World economy talk

[uls]

haha

tapos sana ang problema ng mga bangko diba?

babalik sa original value ang mga bonds na hawak nila

hold to maturity lahat ng bonds

di na kelangan ibenta ng palugi

laki ng returns lalo na mga CDOs na high yield, high risk ang underlying

maka-cancel ang mga credit default swaps kasi wala na bonds mag dedefault

hindi na kelangan bigyan ng pera ang AIG

hehe

tapos ang problema ng economy

all Ben has to do is give everyone money to pay all their bills

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TALF -- Term Asset-backed securities Loan Facility

that's a Fed program to revive the securitization market... which is practically dead right now

the TALF program was announced weeks ago

the goal of the Fed is to encourage lending (if no one is buying loans, there's no incentive to make loans)

the private sector got burned badly by investing in asset-backed securities

there's no demand now of ABS, so securitization stopped, so there's no point in making loans coz no one wants to buy loans to package and sell

so the Fed steps in... encourages investors to buy ABS again

the Fed will LEND investors money to buy ABS

tada!

Nissan to Sell $1.3 Billion of Auto Debt Through TALF
http://www.bloomberg.com/apps/news?p...zcEUw&refer=us

March 17 (Bloomberg) -- The finance arm of Nissan Motor Co. plans to sell $1.3 billion in securities backed by auto loans in one of the first debt offerings eligible for a U.S. government program to boost consumer lending.

The largest AAA portion of the sale maturing in 1.98 years may price to yield between about 185 basis points and 200 basis points more than benchmark interest rates, according to a person familiar with the sale who declined to be identified because terms aren’t public.

The sale signals the start of the Federal Reserve’s $200 billion program to bolster lending to consumers by unfreezing the market for asset-backed securities. Investors may buy the top- rated bonds from Nissan with loans from the Term Asset-Backed Securities Loan Facility, or TALF. Sales of debt backed by consumer loans plunged 40 percent last year, according to Bloomberg data, choking off funding to lenders.

The first phase of the TALF may finance the purchase of AAA rated securities containing loans for autos, education, credit cards and small businesses. Officials eventually plan to finance other assets, including commercial mortgage-backed securities.

The Nissan offering is expected to price on March 19, the person said. JPMorgan Chase & Co. and Bank of America Corp. are underwriting the bonds.

amazing

[tidus1203]

Then package Toyota, Nissan, GM and Chrysler loans into one security and S&P will rate it AAA because of the Toyota tranch and totally forgot GM and Chrysler being junk hehehe... That should lower borrowing costs even for junksters like GM hehehe...

[uls]

haha

pero backed by car loans yan

hindi debt ng company

i'm just wondering how they can rate securities backed by car loans AAA

i know they do research on the credit worthiness of each borrower behind every car loan

pero how can they be sure tuloy tuloy ang cash flow ng mga nag car loan?

sigurado sila hindi mawalan ng trabaho ang mga borrowers? sa panahon na ito?

if borrowers lose their jobs, mag dedefault sa loans yan

and that would poison the AAA rated securities that contain the car loans

well, what do i know?

sila ang expert

[tidus1203]

Holy ****! The USD got killed last night, LITERALLY. It got killed against all currencies and it got killed against GOLD. The US is planning to inject another trillion 200 billion (of course out of thin air, the US is a debtor nation it has no savings) on the financial system and prop up bad assets. That is INFLATION!

http://biz.yahoo.com/ap/090318/fed_i...=TBD&ccode=TBD

[uls]

yep

USD index:



the Fed will now buy treasuries... $300B in the next 6 months

we expected that

we were talking about it a few posts back

that the US will follow the UK

eto na

i was watching bloomberg last night

when it was announced

the USD went into freefall

gold shot up

treasury yields fell

[tidus1203]

Grabe yung EURO (definitely the star of the night). 300 PIPS in an hours time after that announcement. 300 ****ING PIPS! In a regular $100,000 trading account that is already $3000 in an hour. AMAZING! The Swiss Franc also gained around that much, the Yen by 250 PIPS.

[uls]

Game changer yung FOMC announcement last night

[tidus1203]

In the stock market front we are again closing near the resistance point which was the November lows broken late last month. It hasn't breach it yet pero it is a resistance point (resistance points are price levels were there is a lot of seller and the buyers will likely fail to push prices up) and will be an interesting sight to see if it breaks or not. If it breaks then I might conclude we have a bottom in place (does not mean that we will go up back, we just found a bottom) but if it does not break and falls down again then the bear market continues in equities...

[uls]

Last night's Fed action changed the game

the powers-that-be want a weak dollar

they acted

they are indeed very powerful



now what is Europe and Japan gonna do about it?

[tidus1203]

Yep. It was just a matter of time... Kala ko nga mauuna US, inunahan pa sila ni little brother UK...

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the USG issues bonds

the Fed creates money to buy the bonds

the Fed will basically finance USG spending

TARP 2?

More stimulus?

no problem

the USG will just issue bonds, the Fed will monetize the bonds

it just doesnt sound right

something's gotta give...

Dollar Rally Crumbles as Fed Ramps Up Printing Press (Update2)
http://www.bloomberg.com/apps/news?p...oFQ&refer=home

March 19 (Bloomberg) -- The rally that pushed the dollar to the highest levels since 2006 is in danger of crumbling as the Federal Reserve starts buying Treasuries and ramps up its purchases of mortgage debt, adding to a flood of greenbacks.

“The implications of today’s Fed decision are unambiguous,” currency strategists at Citigroup Inc. wrote in a research report within a half hour of the Fed’s decision yesterday. The dollar “should weaken,” they said.

Fed policy makers said yesterday they plan to buy as much as $300 billion of U.S. government bonds and step up purchases of mortgage bonds, expanding the central bank’s balance sheet by as much as $1.15 trillion. The extra supply of dollars threatens to overwhelm investors just as the budget deficit swells.

The trade-weighted Dollar Index, which tracks the currency’s performance against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, tumbled 2.7 percent to 84.595, its biggest one-day drop since 1971. That pushed its decline to 5.6 percent since reaching 89.62 on March 4, the highest in almost four years.

[tidus1203]

Well we all know Ben was itching to run the printing press as we have always been discussing here... But this is the biggest public display yet that he is running the printing press at an unprecedented speed...

[uls]

yep

i wonder why biglaan

ano ang nakikita ng Fed?

they took out their most powerful weapon

you will only use your most powerful weapon when you're desperate

[uls]

++++++++++++++

[uls]

USD index intraday



gold

[tidus1203]

The Yen is the biggest winner today, the Euro, and the Franc are not far behind. I guess game changer nga ito. The USD rally that started mid last year I think its safe to assume its over. Then maybe the thread title can be relevant again after a half year's pause

By the way oil is trading at highest level this year...

[uls]

yep

oil is up

gold is up

copper is up

dollar is crashing

feels like early 2008

hehe

the title of this thread is becoming timely again

it became outdated for a while

the Fed stunned the market with its announcement

game changer dude

[tidus1203]

The stock market fell again. The resistances were respected and it still holds. The previous lows back in November are now the resistance once it was breach late last February. The bear market still holds, the past 2 weeks are still just considered a bear market rally and not a trend reversal...

[uls]

yep

short covering / bear market rally lang yan

and even if the USG and private sector cheerleaders try their best to put a positive spin on the economy, you just can't ignore the fact that the economy is still very bad