Derivatives Market - Warren Buffett has the right idea.

Discussion in 'Economics' started by SouthAmerica, Dec 29, 2005.

  1. Interesting read.



    Time will tell I guess.
     
    #21     Dec 31, 2005
  2. .

    January 2, 2006

    SouthAmerica: On December 29, 2005 the Central Bank of Venezuela announced that in 2006 the bank is incorporating the Euro besides the US dollar on its currency operations.



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    Central Bank of Venezuela

    29/12/2005: BCV incorpora el euro como divisa para las operaciones de cambio

    En el marco del Régimen de Administración de Divisas vigente

    BCV incorpora el euro como divisa para las operaciones de cambio

    El Directorio del Banco Central de Venezuela aprobó la incorporación del euro, además del dólar de los Estados Unidos de América, como moneda para realizar operaciones de compra-venta de divisas con los operadores cambiarios autorizados, en el marco del Régimen de Administración de Divisas vigente. En esta primera fase se excluyen las operaciones que se realizan con efectivo.

    La decisión anterior promueve la diversificación de las relaciones económicas y financieras internacionales de la nación, dada la importancia de la Eurozona en la economía mundial, y del euro como moneda convertible utilizada en el comercio y mercados financieros internacionales.

    El mecanismo operativo diseñado para estas operaciones permite al Banco Central de Venezuela liquidar en euros, a través de los operadores cambiarios, las Autorizaciones de Adquisición de Divisas emitidas por la Comisión de Administración de Divisas en la referida moneda. Asimismo, comprará, a través de los mencionados operadores, los ingresos que se notifiquen en euros.

    El tipo de cambio al cual el Instituto venderá o comprará los euros, a través de los operadores cambiarios, será el tipo de cambio cruzado que resulte de la aplicación del tipo de cambio vigente bolívar/dólar para la fecha de la recepción de la solicitud de compra, o notificación de venta de divisas efectuada por el operador cambiario, y el tipo de cambio USA$/euro al cual el BCV adquiera o venda los euros en los mercados internacionales.

    Para los usuarios del Régimen de Administración de Divisas, la nueva disposición redundará en una reducción de los costos transaccionales (comisiones, margen de intermediación etc.) que se derivan de las operaciones de conversión dólar/euro y viceversa, que debían realizar los operadores cambiarios para atender el anterior procedimiento de compra venta de divisas con el BCV.

    Source: Banco Central de Venezuela

    http://www.bcv.org.ve/c4/notasprensa.asp?Codigo=4507&Operacion=2&Sec=False


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    #22     Jan 2, 2006
  3. .

    December 9, 2006

    SouthAmerica: On January 8, 2006 the Central Bank of Argentina announced that in 2006 the bank will buy Euros to bolster its foreign reserves.

    We can see that slowly Central Bankers from around the world have started shifting their foreign reserves strategy from the US dollar to Euros and gold.

    Eventually this combined global pressure against the US dollar will result in the increase of the value of the Euro and gold, and in the decline of the value of the US dollar in world markets.


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    “Argentina Central Bank to buy euros to rebuild reserves”
    Reuters - Sun Jan 8, 2006 04:11 PM ET

    BUENOS AIRES, Argentina, Jan 8 (Reuters) - Argentina's Central Bank will begin buying euros in the foreign exchange market to help bolster its foreign reserves, which were sharply reduced to pay back the country's debt with the IMF, a Central Bank official said on Sunday.

    The bank habitually buys dollars in the market to pad its reserves, but as of Monday, will also buy euros, the source said.

    The government of President Nestor Kirchner slashed the bank's reserves last Tuesday to $18.5 billion from $28.05 billion previously, using the funds to pay its full $9.5 billion debt to the International Monetary Fund.


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    #23     Jan 9, 2006
  4. What happened in '98 when Long Term Capital could not meet
    their hedged positions with their derivatives.
    What happened in Oct '87 when large brooker firms would not
    answer phones because the market swamped their short positions that gave them little ptotection?
    OPTION COACH
    Your criticism of WARREN BUFFETT
     
    #24     Jan 9, 2006
  5. reveals a superficial knowledge of the man's accomplishnents
    and what he has done for many inveators.

    You shoud hope for a fraction of his sucess in you option trading
    Cheers
    john
     
    #25     Jan 9, 2006
  6. Had you pointed to Buffet when he started, you could have word here. But pointing at him now he succeeded is laughable.
     
    #26     Jan 10, 2006
  7. Say all you want but you avoid the truth, he disparages derivatives but his companies are chock full of derivatives and he himself uses a ton of them- that is called hypocrisy no matter what dictionary you use... Just read his annual report and see the billions in derivatives under his fingers. I am just stating the truth, not taking anything from his success. If he uses derivaives to enahnce his portfolio, hedge his profits or limit his risks, then have hte balls to say that derivatives are great risk reduction tools when used properly instead of flaming them every chance he gets.



     
    #27     Jan 10, 2006
  8. Why can't he be critical and at the same time utilize this tool?

    I have been critical of the combustion engine..,but i still own and drive a car.
    Is it inconsistent to be critical but still permit derivatives to be used by his managers because of their usefullness?

    As howard Hughes once said I don't like it(when referring to defense contractors using payola) I'll stop when my competitors cease

    The man has a net worth ifo approx $40b with the bulk of it
    earmarked for medical science ,don't
    WE ALL BENEFIT???
    Its a sad commentary on the intelligence of those who think he is a Bozo or hypocritical .
    The bottom line is not what statements he makes...but
    THE BOTTOM LINE
    Cheers
    John
     
    #28     Jan 10, 2006
  9. How many people did he fire while taking over companies ?
     
    #29     Jan 10, 2006