...Hedging FX Exposures: Which Strategy is Right for Your Business? This article addresses foreign exchange (FX) risk, examines a large Swiss multinational company and the impact on its financial statements (second half of 2011), and suggests various hedging strategies using FX options. Udi Sela - Vice President - Numerix - 27 Oct 2011 Since the sub-prime crisis, the markets have witnessed unprecedented levels of volatility across all asset classes. The impact of unpredicted volatility could be significant for the core businesses of corporations across the globe. In response, various hedging strategies were prepared towards the end of August 2011, and subsequently measured the performance of all strategies six weeks later (the beginning of October 2011). The FX Market: Facts and Figures The foreign exchange (FX) market is the most liquid market today, serving a crucial role in facilitating international trade. According to the latest Bank of International Settlements (BIS) survey, published in April 2010, the market’s daily volume is US$4 trillion. This represents a 20% growth rate, as compared to April 2007 when the previous survey was carried out. Over the same period, FX derivatives volume has increased by 9%. Interestingly, the market has become more global as the cross-border trading represents now 65% of all FX trading. Corporations Hedging A new survey shows that 94% of the world’s largest corporations report using derivatives to manage business and macroeconomic...
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...that no one trusts more. One may think that a country is a country and there is nothing more to it. If something sells in just one store it is bound to be the next best thing country wide. This is a huge misconception, and a naïve way to do business. There are 26 separate cantons within Switzerland, with numerous separate economies, and what one may like, their neighbor may despise. As of July 2006, the Swiss population was estimated to be 7,523,934, with 68.1% being between the ages of 15 and 64 (Internationalist). All of which have different tastes, cultures, norms, and to say the least, speak a dialect of the five languages that inhabit the country. For the most part the population makes a similar salary as those in the United States. For example a person in an apprenticeship position has a salary between CHF40’000 and 80’000, and a person in lower management has a salary of CHF120’000 and 250’000 (Economy). Now one may be wondering, “What is a CHF?” Just as the ‘$’ represents the American dollar, the CHF signifies the Swiss Franc. The exchange rate for a Swiss Franc is CHF1.25 equals one American dollar (The Internationalist). The above figures would be calculated as: CHF40’000 / 1.25 =...
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...production in Q2, the chips must be transferred by air. TRANSFER STARTING CAPITAL TO AREA(S) Plants you build in your operating Area(s), variable manufacturing cost (cash part), any methods improvement, advertising, the cash part of any goods bought from Nippon (see below), plus any other expenses incurred in the Area all call for transfer of adequate starting capital from Home Office (HO) to the area. Use your budgeting spreadsheet to ensure you transfer enough capital into each area. Advice: do not count on any sales revenue in Q1 - let it be the desirable “cushion”. To transfer the requisite start-up funds fill out Form A3 (you need one A3 form for each area where you are active!). The simplest approach is to transfer Swiss Francs and use the automatic conversion function. In the first column, indicate: F (transfer from HO to area)...
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...Indian Black Money Abroad In Secret Banks and Tax Havens Second Report Of The Task Force on the steps to be taken by India Members Shri Gurumurthy, Chartered Accountant, Chennai Shri Ajit Doval, former Director Intelligence Bureau, Delhi Prof R.Vaidyanathan, Professor of Finance Indian Institute of Management, Bangalore Shri Mahesh Jethmalani, Senior Advocate, Mumbai Submitted to BHARATIYA JANATA PARTY 1 I. The First Interim Report The first Interim Report of the Task Force appointed by the Bharatiya Janata Party was released to the public on 17-04-2009. Afterward different world governments, particularly those in the West, have increasingly begun targeting tax havens and intensely began pursuing black money. The US, and France particularly began a huge campaign against the evil of black money. The estimates black money lodged in tax havens by global financial institutions like the International Monetary Fund reached as high as $18 trillion. The instability in the global financial order itself was traced to the evil money. So the issue has now acquired a totally different dimension. In the first Interim Report, the Task Force had suggested broad national and global strategy for dealing with the menace of black money out of the country. The substance of the recommendations of the Task Force in the First Interim Report is summarized here: Global Strategy: • Creating a powerful public opinion and broad national consensus on the issue. Those who do not...
