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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: Sharp_End_Of_Drill who wrote (76924)	10/23/2000 10:46:08 AM
From: SliderOnTheBlack	Read Replies (1) of 95453

RE: Greenspan on Derivatives & a LTC-esque banking collapse ================================================================= Greenspan, Summers want protection for banking system 5.19 p.m. ET (2219 GMT) October 20, 2000 WASHINGTON — Federal Reserve Chairman Alan Greenspan and Treasury Secretary Lawrence Summers urged Congress on Friday to pass legislation they said would reduce risk to the nation's banking system should a major financial institution go bankrupt. The bill would allow a company in bankruptcy and its creditors to net out their losses from derivatives contracts, rather than have the contracts tied up in bankruptcy proceedings. "We believe that this is a rare opportunity for government to take an important, tangible step to mitigate systemic risk and improve the integrity of our financial system,'' Greenspan and Summers said in letters to House and Senate leaders. The provision also is included in broad bankruptcy overhaul legislation that President Clinton has said he will veto. Greenspan and Summers urged the leaders to pass the provision as a stand-alone bill before Congress adjourns. "It would reduce the likelihood that incidents such as the near-collapse of Long-Term Capital Management in September 1998 would pose a broader threat to our financial system,'' they wrote. ^ ================================================================== Gee; now "WHY" would Greenspan & Summers want "protection for the banking system" here - with Wall Street pouring money into the "Financials" as being so undervalued & so fundamentally strong ? ... two "Keyword/Concepts" - "derivatives" - "LongTerm Capital type collapse" Yes; he is not only aware.... he understands why Rubin "got - while the getting was good".... & probably wishes he would have cited some nebulous "health reasons" & retired himself.... because his legacy is not going to go up in smoke; it's going to go down in flames.... bank on it. tic toc ~ piece by piece, the picture falls into place. ...the market & investors are in the "Denial" stage... very dangerous as it sets up the "trap door" that leads to the "Capitulation" phase - as bulls who just got whipsawed here; throw their last gasps of capital back at what they perceive as yet another all to easy & obvious; October selloff - automatic DCB buying opp... Is it this hard to see - that it just isn't - "this easy" ? The realization of the first now near perrenial "Black October" market meltdown DCB - that doesn't "bounce" will soon set in. ...500 up & 700 down; 2 steps forward, but 3 steps back - of this "Bears" are born, or at least finally acknowledged ~ Now Greenspan & Summers formulating steps for "plausible deniability" & wanting to finally address the "derivative risk in the banking system" - HERE & NOW ?!?!? - when all is so well ? .... gee; whodathunkit ?

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