Creation of the Universe-The mystery

An enigma long unsolved mystery, in fact since the dawn of the human race and ever since humans have started reasoning mother nature instead of just enjoying it. How interesting that humans work so hard for the future, thereby failing to enjoy the present . We have been trying to figure out how the universe was created, but never bothered to realize “Why” it was created, or was it ever created, or was it just lying around to be inhabited by us. Were there a more powerful “element” than science; and more powerful “cause” than reason? Who would have thought about creating a universe and bring life into it. s there something or someone far more supreme beyond our wildest imagination who ropes our fate? Like a cell , an atom is to us, is the universe the same to someone out there? Are there living beings somewhere in the universe, who think the way we do, and trying to get in touch with us? If there is something called time warp, time travelling which lets us travel into the past and into the future, if at all this was to be done in the future, does it mean we are just one phase of our entire life? Is our childhood, old age co-existing with our present age? Is someone directing the whole act so neatly that we in our current state walk by our childhood ten times a day without even noticing that? Another dimension which holds our past and future. If this was the case, certainly man should be able to travel through time, or just “feel” that he is in the past or in the future and experience it. Who knows sometime in the future, we might “find” a time machine which was abandoned by a human or an alien from the future there.

At least someone or a group of people might think the way I think. We have been trying to find the answer for the one “Ultimate” question…what happened before the big bang. No one is sure if a big bang ever happened, only to the fact that the universe is expanding constitutes to this theory that it would have started from a single “dot”. Do we have substantial proof that the universe is expanding? The distance being measured in light years and parsec, a magnificent scale to make scientists more comfortable with the calculations. Has anyone sat down for one whole year and measured how much distance the light travels in a year, taking into consideration gravity, force, time and speed which I have discussed later in this article. Say the galaxies are moving away from each other at the rate of 1 light year per decade, how can one be sure that we had calculated the distance correctly a decade ago? It would have been that we would have calculated the distance short by 1 light year a decade ago, may be because we didn’t have the technology to measure it accurately, and this decade we would have calculated correctly, more so, after 10 years we might find the distance to have increased and this could mean that either we would have calculated the distance incorrectly now or the universe Is really moving away. What if the distance is reduced from the current distance? If it does, then will the galaxies collide with each other? Will it be the end? This can be compared to the sling shot, why so? This is because, the rate at which the universe would shrink would be at an extremely faster, may be 100 times, 1000 or even 10000 times faster than the rate at which it expands, just like a sling, which while being pulled towards the person is quite slow, but when released, goes with a bang. This would be the same with the universe, it surely does revolve around the centre of gravity.

Fig 1.1

Mass and distance pay a vital role in the case of power of gravity.

Gravitational pull = Mass * Distance

At times the distance also becomes irrelevant.

No wonder a person can lift a pin from the ground but not a bike against the gravity of the earth. Does this mean that we are stronger than the earth? Not actually, this is because the pin doesn’t have enough mass for the earth to hold onto it.

How is it that the planets revolve around the sun in perfect orbits? May be because, the sun has almost the exact amount of gravitational force to hold on to them at that distance, but why are the planets revolving instead of staying in one place? This could be the same as a ball tied to a stick with a rope. When we hit the ball, it races away from the bat but due to the rope which plays the part of the gravity makes it rotate around the bat and at a point time the string enwraps itself to the bat and the ball is now tied to the bat, so will it be the same case with the planets that they will collide with the sun? Shouldn’t the planets be coming towards the sun, instead of moving away from it? If at all they are moving. No, that would not happen, at least I hope so, two possible reasons could be that either because the planets are in the stage where the ball is just struck by the bat and is moving away from it or that it has attained the farthest distance, but with no tangible rope to pull back these planets, instead of getting wrapped with the sun, they are rotating around it assume the ball is rotated above the stick and not around the body.

Another assumption could be the black holes. Holes which might be holding back these planets against the gravity of the sun, so does this mean that the black holes are stronger than the central planets, the sun in our case? Not necessarily, sun has a big family to take care of, but the same case may not be applicable with the black holes, one or more black holes might be holding on to one planet.

So, this brings another point of discussion, does the gravitational pull towards a body reduces with the number of units it is trying to pull? Is the gravitational force limited from a source? Not necessarily, the gravitational force generated is almost unlimited, not fully unlimited (so the planets might strap out of the gravity of the sun at one point of time), it only depends on the object which it is trying to pull, how much part of the object is exposed to the source of the gravity. This again shows that

Gravitation pull = Mass* Distance

Where Distance = Speed * Time

Therefore, Gravitation pull = Mass*Speed*Time

To give an example for the above, Place a super charged magnet and take an iron rod across it, first slowly and then very quickly. You will understand the implication of the above equation, the first time the iron rod will stick to the magnet, the next time it will escape the magnetic force.

This rule can be applied to our universe as well, but before that, a little bit more about the black holes, how many of us are sure that they are very small in size, considering the fact they have never been spotted, condensed stars or particles which don’t even let light get away from them. Why can’t they be very big burnt out stars, they are assumed to be small because they are black and cannot be seen or never have been in the past, I suppose. Since they say that even light can’t escape black holes, then how did anyone find it?? Only if an object reflects something, will we find out that it exists there. I hope someone doesn’t argue with the example of Air, Air has mass which can be shown and proved.

Again taking the point of gravity and mass, suppose as per the conventional theory that black holes are small, they must have enough size whereby the object can be attracted towards it upon exposure to the black holes. Some say even light doesn’t escape the black holes, things which come into question is that not only the source but also the object should have enough mass to be attracted towards the source. Next question which arises is that, does light have enough mass to be attracted? May be yes, or maybe not, yes because many scientists have proved over the years that it has mass. I agree to it, but does it has good enough mass to be roaming around in the open universe and not get shattered? Be it normal light, laser light or any other light type.

Therefore, Mass of light = Distance*Speed

To explain the above statement, normal lights travel slowly, the reason they get distorted while passing through objects in the universe. Effect of gravitational pull is mass times speed, comes into effect. Laser lights on the other hand travel at a faster velocity when sent from its source, but not necessarily throughout its journey, they will fade out at a point and disappear in the atmosphere, this does not mean that atmosphere has black holes all around, or does it? If black holes did exist, what lies beyond them? Another galaxy, shortcut to another world. So when someone says that even light doesn’t escape and is absorbed by the black holes, may be its merely routed to another dimension or galaxy, only time will tell.

Time? The most mystifying aspect of the whole universe, which holds answers to almost every questions man may ask, “if only I could travel back in time”. Can this be done? May be yes, maybe not or maybe in the future. In fact we do it almost every day, every time we do something faster than the other person, we are travelling ahead in time, why do I say so, that’s because doing something faster than another actually lets you decide the other person’s fate. An example to illustrate this would be an example of a race between a guy riding a cycle with that of a motorcycle. Suppose, they are taking the same route, the guy in the motorcycle races away and if he places a bomb in the path, then he is actually deciding the FUTURE of the other guy, so when one decides the future, isn’t he already ahead in time? Is he God? May be or maybe not, but he surely has travelled ahead in time.

