Stock Markets surge around the world following the Centralised Intervention in US and UK anticipate a cycle of rate cuts that (we all know) are unaffordable for the Global Economy as of now. As scientifically explicited to our Institutional and Corporate subscribers, we came up with the rationale after running extensive similation with abundant empirical content and scope using our bespoke proprietary modelling and management of portfolio risk and our innovative parameterizing with realistic postulates encompassing collateral valuation; loss distribution in extreme events; collateralized debt obligations (US & UK); synthetic securitizations; liquidity risk stagflation random variables and patterns; regualtory departures as observed against Basel II Spirit and the pioneering pointers indicated on our Global Macroeconomic Observation System (GMOS) namely on the Overall Lyscale Risk Position of the Global Economy as a whole.
Pockets of rationale expectations would have helped trigger a more balanced outcome of the whole cyclical saga had we have the wisdom to let the markets repair the distortions induced by speculative forces. Halas, actions taken by sovereign Central Bankers in the US and the UK played detrimental factors into folding. The Economic sanction of any erratic shortcomings is clearly paid by the economic agents involved in the markets and governement intervention was an ill advised initiative. Issues of market independence are the norms for the time being as Lyscale Riskgrade tries to establish in its eminents empirical studies and research if the Federal Reserve and the Bank of England stance towards rescuing the economic agents involved in the Subprime fiasco will not further distort the workings of the Global Economy. It is a matter of establishing:
Impacting rationale of Central intervention for medium-term distortions
Fraudulent behaviour in the structuring of Subprime Mortgage and their logical drawings in Global Economic terms
Wider implications on the size of the US and the UK Mortgage Resets The implications for such rationale market expectations go in diametrical contradiction with desired effects of magnitudes embedded in the Sysmetic Risk in Interactive Markets (SRIM) and might as well benchmark downwards any effect of dopping growth in Industrialised Markets and enhancing more visibility on Emerging Markets such as India, China, South Africa, Brazil and certain franges of the Middle East financial centres such as Dubai.
Tightening up regulatory prerogatives will play a little role in fine-tuning any dysfunctional distorsions at market levels. The main action to be observed will be one of prudent monitoring of the wider risk spectra aring out of Systemic Risk in Interactive Market (SRIM) now at level in the vicinity of Risk Magnitude 8 on Lyscale Riskgrade with Economic Risk Exposure (ERE) artificially outside the reasonable reach of market makers in broader terms. Needless to say, the whole spectra of peripheric risks are yet to materialize. Looking at indexes within the Lyscale Riskgrade System, financial centres have differing levels of isolation of both risk and return. Lyscale Riskgrade Sector Analysis Suite anticipates substantial downgradings for the Average Aggregate Industrial Composite induced by sectors such as Oil and Gas (RM 11/ERE 134); Investment Companies (RM 13/ERE 159); Banks (RM 7/ERE 99); Insurance (RM 8/ERE 78). Looking at Sector Analysis per se, all things equal, highlights the stability stance on the Global Primary Sector at RM 6/ERE 33 while both Global Secondary and Tertiary Sectors worryingly dip respectively at RM 9/ERE 106 from RM 5/ERE 25 and RM 12/ERE 149 from RM 7/ERE 97. The implications for these realities underline the growing fear of activity-depletion observed in all realms of adequacy shortcomings over substance in deploying sound risk economics methodologies for both economic agents and regulatory agencies. Growth, as a par to country specifics, will fluctuate and leave meagre pockets of decent advancements in some and stagnation in others. Emerging economic entities would be the notable beneficiaries at the detriments of uncompetitive advanced economies such as France, Italy and Canada.
Mr. Mamadou Ly
Chief Executive
Lyscale Riskgrade
PRIVATE EQUITY STRATEGY SQUEEZE
(Forthcoming article)
PENSION PLANS INTO HIGH-RISK ALTERNATIVE INVESTMENTS
(Forthcoming article)
CREDIT RISK: THE LATEST METHODOLOGIES