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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Clint E. who wrote (19722)	2/5/1999 8:24:00 PM
From: Clint E.	Respond to of 70309

Courtesy of Bob ferg: ========================= Monday February 1, 7:54 pm Eastern Time Fed issues risk guides, cites bank vulnerability WASHINGTON, Feb 1 (Reuters) - Banks were told by Federal Reserve regulators on Monday to be specially careful about the risks they take and were told that examiners have been instructed to step up their efforts at supervising them. In a relatively rare ''supervisory guidance'' letter to bank officers who fall under the U.S. central bank's regulatory thumb, the Fed said recent market turbulence as well as reviews it had conducted had revealed too much vulnerability. ''Losses stemming from the Asian crisis and the 1998 market turbulence, including those arising from bank hedge fund relationships, indicate that basic credit risk management policies, procedures and internal controls were insufficient to address the risks of new, fast-growing or evolving products and services,'' the letter said. Last year, the New York Fed had to step in to broker a meeting between faltering hedge fund Long Term Capital Management and representatives of its lenders that led to a $3.6 billion recapitalization of the firm. Last week, the president of the New York Fed, William McDonough, said that saving LTCM was necessary to prevent damage to the U.S. and world economy. Subsequent reports about LTCM indicated that banks that loaned it money frequently had only limited information about the specifics of its operations and the investment risks it was taking. The Fed did not single out LTCM or any other firm in its supervisory letter, but noted that ''recent events in both emerging and developed financial markets have illustrated that risk management systems broke down in some product, customer and business lines that experienced significant growth and above normal initial profitability.'' It said bank supervisors should put increasing emphasis on making sure that bankers set tough policies to accurately measure ''counterparty credit risks arising from their trading and derivatives activities'' and faithfully follow them. It said supervisors should make sure that banks' actual business practices conform with their stated policies. It also says examiners have been instructed to do ''targeted transaction testing'' on fast-growing business lines and products to make sure that bankers were taking necessary precaution against risks that could endanger them.

To: Clint E. who wrote (19722)	2/6/1999 5:05:00 AM
From: Johnny Canuck	Read Replies (3) \| Respond to of 70309

Hi Clint, It sounding like you have had an amazingly profitable January. On the ALA/MOT partnership, A big part of Motorola problems on the infrastructure side has been the weakness in it switching technology. This partnership should give it greater creditability as ALA has more of a presence on the telecommunications side. ALA comes from the 7 and 24 side of the business.I assume the problems in Los Angeles still haunts MOT on the sales side, so this should help. While I agree we should bounce next week, I am not sure I share your intermediate term optimism. I have the SPY, COMPX, Russell 2000 and the DJUA all generating sell signals. Only the DJTA and the DOW 30 seem to be holding up. I think we saw the money rotate out of some of the high tech generals the last few days into the DOW stocks. The weakness in the DJUA and the bonds worry me though. They appear to be signalling a tightening by the Fed. With earning season almost over the focus will shift to a Fed watch and if the perception is that they will tighten, the direction for stocks will be down. From memory, while a good majority of stocks beat estimates I don't think it was anything above normal. Estimates were reduced quite a bit in the past few weeks too. I think I saw on the BRIEFING.COM site that normally 55 percent of stocks beat estimates. Have a good weekend. Harry