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Fed. 41.75B Matures Thursday.
24.00B 14day
5.00B 7day
5.50B 3day
7.25B 1day
The Slosh Report:
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Very nice Win frenchee./
Fed. 1day RP + 7.25B [net Add +5.25B ]
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Fed. 1day RP + 7.25B [net Add +5.25B ]
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Chinese Regulator Authorizes Commercial Banks to Trade Gold Futures
By Li Chunlan
25 Mar 2008 at 09:26 AM GMT-04:00
SHANGHAI (Interfax-China) -- The China Banking Regulatory Commission (CBRC) yesterday issued permits allowing Chinese commercial banks to trade gold futures on the Shanghai Futures Exchange (SHFE).
Commercial banks are required to be members of the Shanghai Gold Exchange (SGE), China's sole spot gold trading platform, and the SHFE, before conducting gold futures trading through the SHFE. Moreover, banks must have a capital adequacy ratio of over 8%, the CBRC announced.
However, the CBRC has prohibited commercial banks from acting as agents for gold futures in an attempt to minimize insider trading by the banks, which have access to market information through acting as gold warehouses and settlement units when authorized by the exchange.
Chinese commercial banks are spot gold trade dealers, and even some of them are granted gold import and export qualification enabling them participate in the global spot gold trade. The CBRC believes that participating in gold futures trade could enhance commercial banks' competitiveness and grant them an efficient risk management system over a derivative market.
"The move will boost gold futures trading on the SHFE and reduce the difference between spot gold prices and gold futures prices," an analyst from Jinrui Futures, surnamed Li, said. "Though these banks are spot gold traders or even own the SHFE gold delivery warehouses, it's very difficult to reach futures-spot arbitrage as transfer costs from the SGE to future contracts on the SHFE remain high."
The transfer cost of spot gold to the June gold contract stands at a high of around RMB 1,400 ($198.6) per lot (one lot equals 1,000 grams).
"These commercial banks have rich experiences in spot gold trading at home and abroad and they can easily avoid risk by keeping a same amount of gold contracts in different directions in the spot gold market and the futures gold market," Li said.
The June gold delivery contract on the SHFE reached RMB 209.45 ($29.71) per gram at 11:30 a.m. today. Shanghai Au (T+D), the most traded product on the SGE, lost RMB 2.9 ($0.41), or 1.4%, to end at RMB 206.6 ($29.3) per gram.
If the U.S. Dollar Index continues weakening, gold prices will be pushed higher, analyst Liu Zhengdong, from Hongye futures, said.
© Interfax-China 2008. For further information regarding Interfax China Commodities Daily Reports, contact David Harman at david.harman@interfax-news.com. Interfax also publishes a comprehensive China Grains & Soft Special Report in March 2008, contact David Harman for details.
http://www.resourceinvestor.com/pebble.asp?relid=41414
Chinese Regulator Authorizes Commercial Banks to Trade Gold Futures
By Li Chunlan
25 Mar 2008 at 09:26 AM GMT-04:00
SHANGHAI (Interfax-China) -- The China Banking Regulatory Commission (CBRC) yesterday issued permits allowing Chinese commercial banks to trade gold futures on the Shanghai Futures Exchange (SHFE).
Commercial banks are required to be members of the Shanghai Gold Exchange (SGE), China's sole spot gold trading platform, and the SHFE, before conducting gold futures trading through the SHFE. Moreover, banks must have a capital adequacy ratio of over 8%, the CBRC announced.
However, the CBRC has prohibited commercial banks from acting as agents for gold futures in an attempt to minimize insider trading by the banks, which have access to market information through acting as gold warehouses and settlement units when authorized by the exchange.
Chinese commercial banks are spot gold trade dealers, and even some of them are granted gold import and export qualification enabling them participate in the global spot gold trade. The CBRC believes that participating in gold futures trade could enhance commercial banks' competitiveness and grant them an efficient risk management system over a derivative market.
"The move will boost gold futures trading on the SHFE and reduce the difference between spot gold prices and gold futures prices," an analyst from Jinrui Futures, surnamed Li, said. "Though these banks are spot gold traders or even own the SHFE gold delivery warehouses, it's very difficult to reach futures-spot arbitrage as transfer costs from the SGE to future contracts on the SHFE remain high."
The transfer cost of spot gold to the June gold contract stands at a high of around RMB 1,400 ($198.6) per lot (one lot equals 1,000 grams).
"These commercial banks have rich experiences in spot gold trading at home and abroad and they can easily avoid risk by keeping a same amount of gold contracts in different directions in the spot gold market and the futures gold market," Li said.
The June gold delivery contract on the SHFE reached RMB 209.45 ($29.71) per gram at 11:30 a.m. today. Shanghai Au (T+D), the most traded product on the SGE, lost RMB 2.9 ($0.41), or 1.4%, to end at RMB 206.6 ($29.3) per gram.
If the U.S. Dollar Index continues weakening, gold prices will be pushed higher, analyst Liu Zhengdong, from Hongye futures, said.
© Interfax-China 2008. For further information regarding Interfax China Commodities Daily Reports, contact David Harman at david.harman@interfax-news.com. Interfax also publishes a comprehensive China Grains & Soft Special Report in March 2008, contact David Harman for details.
http://www.resourceinvestor.com/pebble.asp?relid=41414
W@G2 QQQQ 03/26/08 for a 03/28/08 close
44.98 bob3
44.03 rayrohn
Max Pain QQQQ
http://www.iqauto.com/cgi-bin/pain.pl
Fed Auctions Another $50 Billion
Tuesday March 25, 10:39 am ET
By Jeannine Aversa, AP Economics Writer
Fed Auctions Another $50 Billion to Banks, Bringing Total to $260 Billion Since December
WASHINGTON (AP) -- Fighting to ease a dangerous credit crisis, the Federal Reserve has provided a total of $260 billion in short-term loans to squeezed banks since December to help them overcome credit problems.
