Archive for November, 2009

Call to Expand Offshore Market for Renminbi

Obama calls for a stronger Renminbi: does he have real clout or is this just a publicity stint to appease voters back home? China is the powerhouse of international finance. It has accumulated the world’s largest pool of currency reserves of 2.3 trillion USD. By imposing strict capital controls China has been able to peg its exchange rate to the Dollar. Its ultra-competitive exchange rate has allowed China to grow its exports disproportionately. Today, exports in the amount of 1.4 trillion USD account for 32 percent of its GDP. The low cost Chinese products are the de-facto price benchmark of manufacturing goods across the world. The prices put downward pressure on manufacturing prices and force businesses to offer their goods at prices that are not sustainable and do not allowfor long-term investment and reserve accumulation. This has a distorting effect and drives companies across the globe out of business leading to a loss of valuable human capital. (more…)

November 19th, 2009 | Economics, News | | 2 Comments »

The Hidden Treasure of High Frequency Dynamics: from intrinsic time to scaling laws

I was invited to give a talk at a conference hosted by the Manchester Business School funded by a Marie Curie grant of the EU. The title of the conference was ‘Understanding the New World of Financial Risk Management – Research Agendas after Subprime’. The conference was interesting, because it included both practitioners and academics. The practitioners were sanguine, clearly stating that the current risk models are insufficient. In my talk I tried to introduce how high frequency finance opens a new world of research and explain, why this approach can revolutionize economics and finance.

To download the slides in a PDF format please click on the following: The Hidden Treasures of High Frequency Dynamics
Richard B. Olsen, Founder and CEO of Olsen Ltd

November 18th, 2009 | High frequency finance, News | | No Comments »

Smoke and mirrors of Non Farm Payrolls and alike

In the last month, the economic news releases have been better than expected. Manufacturing numbers and property sales for the US have turned positive surprising the public. Investors and government decision makers ask themselves whether this trend will continue; little do they realize that these numbers are spurious. They depend on the point of reference; are they computed month-to-month, or relative to a year ago? The outcome depends on the starting point; if in the previous year the numbers were bad, then it is easy to report a positive performance now. The practice of reporting one number, such as the growth compared to a year ago, is misleading. Economic numbers should be made public in the appropriate context, ideally as part of a comprehensive weather map for the economy and its financial markets. (more…)

November 4th, 2009 | Economics, General | | 1 Comment »