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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (1562)	10/18/2003 4:36:20 PM
From: Haim R. Branisteanu	Respond to of 110194

Would like to explain why I am using such harsh words with respect of the Major Banks. Take an example of Joe who is a widget manufacturer and tries to deliver best quality products to his clients. He is also a cautious business man trying to lower uncontrollable risks. About 55% of his widget content comes from Europe. Due to FX volatility he entered into an agreement with his clients that money will be wired when the goods from Europe arrive to achieve price stability. Friday he was advised that the import documents arrived he waited until 10 AM after the release of the economic statistics to pay them. At the same time he requested transfer by wire from his clients which arrived after 3 PM Friday, as planned. He took the precaution to transact AFTER economic news were released, asked for a wire transfer from his clients what else can he do? ON the $5 million transaction he lost close to $65,000 in one day - why ? because he paid to his suppliers at 10 AM with the EUR trading around 1.1550 but when the wire from his clients arrived at his bank after 3 PM (due to FED regulations could not use the funds before) at that time the EUR was 1.1680. So who stole the $65,000 from a decent prompt paying manufacturer? no other than plain Criminals. How many average salaries this amount represents ? How many people could make a living from $65,000 which evaporated in one day, due to speculative activity. Further around 15% of his profits evaporated in one day even that he tried to be cautious If I would engage in such swindle or thievery I will sit in jail but big commercial banks get away unscathed.