The central bank on Tuesday announced the results of its most recent auction -- the eighth since the program started in December -- where commercial banks bid to get a slice of $50 billion in short-term loans.
It's part of an ongoing effort by the central bank to provide relief to a spreading credit crunch that has unnerved financial markets. The situation threatens to push the country into a deep recession. Counting the latest auction results announced Tuesday, the Fed has provided a total of $260 billion in short-term loans to banks since December.
In the most recent auction -- which marked the eighth -- commercial banks paid an interest rate of 2.615 percent, the lowest rate for any of the auctions of this kind conducted so far.
There were 88 bidders for the latest slice of the $50 billion in 28-day loans. Demand was high. The Fed received bids for $88.9 billion worth of loans.
The Fed, around the middle of December, announced it was creating an auction program that would give banks a new way to get short-term loans from the central bank and to help them over the credit hump. A global credit crisis has made banks reluctant to lend to each other, which has crimped lending to individuals and businesses.
The smooth flow of credit is the economy's life blood. It permits people to finance big-ticket purchases, such as homes and cars, and help businesses to expand operations and hire workers.
The ill effects of housing and credit problems, however, have made both people and businesses more cautious in their spending. And that has significantly weakened the overall economy. A growing number of economists believe the economy contracted in the January-to-March period and is on pace for its first recession since 2001.
Across the Atlantic, European banks hungry for more cash received an additional $77.1 billion in short-term credit from the European Central Bank on Tuesday as part of weekly operations. The bank has jurisdiction over the 15-nations that use the euro as its currency.
Fed.(1)2) 1day RP + 2.00B [net Add + 2.00B ]
Fed.* (2) 1day Foward 28day 15.00B
* Note: This repo operation has 1 collateral tranche(s).
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Fed.(1)2) 1day RP + 2.00B [net Add + 2.00B ]
Fed.* (2) 1day Foward 28day 15.00B
* Note: This repo operation has 1 collateral tranche(s).
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Upgrades, downgrades, reiterations
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Fed. 3day RP + 5.50B [Net Add 5.50B ]
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Fed. 3day RP + 5.50B [Net Add 5.50B ]
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Futures (2) + World Indices
http://www.cme.com/dta/del/globex.html
http://money.cnn.com/data/premarket/
World Indices (2) Mini Charts
Updates every 60sec ~ Watch the dates!!
http://www.wwfn.com/commentary/oscharts.html
http://www.allstocks.com/markets/World_Charts/Asian_Stock_Markets/asian_stock_markets.html
Don Coxe March 20
http://www.beearly.com/pdfFiles/Coxe20032008.pdf
W@G1 QQQQ 03/24/08 for a 03/26/08 close
44.57 frenchee
43.98 bob3
In the Fed’s Cross Hairs: Exotic Game
By GRETCHEN MORGENSON
Published: March 23, 2008
IN the week or so since the Federal Reserve Bank of New York pushed Bear Stearns into the arms of JPMorgan Chase, there has been much buzz about why the deal went down precisely as it did.
Its primary purpose, according to regulators, was to forestall a toppling of financial dominoes on Wall Street, in the event that Bear Stearns skidded into bankruptcy and other firms began falling apart as well.
But a closer look at the terms of this shotgun marriage, and its implications for a wide array of market participants, presents another intriguing dimension to the deal. The JPMorgan-Bear arrangement, and the Bank of America-Countrywide match before it, may offer templates that allow the Federal Reserve to achieve something beyond basic search-and-rescue efforts: taking some air out of the enormous bubble in the credit insurance market and zapping some of the speculators who have caused it to inflate so wildly.
Of course, it could be simple coincidence that the rescues caused billions of dollars (or more) in credit insurance on the debt of Countrywide and Bear Stearns to become worthless.
Regulators haven’t pointed at concerns about credit default swaps, as these insurance contracts are called, as reasons for the two takeovers. (And Bank of America’s chief executive, Kenneth D. Lewis, has flatly denied that his deal with Countrywide was at the behest of regulators.)
Yet an effect of both deals, should they go through, is the elimination of all outstanding credit default swaps on both Bear Stearns and Countrywide bonds.
Entities who wrote the insurance — and would have been required to pay out if the companies defaulted — are the big winners. They can breathe a sigh of relief, pocket the premiums they earned on the insurance and live to play another day.
Investors who bought credit insurance to hedge their Bear Stearns and Countrywide bonds will be happy to receive new debt obligations from the acquirers in exchange for their stakes.
They are simply out the premiums they paid to buy the insurance.
On the other hand, the big losers here are those who bought the insurance to speculate against the fortunes of two troubled companies.
That’s because the value of their insurance, which increased as the Bear and Countrywide bonds fell, has now collapsed as those bonds have risen to reflect their takeover by stronger banks.
We do not yet know who these speculators are, but hedge fund and proprietary trading desks on Wall Street are undoubtedly among them.
The derivatives market is huge, unregulated and opaque because participants undertake the transactions privately and don’t record them in a central market.
The growth in the market and the potential for disruption, as a result of its size, has surely caused regulators to lose plenty of sleep.
Credit default swaps were created as innovative insurance contracts that bondholders could buy to hedge their exposure to the securities.
Like a homeowner’s policy that insures against a flood or fire, the swaps are intended to cover losses to banks and bondholders when companies fail to pay their debts. The contracts typically last five years.
Recently, however, speculators have swamped the market, using the derivatives to bet on companies they view as troubled.
That has helped the swaps become some of the fastest-growing contracts in the derivatives world.
The value of the insurance outstanding stood at $43 trillion last June, according to the Bank for International Settlements.
Two years earlier, that amount was $10.2 trillion.
But before a contract can pay out to a buyer of the insurance, a company must default on its bonds.
