QP Prices First US Property Put Options

Vancouver, BC: July 28, 2008: Pursuant to the ongoing turmoil and confusion governing the depth of the crisis inside the US real estate market, Quote Platform Syndicate Inc. (“QP”) is now pricing hedge contracts for commercial and residential property-based corporations involved in urban projects. The hedge contracts allow developers to offset the risk of adverse movements in post-project-completion selling prices for condominium units; the hedges can be obtained via a put option or via an insurance coverage on a pre-agreed floor (selling) price.

 

Initial deals for high quality residential condominiums in San Diego and San Francisco, for example, have been priced at 3% per annum with a floor price determined at a level 10% lower than the last public transaction prices in similar developments. The put option or insurance is generally available over an 18 month period.

 

Like for any buyer of options, the developer can simply walk away from the transaction by foregoing the premium paid, in the event that the real estate market trends higher in forthcoming months.

 

QP is part of an international group of risk buying syndicates located in centres (like Mumbai, Singapore and the Middle East) where the process of wealth creation has reached unprecedented heights in recent months. QP’s principals have an extensive record of pricing derivates and insurance transactions in numerous emerging markets.

 

Since QP’s offering of US property risk contracts is premised on the appetites and perceptions of risk syndicates canvassed on a deal-by-basis, the pricing of options and insurance is directly related to the type of credit quality property developers want to accept; sub-investment-grade syndicates will naturally offer better rates and floors than their investment grade counterparts.

 

More updates on prices and on concluded transactions will be posted on QP’s website on an ongoing basis. For more information, contact:

 

Director, Risk Pricing

Quote Platform Syndicate Inc.

3080 River Road

Richmond BC V7C 5N2 Canada

 

www.quoteplatform.com

www.uniqueanalysis.org

 

Blaming Oil on Speculators. Ignorance is Bliss, Indeed.

 

In the latest exercise in populism, senior Democrat Senators are pushing legislation to control futures market speculation. And commentators on the Right and Left are joining the bandwagon in a hurry. “It is insane to let gamblers magnify the effect of anticipated changes in supply and demand, that may not materialize, by buying and selling oil futures,” declared FOXNews contributor Dick Morris yesterday in an email blast. “Oil is just too important strategically and economically to allow that kind of speculation.”

 

This focus on speculators relies entirely on the exponential increase in volumes on the futures markets. Beyond that, few facts are in the public domain, and it is doubtful if Senators Chuck Schumer and Harry Reid had any comprehensive analysis of the futures exchanges in hand prior to proposing new laws. In fact, leaving aside speculators for a moment, nobody in Washington is actually aware, with an acceptable degree of precision, of how much oil is produced or consumed on a daily basis. While output numbers are hopelessly impaired due to the lack of quality international-level audits, consumption statistics from the developing world are seriously flawed. Furthermore, the true impact of deeply embedded oil-related subsidies, in countries like India and China, has been grossly underestimated.

 

Adding to the sorry absence of factual applications are a few other fundamental considerations. Firstly, lawmakers and self-styled oil experts in Washington are failing to recognize, and disclose to the American voter, the huge gap between the demand, for petrochemical products on one hand and the constraints imposed by existing refining capacity other. Secondly, it is quite apparent that nobody wants to study the balance sheets of private, listed and government-owned multinationals; the fine print in the financial statements will show that strategic issues like the timing of oil exploration and oil exploitation are resolved strictly within a corporate, i.e. capitalist, framework, without any allowances being made for public interest benchmarks. By conservative estimates, well in excess of 350 million acres of oil and gas concessions around the world are presently lying dormant; this figure does not include offshore licenses or the vast resource in the Siberian hinterland.

 

I personally am responsible for making ongoing prices on oil and gas derivatives, and I take into a few other facts when making determinations of future prices. I take into account the fact that the most strategic of geographical locations, the Straits of Hormuz, can turn into a war zone at short notice, at the whim of Iran. I do not ignore the fact that oil flows in Africa and Central Asia are directed by corrupt governments, not be commonsense or reason. I am aware that the heavily skewed distribution of oil wealth, in Saudi Arabia and Libya for example, has created the foundations for social upheavals at some point in forthcoming years. Lastly, the developing world’s economic powerhouses can alter the oil and gas matrix quite rapidly, by simply changing subsidy rates.

 

So, as I am asked every day, where are oil prices headed?

