Archive through September 08, 2007
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     kate
Member
Username: kate
Post Number: 745
Registered: 04-2005Rating: N/A
Votes: 0
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| | Wednesday, September 05, 2007 - 05:47 pm: | 
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Captain C
Starting to look elsewhere, commodities will always be my first love but might be better pickings elsewhere. Might be time to look at the tech sector, UNW did well today.
Regards
Kate
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mum
Member
Username: mum
Post Number: 175
Registered: 08-2005
Rating: N/A
Votes: 0
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| | Wednesday, September 05, 2007 - 06:29 pm: |
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I heard on the ABC radio that the market came down this afternoon on rumours an Asian Hedge fund was in trouble. No more detail than that I'm afraid
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kate
Member
Username: kate
Post Number: 746
Registered: 04-2005Rating: N/A
Votes: 0
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| | Wednesday, September 05, 2007 - 08:31 pm: |
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Belinda
Still don't know what's going on. However I listen to a great finance report on ABC News Radio around 6.45 am which sums up whatever has been happening while our market is closed.
Regards
Kate
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holycow
Member
Username: holycow
Post Number: 3137
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Thursday, September 06, 2007 - 10:51 am: |
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http://tinyurl.com/yrmm42
Macquarie Bank economist, Rory Robinson, hasn't missed the significance of what is happening.
"In Australia, as elsewhere, the extent of stresses in money and credit market is unprecedented in modern times," he wrote yesterday morning.
"The RBA is struggling to limit the blow-out in the spread between the "cash rate" it controls and the market interest rates that matter for the economy.
"Today's three-month bank-bill rate set at 7.06%, up by a disturbing 14bp (half a standard rate hike) from yesterday.
"The "bills-cash spread" has punched up from 42bp to 56bp today.
"I wrote yesterday that the RBA wouldn't consider reversing last month's rate hike unless "...market turmoil intensifies dramatically and bank-bill rates are forced well above 7%!" Well, increasingly, here we are!"
...
The credit freeze may have eased a touch but the cost of short term money is rising. So much so that in the past month, we have effectively seen another rate rise of 0.25-0.30% imposed on banks and other financial institutions using the bill market to fund their everyday needs (as most do).
*** 1) the word "unprecedented" seems to reflect very well what is going on currently in the money market. What it really means is quite a number of people, analysts, experts, economists, bankers, whatever... after 20 years of pampering by Greenspan, they have lost the understanding, experience and skill to handle the unexpected and the unprecedented. So, how does one deal with a problem he/she has not experienced before? How do you talk to a Martian and solve the communication gap?
2) the problem, if they can take a look from another angle, is not actually that BIG, because it only boils down to cost - it simply costs more that's all. It costs more to borrow, it costs more to run a business... what's the problem here?
... the problem - if you are so used to cheap, risk free money, or if you are so used to being spoon fed..., and now you find out you have to learn to use a spoon to feed yourself, you are kicking up a big fuss and you howl and cry because Uncle Greenspan is not around to feed you anymore... this, I think is the problem.
And what do they do/want over in the Big Apple? They are demanding Uncle Big Benny to spoonfeed them like Uncle G,... so they can go back to their old way. Again!
HC
...addicted to chart
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holycow
Member
Username: holycow
Post Number: 3138
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Thursday, September 06, 2007 - 02:43 pm: |
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http://tinyurl.com/2onzvc
Credit still critical as risk, assets reassessed
Hans Jorg Rudloff, chairman of Barclays Capital, said the next four to six weeks would be crucial as investors tried to establish new price levels for risk and banks expanded balance sheets to take on assets held by stricken investment vehicles.
"This is the big question: are we capable of establishing a new price level for these assets? If we stay stuck, the patient is going to die," Mr Rudloff said in a speech to Russian executives in Moscow.
"Trading of assets has to be resumed," he said, speaking in his capacity as chairman of the International Capital Markets Association, rather than Barclays Capital chairman...
*** note the timeframe quoted...
HC
...addicted to chart
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holycow
Member
Username: holycow
Post Number: 3139
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Thursday, September 06, 2007 - 02:50 pm: |
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http://tinyurl.com/3e4gw9
Securitisation autopsy...
How bad might the impact become?
Since Americans borrow in their own currency, the US authorities can loosen monetary and fiscal policy at will. A significant global slowdown is not impossible. One reason is that even the US cannot risk losing the confidence of its creditors. Another is that risk premiums are likely to rise across the board, with adverse consequences for economic activity in many countries. Yet another is that banks may lack the capital to replace a temporary shrinkage in non-bank credit. It is not obvious who would act as the world's "borrower of last resort", should US households retrench. Big losses may yet emerge elsewhere, not least in other countries' overvalued housing markets.
...
What is the future of securitised lending?
Good reasons can still be advanced for shifting exposure from the balance sheets of thinly capitalised banks to those of better capitalised outside investors. The theory was that risk would thus be shifted on to those best able to bear it. The practice seems to have been that it was shifted on to those least able to understand it.
The supply of such fools has dried up. In the short run, securitised debt is likely to contract. In the longer term, intermediaries will have to find a way to make their products more transparent to the buyers. Unfortunately, the ratings agencies, which once served this purpose, have lost their credibility...
HC
...addicted to chart
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holycow
Member
Username: holycow
Post Number: 3140
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Thursday, September 06, 2007 - 02:55 pm: |
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http://tinyurl.com/376lct
"My investment team is watching it very closely and is concerned about the financials (stocks). We're very underweight, particularly the diversified financials as they're the ones which have bounced around the most",BT Financial Services general manager of investment management Dirk Morris said.
