Thursday, December 28, 2006

Perks of internship...

Have to say that due to some bad planning on my part, I got to stay in 3 neighborhoods of manhattan during my internship. Well, it turned out to be good, as I got to see very different scenes of the big apple..

First up, Chelsea - near the very famous chelsea hotel, wiki tells me that its had hosted quite a few "bohemians" in its lifetime - Bob Dylan, Hendrix, Stanley Kubrick, Mark Twain...etc. It was quite convienient, close to 2 subways, close to a lot of restaurants and "whole foods"!! 2/5 stars

Next up was Murray Hill, right next to that building you may heard of - Empire state! I liked the apt was being shared with the owner's cat. It was quite interesting since I never had a cat as a pet before. Close to almost everything - Madison square garden (where I saw a Knicks game), shops galore with the worlds largest Macys nearby, and good places to eat! 3/5 stars

3rd stop - East Village - this is an amazing place to live and lots of things to do!! Young, trendy, lots of students, artists, etc. I love this cool italian coffeeshop close to where I live. Just around the block or two are bars with names like "thirsty scholar".. Another crazy thing I saw here is the automat - a vending machine/restuarant that serves hot and fresh food!! 4/5 stars

Knicks game Posted by Picasa

Murray Hill Posted by Picasa

Museum of natural history Posted by Picasa

Wednesday, December 27, 2006

week 41..happy holidays and .. Mortgage backs

In anticipation of the asset backed class next quarter, i found this WSJ article informative. Here are the key issues:
Next year, some of the same forces that helped mortgage bonds do well in 2006 -- low volatility, continued buying from banks and overseas investors -- are expected to remain in place. Mortgage bonds are expected to perform well, though it will be harder for the market to log the same amount of excess returns over Treasurys.

If the 10-year Treasury yield -- the baseline from which mortgage rates are priced -- were to drop toward 4%, "you have mortgage rates low enough to entice more refinancing into the system," says Scott Kirby, portfolio manager for RiverSource Investments in Minneapolis.

Refinancing is bad for mortgage bondholders as their bonds get redeemed early, leaving them with funds to invest in a falling interest-rate environment.

In that case, volatility would likely pick up as mortgage-bond investors scramble to adjust their hedging strategies by buying options.

Monday, December 18, 2006


Today's WSJ carried a good article on Ford's new debt raising..and discusses convert-arb strategy.

One reason for the recent drop in the share price is Ford's issuance earlier this month of $4.5 billion in unsecured bonds that can be converted into its shares, part of the $23 billion in debt issued. The offering was snapped up mainly by "convertible-arbitrage" investors who sold Ford shares to hedge their exposure to movements in the stock price, according to people familiar with the deal.

Convertible-arbitrage allows investors to profit from movements of convertible bonds against other securities. It often involves trades using credit-default swaps, which are derivative contracts that protect buyers in the case of a bond default. Investors also can hedge against a decline in the price of a convertible's underlying shares, as in the latest Ford case, by selling shares in the open market. The more movement there is in the issuer's securities, the more opportunity to trade.

Friday, December 08, 2006

weeks 35-38

Things are heating up at work - the projects now have a deadline on the horizon and the days are getting longer!!

Nothing much to report..It is biting cold in New York but company holiday parties bring some cheer..and there ia also a Haas event in New York coming up!!