Thread: Global Pension Plan

Originally Posted by berty

Bet its still less than 100,000!

[b]I wouldn't hazard betting on any of your "it's impossible" or "it's illegal" comments. There are legal financial vehicles in other countries that even YOU are not aware of.

Tell me about them....I am always willing to learn about new products.

Originally Posted by berty

Tell me about them....I am always willing to learn about new products.

Step outside the "box" and you won't have to ask.

Come on educate me

For example I am very interested to learn about a new style insurance plan that doesn't use the mechanics and structures that every single life assurance company world wide uses to underwrite their plans

And please stop using clichés....

Here is a tally of RP plans that I know of.

GPP ......still with us.
HCI.......down....maybe because I asked some awkward questions.
Early Pension...down and I cannot see a return after such a long absence.
ICC...down..talk of a return.
World Pension..down
Mega Pension...New
Imperia..still with us
UAE...a new one and still one more to come.

On stats then, we have a 50/50 chance of one of them working...which one??

paddy

GPP!!!!!!!!

Originally Posted by chicosan

[b]I wouldn't hazard betting on any of your "it's impossible" or "it's illegal" comments. There are legal financial vehicles in other countries that even YOU are not aware of.

Chicosan, I agree.

Look at "derivaties" Trading among the biggest international banks(top 25 world banks totalling 56 Trillion USD). As you may know,out of 56 Trillion USD, 51 Trillion USD is traded among the Big Three US Banks including CITIBANK and JP Morgan. De****e of the Huge Amount inolved in "Derivative Trading", very few people can underststand the mechanism. Hence, a lot of criticism. But they are legal. Nowaday, there are So Many New "Financial Instruments" being introduced, which are almost impossible to understand their "mechnism" for ordinary folks like us, or even to so-called "Financial or Investmenrt Consultants(Experts).
quote:
There has been much controversy recently over derivatives, mostly because politicians, senior executives, regulators and even portfolio managers have limited knowledge of these complex products. The Financial Pipeline has introduced its derivatives page to educate our visitors and other investors on these complex instruments.

A derivative financial product is a contrived instrument, the value of which depends indirectly on the price of a cash instrument. The price of the cash instrument is referred to as the "underlying" price, quite often. Examples of cash instruments include actual shares in a company, physical stocks of commodities, cash foreign exchange, etc.

Why use derivatives and not just cash instruments? Derivatives exist to solve specific positioning, accounting and regulatory problems. These reasons may not be immediately clear to you but they will be after you read all of the derivatives articles on this web site.
unquote:

For more info, go to: Derivatives Explained
"Derivatives Explained"


pinetree

Pinetree: Since you brought up derivatives, thought you might be interested in this information about derivatives, which is another exotic investment vehicle. But you had better be a mathematical whiz or stay away.

The name itself conjures up images of high dollar stakes, the ability to make a lot of money in a very short period of time, and all the other buzz words that make the heart flutter with excitement and anticipation. But what are derivates really? Well, let’s take a trip down memory lane before we get into a very brief overview of derivatives.

Do any of you remember Barings Bank and Nick Leeson? Well good ole Nick, who was a trader at Barings Bank, incurred a $1.3 Billion Dollar loss that bankrupted the centuries old bank. So how did he manage to do this? By trading in the derivates markets no less. Getting the idea they might be a little risky? No? Well, then how about the largest municipal bankruptcy in recorded History in the good ole USA in Orange County, California of $1.6 Billion Dollars? But let’s not forget the bankruptcy of Long-Term Capital Management closely thereafter. All who were trading in “Derivatives.”

Because derivatives offer the possibility of large rewards, many individuals (and companies), have a strong desire to invest in derivatives. Most financial planners caution against this, pointing out that an investor in derivatives often assumes a great deal of risk, and therefore investments in derivatives must be made with caution. One should also keep in mind that one purpose of derivatives is as a form of insurance, to move risk from someone who cannot afford a major loss to someone who could absorb the loss, or is able to hedge against the risk by buying some other derivative to try to offset potential risk and losses. There is the danger, however, that someone would lose so much money that they would be unable to pay for their losses. This might cause chain reactions which could create an economic crisis. See above reference to Barings Bank.