Theory of relativity is a classic example in this regard, thanks to Mr.Einstein. Ever thought of enjoying when your loved ones have met with an accident? Your time will run very fast, simultaneously will their bad time, don’t you think this will help them? So are you moving ahead in time? May be yes..Maybe not.

Another great theory is that of E=mc2, Energy = mass times speed square. A classic example to show how this works is the movement of heavenly bodies and the movement of things within the earth. Ever imagined how much energy is expelled when we run around and that when heavenly bodies move around? Friction is almost ignored when this happens when heavenly bodies move around or is the blank atmosphere with which they react.

Taking all these factors, viz time, gravity, dimensions, planets, galaxies etc, how does it help us to determine or at least assume how the universe would have formed, could only and only be assumed with no definite proof, there would have been something big, unimaginably huge matter, suspended in atmosphere which we call the universe and some 13.7 billion years ago which out of external contraction and lack of space would have blown out itself and formed the universe, or maybe there was no big bang, when it was there, it was as it is now, all the forces in the universe coming together to form what it is now.

Has the universe expanded enough? As per Fig 1.1, if there are galaxies on all sides and if they are expanding, wont they at one point of time collide with each other? This would be the end of the existing universe, and may be another universe would form, maybe this is how our universe was formed. No wonder, people call it a life cycle, with no beginning, no end, it happens over and over and over again. Will this happen this coming 2012?? Then again, only time will tell..if we are there to see it.




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Treasury Market

Treasury- It is the heart of any institution and has almost become the synonym of business. This is the part of the institution that funds the activities of any business. Treasury in recent years have become a business in itself. Banks, Corporate and Financial Institutions(Broker firms, Hedge fund institutions etc) have found it so very beneficial that they have created their own business and exclusive department for treasury. What exactly does it represent? There are many divisions in treasury, the BIG and the main ones are the FX(Foreign Exchange and the Money Market or the deposits department), they also have the Options department. How does it work? Banks, FI(Financial Institutions) and Corporate make use of the fluctuating rates of the currencies from time to time. It goes like this, initially these techniques were used to safe guard them from future adverse changes, but now it has become a profit making technique. Nothing much has to be told about Money Markets as it is as simple as a deposit which we place with the banks. The banks offer different rates to different clients. This may depend on the size, business, popularity, credit-worthiness of the client. Suppose if the client has many business dealings with the bank, he may be offered at an extra interest rate. The main business of any Bank, apart from MM is FX/Options and other client customized products. The products which are created for the interest of specific clients are called STRUCTURED PRODUCTS( suiting to the specific needs of the clients and which are not conventional), but when these products are used by many banks then they become a standard product.
FX and FX Options : FX and FXO’s are the most common types of trades done by banks and are worth trillions everyday, USD 1.9trillion to be exact. The main difference between FX and FXO’s is that a FX trade is an obligation after it is entered until it is cancelled/fulfilled but in an option’s case, it is a right but not obligation on the part of the buyer. A buyer is a person who get the right(not obligation) to exercise the option. The counterparty is called the seller and he doesn’t has any such option, because the buyer has the right over the seller, he pays an amount in respect of that right which is called the premium amount. Please do not confuse between buying the option contract and the buying/selling currency in that FX Option contract. This premium to some extent off-sets the risk of the seller.
FX trades are basically the exchange of one currency with another. When a person enters into a FX trade he might use any of the following products viz SPOT(CASH-settled on the same date of trading/TOM-settled on the next business date from the trade date/SPOT-settled day after tomorrow after the trade date), OUTRIGHT(FORWARD) or a SWAP(it is a combination of a SPOT and FORWARD). Reason why one enters in a FX trade: 1. For want of a foreign ccy. 2.Making profit out of the buying rate and the selling rate.( The speed at which the value of a ccy changes is what determines the profit and loss made out of a particular transaction) The reason for existence of these products are because time plays an important role and for distinction purpose. These products are classified with respect to the TRADE DATE( The date on which the counterparties enter into an agreement). SPOT trades are trades wherein the settlement is done after 2 days from the date of entering into the agreement. This 2 day gap is given for preparation of the documents, funds and to compensate on the time zone difference. FX is a 24hrs market and basically a few major hubs are across the world from where trades are done, they are London, Chicago,Singapore,Hongkong, Tokyo and a few more. Though Spot is meant to settle 2 days after the trade date, these days it is also settled on the same date as the trade date, the reason being banks which trade often with each other already keep the documents(agreements) ready and funds is not a problem for them at all. Time zone differences is taken care in the form of Currency cut-off’s.
A currency cut-off is a time which is decided by the central bank of that particular country for clearing its currency on a particular day(In India it is 12 noon). This means that it will not accept funds to be cleared via its system for that particular day. For example, the cut-off for INR is 12noon IST, beyond which the Reserve bank will not clear payments for other banks. The concept of cut-off is then again ruled out when the payment is going within the same bank(internal account transfer) since the payment is not actually sent to the central bank. Ex: INR going from XYZ bank from party A’s account to party B’s account with XYZ bank, but if party B’s holds account with any other bank then it has to go through the central bank and cut-off’s are to be taken into consideration. OUTRIGHT/FORWARD As the name suggests, these trades are meant to be settled after trade + 2day(After SPOT date). The main idea behind using this product over SPOT is the time gap. This product can be used for a much future date. This product is used when a institution feels that the value of one currency might go up or down, and wishes to make profit out of such change(the exports, imports, external balance(balance of payments) etc of a country determines the value of its ccy). Say for example USD is worth 43rs and because of radical growth in the Indian economy, the value of USD in the near future will be worth only 39rs, then a person can enter into a trade to safeguard his income/expenses with regards to such changes. SWAP: A Swap trade is a combination of both SPOT and FORWARD with all the characteristics.
FXO’s: FXO’s are an integral part of FX, but with a hint a huge diversity. FXO’s are FX Options, I have explained the difference above. There are types in options as well, main of them being Plain Vanilla Options and other types which include Barriers and even more customer focused products which are called Structured products. A plain option(Vanilla) is an option where based on a condition the exercise or expiry of the trade is decided. This is mainly the rate of a currency, viz if a currency reaches a particular rate or not. The condition might be either way, exercising if the rate reaches the pre-agreed rate or exercising if it doesn’t or vice-versa. So, there are 4 possible ways. Though it is said that the buyer of the option has the right to exercise or not, but it has become conventional that the trade is usually exercised if the condition is achieved and expired if not achieved, this is because the attainment of such a condition is usually favorable to the buyer of the option. Two terms used in options are CALL and PUT where call means BUY and PUT means SELL and the trade is always from the point of view of the BUYER of the option. A Barrier option is an option wherein barriers(conditions) are placed for the fulfillment or exercising of such an option. An option with one barrier is called single barrier and one with 2 barriers in called double barrier option. The more barrier, the lesser the premium. The reason being since more conditions are placed and the probability of the trade being exercised becomes lesser, so the risk of the seller is also reduced and hence he is paid less. The premium amount is usually calculated based on many factors , one of the most important being the risk involved therein. Some other banking related terminologies are also listed below: Nostro : Nostro is our currency correspondent. There is a rule which states that a bank in one country is not allowed to directly deal with any other foreign currency, but in the growing treasury market, the need of dealing with other currencies has become unavoidable, for this purpose banks create subsidiaries in that particular country to be able to deal with that currency. This subsidiary is called a Nostro and is an independent entity. One might ask, instead of spending so much money in establishing another entity, why not get linked with a native bank there. It is so that banks prefer establishing a new branch there because of various operational benefits, the convenience of getting access to funds and the reduction in charges etc determine this. Over a long run these charges plus the local customers’ business worth etc overlap the initial cost and it is capitalized on.
SWIFT: Society for Worldwide Interbank Financial Telecommunications. This is an independent organization which helps link banks and to transfer funds from one bank to another bank/client. SWIFT has pre-determined forms of payments which are used for customized purposes. Eg : MT101(to debit a client who holds account with us or any of our subsidiaries), MT103 for client fund transfer, MT202 for bank fund transfer. Cover Payment : A cover payment means when a payment is sent to client and when he holds the ccy account in a place other than the native of that particular ccy. E.g.: If A holds his USD account with XYZ bank in London then USD is leaving its native and hence a cover is sent. It is kind of an assurance that the sending bank will pay the beneficiary’s correspondent in time. Cover payment emphasizes a kind of assurance. CLS: Continuous Linked Settlement, it is another independent organization. This is also a type of settlement wherein when the counterparty wishes to settle the trade via CLS(condition being the counterparty and the currency is CLS eligible) the payment is made to the CLS bank and it in turn netts everything in terms of counterparty and ccy and then makes a singe payment or receives a single amount from the counterparty. The main advantage of CLS is that security and promptness of the payment. Even if the client fails to make the payment, the CLS bank will make the payment and the debit the counterparty’s account.

