Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Bobby Yellin who wrote (19491)	9/22/1998 9:45:00 AM
From: Lucky Lady	Respond to of 116762

Morgy Dog, I agree. In fact, y2k will put the nail in our coffin!

To: Bobby Yellin who wrote (19491)	9/22/1998 10:02:00 AM
From: Enigma	Read Replies (1) \| Respond to of 116762

Morgy - I think your last line is what will maybe frighten people into gold - eventauly - see that article in lemetropolecafe. E

To: Bobby Yellin who wrote (19491)	9/22/1998 7:37:00 PM
From: goldsnow	Respond to of 116762

Japan banks seen using JGBs to raise dollar funds 04:19 a.m. Sep 22, 1998 Eastern TOKYO, Sept 22 (Reuters) - Big Japanese banks looking to raise dollars before closing their books for the first half of the business year on September 30 are using Japanese government bonds as collateral to borrow dollars from foreign banks, industry sources say. ''A number of banks are involved in such transactions,'' an official at a foreign bank said. ''The scheme is to secure liquidity in times of emergency, when there is a crunch for funds. But it is a rather desperate measure.'' Japanese banks have already been forced to turn to the spot currency market to raise cash, as concerns over the financial health of Japanese banks have prompted foreign banks to refrain from extending credit lines and engaging in currency swap transactions. Japanese banks are also trying to secure dollars by selling overseas assets, the sources said. One major requirement in cross-currency repurchase transactions, negotiated directly between the parties, is for the JGBs provided as collateral to be highly liquid, to ensure the foreign banks can cash them if necessary, the sources said. Demand for JGBs by banks for such purposes may have been one factor in the rally in the JGB market last week. The yield on the benchmark 182 cash bond hit a record low 0.640 percent yield on Sept 18. But some foreign banks have been reluctant to engage in dollars-for-JGBs deals because of the possibility that Japan's sovereign debt may be downgraded, the sources said. In July, rating agency Moody's Investors Service placed under review for possible a downgrade its triple-A ratings for Japanese government bonds and government-guaranteed securities. Foreign banks that do engage in such transactions believe they can offset risks of a possible downgrade by reducing the collateral value of the JGBs, the sources said. On Monday, British rating agency Fitch IBCA downgraded Japan's long-term foreign currency debt rating to AA+ from AAA. But it affirmed its local currency rating for Japan at triple-A, leaving Japanese government bonds at the highest rating. Japanese banks' demand for short-term funds in dollars customarily increases ahead of the end of the business term or calendar year. But funding costs of short-term borrowing are higher due to recent rises in the Japan premium -- the extra cost Japanese banks must pay when raising funds in the euro interbank market. Some Japanese banks were paying as high as around 70 basis points for the six-month euroyen interest rates over the 0.15-0.17 percent that major U.S. and European banks are paying, bankers said on Monday. The premium ranged from 50 to 70 basis points, depending on credit risk of each Japanese bank perceived by the market, the bankers said. At the end of August, the premium was up to around 50 basis points, they said. ((Tamawa Kadoya, Tokyo Treasury Desk +81-3 3432-8027 tokyo.newsroom+reuters.com)) Copyright 1998 Reuters Limited.