In both the Countrywide and Bear Stearns takeovers, the companies were saved before they could default.
Both deals also specify that the acquiring banks assume the debt of the target.
As a result, the insurance policies that once covered Bear Stearns and Countrywide bonds will become the obligations of much stronger issuers: JPMorgan and Bank of America.
No payouts are coming, guys.
So consider all those swaggering hedge fund managers and Wall Street proprietary traders who recorded paper gains on their credit insurance bets as the prices of Bear and Countrywide bonds fell.
Now they must reverse those gains as a result of the rescues.
If they still hold the insurance contracts, they are up a creek — and the Fed just took away their paddles.
An interesting side note:
It’s likely that JPMorgan, the biggest bank in the credit default swap market, had a good deal of this kind of exposure to Bear Stearns on its books.
Absorbing Bear Stearns for a mere $250 million allows JPMorgan to eliminate that risk at a bargain-basement price. JPMorgan declined to comment on the size of its portfolio of credit default swaps.
We’ve yet to hear a peep about losses stemming from the Countrywide and Bear Stearns debacles. That doesn’t mean they aren’t there. Remember all those months that the subprime problem was supposed to have been “contained”?
IF we’ve learned anything from this year-long walk down the credit-crisis trail, it is that speculators on the losing end of such deals don’t typically volunteer that they have suffered enormous hits in their portfolios until they are forced to — often when they’re on the brink of collapse.
Do the Bear Stearns and Countrywide deals represent a regulatory template?
Both had the same types of winners and losers.
Bondholders won, while stockholders and credit insurance owners lost.
Although there aren’t that many big banks left that are financially sound enough to buy out the next failure, it’s a pretty good bet that future rescues will look a lot like these.
Maybe it’s just a coincidence that both these deals involve wiping out billions of dollars worth of outstanding credit default swaps linked to Bear Stearns and Countrywide bonds.
Still, helping to trim the risk just a tad in the $43 trillion credit default swap market certainly qualifies as a side benefit.
Had either Bear Stearns or Countrywide defaulted, the possibility that some of the parties couldn’t afford to pay what they owed to insurance holders posed a real risk to the entire financial system.
It’s pretty clear that some major losses are floating around out there on busted credit default swap positions. Investors in hedge funds whose managers have boasted recently about their astute swap bets would be wise to ask whether those gains are on paper or in hand. Hedge fund managers are paid on paper gains, after all, so the question is more than just rhetorical.
Losses, losses, who’s got the losses?
http://www.nytimes.com/2008/03/23/business/23gret.html
Bank of England Seeks to Ease `Strains' in Markets (Update2)
By Reed V. Landberg
March 22 (Bloomberg) -- The Bank of England said it's in discussions with other central banks about how to ``ease the strains'' in financial markets, although it's not considering requiring taxpayers to assume credit risks.
Britain's central bank said it is ``not among'' those that the Financial Times reported earlier today were contemplating the purchase of mortgage-backed securities to smooth lending to consumers after a worldwide surge in borrowing costs. The Federal Reserve also denied it's in discussions to buy such debt.
``We have been examining a number of other options, but it is too early to go into any detail,'' the London-based Bank of England said in a statement. ``The bank is not among those reported today to be proposing schemes that would require the taxpayer rather than banks to assume the credit risk.''
Financial institutions have criticized the Bank of England for not doing enough to ease conditions in money markets. Bank of England Governor Mervyn King offered an extra 5 billion pounds ($9.9 billion) in loans to banks on March 20, the first move of its kind in six months to push the cost of borrowing by banks closer to the 5.25 percent benchmark rate. King will discuss his strategy in a hearing with lawmakers in Parliament on March 26.
London's interbank offered rate, or Libor, for three-month loans in pounds, climbed to 5.99 percent on March 20, the highest since December after the collapse of the subprime mortgage market in the U.S. made banks reluctant to lend to each other.
Mortgage Lending
The surge in credit costs has choked off lending to consumers in the U.K., especially for new home loans. Banks including Alliance & Leicester Plc, Bradford & Bingley Plc and HBOS Plc Scotland have withdrawn loan offers and raised the cost of borrowing in recent weeks.
``Demand for mortgages remains strong but cannot be fully met from existing funding,'' Michael Coogan, director general of the Council of Mortgage Lenders, said in a statement on March 20. ``Many lenders have had to reduce their product ranges, increase their mortgage prices and, in some cases, to reduce their lending.''
Mortgage lending fell to 24 billion pounds last month, 7 percent less than January and 31 percent below the level in June 2007, just before the credit crunch started. House prices, which tripled in the last decade as banks made credit more affordable, have fallen in each of the past four months, the longest streak since 2000, according to Nationwide Building Society.
The Financial Times reported today that policy makers were discussing whether to purchase mortgage-backed securities as a way to restore confidence to the system and ensure funding for new loans.
Federal Reserve Denial
The paper, without saying where it got the information, said the U.K. central bank was ``most enthusiastic'' while the U.S. Federal Reserve saw the plan as a ``last resort'' and the European Central Bank was ``least enthusiastic.''
A Federal Reserve official denied to Bloomberg News today that the U.S. central bank is in talks about buying mortgage- backed debt. The Federal Reserve has already taken steps to stabilize the market for mortgage-backed securities and provide liquidity to financial institutions.
The Bank of England's statement suggests the British government is in step with U.S. President George W. Bush's administration in attempting to avoid any plan that would risk taxpayer funds. U.K. authorities last month nationalized mortgage lender Northern Rock Plc.
Tim Bond, head of asset allocation at Barclays Capital, said that U.K. policy makers should copy the Fed's program to inject liquidity into financial markets.
Liquidity Sought
``The Bank of England does not provide the same comprehensive liquidity framework that the Fed has just put in place and such as exists already at the ECB,'' Bond told journalists in London on March 20. ``We need them to provide liquidity to any duration. It would deter the raiders.''
