gartner Group estimate, global sales in 2010 reached $9 Billion (up 15.7% from 2009), and are projected to increase to $10.7 billion in 2011.

Gartner also estimates that these software applications, which accounted for a little more than 10% of the total enterprise software market last year, will represent at least 16% of worldwide software sales by 2014.

Zoho is a great example of a software as a service company that was bootstrapped in India and now competes in a global market with corporations like Google and Microsoft.

That said, there are some key challenges that these providers face: Ubiquitous broadband connectivity is still a long way away in India.

In a global context, there are some additional hurdles for an Indian company to compete globally, and Zoho’s success may prove to be an exception, rather than the rule.

U.S. companies already use Indian outsourcing companies to build their product and most of the small- to mid-sized software service providers turn to online marketing for customer acquisition, which means the cost remains the same whether the company is based in India or the U.S.

Read more here: Expert Insight: India’s Software Companies Need a New Model – WSJ.com.

Categories Tags