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Forex in brief – Spot and Forward

Foreign Exchange
I want to go on vacation to London and I need GBP. So I go to the bank and I change my INR into GBP.
A foreign exchange transaction is a contract to exchange funds in one currency for funds in another currency at an agreed rate, and on a agreed date. The agreed rate is the exchange rate, or the price of one currency in terms of the other.
What is a Forex?
A foreign exchange transaction or forex deal exchanges the currency of one country for that of another. It also refers to the actual instruments employed, such as currency, notes, checks and bills of exchange.
Why Forex?
There are several reasons when a forex is used:
· Speculative dealing on mutual currency exchange movements
· International trade
· Repayments on foreign borrowings
· Stabilising domestic currency
The central bank manipulates the economy’s money supply in order to influence the level of economic activity (monetary policy).
When Forex?
Corporate users of the forex markets are normally concerned with covering or “hedging” their foreign currency payables or receivables. However, the great bulk of forex operations is not directly related to international trade or debt rollovers. Most forex deals (about 90 percent) are speculative transactions on behalf of banks. The large profits available through even minor exchange movements are highly attractive.
XYZ BANK acts as intermediary party for its customers and purchases foreign exchange itself. In this XYZ BANK is a market maker in Euro. Besides XYZ BANK hedges its positions in FX options and forwards by buying foreign currency.
Forex types :
Forex spot
A forex spot is a transaction executed at a price agreed today, where one currency is used to buy another currency with settlement in two business days. Another way of expressing this transaction is to see is as a single outright transaction involving the exchange of two currencies at a rate agreed on the date of the contract for value or delivery (cash settlement) within two business days.
FX refers to Foreign exchange and ‘spot’ refers to the fact that settlement is due two business days after the deal is made. In contrast a Forex forward transaction is settled in more than two days after the conclusion of the transaction.
When a company wants to buy dollars, it turns to its bank and the bank takes care of the transaction done at the foreign exchange market. Banks also turn to the foreign exchange market when they hedge their positions resulting from options trading or forward trading.
Quoting exchange rates
In the spot market, a variable number of units of one currency is quoted per one unit of another currency. The convention is that, e.g. the US dollar/Canadian dollar exchange rate is written as USD/CAD if it refers to the number of Canadian dollars equal to one US dollar. The other way around CAD/USD is used if it refers to the number of US dollars to equal one Canadian dollar. The currency code writ­ten on the left is called the “base” currency. The currency code written on the right is known as the “variable” currency (“counter” or “quoted” currency).
When quoting against the US dollar, it is the common to quote currencies in terms of a vary­ing number of units of currency per one US dollar. This is known as an “indirect” or “European” quotation against the dollar. Rates quoted the other way round are known as “direct” quotations against the dollar.
There are some currencies which are conventionally quoted against the USD “direct” rather than “indirect.” The major ones are sterling, Australian dollar, New Zealand dollar, Irish pound and ECU (European currency unit -to be replaced by the proposed Euro). The direct quotation for the Canadian dollar is known as “Canada cross” and the indirect quotation “Canada funds”. In the currency futures markets, as opposed to the interbank market, all quotations against the US dollar are direct.
As in other markets, a bank normally quotes a two-way price, indicating at what level it buys the base currency for the variable currency (the “bid” for the base currency – a cheaper rate), and at what level it will sell the base currency against the variable cur­rency (the “offer” of the base currency – a more expensive rate). For example, if a bank is prepared to buy dollars for EUR 0.8843, and sell dollars for EUR 0.8852, the USD/EUR rate is quoted: 0.8843/0.8852
The quoting bank buys the base currency (in this case, dollars) on the left and sells the base currency on the right. If the bank quotes such a rate to a company or other counterparty, the counterparty would sell the base cur­rency on the left, and buy the base currency on the right – the opposite of how the bank sees the deal.
In the money market, the order of quotation is not important and it does differ between markets. From a quotation of either 5.80%/5.85% or 5.85%/5.80%, it is always clear to the customer that the higher rate is the offered rate and the lower rate is the bid rate. In foreign exchange, however, the market-maker’s bid for the base currency (the lower number in a spot price) is always on the left. This is particularly important in forward prices. The difference between the two sides of the quotation is known as the “spread.”
As the first three digits of the exchange rate (the “big figure”) do not change in the short term, dealers generally do not mention them when deal­ing in the interbank market. In the example above (0.8843/0.8852), the quotation would therefore be given as simply 43/52. However, when dealers are quoting a rate to a corporate client they will often mention the big figure also. In this case, the quotation would be 0.8843/52.
What factors influence exchange rates?
Government policy :
The current and the expected mix of monetary (interest rates) and fiscal (taxation) policy has a powerful effect on the exchange rate. If the government announces a policy change that no one has anticipated, the exchange rate can move very sharply.
Domestic growth :
Strong domestic growth tends to cause a currency to appreciate in the short term. Robust domestic growth raises expectations of higher inflation, and people start expecting that higher interest rates (tighter money) will be necessary at a later stage. A sluggish economy will often have a depreciating influence on the exchange rate.
Over the longer term, strong growth can have the opposite effect on the exchange rate. Economies which are growing rapidly relative to the rest of the world tend to build up deficits on the current account. This exerts downward pressure on the currency at some point. Slow growth economies build up surpluses, and their currencies tend to appreciate over the long term.
Main factors influencing the exchange rate in the long term are:
Relative inflation performance :
A country with persistently higher inflation than its major trading partners will eventually have a depreciating exchange rate (or will be forced to devaluate under a fixed-rate system). Low inflation countries will have an appreciating or ‘hard’ currency.
Government budget deficits and surpluses :
Countries that run persistent budget deficits have to rely on foreign funds to help finance the deficit if domestic savings are not enough. This will put downward pressure on the domestic currency over time.
Random shocks in the economy :
Unexpected disturbances in the world economy can have a substantial impact on exchange rates. Unexpected and therefore inherently unpredictable events will have the biggest impact on exchange rates.
Speculation :
Speculators actually play a very important role in the foreign exchange markets by providing liquidity to facilitate and smooth the conducting of commercial business. Speculators take a currency position hoping to gain from a sudden rise or fall in the currency concerned.
A spot deal is valued at the price paid for the deal. The price paid is the exchange rate. The exchange rate is determined by the market.
