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To: Jim Willie CB who wrote (45824)	1/4/2002 4:56:42 PM
From: Sully-	Read Replies (2) \| Respond to of 65232

I heard there is some US bank exposure, but it is spread over a few of the larger ones. Even if there is fairly significant exposure, it will be written off as a one time event & it will not affect 'Pro Forma' earnings. <g/ng>

To: Jim Willie CB who wrote (45824)	1/4/2002 4:58:22 PM
From: Sully-	Read Replies (1) \| Respond to of 65232

Service Merchandise going out of business NASHVILLE, Tenn., Jan 4 (Reuters) - Bankrupt retailer Service Merchandise Co. Inc. (OTC BB:SVCD.OB - news) on Friday said it will close all of its 200 stores and eliminate half of its 1,000 corporate employees as the U.S. recession and fallout from the Sept. 11 attacks crippled the chain..................... biz.yahoo.com

To: Jim Willie CB who wrote (45824)	1/4/2002 5:05:26 PM
From: BirdDog	Read Replies (3) \| Respond to of 65232

I wonder what the US Bank exposure is? I don't know how good this info is. When Argentina fell and the President resigned. CNNfn had one "expert" on talking about how it didn't affect our markets. They were wondering why? This guy said that our banks that have exposure to Argentina were expecting this. They were already well hedged. So the actual news was a non event. ????? BirdDog@OhHomeOnTheRange.com

To: Jim Willie CB who wrote (45824)	1/4/2002 5:44:57 PM
From: Sully-	Respond to of 65232

Argentine devaluation plan headache for U.S. banks By Mary Kelleher NEW YORK, Jan 4 (Reuters) - It's deja vu for U.S. banks in Latin America: Argentina's plans to devalue its currency could leave them with a bundle of bad loans as the country's financial crisis widens, analysts said. An expected devaluation of 30 percent or more in the peso means cash-strapped Argentinian companies will have to scrape together more money to repay dollars lent by U.S. banks. The government also has pledged to convert smaller loans of perhaps under $100,000 into pesos, so banks could get less money back. And at the same time that they are receiving pesos, banks still must return deposits in dollars. The fall-out could be substantial. U.S. banks held about $21.28 billion in Argentinian debt as of the end of September, according to recent data from the Federal Financial Institutions Examination Council (FFIEC). About 90 percent of U.S. banks' commercial loans in Argentina are in dollars, J.P. Morgan Chase analyst Catherine Murray estimated. ``It's an incrementally difficult situation with a devaluation,'' Murray said. ``Over time, and it may take months or quarters, the pressure to service the debt may cause defaults...If there's economic difficulty, and or greater difficulty servicing debt, the borrower will have incremental trouble, either because there isn't as much business activity or it's 30 percent more expensive to service dollar debt.'' The crisis brings back bad memories of the 1980s, when Mexico shocked its bankers by announcing the need to restruture its debt. Mexico later devalued its currency in 1994. Then, in 1998, a budget crisis and currency turmoil in Brazil created grave concerns about bad loans at U.S. banks, although some banks in fact made foreign exchange trading gains then. Aides to Argentine President Eduardo Duhalde have said the peso could by devalued by around 30 percent or more, but the president has not specified the size of devaluation. ``It's not life-threatening but it could cause some significant lowering of expectations for this year,'' Prudential Securities analyst Michael Mayo said of the impact on banks. Argentina's economy has been in upheaval for a while, so U.S. banks have been braced for possible problems there and mostly hedged against possible trading and loan losses, analysts noted. Analysts also said any possible bad loans would not excessively burden U.S. banks involved in the area, given the massive size of their balance sheets. Still, some of the biggest U.S. players in Argentina, including Citigroup (NYSE:C - news) , J.P. Morgan Chase & Co. Inc. (NYSE:JPM - news) and FleetBoston Financial Corp. (NYSE:FBF - news), are owed hundred of millions of dollars in the country. J.P. Morgan Chase, for example, has $300 million in Argentinian corporate debt and another $600 million in trading-related debt, a source close to the matter said. Citigroup has not itemized its exposure but Murray estimated the company has about $600 million in Argentinian debt. ``It's not good,'' said Ray Soifer, a former bank analyst who runs his own consulting company. ``Primarily it will affect banks that have depositors in pesos who borrowed in dollars.'' Salomon Smith Barney on Friday lowered its rating on FleetBoston, which has long-standing roots in the country, saying concerns about its exposure to Argentina would hurt the stock. FleetBoston's management indicated recently operations in Argentina would be break-even in 2002 but Salomon analyst Ruchi Madan forecast in a research notes problems there could hurt earnings by 5 or 10 cents a share. Spanish banks are also on hook for billions of dollars in Argentina. Spain's biggest bank, Santander Central Hispano , said on Friday it had $7.1 billion of loans outstanding in Argentina and $6.1 billion in deposits. Its rival Banco Bilbao Vizcaya Argentaria also has substantial exposure. Spain has invested about $30 billion in Argentina over the past decade. biz.yahoo.com