World economy talk

[chua_riwap]

Rollback...rollback!!!

Tapos....sabihin ng big 3.....P0.50/l lang.

[tidus1203]

By the way today is JOB's FRIDAY! Everyone seems to be occupied with the drop. Many say we will see positive numbers, but mukang short live lang to...

[Horsepower]

Thanks for the replies.

[tidus1203]

hehe

first time i heard of the "baidu indicator"

According to him he shorted BIDU a few days ago and covered around $700 and was happy about it. The next day was the crash! So much for his "BIDU INDICTAOR"... Watched the video again, long pala sya ng QQQQ's tapos may mga open naked puts... OUCH!

[tidus1203]

Another volatile session. The market is on an emotional swing right now... Kakatakot talaga...

By the way for all its worth payrolls up 290,000 but unemploymet is up 9.9%...

[uls]

FTSE, CAC, DAX all down bigtime

this is no longer just a Greece problem

it has already spread to the European banking system

interbank lending has tightened

LIBOR/OIS spread has widened

[uls]

Another volatile session. The market is on an emotional swing right now... Kakatakot talaga...

By the way for all its worth payrolls up 290,000 but unemploymet is up 9.9%...

yep

very volatile

[tidus1203]

Hey uls does it feel deja vu 2008? Certainly feels like it, although I am not as active in trading now compared to 2008 when I was a full time trader, pero I feel 2008 again... It might not be as bad as 2008 pero I 90% sure this is now the so-called "second leg" of this great recession...

[uls]

yes it does dude

September 2008

ganyan din nangyari

after Lehman collapsed, interbank lending froze

di naman kasing grabe ngayon pero this feels are so familiar

[tidus1203]

And the market movements and the panic selling and the thin liquidity. Very 2008 ang dating... Remember in 2008 meron ding mga 1000pts. like drop in a matter of minutes...

[uls]

yep, really feels like 2008 all over again

Fed considering currency swap with ECB to prevent dollar shortage in Europe

http://blogs.wsj.com/economics/2010/...-swap-program/

The Fed is considering whether to reopen a lending program put in place during the financial crisis in which it shipped dollars overseas through foreign central banks like the European Central Bank, Swiss National Bank and Bank of England. The central banks, in turn, lent the dollars out to banks in their home countries in need of dollar funding. It was aimed at preventing further financial contagion.

Fed officials believe the swap program was one of its most successful interventions aimed at stemming a global crisis, when many banks overseas became strained for dollar funding. In their normal course of business, they borrowed dollars in short-term lending markets and used those dollars to finance holdings of long-term U.S. dollar assets, like Treasury or mortgage bonds. When those markets dried up, the swap lines helped to prevent overseas bank funding crises in 2008.

Fed officials see the swaps as a low-risk program, because its counterparties in these loans are foreign central banks, and not private banks. At a crescendo in the crisis in December 2008, the Fed had shipped $583 billion overseas in the form of these swaps.

Libor rising

Strains in short-term funding markets are starting to show up again, but they’re nowhere near as severe as they were after Lehman Brothers collapsed in September 2008, so it’s not clear that the program is warranted.

One example of this strain shows up in the London interbank offered rate, or Libor, a short-term international lending rate. Libor has risen from 0.31% in mid-April to 0.43% on Friday. Another sign of stress is that it is 0.18 percentage points above the expected federal funds rate — the Fed’s benchmark lending rate — up from 0.09 percentage points over the past three months. When that spread gets larger, it’s a sign of banks’ skittishness about lending to other banks.

[Monseratto]

Does this mean banks from countries in the PIIGS zone must pay higher lending rates or is it banks don't want to lend to banks that are holding a lot of PIIGS debt papers and are using these as collateral?

