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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (21573)	8/24/2007 5:34:24 AM
From: elmatador	Read Replies (1) \| Respond to of 217927

I agree that "scheming who which relationships will live". First the gangrene is cut, like Lehman did. This disguises the and deflect the attention which preempts seeing where are the weak assets while officialdom is called for support. This is done wrapping up the fate of the party-goers with the overall economy. Then comes the write offs. Then the chase for the scapegoats to be paraded in front of CNN cameras. Then there will be the sad stories exposing the maladies, the bad guys, the excesses... But certainly this no interests you. You are interested in what the landscape looks like after the smoke and dust seetle and air clear up after Kaboom! It will be decoupling. That moolah ended up being productively invested elsewhere.

To: TobagoJack who wrote (21573)	8/24/2007 9:56:33 AM
From: elmatador	Respond to of 217927

In Jan. 07 1st) Big risks to global economy 'receding' By Chris Giles in Davos Published: January 30 2007 02:00 \| Last updated: January 30 2007 10:33 Lower energy prices and a more stable US housing market have diminished risks in the global economy to the point where the world now has the "luxury" of worrying about mispriced financial markets, according to the new first deputy managing director of the International Monetary Fund. John Lipsky told the Financial Times that financial market risks - including general high asset prices, an explosion of structured finance or unwise trading in the yen - were "less pressing than those we worried about a few months ago". "Now, (Jan. 07) awe have the luxury of worrying about these other issues," he said. ELMAT: TJ! Sacre Bleu! Do you trust that guy to advise you? Mr Lipsky, former vice- chairman of JP Morgan investment bank and a long-standing optimist on financial markets, is now the most senior US official at the IMF. He is radically reshaping the fund's thinking on financial market issues, something that has come as quite a culture shock for the more cautious IMF staff. At the World Economic Forum in Davos last week he expressed far less concern about financial market risk than the consensus. "Dramatic changes in global financial markets continue to be supportive of the global economy," he said, adding that the explosion of lending to emerging economies provided a strong discipline on borrowing governments to perform: "Good policies get rewarded." Mr Lipsky was not concerned about the weakness of the Japanese yen, which could be caused by the "carry trade", heavy borrowing in Japan to buy higher yielding assets elsewhere. "This is a subject, like asset bubbles, that is easy to talk about, but there is something structural in the net outflow of Japanese saving," he said. "Over the period of deflation, Japanese savers did not invest abroad. Accumulation of reserves was then a proxy for unusual savings. Now, interestingly, savers have shifted their preferences to non-yen assets. If so, [perceptions of a carry trade] must be a transition." Mr Lipsky is also changing the tone of the fund's comments on global trade imbalances. Far from being an imminent danger to the world economy, the imbalances should be thought of as the corollary of remarkable strength in the global economy over the past five years, he said, and policies were moving in the right direction. The US fiscal deficit was falling more rapidly than expected, Europe had enjoyed greater economic strength, some oil exporters were investing in production capacity and beginning to spend oil revenues, Japanese consumption was growing and the clear strategy of the Chinese authorities was to boost domestic demand, Mr Lipsky said. With everything looking much more positive, Mr Lipsky is confident that reform of the IMF can proceed. "The mindset has shifted somewhat," he said. "The challenge is not to stave off imminent risks but to take advantage of the benign environment in terms of institutions, policies and results." One of the reforms particularly close to his heart is to improve the fund's analysis of financial markets and their interaction with the wider economies of countries the fund monitors. This would involve "forging a new understanding of financial markets and their role in the global economy and making financial analysis an integral part of fund analysis". In the longer term, Mr Lipsky wants to ensure financial markets are put at the centre of all the fund's work, including crisis prevention and resolution. ELMAT: My God, Mr. TJ! They really ensured crisis prevention!! "We need to think of techniques that work with the grain of financial markets to limit the scope of crises that do occur," he said. "To accomplish that, it can't be business as usual."

To: TobagoJack who wrote (21573)	8/24/2007 9:57:47 AM
From: elmatador	Read Replies (1) \| Respond to of 217927