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...this point, the writing is on the wall: nothing can be taken for granted. No assurances or promises or proclamations will hold. MiSSioN ACCoMPLiCe... Posted by: williambanzai7 Post date: 01/15/2015 - 16:06 Je Suis _________ User login Username: * Home "It's Carnage" - Swiss Franc Soars Most Ever After SNB Abandons EURCHF Floor; Macro Hedge Funds Crushed Submitted by Tyler Durden on 01/15/2015 06:07 -0500 Search Password: * C reate new account Request new password Log in Bank of England Soros LIBOR National Bank Bond Crude Equity Markets None Reuters Twitter Fail France George Swiss Monetary Policy Switzerland Swiss Franc Twitter Volatility Tw eet 489 Like 382 Share 143 31 "As if millions of macro hedge funds suddenly cried out in terror and were suddenly silenced" Over two decades ago, George Soros took on the Bank of England, and won. Just before lunch local time, the Swiss National Audio Commentary From RanSquawk: open in browser PRO version Are you a developer? Try out the HTML to PDF API pdfcrowd.com Bank took on virtually every single macro hedge fund, the vast majority of which were short the Swiss Franc and crushed them, when it announced, first, that it would go further into NIRP, pushing its interest rate on deposit balances even more negative from -0.25% to -0.75%, a move which in itself would have been unprecedented and, second, announcing that the 1.20 EURCHF floor it had instituted...
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...this point, the writing is on the wall: nothing can be taken for granted. No assurances or promises or proclamations will hold. MiSSioN ACCoMPLiCe... Posted by: williambanzai7 Post date: 01/15/2015 - 16:06 Je Suis _________ User login Username: * Home "It's Carnage" - Swiss Franc Soars Most Ever After SNB Abandons EURCHF Floor; Macro Hedge Funds Crushed Submitted by Tyler Durden on 01/15/2015 06:07 -0500 Search Password: * C reate new account Request new password Log in Bank of England Soros LIBOR National Bank Bond Crude Equity Markets None Reuters Twitter Fail France George Swiss Monetary Policy Switzerland Swiss Franc Twitter Volatility Tw eet 489 Like 382 Share 143 31 "As if millions of macro hedge funds suddenly cried out in terror and were suddenly silenced" Over two decades ago, George Soros took on the Bank of England, and won. Just before lunch local time, the Swiss National Audio Commentary From RanSquawk: open in browser PRO version Are you a developer? Try out the HTML to PDF API pdfcrowd.com Bank took on virtually every single macro hedge fund, the vast majority of which were short the Swiss Franc and crushed them, when it announced, first, that it would go further into NIRP, pushing its interest rate on deposit balances even more negative from -0.25% to -0.75%, a move which in itself would have been unprecedented and, second, announcing that the 1.20 EURCHF floor it had instituted...
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...Key Term: Hedging The key term for week four forum will discuss hedging. I chose this topic because I thought it would be insightful to discover hedging procedures that protect businesses in Italy from increase or decrease in the exchange rates of currency. As for emerging markets, many companies in Italy including State Railways, Autostrade and BT’s Albacom, are getting into the telecoms market as infrastructure and service suppliers. (Cazzani, p. 65) Hedging is defined as measures taken by a company or corporation to protect itself from loss that may occur because of fluctuations in the exchange rate of currency. International corporations that operate globally conduct the majority of hedging in global markets. Our text also pointed out a very important fact to be mindful of while hedging, in that, although hedging may guard against loss, it may significantly destroy potential for great unexpected profits. (Satterlee, p. 145) So I would caution companies in deciding to engage in hedging because it may cause them to lose out tremendously in the future. Speaking of some of the dangers of hedging, the article chosen for summarization discussed when proxy hedging goes badly. We all know that as time changes, so do global markets. And these changes can have adverse effects on corporate treasurers. For a while the Deutsche mark has served well as a proxy hedge for other currencies. However, overtime a good portion of European currencies decided to leave the Deutsche...
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...INTRODUCTION UBS has taken decisive and proactive steps to strengthen its crisis resilience by transforming its strategy and significantly improving its capital strength. The Swiss bank UBS became embroiled in controversy starting in 2008 when the U.S. Federal Bureau of Investigation (FBI) made a formal request to travel to Switzerland to probe a multi-billion-dollar tax evasion case involving the bank. The investigation had, in part, been prompted by disclosures made by Bradley Birkenfeld, a former UBS banker in Switzerland, who testified to the U.S. Department of Justice (DOJ). The issue started by Birkenfeld's whistleblowing and resulting controversy created unprecedented pressure on UBS, the Swiss banking industry and the Swiss government from the U.S eager to claw back delinquent taxes from assets their taxpayers had stashed in offshore accounts maintained by UBS and other Swiss banks. On February 2008 the US department of justice DOJ announced a deferred prosecution agreement with UBS. Whose term allowed UBS to avoid criminal indictment in return of payment of $780 million which comprises interest, penalties, and restitution for unpaid taxes, as well as the 250 names of the US Client who invaded TAXES by hiding assets in Switzerland. Other countries followed the US lead, relying on data that was stolen from Swiss banks. A computer technician who was working at Liechtenstein bank linked a secret to a German intelligence service data showing that hundreds of wealthy Germans had...
