I have chums who write several blogs, amongst which would be say a family related one, a subject specific blog and a work focussed one. However, running these can be incredibly cumbersome if you have to log in and out different services/accounts. Moreover, if one post is to be used on several of the blog eg intersection of subject and work blog, then it is a case of cut and paste.

However, a much better approach is to use a service like WriteToMyBlog which was created by Mark Ascroft.  It allows a single post to be submitted to one or more blogs simultaneously. Very feature rich, it has great wysiwyg post writing/editing facilities that are much better than many mainstream services eg insert and manage tables. You can also handcraft your post in html if you wish. 

The service is free to use and doesn't insist on any sign-up, albeit it's convenient for regular users to do so as it will save the details of all of your blog account, thereby having to enter them each time. 

I got to know Mark last year as we are both cricket fans and chatted via skype about the England v Australia games during the matches – he is an Australian living in Australia.  He created the service in his spare time and did an excellent job in my view. 

Even if you only have one blog you maintain, give it a try and let me know what you think. 

This is not a reference to speaking to friends or parents, but to the growing panic among prime brokers and lenders worried about the viability of some of their hedge fund clients, prompting them to raise their margin requirements on clients and the assets they hold in their portfolios.

Designed to protect the lenders by increasing the deposit they hold against default and to protect against shortfalls in the value of collateral, these margin calls are actually tipping funds into closure. The hedge funds haven’t the cash on hand to pay the margin calls and the assets they do hold are proving illiquid i.e. not easily converted into cash to settle the margin calls.

This is the worst outcome for lenders but lenders can lessen the impact on themselves if they are one of the earliest/quickest lenders to seize assets. Unfortunately, concern about being caught out actually encourages early intervention on the part of lenders.

Three high profile casualties in a week

FT Alphaville reported that US mortgage lender Thornburg has filed a material default notice with the SEC. Thornburg’s share price crashed on Tuesday after speculation over margin calls hit the press. The lender defaulted on a reverse repurchase agreement with JPMorgan on 28th February, after the bank made a $28m margin call

Carlyle Unit Fails to Meet Some Margin Calls
The company said it received margin calls from seven financing groups that totalled $37m and it was not able to meet four of those requests.

“The last few days have created a market environment where the repo counterparties’ margin prices for our AAA-rated U.S. government agency floating-rate capped securities issued by Fannie Mae and Freddie Mac are not representative of the underlying recoverable value of these securities,” Carlyle Capital Corporation said.

FT Alphaville reported Peloton Partners, the stricken London hedge fund manager, told investors Wednesday that its flagship $2bn fund was worthless and that it did not know how much would be left of its remaining $1.6bn fund after banks seized and sold some of its assets. In a conference call Ron Beller, co-founder, set out reasons for the collapse.

Such collapses have a wider impact though since the market knows that the portfolios have to be sold and the anticipated increase in supply forces down prices. Hence the fund is selling into a falling market, exacerbating losses.

According to The New York Times, the trader at the centre of MF Global’s recent trading scandal, Evan Dooley, often entered into about 15,000 wheat futures contracts, the equivalent of around 10% of the market for these kind of contracts in any given month.

Whilst many of these trades will have been to close out opening positions, and not necessarily imply large net positions, such flow size marks out a trader in a market. As such, they are likely to become a target for other firms who will observe activity in the hope of profiting from following or countering the flow.

A high trading profile normally runs contrary to many traders instinct – most prefer not to reveal anything about their trading intentions/activity to other participants lest they utilise that information against them. However, some information leakage is inevitable when you are such a large part of a market and sometimes a trader in such a position will seek to push a market in a particular direction by “weight”, real or perceived.

Dooley took large short positions on Tuesday evening, following Monday’s wheat price shooting up by 25%. He was evidently betting that the price had overshot its’ “natural” level. However, it appears likely that several other firms decided to “squeeze” him by pushing back against the falls in price, thereby allowing them to profit when MF Global was forced to close the positions.