 

Remember that my organization is neither a producer nor a consumer. Our job is to speculate, daily; a job made easier by our knowledge that there is an abundance of empty rhetoric and a paucity of facts.

 

But we are unable to assess the price of oil if speculators like us are driven out of the marketplace. And nobody outside the speculative arena can present a credible assessment either. It is dangerous to pass legislation founded on unsubstantiated theory.

 

To conclude, people like me trade in a sea of ignorance, where boldness, and the willingness to take risks, is a more durable quality than engaging in either reckless blame games or armchair intellectualism.

 

All that said, there is an answer, a sustainable solution: the end of private capital altogether. That solution will not only sort out oil, but also food, and poverty and marginalization.

 

QP Offers Structured Property Risk Hedge Deals

 

July 12, 2008, Vancouver, BC: Quote Platform Syndicate Inc. (“QP”) announces the launch of structured hedge contracts for developers, investors and speculators seeking to offset risks inherent in the US property marketplace. Friday’s collapse of Pasadena-based mortgage lender IndyMac and the sharp decline in the share prices of Fannie Mae and Freddie Mac are both ample evidence of the fact that the US real estate sector has failed to come to grips with flawed appraisals, overly aggressive property valuations and unrealistic, even unsustainable, spreads over benchmark interest rates.

 

 As politicians struggle to find solutions to the ongoing crisis in sub-prime debt, hundreds and thousands of pending projects need to be supported by downside risk coverage. QP is now offering such risk coverage on a selective basis. Such risk coverage will include put options on floor sale prices, interest rate swaps governing borrowings and insurance contracts to offset the risks embedded in pre-completion sales. The risk coverage is now available to counterparties in instances where a mutually acceptable credit risk can be ascertained.

 

QP wishes to clarify that the pricing of hedge deals will be derived from the risk appetite of dedicated risk buying syndicates, established on a deal-by-deal basis, as opposed to the use of any actuarial or option pricing models. In this regard, QP has determined that there are substantial risk placement windows, if the correct risk-reward balance can be achieved.

 

QP is part of an international network of private equity groups engaged in financial and insurance derivates, in particular derivatives relating to business risks in the developing world. QP’s principals have extensive experience in pricing and trading third world risks over three decades.

 

 

For more information, please contact QP’s office in Canada:

 

Quote Platform Syndicate Inc.

3080 River Road

Richmond, BC V7C 5N2 Canada

 

  www.quoteplatform.com

  www.uniqueanalysis.org

 

 email: derivatives@shaw.ca or corporateinformation@shaw.ca

 

Quote Platform Initiates ME Risk Offset Contracts

July 08, Vancouver, BC, Canada: Quote Platform Syndicate Inc., a specialist financial services outfit pricing political, trade and currency risks for the emerging markets, is now offering a range of tailor-made hedge contracts for corporations engaged in business in the broader Middle East. Risk-offset mechanisms will be structured for short and medium term maturities, depending upon the level of credit risk which can be secured between the contracting parties.

 

In recent months, Quote Platform has tested its pricing matrix in relation to (1) trade deals between India and Iraq, (2) discounting of Iran corporate risk and (3) real estate securitizations in Lebanon. A synthetic programme to test currency and interest rate swaps for the Gulf region has also yielded quotable price parameters.

 

Since Quote Platform’s pricing matrix fundamentally entails the creation or identification of risk buying syndicates, as counterparties, the availability of political risk insurance coverage has to be ascertained on a deal-specific basis. At this juncture, indicative 1-year political risk premiums for Iraq and Iran are 12% and 18% respectively; the premium for Iraqi Kurdistan is in the 7-9% range. A 2-year transaction political risk deal for Pakistan was recently concluded at 8% per annum.

 

Of course, given the chaotic pricing conditions in the debt markets, the largest number of inquiries relate to the offset of risks inherent in debt securitizations originating in the developing world, in particular the risk of a degradation of the securitized assets.

 

Quote Platform’s principals and partners have been involved in engineering financial products and arbitrage opportunities emerging markets for almost three decades.

 

 

For further information, contact:

 

Rakesh Saxena, Director

Quote Platform Syndicate Inc.

Canadian office: 3080 River Road

Richmond BC V7C 5N2 Canada

http://quoteplatform.com

http://uniqueanalysis.org

email: crossborderreports@shaw.ca and derivatives@shaw.ca