Puzzel of interest
Foxy Emma Jane
1. After 4 months how much interest had I earned?
2. Where should I have put the money?
Ryan Ginstrom
"Foxy Emma Jane" <foxyem...@yahoo.com> wrote in message
news:3EDDAA06...@yahoo.com...
> So I put 600,000 yen in a Japanese Bank's "saving" account.
>
> 1. After 4 months how much interest had I earned?
A) 0 yen
B) ~200 yen
> 2. Where should I have put the money?
A. Outside Japan
B. Stock in consumer loan companies
--
Regards,
Ryan Ginstrom
Eric Takabayashi
> So I put 600,000 yen in a Japanese Bank's "saving" account.
>
> 1. After 4 months how much interest had I earned?
150 yen?
> 2. Where should I have put the money?
You could have spent up to 100,000 yen to buy yourself a
cheesy suit, prepaid cell phone and instant camera, printed
off some forms, put flyers up on utility poles downtown, and
lent the other 50 man out as a loan shark, with up to a 3,000%
annual return.
Ken
If you were concerned 4 months ago about the slow pace of economic
recovery in Japan and increasing budget deficits and decreasing trades
surpluses, a good short-termish macro bet would have been putting the
money in a foreign currency account, e.g. with Citibank. Technical
indicators and AUD/JPY interest rate differentials could have pointed
you towards, say, an Australian Dollar term account at about 3% p.a.
At the current AUD/JPY exchange rates, however, I'd be reluctant to
recommend such a scheme anymore. Too much volatility risk on the
downside, not compensated with the interest rate differential.
Ken Yasumoto-Nicolson
<gins...@hotmail.com> wrote:
>
>"Foxy Emma Jane" <foxyem...@yahoo.com> wrote in message
>news:3EDDAA06...@yahoo.com...
>> So I put 600,000 yen in a Japanese Bank's "saving" account.
>>
>> 1. After 4 months how much interest had I earned?
>
>A) 0 yen
>B) ~200 yen
-1000 yen as you made withdrawls outside 9-5 or when there's an 'R' in
the month?
>> 2. Where should I have put the money?
>
>A. Outside Japan
>B. Stock in consumer loan companies
Think big - stock in Chihuahua farms! I hear they're now in the range
of 35 man yen for a normal big-eyed rat, and high-class yappers go for
up to 1.2 million!
Ken
Kevin Gowen
> So I put 600,000 yen in a Japanese Bank's "saving" account.
>
> 1. After 4 months how much interest had I earned?
Assuming a lump sum deposit into an ordinary savings account having the
average interest rate of 0.003% per annum, after four months you will have
earned six yen. How close did I get?
Source: http://www.boj.or.jp/stat/kinri/te030604_f.htm
> 2. Where should I have put the money?
Outside Japan. My checking accout has a 1.31% APY. Put the money there.
--
Kevin Gowen
Norman Diamond
news:3EDDAA06...@yahoo.com...
> So I put 600,000 yen in a Japanese Bank's "saving" account.
> 1. After 4 months how much interest had I earned?
2 yen, but if the 4 months were February to June and if you've already
closed the account then you might not get the 2 yen.
> 2. Where should I have put the money?
A different stock each day. Each morning you can read the day's newspaper
to see which stock you should have bought 2 days ago and sold 1 day ago.
Sometimes it might even tell you which stock you should have bought and sold
the same day 1 day ago, but you won't really know for sure until one more
day. And of course sometimes the order of buying and selling should be the
opposite (shorting).
Brett Robson
> Technical
>indicators and AUD/JPY interest rate differentials could have pointed
>you towards, say, an Australian Dollar term account at about 3% p.a.
and you would have earnt around 35% in two years, the opposite of what I did.
---
"2 out of 3 ain't bad" - Meat Loaf
"1 out 2^64 is a real bitch" - Original
Brett Robson
>
>> 2. Where should I have put the money?
>
>Outside Japan. My checking accout has a 1.31% APY. Put the money there.
>
The US dollar is at a 2 year low to the Yen.
http://au.finance.yahoo.com/m5?&a=1&s=USD&t=JPY&c=2
So you would seriously suggest someone put money in US dollars to get a 1.3%
return in the face of a strong possiblity of an adverse movement in the exchange
rate?