The Fed slashed its benchmark lending rate three-quarters of a point to 2.25 percent on March 18 and implemented a program to swap $200 billion in Treasuries for mortgage-backed securities. The ECB loaned 15 billion euros ($23.2 billion) of funds to meet demand for more cash before the Easter weekend.
The Bank of England lowered its benchmark rate a quarter point in February to 5.25 percent, the second cut of that size in three months.
King, who met with banking industry executives in London on March 20, already has said he's considering making changes to the way policy makers conduct open market operations. The central bank's nine-member Monetary Policy Committee next decides on interest rates on April 10.
Lehman Brothers Holdings Inc. and Barclays Plc were among the banks bringing forward their forecasts for a Bank of England rate cut as early as next month.
To contact the reporters on this story: Reed Landberg in London at landberg@bloomberg.net
Last Updated: March 22, 2008 12:51 EDT
Commodities Drop, Rally in Dollar, Stocks Vindicate Bernanke
By Pham-Duy Nguyen
March 21 (Bloomberg) -- The biggest commodity collapse in at least five decades may signal Federal Reserve Chairman Ben S. Bernanke has revived confidence in U.S. financial firms.
The Standard & Poor's 500 Index posted its first weekly gain in a month, and the dollar leapt from its lowest level since 1973 after the Fed stepped in March 16 to rescue Bear Stearns Cos., the fifth-largest U.S. securities firm, and expanded its role as lender of last resort to embrace the biggest dealers in Treasury notes.
Investors who had poured money into gold, oil and corn, seeking a hedge against inflation and a weak dollar, sold commodities to raise cash or buy stocks. The Reuters/Jefferies CRB Index of 19 commodities tumbled 8.3 percent this week, the most since at least 1956, after touching a record on Feb. 29.
``Bernanke took care of the commodity bubble,'' said Ron Goodis, the retail trading director at Equidex Brokerage Group Inc. in Closter, New Jersey. ``Commodities are coming back to earth. The stock market looks OK, and Bernanke is starting to look a little better.''
Concern that the central bank would let inflation get out of control eased after the Fed cut its key interest rate by 0.75 percentage point on March 18, less than the reduction of at least 1 point that investors had expected.
``Clearly they've gotten some stability,'' said Keith Hembre, a former Fed researcher and chief economist at FAF Advisors Inc. in Minneapolis, which oversees more than $107 billion in assets. ``You have to stand back and say, for the time being, it looks to be a pretty successful combination of moves that have worked.''
Oil Plunges
Gold had its biggest weekly loss since August 1990 after reaching a record $1,033.90 an ounce on March 17. Oil plunged almost $10 over three days, after rallying to $111.80 a barrel, the highest ever. Corn dropped more than 9 percent for the week, the most since July.
Until this week, commodities had outperformed stocks and bonds as the Fed reduced its benchmark rate five times since September, eroding the value of the dollar and fueling concern that inflation would accelerate. This week's rate cut brought the Fed's target for overnight loans among banks down to 2.25 percent.
Because commodities such as oil and gold are priced in dollars, they have risen as the U.S. currency has weakened in response to the Fed's previous rate cuts.
Oil, soybeans, platinum and wheat all jumped to records this year. The weighted UBS Bloomberg Constant Maturity Commodity Index of 26 futures has gained more than 20 percent every year since 2001. The index is up 10 percent this year.
Gold had rallied as much as 43 percent since Sept. 18, when the policy makers began lowering the federal-funds rate for the first time in four years.
Buying Euros
``The markets have been buying euros against the dollar, buying oil and buying gold as hedges,'' said Andrew Busch, a global currency strategist at BMO Capital Markets in Chicago, a unit of Bank of Montreal. ``The Fed calmed the markets.''
Bernanke, 54, is expanding the Fed's monetary-policy toolkit as he seeks to keep strains in financial markets from spiraling into a full-blown meltdown. The world's biggest banks and securities firms have reported $195 billion in asset writedowns and credit losses since 2007 stemming from the collapse of the U.S. subprime mortgage market.
Expanded Collateral
Fed officials on March 11 announced a program to swap $200 billion in Treasuries for debt including mortgage-backed securities. Yesterday, the Fed expanded collateral eligible for its auction of Treasuries to include bundled mortgage debt and securities linked to commercial-property loans.
Earlier this month, the Fed increased the size of separate funding auctions to $100 billion in March from a previously announced $60 billion.
The Fed yesterday said it had lent $28.8 billion to large U.S. securities firms under the program announced on March 16, its first extension of credit to non-banks since the 1930s.
The Fed also put taxpayer money at risk by making available up to $30 billion to JPMorgan Chase & Co. for the purchase of Bear Stearns.
Not everyone is convinced that Bernanke has managed to turn the tide for financial firms.
``He has taken extraordinary measures, things that we haven't seen since the Great Depression,'' said former Fed vice chairman Alan Blinder, a Princeton University professor. ``He's working overtime, literally and figuratively, to get this panic under control. But so far, it's not under control.''
U.S. Treasury three-month bill rates dropped to the lowest since at least 1954 yesterday as investors sought the safety of government debt. Bill rates declined as low as 0.387 percent as finance company CIT Group Inc. drew on $7.3 billion in credit lines after being shut out of short-term debt markets.
``This is all about money,'' said Leonard Kaplan, president of Prospector Asset Management in Evanston, Illinois, who has been trading gold since 1973. ``The Fed can control the price of money but the banks still don't want to lend.''
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
Last Updated: March 21, 2008 00:01 EDT
http://www.bloomberg.com/apps/news?pid=20601087&sid=aGnGoiVO0304&refer=home#
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How the Liquidity Crises Affect the Junior Explorers
By Neville Maycock
17 Mar 2008 at 12:22 PM GMT-04:00
ORLANDO (ResourceInvestor.com) -- The U.S. Federal Reserve right now is scrambling to deal with many issues within the markets. They are currently dealing with a housing crisis, a liquidity crisis and a mounting national debt.
