A national competition (similar to britain got talent) is kicked off to find people who will help defend the UK against the rising tide of cyber crime.

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Whistle-blowing website Wikileaks is once again at the centre of attention as it makes public more than 90,000 secret records of incidents and intelligence reports from the US military about the war in Afghanistan.

It is the latest in a long list of "leaks" published by the secretive site, which has established a reputation for publishing sensitive material from governments and other high-profile organisations.
In April 2010, for example, it posted a video on its website a that shows a US Apache helicopter killing at least 12 people - including two Reuters journalists - during an attack in Baghdad in 2007.
In October 2009, it posted a list of names and addresses of people it claimed belonged to the British National Party (BNP). The BNP said the list was a "malicious forgery".
And during the 2008 US elections, it published screenshots of the e-mail inbox, pictures and address book of vice-presidential candidate Sarah Palin.
Other controversial documents hosted on the site include a copy of the Standard Operating Procedures for Camp Delta, a document that detailed restrictions placed on prisoners at Guantanamo Bay.
Legal wrangles It provoked controversy when it first appeared on the net in December 2006 and still splits opinion. For some it is lauded as the future of investigative journalism. For others it is a risk.
Wikileaks published alleged pager messages sent during 9/11 Website publishes '9/11 messages'
In mid-March 2010 the site's director, Julian Assange, published a document purportedly from the US intelligence services, claiming that Wikileaks represented a "threat to the US Army".
The US government later confirmed to the BBC that the documents were genuine.
"The unauthorised publication of Army and DoD sensitive documents on Wikileaks provides foreign intelligence services access to information that they may use to harm Army and DoD interests," a spokesperson told BBC News.
The site now claims to host more than one million documents.
Anyone can submit to Wikileaks anonymously, but a team of reviewers - volunteers from the mainstream press, journalists and Wikileaks staff - decides what is published.
"We use advanced cryptographic techniques and legal techniques to protect sources," Mr Assange told the BBC in February.
The site says that it accepts "classified, censored or otherwise restricted material of political, diplomatic or ethical significance" but does not take "rumour, opinion or other kinds of first hand reporting or material that is already publicly available".
"We specialise in allowing whistle-blowers and journalists who have been censored to get material out to the public," said Mr Assange.
It is operated by an organisation known as the Sunshine Press and claims to be "funded by human rights campaigners, investigative journalists, technologists and the general public".
Since it appeared on the net, it has faced various legal challenges to take it offline.
In 2008, for example, the Swiss Bank Julius Baer won a court ruling to block the site after Wikileaks posted "several hundred" documents about its offshore activities.
However, various "mirrors" of the site - hosted on different servers around the world - continued to operate.
The order was eventually overturned.
Future role Wikileaks claims to have fought off more than "100 legal attacks" in its life, in part because of what is described as its "bulletproof hosting".
The site is primarily hosted by Swedish ISP PeRiQuito (PRQ), which became famous for hosting file-sharing website The Pirate Bay.
"If it is legal in Sweden, we will host it, and will keep it up regardless of any pressure to take it down," the ISP's site says.
The site also hosts documents in other jurisdictions, including Belgium.
Its experience of different laws around the world meant that it was drafted to help Icelandic MPs draw up plans for its Icelandic Modern Media Initiative (IMMI).
The plan calls on the country's government to adopt laws protecting journalists and their sources.
"[To] keep our sources safe, we have had to spread assets, encrypt everything, and move telecommunications and people around the world to activate protective laws in different national jurisdictions," Mr Assange said at the time.
"We've become good at it, and never lost a case, or a source, but we can't expect everyone to go through the extraordinary efforts that we do."
Despite its notoriety, the site has faced financial problems. In February, it suspended operations as it could not afford its own running costs.
Donations from individuals and organisations saved the site.
Mr Assange told the BBC that the site had recently gone through "enormous growth" and had received an "extraordinary amount of material".
"It exceeds our ability to get it out to [the] public at the moment," he said in February.
As a result, he said, the site was changing and hoped to set up a number of "independent chapters around the world" as well as to act as a middle-man between sources and newspapers.
"We take care of the source and act as a neutral intermediary and then we also take care of the publication of the material whilst the journalist that has been communicated with takes care of the verification."
"It provides a natural… connection between a journalist and a source with us in the middle performing the function that we perform best."
By Jonathan Fildes Technology reporter, BBC News 

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Morningstar's announces Bank Credit Ratings

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I found this BBC helpful article helpful: BBC News - Q&A: What are the European bank stress tests for?