Of course, had they failed then Dooley could have equally been sitting on equally sizeable profits at which point he would have been regarded as a hero and trading genius, albeit with a slight smack on the risk for having taken such large bets.

When I was a young lad, my Mother would always point out a man walking around the local area and tell me that he had been the Captain of West Brom (the team I support) in 1954 when they won the FA Cup.

To someone who is a passionate West Brom fan this made the man a hero in my eyes, albeit it was a leap of imagination to see how this man (20+ years on) could have performed at such a level. He always looked quite serious and my Father often remarked on how past heroes seemed to have been forgotten by the club who had brought them such glory, albeit not by the fans who organised a fund-raising effort to provide Albion’s former captain with a motorised wheelchair.

As a player, he was a quiet unassuming fellow, renowned for his gentlemanly conduct and never booked in his 476 senior games (625 appearances) for the club during which he bagged 18 goals, yet he was dubbed “The Agitator”. A polished left-back, he didn’t allow the great Tom Finney a kick in the 54 Final.

My parents were friendly with Len and his wife, and so one day I was invited to go and see Len’s memorabilia at his home in the next street. As a small boy, getting to hold a FA Cup winners medal, look at the match programme, hold the ball from the final and see the shirt he wore, amongst many other items was simply fantastic. It’s a memory I’ve always treasured.

Sadly, Len passed away in 1997 just before his 78th birthday, but his achievements and the manner of the man left a mark on me which I remember each time West Brom play in the FA Cup.
Ivan Ponting Leonard Millard, footballer: born Coseley 7 March 1919; played for West Bromwich Albion 1937-58; died Coseley 2 March 1997.

Given the recent debate about the Government proposal to automatically enrol everyone in an organ transplant scheme, with an opt out capability, it may seem enrolling on the UK Transplant Register is unnecessary.

However, it only takes a minute online, so why wait and you may save someone’s life. Register here.

Look familiar to you?

Shortly after SocGen won Best Derivatives House 2007, it was hit by its’ enormous trading loss. Now, Peloton Partners is being forced to wind down its $2bn ABS fund, which had been named best new fixed-income hedge fund last month.

Peloton ABS was one of the big winners from the US subprime crisis, gaining 87 per cent last year after shorting sub-prime mortgages. This year they began buying distressed AAA mortgage assets. However, continued falls in the value of such assets have prompted margin calls and tightening of lending conditions by lenders.

According to FT.com, the fund was 4-5 times leveraged, normal for a credit fund, with 14 banks owed money, including Goldman Sachs, UBS and Merrill Lynch. The banks are allowing Peloton to lead the sale.

Inevitably, this public sale of assets will drive prices even lower but may allow other less leveraged firms to mop up assets cheaply.

My old firm, MF Global, is the latest to be hit by a large loss ($141m) as a result of unauthorised trading by a wheat trader in its’ Memphis office. The news caused the shares to fall by over 25%.

Apparently the trader had shorted the market and was hit when unprecedented volatility in US wheat markets, with prices falling 11 per cent but then jumping almost 20 per cent to a record $13.34½ a bushel in just three minutes. This against a backdrop of prices rising by 25% on Monday.

The CEO commented that MF Global had relaxed system trading control limits because they made trading desks less efficient when many customers were placing orders – these have now been restored.

Whilst I don’t have any insider information as yet on the specifics of how this happened, one can imagine a number of possible situations, including ones in which a trading desks feels its’ profitability is being impeded by “unreasonable” controls. For instance,

• Limit restrictions may mean a desk can’t accept all the customer orders coming in when the flow of orders are all in a particularly direction eg all buy orders. The desk may contend it can easily lay these off but the sequencing of order means they “temporarily” breach limits.
• In a phone broking environment, sales traders have to record orders manually. Whilst these should be immediately entered into systems during the call, sometimes when the phones are going crazy sales traders can revert to using their own paper blotters to jot down orders and resultant positions, thereby circumventing limit controls .
• Often orders can be processed without allocating them to an account pending client allocation instructions e.g. a client has 10 accounts and hasn’t specified which account(s) to allocate the trades to. Time limits may operate on how long orders may be unallocated and likewise the number/size of unallocated orders may be limited. However, at busy times, it can be perceived as more important to get the order into the market and worry about the details later. In this situation a trader could enter orders for their own account but conceal them under the guise of unallocated client orders