The balance-of-payments situation of a country seems to be the most direct determinant for the external value of its currency. Demand for a currency arises from export of goods and services and from capital inflows (or imports). In turn, a currency is offered in payment for imported goods and services and because of capital outflows (or exports). A surplus on the overall balance-of-payments means a net demand for a currency; creating upward pressure. Since items on the current account of the balance-of-payments are of an irreversible nature, it makes sense to judge the ‘fundamental’ position of a currency according to the country’s current account position. Capital flows, on the other hand, are of a reversible nature. E.g. borrowing abroad creates a temporary demand for the currency when the conversion takes place. The repayments will lead to a corresponding weakening of the currency. While economic factors are of decisive importance for determining exchange rates, certainly in the longer run, non-economic factors too may have an influence. These factors can be political and/or psychological or regulations by central banks etc.
Suppose, the USD/EUR rate is quoted: 0.8843/0.8852 and XYZ BANK concludes two deals.
Deal 1: XYZ BANK buys USD 1,000,000 against EUR 0.8843
Deal 2: XYZ BANK sells USD 1,000,000 against EUR 0.8852
Cash-flow analysis
Deal 1
Inflow USD 1,000,000
Outflow EUR 884,300
Deal 2
Inflow EUR 885,200
Outflow USD 1,000,000
Net result
EUR 900
Now, suppose that a dealer needs to quote to a counterparty a spot rate between the Deutschemark and the Ringgit. XYZ BANK does not have a EUR/MYR trad­ing book. The rate must therefore be constructed from the prices quoted by the bank’s USD/EUR dealer and our bank’s USD/MYR dealer as follows: Spot USD/EUR: 0.8843/0.8852 Spot USD/MYR: 2.4782/2.4792
Consider first the left side of the final EUR/MYR price we are constructing. This is the price at which our bank will buy EUR (the base currency) and sell MYR. We must therefore ask: at which price (0.8843/0.8852) does our USD/EUR dealer buy EUR against USD, and at which price (2.4782 or 2.4792) does our USD/MYR dealer sell MYR against USD? The answers are 0.8852 (on the right) and 2.4782 (on the left) respectively. Effectively, by dealing at these prices, our bank is both selling USD (against EUR) and buying USD (against MYR) simultaneously, with a net zero effect in USD. If we now consider the right side of the final EUR/MYR price we are constructing, this will come from selling EUR against USD (on the left at 0.8843) and buying MYR against USD (on the right at 2.4792). Concluding, since each dollar is worth 0.89 Euro and also 2.47 Ringgits, the EUR/MYR exchange rate must be the ratio between these two.
2.4782+1.6879=1.4682 is how the bank sells MYR and buys EUR
2.4792+1.6874=1.4692 is how the bank buys MYR and sells EUR
Therefore the spot EUR/MYR rate is: 1.4682/ 1.4692.
Risks concerning spot transactions
The greatest potential risk with a spot transaction is that one of the parties of the transaction fails to settle the correct amount in time. There is also a risk that one counterparty goes bankrupt between the time the deal is closed and settled. The remaining counterparty might have to re-arrange the deal with another counterparty. In this respect he is exposed to the risks of exchange rates changing in the meantime. In certain situations, such as selling US Dollars and buying Japanese Yen, one currency may be delivered several hours before the other. This creates the risk that the counterparty may deliver on its side of the deal but won’t receive payment from the counterparty in default.
Risks covered
Þ Issuer risk
Þ Juridical risk
Þ Liquidity
Þ Volatility
Þ Maturity risk
Þ Market risk
Risks exposed
Þ Counterparty risk
Þ Forex Risk
Market information
Spot trades are simple, highly standardised transactions taking place in a very liquid market.
Currencies traded
The US dollar plays an important role in the foreign exchange market. This is because the dollar is used as a vehicle for cross-trading between other currencies. For some currencies, almost all trading takes place in terms of the US dollar, the Canadian dollar, Australian dollar or the Japanese yen. The US dollar figures less prominently, in deals involving European currencies.
The Japanese yen is the most widely traded currency. It is involved in two of the ten most widely traded currency pairs. US dollar/Japanese yen trading tends to be concentrated in Asian centres, the United States and in the United Kingdom.
Geographical patterns
The bulk of foreign exchange market trading takes place in a small number of centres, such as the United Kingdom, United States and Japan. Together they account for more than half of turnover in the foreign exchange market. The next four most important centres are: Singapore, Hong Kong, Switzerland and Germany.
There are considerable differences among centres in the scale and composite of the business. The position of a centre depends both on the role of the home currency itself in the international monetary system and on the importance of the country as a trading centre. For example, centres in which domestic currency business accounts for less than twenty percent of turnover (Singapore, Luxembourg, United Kingdom, Hong Kong) have clearly specialised in global foreign exchange trading. In contrast, in markets where domestic currency business accounts for around seventy percent or more of turnover, partly due to the use of the domestic currency as a vehicle and partly to the greater prominence of transactions driven by cross-border trade and financial flows rather than cross-currency arbitrage and hedging.
Banks and the foreign exchange market
Professional foreign exchange dealing requires advanced technical equipment. Business is done by telephone, telex and computer systems. Spot and forward rates of virtually every currency and money market rates are displayed on several monitors supplied by agencies such as Reuters and Telerate.
Exchange rates are quoted directly or indirectly. A direct quotation shows a variable amount of domestic currency against a fixed amount of foreign currency. An indirect quotation shows a variable amount of foreign currency against a fixed amount of the domestic currency. In dealing circles, a direct quote is a quote in which the US dollar is the base curren­cy, while an indirect quote is one in which the dollar is not the base currency.
Bank for International Settlements: the Basle-based organisation grouping the central banks of the ten most industrial nations.
Cash flow: the cash receipts and payments of a business. This differs from net income after taxes in that non-cash expenses are not included in a cash flow statement. If there is a higher cash income than cash outflow, there is a positive cash flow. If more cash is outgoing than incoming this causes a negative cash flow.
Eurocurrency: certificates of deposit (CDs), bonds, deposits, or any capital market instrument issued outside of the national boundaries in which the instrument is denominated (Eurodollar bonds or Eurodollar CD’s).
Hedging: protecting existing or future securities asset by buying or selling forward contracts, repo’s or options.
Inflation: the creation of money by monetary authorities. In more popular usage, the creation of money that visibly raises goods prices and lowers the purchasing power of money. Inflation may be creeping, trotting, or galloping, depending on the rate of money creation by the authorities. It may take the form of “simple inflation,” in which case the proceeds of the new money issues accrue to the government for deficit spending. Or it may appear as “credit expansion,” in which case the authorities channel the newly created money into the loan market.
Liquid market: is one where selling and buying can be accomplished with ease because there is a large number of interested buyers and sellers willing to trade substantial quantities at small price differences.
Money market: a wholesale financial market in which sovereign states, banks and major corporations raise funds through debt instruments with maturities of up to twelve months.
Outright (forex forward): is a deal whereby two parties agree to exchange currencies on a specific future date.
Over the counter (OTC): a general name for any transaction that does not take place on an exchange. An over-the-counter option is a call or a put whose strike price, expiration, and contract amount premium are negotiated between two parties.
Spot: the market in which commodities are available for immediate delivery. It also refers to the cash market price of a specific commodity.

