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

To: 2MAR$ who wrote (83912)	12/1/2011 1:29:25 AM
From: TobagoJack	1 Recommendation Read Replies (1) \| Respond to of 218323

still in jakarta the local boyz are all gearing up for possible rating upgrade for all things indonesian, from sovereign on down in the mean time it is pretty funny how all the large central banks, in the chain of coordination or otherwise all seemingly acted in coordinated way in any case, just in in-tray From: H Sent: Thursday, December 1, 2011 2:43 AM Subject: Re: Comments - Week of November 28 In commodities trading, the French banks are, or probably rather were, the biggest financiers. All the small to mid sized commodity trading houses in Switzerland have seen their access to credit from these sources cut off practically overnight. I wouldn't be surprised if that had something to do with the weakness we have seen in some commodities, as it has become more diffuclt to hold inventory. A lot of inventory was probably liquidated out of sheer necessity. The same thing happened in late 2008. So now euro area banks will probably be prepared to make more use of the swaps window, since the 'stigma' associated with borrowing dollars from the ECB has become less of a concern - now the borrowing can be justified on solid commercial grounds, as the interest rate has been practically cut in half. That makes it possible to carry USD assets through the liquidity-constrained year end period, but what happens thereafter? Note that euro-land banks are up to their eyeballs in US housing bubble related legacy assets. If they had to mark everything to market, the lot of them would be insolvent. So the deleveraging attempts will continue one way or another - in additon, the ECB's balance sheet will be laden with ever more repackaged toxic crap. That is another trick, the banks create new securitizations of old unmarketable securities and loans, slightly overcollateralize them and get higher ratings on them that way, which makes these assets eligible for repos with the ECB. The ECB has become a giant 'bad bank'. On Wed, Nov 30, 2011 at 4:16 PM, G wrote: H I fully agree with you I suspect that 90% lf the clowns trading equities have zero clue on the subjects that you have just touched What am I saying 99.9%. They trade a headline that somehow the battle was won. Without ever understanding that there was war , and that war in this case was almost the complete cut off of usd that supports almost all international commerce and investment. Its wonderful for usa to jump up and down, until one realizes that the euro zone banks have been the biggest liguidity pump into most asset classes. Once this slows, there is no natural replacement As such cracks start to form. For instance commodity trade finance. I am hearing rumours that big usd credit lines cut off. Why ? Is it because it is not good business or good clients. No , it is because it was the easiest to shut down in short time frame, as many other places usd is lent by euro banks , is simply too long of horizon to see meaningful retrenchment in usd exposures. So hold on. The guys on wall street are going to get a real rocky ride ----- Original Message ----- From: H Sent: Wed Nov 30 23:10:17 2011 Subject: Re: Comments - Week of November 28 I don't believe this was the reason for intervening in the euro-dollar swaps. The reason is that euro-land banks find it impossible to sell their assets anywhere near the prices they expected to get. So now they have the choice of either recording huge writedowns (which they possibly wouldn't survive) or getting the necessary funding from somewhere else than the interbank market. Yesterday, euro basis swaps plunged back to their 2008 crisis wides. The ECB could no longer fully sterilize the SMP either, as banks everywhere scramble for liquidity. We were very close to a big financial accident. This was imo the reason for this coordinated intervention. I'm not sure what the stock market thinks it is celebrating - that the system was once again rescued from the very brink?? It will be right back at the brink by year end imo.