This episode will be especially embarrassing to the COO of MF Global who has always been fanatical about operating rigorous internal controls, albeit tinged by commercial considerations. Whilst the fallout from this episode will not go as high as the COO, he will take this very personally.

UPDATE : MF Global shares continued to take a battering when the US market opened and at one point they were 50% lower than prior to the news at $14.22, before staging a rally. This will have financially hit many of the staff and Directors, many of whom hold shares and options, albeit many will probably see it as a buying opportunity.

Similar to Sean Park, I’ve long maintained that the arcane ticketing industry is ripe for capital market models and techniques to be applied. The growth of online secondary markets has been spectacular and has even been embraced by traditionalists like Ticketmaster who recently acquired Getmein in the UK.

The next wave of market evolution is building, which will be very familiar to anyone in capital markets, namely an options market. Several examples now exist in the USA, with Yoonew, being one of the latest. It offers a continuous market on US sports events, most notably the Superbowl.

In Yoonew’s case the market actually culminates in physical delivery of the tickets to the event, rather than a cash payout. Hence, if you buy an option for a Superbowl ticket for a specific team then that contract will either result in you forfeiting your “single premium” if the team you select fail to reach the final or actually receiving tickets if they do. As a consequence of this structure, people selling options on teams have to be able to guarantee delivery of the event tickets by buying event tickets contracts in the Yoonew market which provide a ticket regardless of which teams reach the final.

For example, if you wanted to short Fantasy Seats for the New England Patriots in Super Bowl XLII in seating category B, you would first need to buy Super Bowl Tickets in seating category B. Purchasing tickets give you the ability to short contracts in one or both conferences. If you purchased 10 tickets, you could sell 5 contracts for every NFC team and 5 contracts for every AFC. Or you could short 10 contracts for every team in a given conference. With our Ticket Margin system you can short sell Team Fantasy Seats as long as you own enough tickets to cover the maximum number of short positions.

Operating a physical delivery constrains the number of contracts that the market can sustain – ultimately the size of the stadium is the limiter and so the market operator will set a threshold of underlying tickets it thinks it can supply to the market. This will dictate the maximum number buy orders for any given team.

There are a number of fascinating about this including

• the ability of sports fan to buy a futures contract on a Superbowl ticket that pays out if their team reaches the final
• the opportunity to hedge your position or arbitrage in other sports betting markets eg betfair may offer better odds of a team reaching the final
• the reliance on the central operator to deliver on the contracts, since if it went bust or failed to get tickets the punters would have little or no recourse
• the lack of a cash equivalent market whereby the end outcome is the price of a ticket, rather than a ticket itself

There will be many traditionalist who will contend this is scalping in disguise, but I disagree and think this represents a sensible development of the market and one that I hope that will soon be replicated in Europe. You can also see here the view of Allaboutalpha on the matter.

Google have released a Gtalk chat widget that you can post onto any web page, which allows visitors to chat with you whenever you are logged into your gmail account. I’ve embedded it onto this blog on the left above the meebo widget.

Whilst it’s not as slick as Meebo’s widget [little customisation available and the visitor chats in a pop-up window, assuming they allow pop-ups in their browser], it works fine. Perhaps this is the start of Google edging into Meebo’s space.

AFTERTHOUGHT
I also realised that the Gtalk widget doesn’t provide a presence indicator unlike Meebome ie. meebome tells me if there are visitors on the page in real-time and provides me with the chance to initiate a chat, whereas the Gtalk widget only lets me respond to visitors if they start the chat.