Reddy has the Readies

In English slang, the expression “readies” refers to having bank notes to hand. “Have you got the readies?” would be one usage.

The Reddy family have chosen to celebrate the wedding of their daughter with a £5million wedding near Bangalore at exactly the same time as the rest of India is trying to scrape together a few rupees. They clearly have the readies! Coming from a man who was previously and is still under investigation for all manner of misdemenours – Cloth Ears, or what?

As you might expect, Indians are not impressed!

Reflections on Demonetisation in India

Prime Minister Modi’s radical decision to cancel 500 and 1000 INR notes was unprecedented and unexpected. It was designed to stamp out the black economy and in a sop to nationalists was sold as an anti-terrorism measure. No mention was made of the likely impact on political parties who rely on cash donations to grease wheels during election time.


In the short-term the measure has drawn attention to India’s corruption problems and the importance of undisclosed cash payments in all spheres of the economy: 86% of transactions are in cash and much of the paperwork is inaccurate. If successful, the longer term outlook will be beneficial if it leads to a more transparent economy. The challenge will be changing the culture of backhanders and inaccurate invoicing. The question will be if this is just a clearing of the balance and the citizenry will start hoarding the new notes as fast as the old!

Money Reputation

Businesses and citizens rely on the stability of the currency to plan for the future. Modi has show himself to be bold, but the question is whether this will worry people about what else he can do in the future. What other tricks does he have up his sleeve and what impact might that have on investment decisions.

Money is a figure of trust – it means nothing if you cannot trust it – simply a piece of paper to light a fire. Indians have discovered that bundles of paper that were designed to tied them over in the future are now worth nothing. What will be the longer-term impact on citizens? Indians already have an obsession with gold and other portable stores of wealth – will that increase in future?

Web of Trust – Haha

If you call yourself “web of trust” and launch a web browser add-on, you better be trustworthy! Instead, you sell customer data, you tell lies about it and then get found out by researchers who prove that you are telling porkies! Outcome – your browser add-on gets pulled from browsers and your business goes kaput.

The must be a moral in that story somewhere!

Whole Story here

Comment from Company

We take our obligations to our users very seriously. It always has been, and remains, our intention to inform our users, clearly and accurately, as to what data we collect from them and how it is used. We never intend to collect or share data which can be used to identify our users, and we have developed extensive data cleansing techniques to ensure our users remain anonymous.

After a review of some of the information recently reported and a thorough investigation of facts and circumstances, we now believe that our data cleaning techniques may not have been sufficient to fully anonymize the browsing data WoT users shared with us. While we deployed great effort to remove any data that could be used to identify individual users, it appears that in some cases such identification remained possible, albeit for what may be a very small number of WoT users. Of course, if the data allows the identification of even a small number of WoT users, we consider that unacceptable, and we will be taking immediate measures to address this matter urgently as part of a full security assessment and review.

We hope to earn back the trust of the community by implementing a set of measures which will ensure that those who prefer not to share their data can easily choose to keep their data private while still participating in the WOT community.

Regarding the relaunch of WoT – we received a notice from the Mozilla store that they were removing our add-on from the store pending answers to certain questions. We decided to remove WoT from the other platforms at our own initiative so that we could have the time to study the feedback we have been receiving and to make appropriate changes.

We are now preparing to relaunch an updated version of WoT which will include the appropriate measures to regain the trust of our users.

Good luck with relaunching your product under the same name. You might want something like “Web of Mistrust”

Unfortunately, in today’s world, you only get one bite of the apple.

Apple’s New Laptops

pexels-photoWhat’s up with Apple? As a company they have always had a reputation for being out front and ahead of the curve. Up til now!
Their revently announced new laptops are the same as the old ones except for a few (seemingly pointless ) gizmos. Does it matter. I think it does because these are the laptops that creatives and fashion leaders use and it from them that Apple’s reputation has been built. The response from them has been underwhelming to say the least just at the same moment as the boring company Microsoft seems to be getting its shit together with the various iterations of the Surface line.

Branding and reputation are subtle and nuanced and the deterioration of a brand starts many years before it is really evident on the street. Over the past two years, it feels as though Apple have kept missing the bulls eye with their launches. The iPhones have been underwhelmingly received, the apple watch seems moribund – almost a joke in some circles and now the laptops seem forgettable.


see the cries of horror from the key constituency – designers, creatives and “makers” whose schutzpah drives the underlying meaning of the Apple brand!

New MacBook Pros and the State of the Mac

Speak with Passion

Michelle Obama has proven that speaking from the heart is what matters. Some might argue that Donald Trump does the same, but being a demagogue is not the same as speaking from the heart. He appeals to the heart (perhaps) but mainly to people’s visceral beliefs and hangups. The First Lady has managed to speak both passionately and with an authentic sense of indignation. It is those two characteristics that make her so popular. It does not matter whether she is necessarily right or wrong so much as the fact she believes what she says and it is not hostile to other groups. Executives might learn from her!

The Impact of the USA Election

Is there anyone in the whole world who is not amazed , shocked, frustrated and appalled by the dumpster fire that is this presidential election.

Neither candidate is anything other than completely unlikeable and their popularity ratings are the lowest in  History. To say that both reputations has been completely destroyed during the election is an understatement. A more interesting question is what impact does this election have on American democracy and it’s authority around the World.