(if you don't understand the above, I'm sure Declan would be happy to fill you
in).
Declan Murphy
> On Wed, 4 Jun 2003 11:50:01 -0400, "Kevin ...
>
>>>2. Where should I have put the money?
>>
>>Outside Japan. My checking accout has a 1.31% APY. Put the money there.
>
> The US dollar is at a 2 year low to the Yen.
>
> http://au.finance.yahoo.com/m5?&a=1&s=USD&t=JPY&c=2
>
> So you would seriously suggest someone put money in US dollars to get a 1.3%
> return in the face of a strong possiblity of an adverse movement in the exchange
> rate?
>
> (if you don't understand the above, I'm sure Declan would be happy to fill you
> in).
Actually I don't think I would be. Real exchange rates and hedges are a
bitch.
--
"All FDR undid was the value of the dollar"
Kevin Gowen (really)
Brett Robson
OK we will keep it simple.
1. The yen is at a 2 year low to the dollar.
2. Daily Yomiuri 5 June 2003
"You do not have to be an expert [Kevin] to sense that something big is
happening in the foreign exchange market. Just recently, the Bank of Japan sold
a whopping $20 billion worth of yen to prevent it from becoming too strong
against the dollar."
[of course that will last as long as the money does.]
"The weak dollar may be far from the intended result. It could be, rather, a
market consequence of a runaway US current account deficit, depleted US
household savings and the bursting of the stock market bubble."
Michael Cash
<declan...@hotmail.com> belched the alphabet and kept on going
with:
>hedges are a bitch.
Tell me about it. There are places I drive where people let their
hedges grow out so far into the roadway that trucks are forced to use
about a foot of the opposite traffic lane. Either that or risk busting
a mirror.
--
Michael Cash
"My name is Elmer J. Fudd, millionaire. I own a mansion and a yacht."
Elmer J. Fudd
Millionaire
Declan Murphy
> On Thu, 05 Jun 2003 11:36:06 +0900, Declan Murphy
> <declan...@hotmail.com> belched the alphabet and kept on going
> with:
>
>>hedges are a bitch.
>
> Tell me about it. There are places I drive where people let their
> hedges grow out so far into the roadway that trucks are forced to use
> about a foot of the opposite traffic lane. Either that or risk busting
> a mirror.
Its life Jim, but not as we know it.
Declan Murphy
> On Thu, 05 Jun 2003 11:36:06 +0900, Declan ...
>
>>Brett Robson wrote:
>>
>>>On Wed, 4 Jun 2003 11:50:01 -0400, "Kevin ...
>>>(if you don't understand the above, I'm sure Declan would be happy to fill you
>>>in).
>>
>>Actually I don't think I would be. Real exchange rates and hedges are a
>>bitch.
>
> OK we will keep it simple.
>
> 1. The yen is at a 2 year low to the dollar.
>
> 2. Daily Yomiuri 5 June 2003
But thats the point. Its easy to show that anybody who followed Kevin's
advice of putting the equivalent of 600,000 yen into a checking account
with 1.31% APY in Sepponia as per Kevin's suggestion would have lost
even more money than had it been left in Japan. Retrospective "wisdom"
is like that. Its not so easy to recommend where to invest/deposit now
with a view to four months down the track. Real exchange rates and
hedges are a bitch.
--
Ryan Ginstrom
"Declan Murphy" <declan...@hotmail.com> wrote in message
news:3EDF1845...@hotmail.com...
> Michael Cash wrote:
> > On Thu, 05 Jun 2003 11:36:06 +0900, Declan Murphy
> >
> > Tell me about it. There are places I drive where people let their
> > hedges grow out so far into the roadway that trucks are forced to use
> > about a foot of the opposite traffic lane. Either that or risk busting
> > a mirror.
>
> Its life Jim, but not as we know it.
Tell me about it. Lack of hedges can be a bitch, too. When we first move in
here, the property next to us had this nice, lush hedge. Then the owner came
and razed that sucker, and to top it off the city came and trimmed the line
of trees on our sidewalk. Now that all the cover is gone, I have to at least
wear underwear while I drink beers in the garden or the neighbors will
stare.