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...Introduction Over the years, Swiss products and services enjoy excellent popularity all over the world. Switzerland’s first-ranking performance among twenty-five best country brands in the 2012-13 Country Brand Index has no doubt proved that Swiss brand is a renowned one. To customers, goods designated “made in Switzerland” are associated with exclusivity and tradition, and is a guarantee of impeccably high quality. In an increasingly competitive business world, the reputation of Swiss products has made it favourable for firms to use Swiss designations to earn extra revenues. Businesses are now using “made in Switzerland” and the “Swiss cross” to indicate the country of origin of their products. This has brought some undesirable consequences, in particular, the misuse and abuse of indications of Swiss designations. In view of these, the “Swissness bill” was proposed to enhance the Swissness of alleged Swiss products, that is, to manufacture mainly with components in obtained domestically in Switzerland. The legislation has great impacts on business operation and consumers’ interests. This essay first discusses the reasons for the proposal of the Swissness bill under globalisation. It then further evaluates whether the bill is beneficial from the viewpoints of local producers and consumers respectively. A brief overview of the Swissness bill The draft of the Federal Act on the Protection of Trade Marks and Indications of Source provides a more sophisticated regulation...
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...division of the bank was preparing a 700 million USD loan contract for one of the bank’s former client - Poseidon Cruise Lines. Poseidon intended to order a large cruise ship for their fleet to a French shipyard, which required a contract to be signed for five years and in French francs. This in turn raised concerns in Poseidon management, related to the possible economic losses related to dollar-franc exchange rate risks, since the cash flow of Poseidon was in dollars. The contract elaboration was assigned to Linda, one of the top salespersons of the First America bank and the author of article, as an assistant to her. Linda had a reputation of being volatile and hot tempered person, with aggrieve business style. She was particularly known for her prudence in receiving full credit for the good results of closed deals by her. Since Linda had personal relationships with the CFO and treasurer of Poseidon, she proposed to elaborate a structure, which will minimize the Poseidon costs and risks for those transactions. The elaborated scheme suggested that First America provides francs to Poseidon in several tranches and receives the interest rates and loan principal in dollars, thus eliminating Poseidon’s franc obligations. In reality the scheme developed by Linda was offering much more profit for the bank and cost for Poseidon, than it was observed in terms of other usual transactions. This resulted in dilemma for the author, since a definite mismatch between his personal values, ethics...
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...Napoleon was nothing more than a dictator in his rule of France between 1799 and 1815. How far do you agree? “History is a version of events which everyone has agreed on” - Napoleon Napoleon was nothing more than a tyrant as he exploited France in pursuit of his own ambitions to achieve a dynasty in his name. A dictatorship is often associated with repression and the workings of a police state. Both of these were, in fact, being used in France . For example Napoleon vigorously censored the press and even the theatre. When Napoleon took power, Paris had a vibrant newspaper business, by the end of his reign there were only four newspapers left due to his denial of a free-press and all of these had been under his control. These newspapers were censored and used by Napoleon for propaganda. He also had spies and informers working for his Ministry of Police, he used special courts and arbitrary imprisonment which really supports the concept of a police state under a dictatorship. Implementing these resources allowed Napoleon to repress any opposition to his rule and crush any civil unrest Considering these facts only it would appear that Napoleon was nothing but a tyrannical dictator , but , this would not necessarily be a fair judgment as throughout his reign he continued to use certain administrative bodies which limited his freedom of action , such as the Senate and the Legislative Body which suggests he didn’t have or want overall power as a dictator for matters such as...
