Global Investing

Bond yields are on the rocks, prices are hitting the steepest slopes and credit derivatives are at an impasse. So what better way to spend the time than to join 200 bond traders for a skiing weekend in Switzerland?

Throwing caution, and the global financial crisis, to the winds, the International Capital Market Association, the self-regulatory organisation for capital markets, is holding its annual ski weekend in the Swiss resort of Villars, “set on a sunny plateau above the Rhone Valley, with superb views over the
Vaudois Alps”.

The association has been running ski events for members for over 30 years. “A packed programme of outdoor activities and entertainment starts with the welcome drinks and dinner on Friday evening … and gets into full swing with racing on Saturday.”

– The estimated earnings growth rate for the S&P 500 for Q4 2008 currently stands at -1.2 percent. Six months ago, this was estimated at 59.3 percent.

– The price of oil was $37.71 at the close on December 26, the last formal price before Israel began its bombardment of Gaza. It has since risen close to 25 percent.

– A standout winner among investments last year was German stock volatility. The DAX New Volatility index rose more than 139 percent in 2008.

As financial markets wrap up the final full trading week of 2008, investors are contending with “quadruple witchings”, that is the day on which stock index futures, stock index options, stock options and single stock futures all expire.

French investment bank Calyon says that in addition the U.S. Treasury debt future also expires on Friday. “More witches than a Hallowe’en party,” the bank said in a note to clients.

“It is Friday, six days before Christmas in the middle of a credit crunch and this will only amplify the movements.”

The storm raging through financial markets has already cost bankers much of their business, bonuses and public esteem. But now they won’t even be able to drown their sorrows in their usual glass of bubbly at one of the most cherished events in Frankfurt’s social calendar.

The glitzy, champagne-laden black-tie gala that usually closes Frankfurt’s annual Euro Finance Week and hosts the VIPs of Europe’s banking and insurance industry, has been cancelled.

Top German banks, Deutsche Bank and Commerzbank and Dresdner Bank concluded that such a show of opulence was not “suitable for the times”, writes Spiegel magazine.