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Robin Hood Tax

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  1. #31

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    Following the issues with the wrong way bet it would appear Cathay 'changed' their strategy to one of hedging, which would suggest that previously they were betting on which way fuel would go.

    “Now, we have a policy which is very clear and is based on hedging seeking to do two things: one is to smooth out the peaks and troughs a little, in other words volatility management, and the other is sustainability management. That is to make sure we either buy or have options to call fuel at no more than our estimated break-even fuel price.”

    Happy to be proved wrong if you have evidence that the Cathay strategy before the time of the losses did not 'tinker' with forward bets based on their view of forward oil prices.


  2. #32

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    Original Post Deleted
    The only evidence I can find is that Cathay changed their strategy to a hedging strategy which indicates that before they were speculating.

    Please let me know what aspect of a forward contract I have mis-understood.

  3. #33

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    Original Post Deleted
    1) As part of a hedging strategy to reduce volatility/risk to allow a more stable income/expenditure.
    2) A punt on the future value believing you have more accurate knowledge than the market

    Option one will not over the long term result in a net profit or loss, option two can.

  4. #34

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    The mechanism hasn't changed just the strategy


  5. #35

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    Let me get this right so we should take money away from hard working citizens/corporations for every transaction they do and give it to the government?

    Who do you think the banks are going to pass this fee to?

    Government will have this huge pile money and we all know how efficient the government is with money, when these banks make some crazy "speculations" and lose the government will bail them out.

    The consumer/little guy always gets screwed in this they are forced to go into the markets with sharks and hope that in 20 years they are at par/beat the market. Fund managers do not care if they make money or not as long as they get the MER.

    I think we should let the free market/people make their minds up to do with their own money instead of government intervention in MPF, Deposit insurance, and all these bailouts.


  6. #36

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    ah just to say, this 'robin hood' tax is essentially the tobin tax (Tobin tax - Wikipedia, the free encyclopedia) which has two versions (on currencies only, on all financial transactions)

    some countries actually tried it...have a read you all before you comment any further


  7. #37

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    Original Post Deleted
    Obviously an airline is not going to be very public with its finance strategies but the fact that they change the forward buy options based on the way they feel oil prices move means they are betting on oil prices. You probably call that hedging - I would call that betting (with some degree of hedging). They are looking to gain an advantage over rivals not purely reduce volatility. If there are any upside considerations it is a bet

    Cathay Pacific, Hong Kong's flagship carrier, is hedging 35% to 40% for the 2010-11 financial year compared with 50% a year earlier

  8. #38

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    Original Post Deleted
    That's an elegant way to put it. Well said.

  9. #39

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    A small amount of sand in the real engine is a small price to pay to get rid of the huge, noisy and totally useless gambling machine which now all but drowns out the real engine.

    luckycat likes this.

  10. #40

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    Quote Originally Posted by PDLM:
    A small amount of sand in the real engine is a small price to pay to get rid of the huge, noisy and totally useless gambling machine which now all but drowns out the real engine.
    I have yet to see any evidence of this gambling machine you assert though. Where is it?