HC
...addicted to chart
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holycow
Member
Username: holycow
Post Number: 3141
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Thursday, September 06, 2007 - 03:04 pm: |
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http://tinyurl.com/2n9kae
NATIONAL Australia Bank has joined ANZ in revealing that it is bringing assets back on to its balance sheet as the turmoil in global credit markets freezes up funding options for off-balance sheet vehicles.
In an overnight investor presentation in London, NAB finance director Michael Ullmer said $6 billion in so-called "conduit assets", mostly mortgages, had so far moved on to the group's balance sheet...
*** just thinking out loud, how much will NAB's growth be affected by this action? Thinking... thinking... -$$$? zzzz...
HC
...addicted to chart
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holycow
Member
Username: holycow
Post Number: 3142
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Thursday, September 06, 2007 - 06:08 pm: |
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http://tinyurl.com/33ero7
Alarm raised over Japan real estate
The head of Japan’s second biggest housebuilder on Wednesday warned Japanese property prices were a bubble set to burst, fuelling concerns that real estate prices have reached unsustainable levels just a few years into a recovery from a prolonged slump.
“The property market has become dangerous and I wouldn’t be surprised if the real estate bubble goes bust,” Takeo Higuchi, chairman of Daiwa House, told Bloomberg.
Mr Higuchi’s remarks come as two of the world’s hitherto most buoyant property markets – the US and the UK – face widening problems, raising fears of a global property slump.
The US market has been hit by fears about problems in the subprime mortgage sector, which has aggravated a downturn in the broader real estate market while the UK has seen a sharp decline in the value of real estate investment trusts.
Mr Higuchi’s comments highlight growing concern that Japan’s property sector, which has risen strongly on a wave of investment, particularly by foreign funds, has peaked.
They sent property stocks down 4 per cent yesterday, which contributed to a 1.5 per cent fall in the benchmark Nikkei average...
*** well, this bit of news kinda provide an explanation on the drop of 1.5% in Nikkei. Let's take a closer look,... what if Japan is setting itself up as one of the big victims in the current subprime fiasco?
Referring to the above post entitled "Securitisation Autopsy"... and this line: It is not obvious who would act as the world's "borrower of last resort", should US households retrench. Big losses may yet emerge elsewhere, not least in other countries' overvalued housing markets.
This sounds like Japan!? What does it mean to their demand on Aussie exports? Esp in commodities?
HC
...addicted to chart
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holycow
Member
Username: holycow
Post Number: 3143
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Friday, September 07, 2007 - 09:43 am: |
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http://tinyurl.com/3as2cn
Reserve eases credit squeeze on banks with lifeline
...Commonwealth Bank, said it had $4 billion exposed to "sponsored or third-party asset-backed conduits". Banks use conduits to move loans off their balance sheets, lowering the amount of money regulators require to be held against the risk.
CBA has so far brought $1.35 billion back onto its balance sheet...
National Australia Bank told investors it had brought $6 billion of loans onto its balance sheet because it could not find short-term investors to buy the debt and had an additional $5 billion in conduits.
ANZ made a similar announcement last week when it said it had to bring $5.5 billion onto its balance sheet. Westpac said it had $6 billion in conduits, of which it had drawn down 15 per cent.
It has become difficult for banks to find money quickly because investors on global credit markets have become less interested in buying debt after mortgages given to borrowers in the US with poor credit histories began to fail.
The failures are being triggered as honeymoon rates on the loans expire. Last week, NAB group chief executive John Stewart said there were about $250 billion in subprime loans with honeymoon periods set to expire in the US over the next 12 to 18 months.
*** not sure if "they" see it or not - it's still not about liquidity, it's about risk and reward. On top of that most banks have got all the risk and debt they could take in the last one and a half year with private equity funds running wild in the local financial markets. The banks are over-exposed, now all they want is to dispose of these bad debts and bad risks in a way that won't reflect as big losses in their balance sheets. Regardless how big the carrot they tangle in front of other banks, no one will bite. No one is that dumb to be attracted by the little reward they offer to take these hot potatoes off their hands. And no reward they offer can match this one single threat - a total write-off!
HC
...addicted to chart
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holycow
Member
Username: holycow
Post Number: 3144
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Friday, September 07, 2007 - 10:16 am: |
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http://au.biz.yahoo.com/070906/33/p/1dx88.html
The IMF said Thursday it was scaling back its projections for economic growth in the United States and Europe following recent turmoil on global stock markets tied to the US housing downturn.
"There will be some downward revision to our growth projection, more so next year than this year," Masood Ahmed, a spokesman for the International Monetary Fund, told reporters at a briefing.
"We can already say that the downward revisions are likely to be the largest for the US but we will also see some impact in the euro area."
*** more details in Oct, this just serves as a early warning... so just how much will this affect the demand on Chinese goods and the demand on Aussie commodities? Will this provide a greater leverage to the Chinese in next round of bargaining? In marketing and sales management "theory" - it's not a good position to be in for any firms to have either a single big customer or a single big supplier.
In Australia, many fresh producers can tell you how much crap they have been copping from both Woolies and Coles... and there are probably quite some contractors that can tell you a similar story in providing services to Telstra. Monopoly, duopoly and oligopoly, I think are dirty words if you like free market...
HC
...addicted to chart
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easymoney
Member
Username: easymoney
Post Number: 57
Registered: 03-2005Rating: N/A
Votes: 0
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| | Friday, September 07, 2007 - 02:18 pm: |
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With respect to the sub-prime mortgage market, can you tell me (again?) who has done the leveraging to turn this from a disaster for home-owners into a disaster for financial markets?
In my mind, even if the lender has over-lent and the property has diminished in value, the loss to the lender should be maybe 20% or thereabouts but not 100%.
Two of them say they're Jesus.
One of them must be wrong.
Industrial Disease
Dire Straits
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holycow
Member
Username: holycow
Post Number: 3145
Registered: 08-2004
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