today same guy 2nd) IMF warns of risk to global growth By Krishna Guha in Washington Published: August 22 2007 00:37 \| Last updated: August 22 2007 00:37 Turmoil in the financial markets will affect growth worldwide, John Lipsky, the number two official at the International Monetary Fund, said on Tuesday. In the first interview by a senior IMF official since the market turmoil intensified, Mr Lipsky, a former senior banker at JPMorgan, told the Financial Times: “This undoubtedly will dampen economic growth.” He said that emerging markets had so far withstood the challenge well, but added: “It is far too optimistic to assume there will be no impact.” ELMAT: He is salivating for a 'saving' operation to rescue the IMF!! Mr Lipsky, first deputy managing director, said that in addition to the possible spillover effects on trade of weaker growth in the US, other economies would be directly affected. “I would expect it to have some impact . . . in a globalised world,” he said. “A number of the financial institutions that have been affected most strikingly have not been US-based.” Mr Lipsky said that it remained unclear how large the impact of the market turmoil would be. “Whether the dampening is substantial or moderate, whether it is temporary or more extended, remains to be seen.” The world economy, he said, had entered this market turbulence in good shape, with strong growth momentum, a large part of which came from emerging market economies. Mr Lipsky said that problems in emerging markets as a whole – as opposed to individual economies – had tended to follow instability in developed markets. However, emerging markets were “almost universally” better equipped to deal with these strains. Their economic performance was strong, the structure of their financial systems had improved and their policies were better. “It would be foolish to assume that they will be immune from some serious strains in developed markets,” he said. “But their ability to withstand these strains may be better than in the past.” Mr Lipsky warned there would be no quick end to the turmoil because of uncertainty as to how much damage it would do to growth. “This will create a feedback loop that means it will . . . take some time for markets to restore a normal amount of volatility.” Mr Lipsky said that the market crisis had three main components: first, a repricing of credit risk; second, a testing of the newer parts of the asset-backed securities market – in particular collateralised debt obligations and collateralised loan obligations (derivatives backed by pools of credits) that have not yet been tested under strain; third, increased fear of counterparty risk, caused by inadequate transparency on the part of banks as to the extent of their true contingent liabilities. “Lack of transparency can create doubts that translate into market volatility,” he said. “We are finding that in some cases regulated financial institutions are carrying off-balance-sheet risks that have indirect implications for those institutions.” Mr Lipsky said this had caused uncertainty about what risks a counterparty institution might be bearing and, in turn, contributed to the drying up of liquidity in parts of the markets. He said “lessons would be learned and actions taken” by global regulators. However, while many market participants appeared to have lost confidence in their counterparties, Mr Lipsky said the risk transfer mechanism through bilateral derivative contracts seemed to be working so far. “There have been no counterparty failures,” he said. “There have been traditional failures by people who made a bad investment.” If there were counterparty failures, he said “that would create greater strains in the market”. The senior IMF official added that one big difference between the current episode and the financial crisis in 1998 was that, in 1998, the risk transfer mechanisms that came under strain had been designed to transfer interest-rate risk, whereas the mechanisms being tested now were designed to transfer credit risk. Mr Lipsky said it was not the IMF’s job to judge whether credit rating agencies had done their job well. However, he added: “The basic issue is that, in the end, professional investors bear the ultimate responsibility for risk assessment and management in a securitised market. It is not realistic to expect third parties to take that responsibility.” ? Russia has nominated Josef Tosovsky, a former Czech central banker, to head the IMF, board sources said on Tuesday, Reuters reports from Washington. The Russian move pits Mr Tosovsky against Dominique Strauss-Kahn, the former French finance minister, who is the European Union’s choice

To: TobagoJack who wrote (21573)	8/24/2007 11:58:21 PM
From: energyplay	Read Replies (1) \| Respond to of 217927

Saving the commercial paper market - Fed says banks can loan against ABCP - Conde Nash Portfolio blog- portfolio.com An informative blog article Actual source blog - nakedcapitalism.com *************************** As a result, the Fed has now taken what (for it) is a novel step, that of allowing banks to use investment grade ABCP, as it is known in the trade, as collateral. Greg Ip at the Wall Street Journal explains: In another step aimed at unfreezing the commercial paper market, the Federal Reserve Bank of New York clarified its discount window rules with the effect of enabling banks to pledge a broader range of commercial paper as collateral. Under the clarification, issued verbally by New York Fed officials to market participants in the last day, banks may pledge asset-backed commercial paper for which they also provide the backup lines of credit. "This strikes us as a very big deal," said Lou Crandall, chief economist at Wrightson-ICAP LLC....The clarification, he said, means if an issuer is unable to sell an entire portion of its paper, the bank providing the backstop can finance the unsold portion with a discount window loan, backed by the assets underlying the paper. "We are comfortable taking investment-quality asset-backed commercial paper for which the pledging bank is the liquidity provider. This is a clarification of something that has become, over time, accepted practice at the Federal Reserve Bank of New York," said New York Fed spokesman Calvin Mitchell..... Several market sources however interpreted the action more as a change in, than a clarification of, policy. "Previously banks could not post such ABCP as collateral, that is ABCP for which the bank is a liquidity backstop," said Michael Feroli, economist at J.P. Morgan Chase, in a note to clients. "While reluctant to characterize this as a major change in direction, our contact at the Fed noted that this measure was a means to 'insert flexibility' in the way the window deals with evolving needs," Mr. Feroli wrote. Another sign of how seriously the Fed is taking this matter is that it has quietly relaxed some of its rules around regulatory capital. Note that the Rodgin Cohen mentioned below is the dean of bank regulatory lawyers: In the past week, the Fed gave temporary exemptions to three major bank holding companies from limitations on loans between their bank and securities dealers units, according to people familiar with the matter. It also notified banks, via a letter to Rodgin Cohen, chairman of New York law firm Sullivan & Cromwell LLP, that loans secured by debt and equity securities meeting certain conditions would attract a lower risk weighting than regular loans to private borrowers. That means the bank has to put aside less capital per dollar loaned. "Less capital per dollar loaned" translates into, "You can lend more against that capital."