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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: Bill Murphy who wrote (2444)	12/5/1998 11:11:00 AM
From: IngotWeTrust	Read Replies (1) \| Respond to of 81122

LazloT's gold post sez: regulators were suprised to find hidden gold transactions. and gold was never s'posta be a part of LTCM's portfolios. I actually guffawed outloud when I read that, Bill...you see, it was Central Banks who loaned the gold to Merriweather to gamble with in the first place. Regulators and joeschmoo on the streets must have been the only 4 people who DID NOT know gold was part of LTCM's "cutesy portfolio." Tell me, Bill, when was the last time YOU waltzed into the bank to borrow "gold"--aka MONEY--, and the bank "forgot" to ask you what you intended to do with the proceeds????!!!! I imagine the CBs' who were loaning Merriweather the stuff are just playing CYA with squid-ink words!! I refer you to the following article from the South China Morning Post/Business Post, of Sat 9/26/98 to buttress my incredulity at such assinine CBs'/Analysts'/Regulators' utterances: OPEN QUOTES: Dresdner caught in LTCM net SHEEL KOHLI in London Germany's Dresdner Bank (#1)has emerged as the latest victim of investments in Long Term Capital Management (LTCM), the giant United States hedge fund being bailed out by a consortium of international banks. The disclosure came as Deutsche Bank joined the international rescue effort with a US$300 million injection. The bank, which has no direct stake in LTCM, said the money would help avert further international financial turbulence. As the share price of banks throughout Europe slid, Dresdner said it had made losses of 240 million deutschemarks (about HK$1.1 billion) due to investments with LTCM. However, it will not need to alter its forecasts for profits this year, as previous returns from LTCM investments had outstripped its 240 million mark charge. The bank has other secured credit exposure with LTCM, but does not expect losses from these instruments. The comments, however, appeared to have done little to ease concern over what other turmoil could erupt if other large hedge funds were allowed to collapse. On Thursday, the giant Swiss bank, UBS, (#2)revealed a 950 million Swiss franc (about HK$5.29 billion) write-off from a direct stake it held in LTCM. UBS shares sank 16 per cent to their lowest levels this year during trade yesterday. Credit Suisse Group,(#3) which is also part of the LTCM bailout consortium, was also hit, despite attempts to calm investor nerves by saying it was sticking to its forecasts of satisfactory profits this year. Its shares also fell sharply, by over 8 per cent at one stage. The $3.75 billion bailout involves 15 banks, almost all of which have had direct dealings with LTCM. Seven are from Europe. In France, where Societe Generale,(#4) Banque Paribas(#5) and Credit Agricole(#6) are contributing over $100 million each, shares were also heavily depressed by the latest news. Shares in Banque Paribas fell by over 14 per cent at one stage and Societe Generale shed more than 11 per cent. Banque National de Paris declined almost 10 per cent, with the benchmark CAC-40 Index off by over 4 per cent at its open. Deutsche Bank said it had made no unsecured loans to LTCM, but said it wanted to participate in the bailout "because [it] is one of the biggest participants in global financial markets and wishes to avoid the turmoil that the collapse of the hedge fund would bring to these markets". British banks, led by Barclays,(#7) which is contributing about $300 million to the bailout also suffered a harsh day on the markets. Opening trade saw its shares fall 7 per cent, as it dragged down the rest of the British banking sector with it. ******** I don't know about you, Bill, but when I think of Central Banks, particularly SWISS CBs, I do NOT think those are TWINKIES stacked in those vaults as collateral! Besides, if you were loaning gold to these LTCM boyz, wouldn't you require hedging in the futures markets as part of the loan "conditions???" I sureasHellwould! Ayup!!!! Currie's post made mah weekend. (Thx, Jim.) Ole "non-contributor to 'regulators' Twinkie Defense Fund" 49r