Next year I want to go on a holiday to Spain, so I need EUROS. The exchange rate of the EURO/INR fluctuates very much. To be sure that I can exchange my INR for a lot of EUROS. I make an agreement with someone. We agree that next year I receive a fixed amount of EUROS in three months for a fixed amount of INR.
Forex forward (outrights) transactions are defined as the exchange of two currencies for settlement more than two business days after the conclusion of the deal. Two parties agree with each other to deliver a certain amount of currency in return for an amount of another currency on a future date. In other words a currency spot in the future.Outright forward deals are structurally similar to spot transactions. Once the exchange rate for a forward deal has been agreed, the confirmation and settlement procedures are the same as in the cash market. However, the longer the forward period, the greater the risk that the creditworthiness of the counterparty could deteriorate. Non-standard amounts or maturities may leave the market-maker with exposure that is difficult to unwind immediately, and the smaller number of participants and lower volumes in this sector imply somewhat less competitive pricing.
Why Ourights?Forward transactions can serve a number of different purposes. First of all, by doing forex forward transactions you can hedge exchange risk resulting from a financial transaction.Currency risks can result from the following financial transactions:· Securities investments, money market deposits, loans extended to subsidiaries abroad, direct investments, etc., if done in foreign currencies all represent foreign currency assets· Borrowing in capital markets abroad, for instance, if done in foreign currencies represent foreign currency liabilitiesWhen you do not have access to the forward market you can replicate on outright deal. Suppose a Dutch importer is due to pay euro 500,000 in three months. He has to take the following actions:1. Buy Euro/sell USD spot2. Deposit USD for three months3. Borrow USD to settle spot dealThese three transactions involve three separate dealers which all want their margins. When you use an outright in stead of the other instruments you replace these separate instruments. This reduces costs because you only have to deal with one dealer spread.Other frequent users of outrights are institutional investors. They use these deals to make or liquidate overseas investments. Equity and bond markets have different settlement periods in different countries. Institutions can match the value date of the currency deal to the settlement of underlying investment transaction using the forward forex market.

The forward rate exchange rate can be calculated from the spot rate rate using the following formula:

Forward rate = spot rate *{[1+(v*N/Bv]/[1+(b*N/Bb)]}

v = variable currency interest rate for the period
b = base currency interest rate for the period
N = number of days in the interest period
Bv = day base for the variable currency
Bb = day base for the base currency
Forward prices can only be calculated where money market rates are known. This limits the maximum possible maturity of forward deals in many markets. For example, where inflation is very high, interest rates may be quoted up to three months only. Forward deals for longer periods can not be hedged or priced.

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He sat on the stairs of the overbridge, evening sunlight brightening his then dull face

He sat on the stairs of the overbridge, evening sunlight brightening his then dull face, tears rolling down his cheek, with a smile on his face, hand full of sleeping pills and a bottle of brandy in another hand.Even he was not sure if he was happy that his miseries are going to end or was upset that he couldn’t find a true love.
One month ago, 10am, bright sunny morning, he was waiting for Shreya at the railway station, dressed up like a hero. Minutes passed like hours and waiting for half long hour, he saw her walking towards him, his eyes became brighter by the second and there she went past him and as if someone threw stones at those bright bulbs, both went dark. He was wondering why she ignored him and went past. She got into the slowly moving bus and our her hero followed the bus in his bike.

