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About andydtaylor

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    HPC Poster
  1. I was surprised not to see this one yet: "Downturn". It's a recession or it isn't.
  2. It makes complete sense. On the forward FX curve the £ is in backwardation, so if they lock in a long forward contract when the debt is issued, it effectively lowers the interest rate they'd be paying. It's a sound enough decision.
  3. Guys, They ran 4 scenarios based on slow/fast economic recovery and slow/fast environmental action. It's only in the fast/fast scenario that prices rise 60%. Basically this is sensationalist journalism. The reality is prices will rise by only 20% by 2020 in 3 of the 4 scenarios. This is down to the world being awash with wholesale gas at close to record low prices. What might drive theseprice increases according to Ofgem (quote): 1. Britain will face significant levels of gas imports, in particular for gas power plants to replace lost nuclear and coal-fired capacity. This increases our exposure to uncertainties in the global gas market, supply disruptions and potential price increases. 2. Significant changes in the way in which we generate and consume power may be needed to manage the variability associated with increasing reliance on wind power. 3. Given the massive levels of investment needed, there is a high likelihood of rising consumer bills, especially if oil and gas prices continue their underlying rise since 2003. What hasn't been spoken about in the press (typical bbc cowardness perhaps) is that the 2nd of the 3 main price driver risks they flag is dealing with the power output/price volatility caused by increasing use of windfarms (which idiot politicians love)- to those who don't work in the industry these are basically your worst nightmare if you're trying to generate constant power frequency that won't cause your fridge to explode. So in summary - no real news other that we will be increasingly reliant on gas and wind, which are volatile power commodities. But then that's where we were going anyway. Andy
  4. Fropm an accounting prespective, unearned income means the following: Imagine a scenario where a customer has paid you up-front for say all of the van servicing they're going to need for the next three years. You might have given them a discount to encourage them to do this. So you book a block of cash which becomes an asset on your balance sheet. You start to book income (i.e. earned income - this is you recognising portions of that cash as income) as you service the vans. The income which has not yet been earned i.e. that attributed to the vans not yet serviced would appear as a liability on the balance sheet called 'unearned income' Together the cash you booked, the earned income and the unearned income net off to zero.
  5. Injin you really should know better than to post this. Haven't you learned anything? Rate of money growth has plummeted. Lending is miserable. This environment is overwhelmingly deflationary.
  6. Which 3 are in Financial trouble? Isn't this all to do with the PIII EUETS carbon uncertainty - i.e. no-one can sell 2013 power until 2011 at the earliest which is a year later that would normally be the case? As I understand it S&P are now downgrading everything becase they made so many mistakes in the recent past - and this includes the independent wholesale power generators who have no retail business to act as a natural output hedge for this 2013 power.
  7. The downside is that Retail banking would become more expensive for the consumer. Higher bank charges and fees would be the result.
  8. Hi all, This is nothing to do with meter reading as such, and everything to do with integrity and capacity of the electricity supply system in the UK. The curve for power demand is a very odd one. Low demand over night, rising demand from early morning, peak around tea-time and falling demand after than. It's that peak around tea time, and specifically 5-7pm in Q4 winter that determines the required level of electricity supply. Smart metering will enable portions of that chart to be targeted i.e. 5-7pm in the evening will be specifically charged at a higher rate than 2pm. Thus you'd persuade people not to do the ironing whilst watching Neighbours, not to put the washing machine on when they come home from work etc. This has the effect of lowering the peak demand, which means: * Lower overall prices because emergency oil-fired/ less efficient coal stations are not required; * lower emissions because the more efficient base load stations are used more of the time; and * better energy security as a more robust generating platform emerges. Hope this is useful, Andy.
  9. The definition of hyperinflation is more than 100% inflation over 3 years. To think that's going to happen anytime soon in the UK you'd have to be out of your mind.
  10. One's a price weighted index (Dow) and the other's value-weighted (FTSE) - so changes woun't be in proportion.
  11. 3 things: 1. Contact an Employment Solicitor. I used the below recommended by a solicitor friend when Goldmans wanted me out earlier in the year: Russell Jones & Walker +44 (0)20 7837 2808 - I spoke with Harriet. 2. Bear in mind that even if you were fortunate enough to negociate a 2 year contract they can always force you out later on 'performance grounds'. 3. In terms of Settlement you could reasonably expect about 3 months pay plus your notice AND the guaranteed bonus you'd be forgoing. This is approx £30k for you tax free (plus your notice period pay - sadly taxable) and you'd be free to find another job immediately. If you're anything like as good as your pay level indicates you should not struggle to be re-employed. And this time you get to chose what in. I'm now working as a Carbon (EU ETS) analyst and it's leaps and bonds more interesting than Equity Derivatives. Good luck with the CFA. I'm doing L II (again...) next year. It's all interesting stuff and it will help you to get jobs in the future - as a job winner more than qualifier, but still worthwhile. Are you at Citi BTW? Regards, Andrew
  12. Jesus is weeping pal. Risk is being transferred. The biggest point regarding an (on market) swap, is that both sides are equivalent at the start. Think of it as a fork in the road where you could take either path. If I'm worried interest rates will rise I'd wan't to receive fixed rate interest. On the other side is someone who maybe is receiving fixed rate interest, but has variable rate debt they need to pay - so it suits each side to swap one for the other. Fast forward a year, and in the same example, I'm receiving my lovely fixed rate I wanted so badly, but in actual fact the prevailing rates are higher. So I've lost out with regard to that particular snapshot in time, but in a way I gained at the start by fixing the rate I was getting, which helped me with my planning etc saving me money that way.
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