 Stress test results at CEBS - 2010 EU WIDE STRESS TESTING.

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The figure below shows the Ijara fund structure. Ijara funds typically incorporate periodical redemption features. The redemption frequency profile of an asset management product is important to investors in general and even more so to Islamic institutions with limited recourse to an interbank alternative. The investment exit strategy for Ijara funds has
usually been underwritten by the product sponsor, who will acquire asset holdings from the investor or arrange asset sales on a best effort or matched basis.

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AIM: Define market efficiency, identify the three forms of market efficiency, and discuss the link between efficiency and the CAPM.
Questions:

30.1 If the STRONG-FORM of efficient market hypothesis (EMH) is true, then which investor group can produce sustained alpha?

* a. Fundamental analysts
* b. Stock exchange specialists
* c. Corporate insiders
* d. No groups

30.2 Which is the best test of WEAK-FORM EMH?

* a. Autocorrelation of security returns
* b. Price-to-book ratio in Fama-French three factor model
* c. Returns for professional security analysts and money manager
* d. Event studies

30.3 Which is the best test of SEMISTRONG-form EMH (conditional on a priori acceptance of weak-form)?

* a. Autocorrelation of security returns
b. Price-to-book ratio in Fama-French three factor model
* c. Returns for professional security analysts and money manager
* d. Performance of algorithmic trading rule(s) based on market data; e.g., block trades

30.4 Which is the best test of STRONG-form EMH (conditional on a priori acceptance the semi-strong form)?

* a. Autocorrelation of security returns
* b. Price-to-book ratio in Fama-French three factor model
* c. Returns for professional security analysts and money manager
* d. PEG (price-to-earnings growth) ratio

Answers:

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AIM: Derive the basic equilibrium formula for pricing commodity forwards and futures

The forward price is equal to the expected spot price in the future, but discounted to the present.

Non storability
AIM: Explain the effect non‐storability has on electricity prices

Because electricity cannot (mostly) be stored, the forward market provides “invaluable price discovery.” Price changes largely reflect “[consensus] changes in the expected future spot price.

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A: Share Large Files over Email

The Gmail service cannot handle email attachments that are larger than 25 MB but the recently-revamped Hotmail service is a much better alternative as it lets you send email messages as large as 10 GB.
The maximum size of an individual file that you can attach to an Hotmail message is only 50 MB but you can use a file-splitting utility like HJ-Split to break a big file into smaller chunks and then attach them all to a single message. The recipient can then join these chunks to restore the original file and he can do without requiring external programs.

B: Share Large Files without Email

The downside with email attachments is obvious – most ISPs and web-based email programs (including Gmail) will reject incoming messages that have big attachments and therefore, if you are sending a bulky file via email, the recipients also have to be on Hotmail as well in order to receive that file.
One of the best options for sharing large files without email is Dropbox. Once you install the the Dropbox utility on your (Windows, Mac or Linux) desktop, you can upload files of virtually any size to the Internet – it’s only limited by the size of your Dropbox storage which is 2GB in the case of free accounts. Alternatively, if you don’t want to install Dropbox, you can upload files straight to the Dropbox website from your browser but the limit in this case is 300 MB per file.
You can even consider using Google Docs to share those big files over the Internet. Google Docs lets you upload files up to 250 MB in size and they can be in any format. You have 1 GB of free storage space for storing all the non-Office files on Google Docs but you can also buy more space for a reasonable fee.
Unlike FTP servers, services like Google Docs and Dropbox don’t support resumable downloads. That means if the connection breaks while the recipient is still trying to download your “huge” file, he or she will have to resume the download from scratch. That can be a deal-breaker for lot of people.
SkyDrive, part of the Windows Live family, can solve this problem in a way.
The service offers 25 GB of free online storage, with individual files limited to 50 MB. To upload a large file, split it into chunks of 50 MB each and then upload them all to a single folder on SkyDrive. The recipient can download the entire folder as a ZIP or, if he’s on a flaky connection, he can download files one by one and then join them all at his end.

