Skip to main content

Market Waits On


As the trading day ends for the week in a few hours, the world anticipates for news on Paulson and the members of the Treasury to disclose details on the bailout plan. The current market's  sentiment, judging from how equity indices are performing (volatile), indicate that market participants are running dry on patience, as they begin to doubt whether anything would be passed to restore liquidity in the markets, and save the sinking boat. 

In my opinion, restoring liquidity may not save all the firms from failing, but it is likely to calm the markets as well as those OTC derivatives creators who are still writing credit default derivatives.

Monday's market open would likely be another interesting one, as the markets will likely begin to discount the outcome, as it may no longer matter if the Bill is passed or not. Here is a short article of an enthusiastic party to this bailout plan:

UK banks hold 95 bln pounds of sour assets that could qualify for US bailout plan - Times of London

Times of London reports Britain's five leading high street banks have as much as 95.3 bln pounds ($175 bln) of distressed assets on their books that may qualify for the American bailout scheme. If the British banks tap the rescue fund being set up by the US Treasury and the Federal Reserve to the maximum, they could secure one quarter of the $700 billion being made available. Under the terms of an outline agreement that appeared to have been reached by US policymakers last night, Britain's lenders will be able to use the facility... According to analysts' estimates, and the banks' own recent filings, HSBC (HBC) has as much as 45 bln pounds in structured mortgage debt and other soured assets sitting on its balance sheet that it might look to exchange with the Fed under the plan. Next are Barclays (BCS), with 17.4 bln pounds; Royal Bank of Scotland (RBS), with 16.2 bln pounds; and HBOS, the UK's largest mortgage bank, with 13.3 bln pounds, analysts said yesterday. Lloyds TSB (LYG) follows some way behind in its exposure to the troubled mortgage securities, with assets of about 3.4 bln pounds.


Let's look forward to next week, where the Chinese exchanges will get an entire week's holiday for their national day. And I will be looking forward to this weekend's F1 in Singapore. Have a Great Weekend! 

Comments

Post a Comment

Popular posts from this blog

Financial Crisis Management

Back in the 80s, when the US government had to deal with a crisis where the Resolution Trust Corporation, which is a holding company formed and housed within the Treasury, to deal with distressed real estate that was funded by loans and savings, the strategy was deemed a sucess where it was later reused by the HK and Indonesian government during the asian financial crisis. This indeed managed to give immediate liquidity and confidence to the markets during such turbulent times. In addition, this came as a win-win situation for the governments, because as these distressed assets were bought in a 'fire-sale' price, which was significantly cheaper than its face value, the governments made profits from such transactions, where in today's case, the similar situation applies. The target of this plan for the purpose of restoring order in the banking system, so banks will remain confident to lend, as well as to free up funds for further lending and use when the economy grows.  Afte...
Post a Comment
Read more

Market Call

After much thoughts as to how my market calls should be made in order to create the best effect and authencity, here are some details that I would like you to know: All trades made on this  trading  account no. 77104 will be 'real' live trades. A report in the format (shown on the right) will be reported on a weekly and monthly basis. Trades and market calls made by me, are only for the purpose of reference, and is no indication for you to trade and follow.  Entry and exit of trades may be in a matter of minutes, therefore, I would urge readers to follow them closely or to backtrack the results with the use of their charts for authentication of results. See ya soon on market call.
Post a Comment
Read more

Can Banks Be Trusted?

Today's events have indeed been a thrilling experience experience for the international markets. As I am writing this, the China Central Banks has just cut its key interest rate again by 27 basis points to spur growth, Lehman (est. 1844) has filed for Chapter 11 (Bankruptcy) , there are rounds of ECB having an emergency rate cut, UBS sneaking in to declare another $5B of writedowns, AIG seeking help from the Fed with a request of a $40B bridge loan after rejecting an offer by Flower to prevent themselves from joining the slaughterhouse where their CDs are currently gapping outwards, and it seems that the only few pieces of good news are probably that Merril had a merger with BOA, as well as a consortium of global banks have put together a $70B fund to facilitate liduidity and an orderly resolution between Lehman and their counterparties. ECB also joined in with $30B to curb liquidity woes as well.  In my opinion, it seems like an obvious trend that all Fed Governors are challenged ...
3 comments
Read more