Shreya was working for a multinational bank and our hero was working for a private company. Shreya was a good looking girl, in her early twenties, bright eyes, eye liners making them look even more bright, long dark hair, medium built and a mix of conventional and hi fi culture. Dressed up so very neatly to prove that she respected the tradition of India and was modern enough to break many hearts, like that of our hero.
Her bus stop came and she got down from the bus and started walking towards her office building, our hero stopped his bike right in front of her and eyes met. She was sending messages to him and it was crystal clear that he had done something very stupid the other day, our hero was clueless as to what she was trying to tell. It seemed to him as if the message was encrypted with 1024 bit encryption code. The staring lasted for another minute and there came bombs like words from her mouth, “You have no sense at all, you are least bothered about me when I’m with you, I have to remind you about everything and how dare you forget my birthday?, that’s it I am through with you!.”
Our, hero was dumb struck, was cursing himself for what he did, actually for what he forgot to do. Running around her like an insect flying around a light bulb at night, was trying to convince her, but she was reluctant to listen to him.
It took him almost half an hour to convince her and by that time she realized that she was getting late for office. She told him she will meet him at 8pm at the coffee shop.
The clock struck 8pm, our guy was there at 7.30pm, not wanting to mess this up again.
The moment the clock struck 8, and there she came walking, as if she was hiding behind the wall waiting for the clock to hit 8. She looked fresh like ever, as if she had just replaced her face with a spare one, freshly made up.
Our hero ordered for 2cups of coffee. It smelled all over the place and our hero was the one responsible for that, he was badly drunk, all because of his office party earlier that afternoon. She smelled it and got up to go when our hero caught hold of her hand and made her sit. He was sure that this could be his last meeting with her and so to save himself, he built up a story to make him look pitiful.Forgettting Shreya’s birthday was the cause for all this.
He started “Shreya, I am sorry that I am drunk, but I didn’t have the courage to tell you what I am going to tell you now, under my senses. Please do not mistake me and I am telling you this only because I love you and do not wish to hide anything”.
Shreya raised her dark thin eyebrows, shooting many questions eye to eye.
Our hero this time, was a bit clear that she wanted more information and explanation. It was as if the alcohol decrypted the code and made him a bit intelligent. He started again, “ Shreya, I met Pooja last night, the day of your birthday and it seems she has left her husband and is living with her parents….and “
Pooja, who a few months ago had married a guy against her wish, was our hero’s first love. Our hero had told a lot about her to Shreya during the initial days of meeting. Shreya, then being a friend of our hero had tolerated him telling about her and made him feel comfortable.
Since now Shreya and our hero were a pair, She never encouraged him talk about her, this situation being no exception, but the alcohol had given him either abnormal courage to talk or made him deaf from hearing what Shreya was shouting about.
After an hour long one sided discussion, our hero told that Pooja needed his support and he wanted to help. Shreya hearing this, got up and walked away, at this stage our hero was in no position to stop her since alcohol had made him dizzy, not realizing what he had done, he lay down and got up only when the waiter told him to leave.
The next morning our hero realized that the story went bad and Shreya who was already fed up with him, decided to break up with him. Weeks passed, our hero tried to contact Shreya but couldn’t. One evening, while returning from office, half lost in thoughts, suddenly came to full strength when he saw someone. Pooja was walking on the other side of the road.
Fifteen minutes later both of them were sitting in a coffee shop and discussing about their lives. Pooja was a bit dull and after enough nagging by our hero , Pooja told him what had happened. Our hero was shocked to hear the same story what he had told to Shreya the other day. He was not sure if he was dreaming or if Pooja had overheard his chat with Shreya.
Shreya who was passing by saw him and both eyes met, this made her even more determined about her decision.
Our hero, for the next few days was so engaged with Pooja’s problem that he totally forgot about Shreya. The few days spent with Pooja were heavenly, and it so happened that he never heard from her again.
Something had happened to Pooja as per our hero. Our hero was very upset and started drinking more and more. One fine day he saw Shreya getting down from a car and another handsome guy accompanied her. He tried to talk to her, but she said that they both were now engaged.
He felt as if a stone wall landed on his head. Shreya had a smirk on her face. Shreya and so called her fiancée went away while our hero was standing like a pole.
A while later He sat on the stairs of the overbridge,evening sunlight brightening his then dull face, tears rolling down his cheek, with a smile on his face, hand full of sleeping pills and a bottle of brandy in another hand. Even he was not sure if he was happy that miseries are going to end or was upset that he couldn’t find a true love.”
Meanwhile Shreya and Pooja were talking to each other and the guy was Pooja’s husband. They had played a prank with our hero. Shreya had met Pooja the other day after meeting our hero and told her what our hero had told. Pooja told that it was not the situation.
Next, day our hero, was standing again at the same bus stop, dressed in white, waiting for Shreya and to his surprise, she went pass him. She was not the usual bright girl, she had lost her charm, he tried calling her but she ignored. He later realized that he was no longer alive, the overdose of sleeping pills and alcohol had taken his life. He was one among the angles………..
He saw another angel fly by and SPAT!!! A pat on his back……a a a his mom was standing by with a cup of coffee and shouting “Dreaming again? “
It was a dream after all….that day was very important….it was Shreya’s birthday!!!!!!

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Raja lay his head on the desk, resting on his hands, a million thoughts…….