C. Share Files without Registration

Finally, if you are looking for something quick and simple that doesn’t even require registration, talk to YouSendIt or WeTransfer (if the file size is really big). Just upload the files via the browser, enter the email address of the recipient and hit send. WeTransfer lets you send files up to 2 GB in size while the maximum allowed limit is 100 MB in the case of YouSendIt (free version).

Chart: Comparison of file sharing services

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A spread strategy is a position with two or more options of the same type (i.e., two or more calls; or, two or more puts).

… bull spread (type of vertical spread)

buy (long) a call option and sell (short) a call option on the same stock (and same expiration) but with a higher strike price. In this example, long call (strike = $20, premium = $1.99) + short call at higher strike (strike = $23, premium = $0.83)
Features of bull spread:

• Net debit but outlook is bullish

… Bear spread (type of vertical spread)

Buy (long) a call option call option and sell (short) a call option on the same stock (and same expiration) but with a lower stock price. In this example, bear spread: long put (strike = $23, premium = $2.93) + short put at lower strike (strike = $20, premium = $1.20)
Features of bear spread:

• Net debit but outlook is bearish

… Butterfly spread (sideway strategy)

Buy a call option at low strike price K1, buy a call option with high strike price K3, and sell two call options at strike price K2 halfway between K1 and K2. In this example, the butterfly spread: Long call (strike @ $18, premium = $3.21), long call (strike @ $22, premium = $1.13 ), short two calls (strike @ $20, premium = $1.99)

Features of butterfly spread:

• Expects low volatility (range-bound), Capped risk

… Calendar spread

In a calendar spread, the options have the same strike price but different expiration dates. The calendar spread can be created with calls or puts.
Two calls: sell a call option with strike price K1 and buy a call option with same strike price K1 but with a longer maturity term
Two puts: sell a put option with strike price K1 and buy a put option with same strike price K1 but with a longer maturity term

Short call with 1 year maturity (strike = $20, premium = $1.99) +Long call with 1.25 year maturity (strike = $20, premium = $2.27)

… Diagonal spread

In a diagonal spread, both the expiration date and the strike price of the calls are different.

… Box spread

A box spread is a combination of a bull call spread with strike prices K1 and K2 and a bear put spread with the same two strike prices. The payoff from a box spread is always K2 – K1.
The value of the box spread is always the present value of its payoff or (K2-K1)*EXP(-rT).

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The recent financial reform that has passed / is in the process of being passed falls into that last category of something big happening.
So let’s see what just happened, whether or not the finance industry will survive, and how your bonus will be affected.
What Happened
First, everything here is as of July 14, 2010 in case you happen to be reading this at a later date.
In the US, the House of Representatives passed financial reform legislation that includes these key points:

1. The government now has broader authority to liquidate insolvent firms.
2. There are more regulatory and risk management requirements.
3. There are new limitations on prop trading, derivatives, and PE/HF investing and only 3% of a bank’s capital can be invested in private equity firms and hedge funds.

(And yes, I’m aware of the consumer protection provisions but we’re just focused on investment banking-relevant changes here.)
The Senate is expected to pass the same legislation shortly.
Europe
But if you thought that sounded bad, it’s far worse in Europe – here’s what you got over there:

1. 40-60% of bonuses must be deferred for at least 3 years.
2. Only 30% of the total bonus can be paid in cash upfront.
3. At least 50% of the total payout must be in the form of stock.