The markets have seen multiple rate cuts by the Federal Reserve, liquidity injections by other major banks, and an economic stimulus package by the U.S. government. All of these were done in order to stimulate the faltering U.S. economy. World central banks have also helped out by pumping trillions of dollars into the market as well. The end result has been the markets going into a deeper panic, as no one truly knows how far these credit crises have gone.
The Federal Reserve’s hope is to stop a recession from occurring. Thru all of their manipulation of free market forces, they have not been able to stop the current downturn in the markets. Meanwhile the U.S. National Debt keeps rising at an alarming rate and the value of the dollar has reached all-time lows.
An Associated Press report on Friday discussed how Ben Bernanke vowed to help distressed homeowners. Bernanke said the Federal Reserved is "strongly committed to fully employing our authority, expertise and resources to help alleviate their distress." My question to Mr. Bernanke is how do you plan on saving these homeowners, while keeping the dollar afloat while bailing out these homeowners and their associated mortgage banks as well?
Next Bear Stearns, the fifth largest investment bank of the world essentially being bought out for US$236.2 million by JP Morgan because their leverage in a deteriorating sub-prime mortgage market. How can anyone feel comfortable with the state of the markets?
Now some will say in this kind of market environment, the best move will be to put your money into safe havens such as precious metals and their associated stocks. My opinion is while long-term gold and silver will greatly benefit from the devaluing of currency, the associated stocks will not benefit at this point. The reason behind this is that stock investors will be running to the exits trying to take whatever money they have in the markets out of it.
This will include some of the outperforming precious metal stocks. A serious downturn in the world markets all at once will take all the great stocks perform just as poorly as the bad stocks.
Another interesting twist to the liquidity crisis is the junior mining explorers will have a more difficult time obtaining financing for their projects. Banks as well has institutional investors will be very selective in their lending practices and will most likely structure deals that will almost guarantee that they will not lose money on their investment. In this environment marginal projects will not get financed.
Therefore, these junior mining explorers may have to turn to the senior producers, who have plenty of reserve cash, to be their finance partner for their development projects. Again these deals will be greatly skewed to benefit the senior producers.
Thus, junior mining explorers, who have big capital expenditure projects in the bankable feasibility stage, might be delayed a long time in obtaining financing. This will drive supply of the associated metal down. Now will the demand be there by the time these companies obtain financing? These junior companies and their shareholders certainly hope so.
Even though the sub-prime market issues might make all the precious metals bulls finally seem correct in their predictions, the associated mining sector might take a hit as the financing won’t be there to develop these major projects.
http://www.resourceinvestor.com/pebble.asp?relid=41247
New York Fed's chief steers Wall Street into uncharted waters
6:20p ET March 21, 2008
WASHINGTON (MarketWatch) --
http://www.marketwatch.com/news/story/new-york-feds-chief-steers/story.aspx?guid=%7B0D8682ED%2D74B4%2D4144%2D85FE%2DF2214455F37E%7D
When the phone rings at 3 a.m. alerting the government to a financial emergency, the call doesn't come in to 1600 Pennsylvania Avenue but to an apartment in Manhattan.
The government's go-to guy on crises big and small is a quiet, unassuming public servant with a wife and kids, a winning smile and an aversion to the spotlight.
His name is Timothy Geithner and he's the president of the New York Federal Reserve Bank, which is the Fed's outpost on the front lines of the credit maelstrom now rocking the nation.
Geithner has been at the center of the two of the most remarkable weeks in Fed history as policy-makers worked overtime to prevent a financial meltdown.
In that time, the Fed has slashed the federal funds target rate by three-quarters of a percentage point, cut the discount rate by a full percentage point, rescued Bear Stearns Cos. by arranging an 11th-hour sale to J.P. Morgan Chase Co. and set up two unprecedented lending facilities that allow investment banks and bond dealers to borrow almost unlimited sums from the central bank.
Remarkably, Geithner (pronounced GITE-ner) has largely succeeded in avoiding the media's glare despite a resume full of high-stakes work that has already, at age 46, given him a storied career.
Although not a household name, he has been a point man on the U.S. response to almost every major financial blowup of the past decade, including the Mexican peso crisis, the Asian financial meltdown, the government's bailout of Long Term Capital Management, and now the current storm that's still raging.
Take one for the team
Those who've worked closely with Geithner over the past decade say he's most comfortable working behind the scenes, where he's succeeded in getting some of the most powerful and competitive financiers in the world to compromise in the name of taking one for the team.
Reticence is a rare commodity at the New York Fed, which has been run in the past by men with outsized egos such as Gerry Corrigan, Benjamin Strong, and Paul Volcker.
Geithner will need considerable skills to stay on top of the most incendiary financial crisis since the Great Depression. He seems unusually suited for the role, with a quick mind tempered by a knack for finding a win-win solution where others see only hopeless conflict.
The New York Fed president has the dual role of the vice chairman of the Federal Open Market Committee, the Washington-based Federal Reserve's central policy-setting arm, and is the only one of the 12 bank presidents who always has a vote on that all-important panel.
The New York Fed occupies one of the most strategic points in the financial world. Through the open-market desk, the New York Fed has its fingers on pulse of the fixed-income and currency markets. It's in constant touch with the markets through a group of large investment banks and dealers, known as the primary dealers.
While the Federal Reserve Board in the nation's capital can afford to supervise the economy from 30,000 feet, the New York Fed is down in the sewers, fixing the leaks and listening intently for the sounds of crisis.
Geithner has been listening and, at times, warning. In a prescient speech a year ago, he surveyed the vast unregulated financial system that had grown up in recent decades and declared himself to be worried.