--
Regards,
Ryan Ginstrom
Ken
But in Foxy Emma Jane's case, I think it would have been more of a pure
directionality bet, and hence not hedgeable. If hedging were possible
whilst capturing the interest rate differential, arbitraging would
have been possible...
Anyway, a 3-month plain-vanilla AUD call option with a spot of around
70 in early Feb, strike@75 would have gained about 460%. FEJ's JPY
600K could have morphed into JPY 3400K, not a bad return for 3 months.
Of course, she should have been prepared to lose all of her money too,
but that minor detail just adds the required spice and excitement to
unhedged position-taking, isn't it ?
Foxy Emma Jane
> "Foxy Emma Jane" <foxyem...@yahoo.com> wrote in message
> news:3EDDAA06...@yahoo.com...
>
>
>>So I put 600,000 yen in a Japanese Bank's "saving" account.
>>1. After 4 months how much interest had I earned?
>
>
> 2 yen
あたり、ピンポーン
> but if the 4 months were February to June and if you've already
> closed the account then you might not get the 2 yen.
I was thinking of moving the money overseas, but if it
means I will loose all my interest, I may have to think
again!
Declan Murphy
The bank charges for transferring the well earned loot overseas would
exceed 2 yen by a fair margin methinks. If you don't mind risky
investments, just lend it to me :-) Hic.
Michael Cash
>Foxy Emma Jane wrote:
>> Norman Diamond wrote:
>>
>>>"Foxy Emma Jane" <foxyem...@yahoo.com> wrote in message
>>>news:3EDDAA06...@yahoo.com...
>>>
>>>>So I put 600,000 yen in a Japanese Bank's "saving" account.
>>>>1. After 4 months how much interest had I earned?
>>>
>>>2 yen
>>
>> あたり、ピンポーン
>>
>>>but if the 4 months were February to June and if you've already
>>>closed the account then you might not get the 2 yen.
>>
>> I was thinking of moving the money overseas, but if it
>> means I will loose all my interest, I may have to think
>> again!
>
>The bank charges for transferring the well earned loot overseas would
>exceed 2 yen by a fair margin methinks.
The bank charges for just taking the money out and putting in her
pocket would also exceed 2 yen by a(n un)fair margin.
Declan Murphy
> On Fri, 06 Jun 2003 18:49:50 +0900, Declan Murphy
> <declan...@hotmail.com> belched the alphabet and kept on going
> with:
>
>>Foxy Emma Jane wrote:
>>
>>>Norman Diamond wrote:
>>>
>>>>"Foxy Emma Jane" <foxyem...@yahoo.com> wrote in message
>>>>news:3EDDAA06...@yahoo.com...
>>>>
>>>>>So I put 600,000 yen in a Japanese Bank's "saving" account.
>>>>>1. After 4 months how much interest had I earned?
>>>>
>>>>2 yen
>>>
>>>あたり、ピンポーン
>>>
>>>>but if the 4 months were February to June and if you've already
>>>>closed the account then you might not get the 2 yen.
>>>
>>>I was thinking of moving the money overseas, but if it
>>>means I will loose all my interest, I may have to think
>>>again!
>>
>>The bank charges for transferring the well earned loot overseas would
>>exceed 2 yen by a fair margin methinks.
>
> The bank charges for just taking the money out and putting in her
> pocket would also exceed 2 yen by a(n un)fair margin.
Yerright. Forget about touching the money for at last 15 years.
Dale Hicks
> On Wed, 4 Jun 2003 11:50:01 -0400, "Kevin ...
> >
> >> 2. Where should I have put the money?
> >
> >Outside Japan. My checking accout has a 1.31% APY. Put the money there.
>
> The US dollar is at a 2 year low to the Yen.
>
> http://au.finance.yahoo.com/m5?&a=1&s=USD&t=JPY&c=2
>
> So you would seriously suggest someone put money in US dollars to get a 1.3%
> return in the face of a strong possiblity of an adverse movement in the exchange
> rate?
I'm guessing Kevin would advise everyone here to put money into his
checking account. Seriously.
--
Cranial Crusader dgh 1138 at bell south point net