Ouch.
And yes, you’re reading that right: not only will around 50% of bankers’ bonuses be deferred years into the future, their cash bonuses will now be tiny as well.
What They Thought Would Happen
The European legislation came as more of a shock because there was so much focus on the US and the potentially disastrous consequences there:

• Originally, they were going to ban all PE and HF investing by banks.
• Originally, all derivatives might have been banned rather than just certain classes of derivatives.
• Originally, banks would have had to pay $17.9 billion in fees.

So the final legislation was watered down considerably from these early proposals.
Banks responded by ramping up their hiring efforts.
How This Affects You
In the US, these new regulations are much more worrisome if you’re on the sales & trading side or you’re working at an internal PE fund or hedge fund.
There are no bonus caps similar to what was passed in Europe, so this reform won’t directly impact you if you’re in a front-office investment banking role.
If you’re at a private equity firm or hedge fund at a bank, well, you should now be thinking about your Plan B options.
Technically they can still exist, but 3% of a bank’s capital is very little to invest.
On the trading side, some banks are getting around restrictions by re-assigning prop traders to client-facing flow trading desks instead.
So that’s one possible outcome – although you may still be doing prop trading due to some clever loopholes (more on that below).
And In Europe…
So what happens in Europe with all these bonus restrictions?
The obvious answer is that banks will raise their base salaries to compensate for lower bonuses – but that logic doesn’t quite hold up 100%.
The bonus system works because banks must see what the full year’s results look like before handing out large piles of cash.
If analysts make a $70K base salary and $50K bonus – hypothetical numbers – banks cannot just raise base salaries to $120K to get around these new rules.
They may bring them closer to $100K, but beyond that it’s too risky to make base salaries exactly equivalent without knowing what the full year looks like.
And it’s even worse for the senior bankers who make high 6-figure and 7-figure bonuses – there’s no way base salaries will come close to compensating for those.
All of this also ignores the fact that 50% of your bonus will be deferred for several years – an issue for junior analysts who often leave after 2-3 years.
So What Happens to Bankers in Europe?
Even with significantly lower bonuses, it’s safe to say that no one will go out and get a real job – finance still pays more than anything else.
Instead, more and more talent may migrate to the US, Asia, and emerging markets where pay is higher and regulations are less burdensome.
Got Loopholes?
Of course, there’s also no guarantee that any of this will be implemented as it has been reported.
Maybe the bonus restrictions will only apply to certain bankers or certain groups, maybe they will find another way to pay salaries or bonuses that gets around the restrictions…
There’s always a gap between resolutions that get passed in the EU Parliament / US Congress and the implementation, and with this type of reform the gap will be even wider.
In the US, meanwhile, banks are simply moving traders from prop trading desks to client-facing flow trading desks to skirt around the new regulations.
And even if firms can only invest 3% of their tangible common equity in hedge funds and PE funds, they can take their sweet time selling off their existing divisions.
So it’s safe to say that even with new regulations in place, banks will find loopholes to reduce the impact.
Will It Work?
If you care more about the global economy than banker bonuses (What? Seriously, why are you reading this site?), you might be wondering whether or not these proposals will prevent another financial crisis from happening.
They may help a bit, but overall governments have placed far too much blame on banks and ignored everyone else who played a part in the crisis.
Yes, credit default swaps contributed, but what about predatory lending, people buying houses they couldn’t afford, and the Fannie Mae and Freddie Mac debacles?
These new regulations might lessen the impact of another 2008 meltdown – but does anyone seriously expect the next crisis to resemble this past one at all?
So, What Now?
Other than, “Pay will be down, but still higher than other professions” it’s hard to say much without seeing how these new rules are implemented.
If you’re interested in trading, hedge funds and prop trading firms suddenly look a lot better than large banks.
Few people do PE internally at banks vs. real PE firms anyway, but the same deal applies there.
The European reforms seem the most serious, but you may not want to pack up and leave just yet: they probably won’t be implemented as they appear, there will be loopholes, and who knows how many bankers will actually be affected.
Still, there’s no denying that bonuses are heading south – but did you expect anything different?

Mergers & Inquisitions

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