"Broad changes in financial markets may have contributed to a system where the probability of a major crisis seems likely to be lower, but the losses associated with such a crisis may be greater or harder to mitigate," he said.
He compared unraveling all risks to "unscrambling an egg."
The Fed cannot monitor or control all the risks that have arisen, Geithner told his audience, nor can it "act preemptively to diffuse" stresses in the system. The best the Fed can hope for, he concluded, is to beef up the "the shock absorbers."
And so when today's crisis hit, Geithner knew just where to place the shock absorber that would keep Bear Stearns afloat and prevent a chain-reaction collapse. For that, he counted on J.P. Morgan
The still-unfolding rescue of Bear Stearns "is likely to affect the debate in other economic areas and strengthen the hand of people who are arguing for public money for families facing foreclosure," said Jason Furman, an economic analyst at the Brookings Institution.
Tax-payer money
Already, syndicated columnist Robert Novak has singled out Geithner as the architect of the Bear Stearns plan, which puts tax-payer money at risk.
Geithner is less like Austin Powers, an international man of mystery, than Jack Ryan, the intelligence hero created by novelist Tom Clancy. As in the case of Ryan, Geithner's hard work caught the eye of an influential superior and vaulted him into the highest ranks of government policy circles at a tender age.
Geithner grew up in Thailand and India. He graduated from Dartmouth College and earned a master's degree from Johns Hopkins University.
Gifted in Japanese, he joined the Treasury Department and appeared to be settling into a career at the department, eventually being assigned to the Treasury team at the embassy in Tokyo.
But Geithner was noticed by Larry Summers, who had joined Treasury as a member of the Clinton economic team and eventually took over for Robert Rubin as its chief. Geithner's star then rose like a rocket.
Soon Geithner had a seat at the inner circle headed by Rubin, who had moved to Treasury after two years in the White House. Geithner was part of the close team whose bonds were forged during the intense heat and pressure of Mexico's peso debacle in 1994.
Talented with people
The team then was tasked with taking on the "Asian contagion" financial crisis of 1997 and the collapse of the hedge fund Long Term Capital Management the following year.
In February 1999, Rubin, Summers and Alan Greenspan formed their committee to save the world, and Geithner was featured as a prominent member of the subcommittee.
In his memoir of the period, Rubin wrote that Geithner has "a talent for working with people, terrific common sense, and sound political judgment."
Ted Truman, a former senior Fed official who came to Treasury to work under Geithner for the last few years of his career, said Geithner was quietly effective.
"He was asking someone 20 years his senior to come work for him and he succeeded," Truman said. "Most people would have thought he was crazy. When I first approached me, I thought he was crazy. But he was very instrumental in persuading me and I never regretted that."
"He's a very conscientious, intelligent person and brings people together," Truman added.
Putting out feelers
When the Treasury Department was putting together rescue packages for Asian countries, Geithner put out feelers to the private sector to get a sense on whether the countries would deliver on their promises, Truman said.
"Sufficiently extraordinary times deserve extraordinary responses," Truman said.
"The question is whether in the process of that extraordinary response, you create problems for yourself down the road," he said. "We won't know the answer to that for several years."
After the end of the Clinton era, Geithner moved to the International Monetary Fund, perhaps to await another Democrat in the White House.
But to the surprise of many on Wall Street, the directors of the New York Fed tapped him in late 2003 to head the institution.
The choice of Geithner was never popular on Wall Street because of his lack of market experience. But his close ties with Rubin were seen as a plus.
Frustrating observers
Since taking over at the New York Fed, Geithner has frustrated Fed watchers by playing his cards close to the vest and mainly avoiding the topics of the day.
But a constant theme in many of his speeches was a warning to Wall Street that the era of easy credit might come to an end.
His speeches came with neither carrots nor sticks to move Wall Street and generally received little attention in the media. Behind the scenes, however, the groundwork was being laid.
Indeed, in his first public address in March 2004, Geithner warned that the good economic times were obscuring the fact that financial innovation was outpacing supervision.
In a remark that seems eerily insightful in light of the Bear Stearns collapse, Geithner warned that innovations had probably not brought an end to panics in financial markets and "they will not by themselves preclude the possibility of failure in a major financial institution."
Fed. Ops: 29.00B Matures this week.
Thu: 5.00B 14day
>>> 24.00B 7day
Float: 34.00B
* Paint Job 4 EOM Action IMO !!
=================================================
Temp Ops:
Perm Ops:
=================================================
Public Debt:
Limit ~ $9,815 T
3/20 ~~ $9,392 T
=========================================================
The Slosh Report:
http://www.gmtfo.com/RepoReader/OMOps.aspx
#msg-27425587
http://www.ny.frb.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE
Fed. Ops: 29.00B Matures this week.
Thu: 5.00B 14day
>>> 24.00B 7day
Float: 34.00B
* Paint Job 4 EOM Action IMO !!
=================================================
Temp Ops:
Perm Ops:
=================================================
Public Debt:
Limit ~ $9,815 T
3/20 ~~ $9,392 T
=========================================================
The Slosh Report:
http://www.gmtfo.com/RepoReader/OMOps.aspx
#msg-27425587
http://www.ny.frb.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE
Gold at one-month low as investors shun commodities
Thu Mar 20, 2008 6:13pm EDT
By Frank Tang and Anna Ringstrom
NEW YORK/LONDON (Reuters) - Gold finished nearly 3 percent lower on Thursday, capping a tumultuous week that included a record high on Monday and a 6 percent slide the previous session, as investment funds cashed in bullion for cash to cover losses in other financial markets.
All U.S. commodities markets will be shut on Friday for the Good Friday holiday. The markets will reopen on Monday for normal trading hours.
The combination of a sharp bounce of the dollar and heavy losses in the energy markets also prompted liquidation in gold amid a full-scale commodities retreat for a second day.
Other metals also dropped sharply following gold's decline, led by silver's losses of more than 8 percent. Platinum and palladium also slumped.