Now that we have a little background on just how volatile and risk is involved, let’s define the primary types of derivatives. A derivative is a generic term for specific types of investments from which payoffs over time are “derived” from the performance of assets (such as commodities, shares or bonds), interest rates, exchange rates, or indices (such as stock market index, consumer price index [CPI], or an index of weather conditions). This performance can determine both the amount and the timing of the payoffs. The diverse range of potential underlying assets and payoff alternatives leads to a huge range of derivatives contracts available to be traded in the market. The main types of derivatives are futures, forwards, options and swaps.

Broadly speaking there are two distinct groups of derivative contracts, which are distinguished by the way they are traded in the market:

Over-the-counter (OTC) derivatives are contracts that are traded (and privately negotiated) directly between two parties without going through an exchange or other intermediary. Products such as swaps, forward rate agreements, and exotic options are almost always traded in this way. The OTC derivatives market is huge.

Exchange-traded derivatives are those derivatives products that are traded via derivatives exchanges. A derivatives exchange acts as an intermediary to all transactions and takes initial margin from both sides of the trade to act as a guarantee. In short making sure all parties pay up on all trades by ensuring they have the necessary capital requirements to trade.

Now if I have not confused you before this, maybe this will do the trick. There are three major classes of derivatives:

1. Futures/Forwards, which are contracts to buy or sell an asset at a specified future date.

2. Options, which are contracts that give the buyer the right (but not the obligation) to buy or sell an asset at a specified future date.

3. Swaps, where the two parties agree to exchange cash flows.

So just who has can be a player in the over-the-counter markets for tailor-made (private) derivatives? Well they consist of investment banks who have traders who make markets in these derivatives, and their clients are hedge funds, commercial banks, government sponsored enterprises, etc. In short you must be a "qualified" entity or you cannot participate in this market.

The majority of trades done in the derivatives markets are done on margin. This simply means you only put up a fraction of the cost, which means you can buy more contracts than you could buying individual stocks. Bonds, currencies, etc., but you are also increasing your risk factor many times over. A short example: You could buy 100 shares of XYZ stock for $1,000 ($100 per share), but on margin you could purchase 10 contracts representing 10,000 shares for just about the same price as the 100 shares of stock. If you guess right, you win big. If you guess wrong, you lose big. Now it is a lot more technical than I have explained it here, but I think you get the picture.

While you may have a little amount of capital outlay, you have a whole lot of capital at risk in margin trading derivatives. That’s how Nick Leeson lost all that money and the same thing for the Orange County Municipal Bankruptcy. The markets went against their positions, and they could not cover their margin calls. Funny thing about the markets, they make you use real money to play, and you either lose or make real money.

In short, derivatives are not for the faint of heart, and you had better have the financial net worth of the Forbes Top 100 or stay away. This is one of the reasons why I knew PIPS was a fraud since BM claimed PIPS was trading in OTC Derivatives, and PIPs was not a qualifying entity to do so.

Originally Posted by pinetree

Chicosan, I agree.

Look at "derivaties" Trading among the biggest international banks(top 25 world banks totalling 56 Trillion USD). As you may know,out of 56 Trillion USD, 51 Trillion USD is traded among the Big Three US Banks including CITIBANK and JP Morgan. De****e of the Huge Amount inolved in "Derivative Trading", very few people can underststand the mechanism. Hence, a lot of criticism. But they are legal. Nowaday, there are So Many New "Financial Instruments" being introduced, which are almost impossible to understand their "mechnism" for ordinary folks like us, or even to so-called "Financial or Investmenrt Consultants(Experts).
quote:
There has been much controversy recently over derivatives, mostly because politicians, senior executives, regulators and even portfolio managers have limited knowledge of these complex products. The Financial Pipeline has introduced its derivatives page to educate our visitors and other investors on these complex instruments.

A derivative financial product is a contrived instrument, the value of which depends indirectly on the price of a cash instrument. The price of the cash instrument is referred to as the "underlying" price, quite often. Examples of cash instruments include actual shares in a company, physical stocks of commodities, cash foreign exchange, etc.

Why use derivatives and not just cash instruments? Derivatives exist to solve specific positioning, accounting and regulatory problems. These reasons may not be immediately clear to you but they will be after you read all of the derivatives articles on this web site.
unquote:

For more info, go to: Derivatives Explained
"Derivatives Explained"

pinetree

pinetree

You'll never reach parity of agreement here on any program. The proof will come when GPP pays out and then the scrambling for
excuses among the ones who produced all of the info supposedly showing GPP as impossible and illegal.