Raja lay his head on the desk, resting on his hands, a million thoughts flashing through his mind. Thoughts so fast that he lost his cool, stoop up, banged the table and walked away….the whole team staring at him.
It was 17th July, late in the evening and Raja had just returned from office after obtaining the flight tickets. He was leaving for Australia on an official trip that night along with one other friend, 3 days after the first batch had left. His tickets got delayed due to visa problems.
Raja was in his late 20’s and was working for a Multinational bank as an Executive.
11 pm, Raja checked in at the baggage counter carrying his hand luggage and his laptop to get into the flight. Twenty minutes later he was sitting inside the flight, sitting next was his colleague Amar. Amar was in his early 40’s and was heading this project and was a serious character and acted professionally all the time with least sense of humor at any given time. It was a connecting flight to Australia via Malaysia. Ten hours had passed and now 9am, 18th July, both of them where sitting at the KL international airport, their connecting flight was at 8pm and Raja wanted to use this time by doing anything except sitting with Amar.
Raja requested Amar to take care of his luggage and told he would return on time for the flight to Australia and started exploring the place. Malaysia, to its reputation was full of shopping malls and full of people from around the world. So many people passed him, but one girl caught his eyes. Wasting no time Raja went near her and expressed his interest towards that girl. The girl showing an expression of shock, immediately took her mobile and started typing something. Raja got scared and thought that she was going to call the police. Raja immediately apologized and said he did not mean any offence. The girl then smiled and showed Raja her mobile screen to Raja which read “Hi, thanks for your humbleness, I cannot speak, I am dumb. Still interest? J “. Our hero was even more shocked, not sure what to do, he took his mobile and started typing, when the girl stopped him and again showed her mobile and this time it read “ I can’t speak, but I can very well hear “
An hour later after too much typing and even more talking, they familiarized each other. The girl, to Raja’s surprise was also an Indian, in fact a Bangalorian and was in Malaysia for the shopping festival. She was working for a software company, in her early twenties, fair and depicting the modern Indian culture. Raja had seen many people type quickly using their mobile phones, but she was even quicker, as if she had a software which turned her thoughts to messages. She mentioned that she had lost her ability to speak in an accident a few months ago when a car coming in the opposite direction had hit her vehicle. Both of them agreed not to discuss about the accident anymore. Time passed by and Raja was getting late for his next flight. Excusing himself he stood up and they exchanged e-mail addresses’ and promised to be in touch.
All along the journey Raja was thinking about the girl and was wondering if she would make his perfect life partner and will his parents accept her since she couldn’t speak. After reaching Australia he called up his parents and told what had happened in Malaysia, and to his surprise they were ok with the marriage, Raja was waiting to return to India and meet her and tell her this news, though he never told this over the e-mail conversations which he had over the days. During his stay in Australia, he used to call his friend Shreya, talking to her for hours but never told about his love. Shreya was his college mate and his first love, she was the beauty queen of the college, but Raja never proposed her fearing that he might lose her friendship.
Raja in one of the mail conversations with the girl told that he wanted to marry her. The girl told she was also interested but will have to check with her parents.
The girl, one fine day mailed him that her parents were also fine with the marriage and this made Raja even more eager to return to India.
Taking this girl for granted our hero got busy with work and the number of mails exchanged got reduced. —————————-
Shreya, unaware of Raja’s love life one day sent him a mail expressing her love for him. She had started liking him because he had told her that he lost his hearing ability in the left ear because of an accident while trying to save a girl who also met with an accident at the same time. Shreya though that he saved that girl without worrying about his life.
Raja was a bit shocked and took a few days to reply to her mail, finally he replied saying that he also loved her a lot. It was as if Raja had got an option of choosing a new car and didn’t have to worry about his old bike. He ignored the other girl completely. Raja and Shreya exchanged mails and to show their faith and commitment towards each other even exchanged their passwords.
It was December 6th and Shreya was going through the mails in Raja’s mail box to refresh their love, especially the initial mails exchanged between them… dated as old as 11th September, her eyes became bigger, she had noticed a mail which read “ From: Pooja Hi dear……” .
Shreya double clicked the mail and started reading the mails exchanged.
Shreya went through those mails and was so shocked, Raja had done a job better than a Xerox machine, copying the contents while Shreya re-lived the moments. She felt as if Raja was talking to her in person.
Shreya was dumb struck, she closed the mail box and walked away. Days passed and the exchange of mails continued and she never showed the effect of those mails in her, it was as if her part of brain which read Pooja’s mails was not working or worse, lost.
One fine day, Raja was browsing through the net and a pop up showed a new mail in his Gmail account. He opened his mail box and it read -“Orkut account notification -You have a new friend’s request from Sharada”. Our hero, after all turned out to be a flirt, he opened the website and changed his setting such that to change the profile visits tab to “hide profile visits” and went on to browse through Sharada’s profile and her friends list which was not that big and all of them being good looking girls, he was a bit excited, and was looking at his prospective new lover….though he did not act on the friend’s requested immediately and continued visiting her profile for the next few days, he thought that making her wait will make her think that he is busy and special. Later, one day he accepted her request and sent a formal message telling her that thanks for adding him as her friend and also asked how she came to know about him. Every day he checked his mail box for a reply from Sharada, but was disappointed every time he didn’t get a mail, it was as if she was acting the same way as he did…making him wait and making herself look special.
Raja, as usual opened his mail box and jumped out of his bed in excitement because he had received a message from Sharada. He quickly opened orkut and read through the message almost ten times and was blushing, the dark face glowing red. Sharada had told that she went through his profile and had liked the contents of the various fields. Raja was appreciating his abilities to copy content from others and put it in his own. He quickly typed back and sent a message stating he was happy to hear this from her and looking forward to a great friendship ahead.
A new friendship and love story was in the making, may be third time lucky for Raja and third time lucky for all the girls he had already fallen in love and for those he was going to love in the future.
He received mails from Shreya, but seldom replied, Shreya was also least bothered since she was getting ready for something big, big indeed.
The love between Sharada and Raja was blossoming, in fact moving towards the end. Sharada had once told Raja, that the end of their love story was the beginning of her marriage life and she meant only her marriage life and not their marriage life, Raja did not realize the singleness of the marriage proposal she had made. Raja was a guitar player and Sharada was going to play the strings this time and use the strings to strangle Raja.
Sharada told Raja that she would like to meet him in person and listen to him play the guitar. They both decided that they would meet at 8pm at the pizza place, the one near the Army HQ.
Raja lay his head on the desk, resting on his hands, a million thoughts flashing through his mind, not sure what was he supposed to do during their first meeting and how to impress her. Thoughts so fast that he lost his cool, stoop up, banged the table and walked away….the whole team staring at him.
On the agreed date they both met at sharp 8pm and Raja was carrying his electric guitar. They had food and she told that she would like to listen to him play the guitar in the open, it was already dark and it being a place near the Army HQ was almost deserted.
Sharada said that she needs to make a call and moved a little bit away and took her mobile and opened the music folder, she played the AK47 music file and the china mobile with 8 small speakers was good enough to make it sound like a real gunshot, Raja could not hear this because he had hearing problems in his left ear, all because of an accident a few months ago and also because he was busy tuning the guitar. The security guard who was standing near the fence, after listening to the sound turned, and as it was dark, mistook Raja for the terrorist and the guitar in the dark was looking like a rocket launcher, Raja unaware of this was fine tuning the guitar, playing music for his own death, the guard thought that Raja was preparing the rocket launcher to fire. The guard warned him to drop the weapon, but since Raja had problems listening from one side and also he was very busy fine tuning the guitar, ignored the warning and as if the mobile music was magnified many times, two gun shots in fine tune with each other went straight through Raja’s chest. Raja immediately fell on the floor, blood flowing all over the place. Since it was just after the 26/11 Mumbai attacks, the guard didn’t think much before shooting. Sharada didn’t react much to the situation and came running to him as if she was the one who shot him, Shreya who was standing near the guard also walked to him. She was the one who had told the guard that she was a reporter and had followed Raja whom she had overheard talking over the phone about an attack.
Raja was still alive but fast losing his consciousness. Shreya told Raja which during his last few minutes made him think…..may be he should have listened fully about the accident which the girl was talking about at the KL airport, maybe he should have proposed to Shreya earlier and broken the friendship for good…… a min later Raja lost his life…..
Shreya and Sharada were sitting in a restaurant waiting for another person to come in, with mixed emotions.
Suddenly Shreya smiled on seeing that person. Pooja walked in and her eyes were doing all the talking. She was the girl whom Raja had met at the KL airport. Shreya started talking, Sharada was eager to know why she was a part of this, but had done this after Shreya had told that she would be happy after doing this. Shreya started, “I was going through Raja’s mail box and saw Pooja’s mail and I found that she had lost her speech in an accident a few months ago and in the same accident she also lost her dear friend in the same accident.” Sharada stopped her and continued as if she had read the same mail and knew what exactly happened next. Pooja was shocked to hear this and was wondering how Sharada knew this much. Sharada then told her that she was Isha’s sister. Pooja then started to get it, Isha had died in that accident and in which Pooja had lost her speech. The car which had hit their 2 wheeler was driven by Raja under the influence of alcohol, it turned out that Raja had escaped the suit by bribing the officials and also told a false story to impress Shreya.
Sharada started crying and told “I would have been happy if I had known this earlier, I would have told this to Raja during his last moments…………………
Shreya smiled and started drinking her coffee because she had told this to Raja….
………….. I closed the book, immediately opened my Gmail account, changed my password and took my mobile and sent a message to my love “Dear. I love you a lot! “.