On Thursday, spot gold bottomed at $904.65 -- a level last seen on February 18 -- versus $944.20/945.00 late in New York on Wednesday. It was last at $920.30/921.10 by New York's last quote at 2:15 p.m. EDT.
Gold dived 6 percent on Wednesday in a dash for cash which analysts said was sparked by a smaller-than-expected U.S. rate cut on Tuesday.
Gold peaked on Monday at $1,030.80. The yellow metal was still up 10 percent since the start of the year.
Jonathan Jossen, an independent floor trader in New York, blamed gold's decline on deleveraging -- raising cash to reduce debt, meet margin calls and cover losses.
"That's what is happening all around the market. All they knew was to be long in commodities, but now they pulled the rug out from under it. So, I'd definitely say it's margin calls. It's definitely part of it," Jossen said.
The active U.S. gold contract for April delivery on the COMEX division of the New York Mercantile Exchange settled down $25.30, or 2.7 percent, to $920.00 an ounce, following the biggest one-day percentage loss in nearly two years on Wednesday.
Stocks in gold producers also extended their sharp sell-off into a fourth day on Thursday.
The most volatile of the sector indexes, the American Stock Exchange's Gold BUGS index of producers, shed another 4 percent on Thursday, bringing its losses since its Monday peak to nearly 17 percent.
"There has been a lot of long liquidation, I think primarily driven by the flee to cash to cover other losses ... especially in equities and currencies," said Daniel Hynes, metals analyst at Merrill Lynch.
"I think gold will remain under pressure today and it could drag on into next week. But I don't think we are too far off some good support levels which may see it rebound," Hynes said.
The dollar rallied on Thursday to its strongest level against the euro in a week, as investors took profits from oil, gold and other commodities, repatriating their cash back into the beleaguered U.S. currency.
Oil was down as much as 4 percent, briefly dipping below $100 a barrel, denting gold's appeal as a hedge against inflation. However, U.S. crude futures retraced early losses and traded just below $102 a barrel in afternoon trade.
Dealers also noted a significant drop in the open interest of the U.S. gold futures after they surged to a record high on Monday, signaling heavy liquidation of long positions.
UBS said in a research note it too expected gold to remain volatile in the short term, being caught up in the broader deleveraging trend.
"We are now at very attractive levels in many precious and base metals, but it is impossible to stand in the way of the relentless selling," the bank said.
Other precious metals followed gold. Silver dropped 8.3 percent to $16.86/16.91 an ounce from its previous finish of $18.38/18.43 late in New York on Wednesday.
Platinum fell 2 percent to $1,855/1,875 an ounce from its Wednesday close of $1,900/1,910 -- off a record high of $2,290 hit on March 4 -- while palladium fell 6 percent to $438/443 an ounce from its U.S. late Wednesday finish of $455/460.
(Additional reporting by Bate Felix in London)
http://www.reuters.com/article/goldMktRpt/idUSL2040688320080320?pageNumber=2&virtualBrandChannel=10150&sp=true
Gold at one-month low as investors shun commodities
Thu Mar 20, 2008 6:13pm EDT
By Frank Tang and Anna Ringstrom
NEW YORK/LONDON (Reuters) - Gold finished nearly 3 percent lower on Thursday, capping a tumultuous week that included a record high on Monday and a 6 percent slide the previous session, as investment funds cashed in bullion for cash to cover losses in other financial markets.
All U.S. commodities markets will be shut on Friday for the Good Friday holiday. The markets will reopen on Monday for normal trading hours.
The combination of a sharp bounce of the dollar and heavy losses in the energy markets also prompted liquidation in gold amid a full-scale commodities retreat for a second day.
Other metals also dropped sharply following gold's decline, led by silver's losses of more than 8 percent. Platinum and palladium also slumped.
On Thursday, spot gold bottomed at $904.65 -- a level last seen on February 18 -- versus $944.20/945.00 late in New York on Wednesday. It was last at $920.30/921.10 by New York's last quote at 2:15 p.m. EDT.
Gold dived 6 percent on Wednesday in a dash for cash which analysts said was sparked by a smaller-than-expected U.S. rate cut on Tuesday.
Gold peaked on Monday at $1,030.80. The yellow metal was still up 10 percent since the start of the year.
Jonathan Jossen, an independent floor trader in New York, blamed gold's decline on deleveraging -- raising cash to reduce debt, meet margin calls and cover losses.
"That's what is happening all around the market. All they knew was to be long in commodities, but now they pulled the rug out from under it. So, I'd definitely say it's margin calls. It's definitely part of it," Jossen said.
The active U.S. gold contract for April delivery on the COMEX division of the New York Mercantile Exchange settled down $25.30, or 2.7 percent, to $920.00 an ounce, following the biggest one-day percentage loss in nearly two years on Wednesday.
Stocks in gold producers also extended their sharp sell-off into a fourth day on Thursday.
The most volatile of the sector indexes, the American Stock Exchange's Gold BUGS index of producers, shed another 4 percent on Thursday, bringing its losses since its Monday peak to nearly 17 percent.
"There has been a lot of long liquidation, I think primarily driven by the flee to cash to cover other losses ... especially in equities and currencies," said Daniel Hynes, metals analyst at Merrill Lynch.
"I think gold will remain under pressure today and it could drag on into next week. But I don't think we are too far off some good support levels which may see it rebound," Hynes said.
The dollar rallied on Thursday to its strongest level against the euro in a week, as investors took profits from oil, gold and other commodities, repatriating their cash back into the beleaguered U.S. currency.
Oil was down as much as 4 percent, briefly dipping below $100 a barrel, denting gold's appeal as a hedge against inflation. However, U.S. crude futures retraced early losses and traded just below $102 a barrel in afternoon trade.
Dealers also noted a significant drop in the open interest of the U.S. gold futures after they surged to a record high on Monday, signaling heavy liquidation of long positions.
