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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (41006)	12/26/1998 7:36:00 PM
From: Merritt	Read Replies (1) \| Respond to of 132070

MB: Good post...but when will all this come to pass? The Latin America loans are still going to be carried on the books as performing...at least for the coming Q. Chavez, of Venezuela, has been quoted to the effect of that he'll be lowering oil production to better fit the OPEC model. If he actually does that, then he'll have a short term shortfall in income (well, a bigger shortfall<G>), and something has to give. Venezuela has reportedly been stalling payments to the oil service companies, but a default on those payments won't be enough to off-set the drop in revenues from oil production cuts. But, that's still at least a Q away. I doubt Brazil will devalue until after a Venezuelan default. The bank's derivative exposure was covered by the Fed's market intervention, and with the Fed lending huge amounts to the banks during the October "correction." The banks buying the indexes with most of the funds (hence no shrinkage of the interest spread), means they've been making money off the "investments" and will probably report good numbers this coming Q (witness CMB's announcement). At least that's what I see through my, admittedly limited, view. So...when...? Best regards, Merritt