[uls]

both actually

European banks are demanding higher rates from each other for short term borrowing due to uncertainty about each other's exposure to PIIGS sovereign debt

and banks have become reluctant to lend to each other coz the quality of the bonds used as collateral are diminishing

Greece banks have already been totally shut out of international money markets

kaya diba the ECB said it will still accept Greece bonds as collateral kahit junk status na

Greece banks have no one else to borrow from except the ECB

[pup2]

Kawawa din yung tao sa video if true. Feeling super smart & mega rich 1 day, broke & idiotic the next.

I guess a) humility pays off and b) margin trading is the tool of the devil ...

[uls]

hehe

only when you get a margin call

---

a video from the same guy

this is funny stuff

[ame="http://www.youtube.com/watch?v=TH9BsfyI3JI"]YouTube- Stock Market Crash 2010[/ame]

[tidus1203]

Natawa ako ah. What that Cramer? (referring to CNBC's Jim Cramer) Nope me! HEADHSOT!

[uls]

the EU's version of TARP

+ ECB quantitative easing

EU Crafts $962 Billion Show of Force to Halt Crisis (Update1)
http://www.bloomberg.com/apps/news?p...z3fbc9ic&pos=2

May 10 (Bloomberg) -- European policy makers unveiled an unprecedented loan package worth almost $1 trillion and a program of bond purchases as they spearheaded a global drive to stop a sovereign-debt crisis that threatened to shatter confidence in the euro.

Jolted by last week’s slide in the currency and soaring bond yields in Portugal and Spain, European Union finance chiefs met in a 14-hour session in Brussels overnight. The 16 euro nations agreed in a statement to offer as much as 750 billion euros ($962 billion), including International Monetary Fund backing, to countries facing instability and the European Central Bank said it will buy government and private debt.

ECB to buy bonds in the secondary market

Rehn Says ECB Has Decided to Intervene in Secondary Market
http://www.bloomberg.com/apps/news?p...B.EV_9Kw&pos=4

May 10 (Bloomberg) -- European Union Economic and Monetary Affairs Commissioner Olli Rehn said the European Central Bank has decided to intervene in the secondary market.

“The ECB has taken a decision to intervene in the secondary market of securities,” Rehn told reporters in Brussels.

Fed restarts currency swap with other central banks

Fed reopens currency swap lines with ECB, others
http://www.reuters.com/article/idUSTRE6490HT20100510

(Reuters) - The U.S. Federal Reserve reopened currency swap facilities with other major central banks on Sunday to help ease market strains in Europe.

The Fed revived facilities established during the 2007-2008 financial crisis with the European Central Bank, the banks of Canada and England, and the Swiss National Bank.

"These facilities are designed to help improve liquidity conditions in U.S. dollar funding markets and to prevent the spread of strains to other markets and financial centers," the Fed said in a statement.

The Fed will provide dollar swaps for the ECB, the Bank of England and the Swiss National Bank with no upper limit against fixed collateral, as was the case with facilities that had expired February 1.

[tidus1203]

The Bazooka should stop the bleeding for some time. Does not mean this is over...

[uls]

yep

all it will do is calm the market temporarily

the Euro took off like a rocket... went above 1.30... then lost momentum



--

QE begins

RTRS-GERMANY’S BUNDESBANK SAYS EURO ZONE CENTRAL BANKS HAVE STARTED BUYING GOVERNMENT BONDS.

[uls]

Eurozone money printing goes into overdrive

Bank of France: Purchase of Eurozone Govt Bonds Has Begun
http://imarketnews.com/node/13153

PARIS (MNI) - The Bank of France has begun buying eurozone government bonds, a spokeswoman confirmed Monday, without giving further details.

Euro zone central banks buying govt bonds - Bundesbank
http://www.reuters.com/article/idUSWEA125920100510

FRANKFURT, May 10 (Reuters) - Euro zone central banks have started buying government bonds, Germany's Bundesbank said on Monday.

"We confirm this," a Bundesbank spokesman said.

The Bank of Finland said earlier that all euro zone central banks would take part in the bond buying plan, a key part of the $1 trillion package aimed at resolving the euro zone debt crisis.