UBS said in a research note it too expected gold to remain volatile in the short term, being caught up in the broader deleveraging trend.
"We are now at very attractive levels in many precious and base metals, but it is impossible to stand in the way of the relentless selling," the bank said.
Other precious metals followed gold. Silver dropped 8.3 percent to $16.86/16.91 an ounce from its previous finish of $18.38/18.43 late in New York on Wednesday.
Platinum fell 2 percent to $1,855/1,875 an ounce from its Wednesday close of $1,900/1,910 -- off a record high of $2,290 hit on March 4 -- while palladium fell 6 percent to $438/443 an ounce from its U.S. late Wednesday finish of $455/460.
(Additional reporting by Bate Felix in London)
http://www.reuters.com/article/goldMktRpt/idUSL2040688320080320?pageNumber=2&virtualBrandChannel=10150&sp=true
Gold Falls to Biggest Weekly Drop Since 1990 as Dollar Rallies
By Pham-Duy Nguyen
March 20 (Bloomberg) -- Gold futures fell, capping the biggest weekly loss since 1990, as the dollar rallied and traders pared bets on future cuts in U.S. interest rates by the Federal Reserve.
Interest-rate futures show a 58 percent chance the Fed will cut borrowing costs by 50 basis points to 1.75 percent next month, compared with an 82 percent chance yesterday. The Fed has cut the overnight lending rate six times since September, when it was 5.25 percent. Gold reached a record $1,033.90 on March 17, before losing as much a $100 this week.
``Gold can thank the Fed and the dollar for this monstrous sell-off,'' said Matt Zeman, a metals trader at LaSalle Futures Group Inc. in Chicago. ``Right now, we are in no man's land.''
Gold futures for April delivery fell $25.30, or 2.7 percent, to $920 an ounce on the Comex division of the New York Mercantile Exchange. The price fell 8 percent this week, the biggest weekly drop for a most-active contract since August 1990.
Silver futures for May delivery fell $1.595, or 8.6 percent, to $16.85 an ounce on the Comex, dropping 18 percent for the week. Silver still is up 13 percent this year, while gold has gained 9.8 percent.
The dollar rose as much as 1.1 percent against a basket of six major currencies, reaching 72.922. On March 17, the index fell to 70.698, the lowest ever, according to Bloomberg data.
Six-Month Rally
Gold had rallied as much as 38 percent since the Fed began cutting the overnight lending rate on Sept. 18 as a housing slump and credit-market losses threatened to usher in a U.S. recession. The cuts sent the dollar to all-time lows against the euro and boosted the value of commodities that are priced in the U.S. currency.
Oil, soybeans, platinum and wheat futures all rose to records this year. Demand for precious metals soared as investors purchased gold and silver contracts to hedge against the declining dollar and commodity inflation.
The UBS Bloomberg Constant Maturity Commodity Index of 26 commodities fell as much as 3.3 percent to 1,384.485 today, after reaching a record 1,573.838 on Feb. 29.
``The psychology of the market has moved manifestly against gold,'' said Dennis Gartman, economist and editor of the Gartman Letter in Suffolk, Virginia. ``The dollar is strong. The other commodities are weak. That is putting downward pressure on gold.''
Holdings in the StreetTracks Gold Trust, the biggest exchange-traded fund backed by bullion, fell 2.3 percent yesterday to 648.8 metric tons from a record 663.8 tons reached on March 17.
Gold may drop to $850 before investors return, said Stuart Flerlage, who helps manage more than $600 million at NuWave Investment Corp. in New York.
`Cyclical Correction'
``This is a cyclical correction in a long-term secular market,'' Flerlage said. ``The fundamental underpinnings for gold remain the same. Gold has been a fiat currency play in the last five years as investors put money into gold to diversify away from dollar-denominated assets.''
Gold climbed 31 percent in 2007, the seventh straight annual gain and the most since 1979, when the price more than doubled. Gold broke the record of $873 set in 1980 on Jan. 8. This is the fourth weekly decline the metal has had this year.
``This is the correction we've long been expecting,'' said Adrian Day, president of Adrian Day's Asset Management in Annapolis, Maryland. ``It was triggered by buyer exhaustion. I would not sell and look to be a buyer again.''
Gartman, who sold half of his positions in gold yesterday, told clients today that gold may set fresh records by year-end.
``We are certain that sometime later this year, we shall see gold, and the grains and perhaps even the base metals trading materially higher than where they had traded earlier this week,'' Gartman said.
WTG Ray, get $$ & Room Comp @ Cashiers desk.
Fed to Auction $75 Billion in Securities
Thursday March 20, 2:50 pm ET
By Jeannine Aversa, AP Economics Writer
Fed Says It Will Auction $75 Billion in Treasury Securities Next Week
WASHINGTON (AP) -- The Federal Reserve, seeking to ease a painful credit crisis, will be making $75 billion of much-in-demand Treasury securities available to big investments firms next week.
Investment houses will get an opportunity to bid on a slice of the securities at a Federal Reserve auction next Thursday. The new lending program was announced by the Fed last week. It will allow investment firms to borrow up to $200 billion in super-safe Treasury securities by using some of their more risky investments as collateral. The first of the weekly auctions will be next Thursday.
http://biz.yahoo.com/ap/080320/fed_credit_crisis.html?.v=2
Fed.(2) 7day RP + 24.00B [ big ADD]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Fed.(2) 7day RP + 24.00B [ big ADD]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Fed. 14day RP + 5.00B [ Drain sofar -7.00B]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Fed. 14day RP + 5.00B [ Drain sofar -7.00B]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Congrats farooq /
Chichi2 BullandBearwise NotUpdated yet.
QQQQ ~ FOMOOut ~ SOMA ~ SPX #msg-11379252
Chichi2, info is incorrect that's why
l have not posted the net.