There are so many negative things to say about this election cycle that it’s hard to know where to start. With a population of over 200 million people comma you would think that the Americans could come up with a more exciting pair of candidates. Then there is the behaviour of both the media and the electric as a whole who has absolutely failed to bring balance to the proceedings. Then there is the almost complete absence of facts and the way the election has been blanketed in a lurid covering of innuendo.

It’s no surprise that the rest of the world is laughing and countries used to being lectured by the United States are now pondering on the question of whether American democracy is a workable system anymore.

This is an outstanding example of reputation disaster in action. It starts at the top and then works it way down until the only person who comes unscathed is Michelle Obama, it would seem.

Wall Street Journal Amends Privacy Policy

The WSJ (Wall Street Journal) has announced substantive changes to its privacy policy ” to allow the site to connect personally identifiable information with Web browsing data without user consent.” This is a migration from a previous policy of obtaining  “express affirmative consent” from its users. The WSJ describe the change as ” part of a larger effort by the Journal to streamline and simplify privacy policies across its network of websites”. It is not being applied retroactively which means that present subscribers will not impacted by the change. In other words, it is partly streamlining its policies! Continue reading “Wall Street Journal Amends Privacy Policy”

Rouge Behaviour by Stephen Pope

Once again the world of investment banking is reeling from a massive loss caused, apparently, by a “rogue trader“.

Kweku Adoboli, a UBS investment bank trader remains in police custody amid allegations that he cost the Swiss bank £1.3Bn. UBS has not officially confirmed Mr Adoboli’s role, however, an entry on his Linkedin site described him as director of exchange traded funds (ETF) and Delta One trading at UBS.

This operation, based within the equities division on the 3rd floor of the UBS office in London, was known regarded internally as being a key profit centre and highly valuable as it was deemed to be a risk free business unit. (There is no such thing!)

Much as with previous infamous traders such as Raj Rajaratnam (galleon Insider Trading), Bernie Madoff (Pozi Schemes), Nick Leeson (Barings Bank), Yasuo “Mr Copper” Hamanaka (Sumitomo Corp) and Jérôme Kerviel, (Société Générale) one has to question if compliance officers and senior management actually knew what was happening on the trading desk, or did they justsee a “black box” that produced money. If so, perhaps they didn’t want to look too closely at the gift horse’s teeth.

What are the trading instruments?

Delta One products are a financial derivatives carrying no optionality. That implies they carry a “delta” that is equal to or very close to 1.

What is “delta”?

The delta is the ratio of the change in price of an option to the change in price of the underlying asset, it can sometimes be called the hedge ratio and it applies to derivative products.

Consider a simple Call Option on a stock or a currency. The call option gives the holder the right, but not the obligation to acquire the said stock or currency at a specified future date or dates if it makes economic sense. So if the call option value is less than the spot market level on exercise day or days the option is in the money. If the stock were actually trading lower than the spot market, the option would not be exercised because the option would be “out of the money”.

For a call option on a stock, a delta of 0.50 means that for every $1.00 that the stock goes up, the option price rises by $0.50. As options near the end of their life or expiry, an in the money call option contract has a delta that approaches 1.0. In contrast an in the money put option (the right but not the obligation to sell) will have a delta that is approaching -1.00. (This is not the place for more complex mathematics)

Delta One have no optionality so their delta is 1 or very close to it…so the leverage or price relationship is perfect unity, for a given percentage move in the price of the underlying asset there will be an identical move in the price of the derivative. Delta One products will be seen as incorporating a number of underlying securities and as such give the holder an easy way to gain exposure to a basket of securities in a single product. (Swaps, Forwards, Futures and ETF). Did he get blind sided by the Swiss National Bank when they intervened in the FX market so forcing the Swiss Franc down by 8% against the Euro in day?

Given that trades have to be processed via the settlement office it does seem puzzling as to how such huge positions can be accumulated. It may be that as all banks have had to accumulate capital and control their costs on expenses and headcount any operation that is making a profit is encouraged to keep up the good work. Of course in C21 markets there is no longer a simple linear market in bonds or equities. Trades are made in cash instruments, futures, forwards, options, structures, special purpose vehicles, collateralized products and can be OTC or exchange based.

If a trader does not book an OTC trade at the appropriate time, red flags should rise as all trades need to be confirmed within a specified time limit from the execution. Still on a busy day, especially when markets are volatile the settlements office may not find out about the trade until the counterparty calls them days later asking why the deal has not been settled yet.

As finance professionals climb the ladder of success they assume more managerial activities that take them further away from the dealing floor and the latest techniques within asset structuring and trading…in the world on “my word is my bond”, the level of trust feels more like a layer of rust.

By Stephen Pope Managing Partner – Spotlight Ideas 

Cameron’s predictable zero tolerance policy

David Cameron has emerged from his tuscan holiday hangover with a classic tory response to crime – zero tolerance; which presumably means that he was tolerant of crime before. Politicians like to posture like this as a sign they are tough leaders. For the past few years Cameron has sought to distance himself from the traditional conservative stance on crime with his concept of the big society. Last week’s riot has seen a pivot towards the old positions. Whether this is a long term change or simple expediency… We will see.