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I think, U think and they think!!! – PART 2

Dominik was cursing the guy sitting opposite to him, cursing only because he was sure that the guy opposite was teasing or thinking stupid about him, Dominik wanted to tell him, “don’t you dare think like that about me”
That morning Dominik and Shreya reached Spencer Plaza and were going around and after enough window shopping they finally settled down at coffee day, Dominik was as usual busy finding out someone who was more beautiful than Shreya and convincing himself that Shreya was in fact beautiful than her, typical lover J. After enough argument as to which tasted better Cremosa or Mahwah without even knowing how they tasted, finally decided to get the former only because it sounded better. Dominik went to the counter and found himself in a big queue evidently all men as if it was a rule that only men had to pay the bill and carry the load. He didn’t mind much because in front of him was a girl and wished to start of a new conversation and it so happened that she had come with a branded jerk who was busy with his magazine at the desk…. He thought, wish at times he could act like a jerk, but Shreya was sweet enough to be made to work. He then got busy watching people placing funny orders and act as If they drank at coffee day everyday…. Many had come for the first time thinking that Coffee day’s logo “ a lot can happen over coffee “ would work great for them ,many hoping that something good happens and a few hoping that something bad happens so that they can get a new girl.

Shreya on the other hand was going through the menu card planning for her next round, when she felt someone come and sit opposite to her, the moment she raised her head, she turned red like a cup of hot lemon tea, she was about to spill herself over when a girl came from behind that guy, a cute girl in fact, Shreya thought, very odd when a girl praises another girl, but Shreya had to admit it, and thought if Dominik sees her, he would be s awed by her beauty as if she knew perfectly what he thought about all the time.
The guy was none other than Raja, Shreya’s UG mate.

Raja: Hi Shreya, how are you?? Remember me?

Shreya (with a heavy voice): How can I ever forget you? I treated you like my best friend and what did you do to me?? I never expected that from you.

Raja: Shreya, just listen to me for minute. Firstly, this is Shalini, my love and soon to be my life partner.
Shalini gave her a humble smile, but didn’t speak.

Shreya: Ah! So you found another one?? No wonder I thought right about u…….

Raja: Shreya…

Dominik got back just as Raja was about to talk…

Dominik: Heyyyyyyyyyyy dude, how are you???

Raja: Im good man, how are you???

Dominik: Doing great man, all thanks to u J…. So who is this cute lady??? 😉

Shreya: Grrrrr… some idiot!!!

Raja (Blushing…): yes man… my fiancée in fact; we are getting married next month.

Dominik: Cool congrats man…Hey I owe you a lot dude, had you not given the letter to Shreya on my behalf, it would have ended long back….. Good thing I did not write my name on it!!!

Shreya: What the hell… which letter are you talking about…

Raja (smiling): The letter which stopped you from talking to me for all these years….. The letter you thought I gave to you, was actually given written by Dominik, he was a scary goat those days, I wonder how he got u finally..

Dominik: Don’t start that again man, those days are gone…

Shreya (Staring at Dominik) : Youuuuuuuuuuu…..

And spat a slap landed on his face, Dominik turned red like another cup of hot lemon tea…

Raja: Hey cool down, its old story… so how are things going on??

Shreya was speechless, she was cursing herself for what she did and for what Raja never did… after a nice chat they left and the moment Raja and Shalini left, Shreya started crying, her white face with tears running down her cheek, she was looking like a cold cup of water with water droplets all around the cup..She was still cursing her that she missed such a nice friend only because of her stupidity…
Dominik convinced her a lot and apologized a lot and they started from there at 05.30pm……. they got into an auto and reached Nungambakkam station….
The clock struck 6.15pm and they got into the train and after the train reached Saidapet, they got a place to sit, sitting opposite was a guy smiling at Dominik for all the wrong reasons….. Dominik knew why he was smiling….
The guy sitting opposite, when the train reached Tambaram, got up to get out of the train, Shreya had got down earlier…. After which Dominik had called her and again apologized to her and wished her “HAPPY VALENTINE’s DAY “. The guy told Dominik “Thank you Sir, I was not smiling at you with a wrong reason, I knew what had happened, after all what I think, U think and they think are all same.”

HAPPY VALENTINE’s DAY!!!!!!!!!!!!!!!!!!!!!!!!!

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I think, U think and they think!!! – Part 1

The clock struck 6.15 pm; Dominik had just reached the Nungambakkam station and was heading home after the last day of training in the office. It was a short but awfully long day comparing the other weekdays, may be because it was a Friday and He was looking forward to the weekend. He knew how eager He was to spend another weekend with his love. Her name was Shreya, in her early 20’s she was the most beautiful girl He had ever seen, hmmm He knew He was sounding like a typical lover, but then , she in fact was the most beautiful girl by many standards. She was doing her final year MBA in Loyala college…His full name is Dominik Aryan and he was working as a business consultant with a multinational company. He joined this product based company recently after a sobbing exit from his old company which was like his second home. He had met Shreya at a UK education convention with big hopes of doing his PG overseas and dropped that idea and started working just to support her makeup kit J, actually to make sure that he stays with her.
He got into the train and managed to suck himself inside the jam packed train, after the train stopped at Saidapet station, a third of the train compartment became empty, as if they were giving free mobile phones to everyone there. He made himself comfortable and saw a young couple sitting opposite to him, hand in hand. The girl was exceptionally beautiful, for a moment his mind slipped off track and doubted if this girl was more beautiful than Shreya, he took another look at the girl and noticed something odd. Tears rolling down her cheek, bringing along with them a hint of powder and cream, they didn’t make much difference because she was still looking beautiful. Thoughts flashed across his mind, a million questions went as to why she was crying, what could have gone wrong, why wasn’t the guy trying to convince her. He was thinking silly about the guy as to his inability to convince her. The train reached Chromepet and the guy whispered something into her ears and she got up to go. She started weeping even more as if that was going to be their last meeting, as if God had sent her a message that they will not meet after that day. After the girl got down, the guy took his mobile and called a number, Dominik was pretty sure that he was talking to that girl and He was in fact correct, He heard the girl crying over the phone. The chat continued for a few minutes and they guy hung up the phone. The train reached Tambaram and the train was empty in a few minutes. The guy was the last to leave and they went in the opposite directions, as he was heading towards the sorrow field and Dominik towards the happyville.
Dominik reached home in another 15 minutes, freshened up , ate his dinner and started fighting with his mobile and was busy messaging Shreya. They decided that they will meet tomorrow at 10 am at Madras Christian College. Shreya reached the college before Dominik did and as if a dog smelling a bone from a hundred meters, she smelled him coming and the moment he was near enough to hug, she turned back and gave a tight hug, a feast to the youngsters around, disgust to the elderly lovers. They spent the day doing all possible things to enjoy life to the fullest extent. The day passed very quickly. It was as if God was watching from above, the clock struck 6.15pm and they both were sitting in the train, tears running down Shreya’s cheeks, Dominik was wondering if God had replaced them in place of the couple he had seen yesterday and it was as if everything was becoming clear to him and he got the answers for all the questions which went through his mind yesterday and he realized what could have possibly gone wrong with the couple , also he was cursing the guy sitting opposite for the way he was smiling and knew what he was thinking……..
To be continued…………………

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