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...European Union, but immediately declined the invitation. In fact, Switzerland is so great and their government thinks so highly of itself, that they believe that there is no place for them in the European Union. Switzerland ranks high in several metrics of national performance. According to Credit Suisee, Switzerland has the highest nominal wealth per adult in the world and the eighth highest per capita gross domestic product. Swiss citizens also have the highest life expectancy in the world and the country spends the most money in the world on healthcare. Zürich and Geneva, two major cities in Switzerland, have both been ranked among the top cities in the world with the highest quality of life. Established on August 1, 1291, Switzerland has a current population of 8 million. The country is known for being neutral and avoiding warfare; they have not been involved in a war since 1815 and did not join the United Nations until 2002. Switzerland is frequently involved with peace-building around the world; in fact, the Red Cross came from Switzerland. Swiss values are federalist in nature and the country runs under a direct democracy. Education is very important in Switzerland; there are more public schools than private schools nationwide. Advanced classes are mandated for students who perform exceedingly and students who learn more slowly work at a normal pace for their courses. The University of Zürich is the largest university in Switzerland, with a population of 25,000 students...
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...Fireweed Skye Brannon ”Fireweed” is a short story written by Skye Brannon, and takes place in the United States. The main character is Baluta, or his alias, Joel. Baluta lives with his brother and his sister-in-law. They are refugees from the civil war in Liberia. They do not have a lot of money, and you can see that by the description of the car that Baluta is driving; ”The old Camero had so many holes in its body, the attempts at duct-tape patchwork had been abandoned, and Baluta heard the wind whistle through them as he drove through the ghettos of his neighborhood”. Here we also see that they live in a ghetto, which confirms that they do not have a lot of money. Also they do not have a lot of warm water, because there is only cold water left after Baluta’s brother and his sinster-in-law have taken a shower, which again show us there are poor. In the text there are two stories, the current time of Baluta’s life, and his memories from Liberia. Right in the start we are told that Baluta often have these “remembering days”, where many memories hit him. We can see that he has these days regularly; “Sometimes remembering began later in the day. But not today.” The current time story is told chronological, with interruption of his memories from Liberia. As soon as he sees something that reminds him of his former life, the memories hit him. For example just that he sees a pond, makes him think of when he and his sister caught fish in a pond as kids in Liberia. His memories of...
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...Running Head: JAMES REASON'S SWISS CHEESE THEORY James Reason's Swiss Cheese Theory [Name of the Writer] [Name of the Institution] James Reason's Swiss Cheese Theory Introduction The model of Swiss cheese is a model of accident causation which is used risk management and its analysis in system of healthcare, aviation, and engineering. Swiss Cheeses Model compares human system to Swiss cheese slices. The slices are piled together with one another. Basically it was founded in 1990, by James T. Reason, a British psychologist of University of Manchester. The model gained wide acceptance and has been used by healthcare industry, emergency services organizations, aviation industry, and safety industry since it was developed. It is also known as cumulative act effect. According to a survey, in most of the cases, there can be four levels of failure for an accident: unsafe supervision, unsafe act of themselves, organizational influence, and preconditions for unsafe acts. James T. Reason, in his Swiss Cheese Model developed defenses of organization against the failure and represented barriers as slices of Swiss cheese. And individual weaknesses are shown by the holes in the slices as part of the system, and all holes are different in position and sizes in those slices. The failure of the system occurs when holes in slices simultaneously align in aggregate, giving permission, as James Reason's said “a trajectory of accident opportunity", so that in...
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...where as assisted suicide is defined as, “helping a person kill him or herself” ("Euthanasia & Assisted Suicide"). The difference is slight, yet there is a difference and this distinction is a very important element of the Swiss law. It has been suggested that this difference is important in countries such as Switzerland because “the term euthanasia is generally avoided because of its association with the eugenicist policies of the Nazi era” (“Euthanasia and Assisted Suicide Laws”). Dignitas - “to live with dignity – to die with dignity” is one association in Switzerland that follows the Swiss laws for assisted suicide. Dignitas was founded in 1998 with the purpose of ensuring life and death with dignity. Dignitas is actually only one of six organizations that exist in Switzerland. This organization provides counseling regarding end-of-life issues. Since this is an association and not a clinic, people join. Not all people who join this association participate in assisted suicide, in fact very few do. They join Dignitas to have the comfort of knowing that if they find themselves in a helpless situation in the future, they are assured that they will have the assistance of Dignitas to end their life with dignity. Dignitas supposedly works in accordance to the Swiss Federal Code, Article 115 that states, “Whoever, from selfish motives, induces another person to commit suicide or aids him in it, shall be confined in the penitentiary for not over five years, or in the prison, provided...
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