Liquidity

TOKYO - THE global liquidity crisis appears to be over but much work remains to be done to rebuild the economic damage wrought by months of financial turmoil, the head of Japan's top broker said on Wednesday.'The liquidity crisis in the financial world is over. The next step is how to rebuild the real economy,' Mr Kenichi Watanabe, chief executive of Nomura Holdings, told reporters.'This of course

More measures announced by the Reserve Bank of India (RBI) to shield the Indian economy from the global economic slowdown may lift the market from a recent steep fall. But stepping up of sales by foreign funds in the last two days may weigh on the sentiments. On the flip side, gains in Asian markets may support the domestic bourses. Asian markets rose even as there was no concrete move at a meetin

Central banks' move to guarantee deposits and inject liquidity may produce inflationary pressure, according to some market watchers. Marc Faber, managing director of Asia-based investment advisory firm Marc Faber Ltd, said,"You have inflationary monetary policies, fiscal policies, and debt growth that will really accelerate." When asked abot US situation now, Warren Buffett replied: "It's much eas

Chanda Kochhar, Joint MD and CFO, ICICI Bank, said the bank has adequate rupee and global liquidity of Rs 12,000 crore. "We have no international investments, only loans on our balance sheet. We do not use rupee liquidity to fund global activities."Kochhar said the bank has not seen a scale-down in deposit growths. "The focus this year is on current and savings accounts."According to her, the bank

The government decided on Thursday to speed up the disbursement of Rp25.9 trillion of the Rp290 trillion allocated for the social safety net and growth stimulation in the 2008 national budget to ease liquidity."This month the government will speed up the disbursement of Rp25.9 trillion in the budget as the finance minister has explained which is needed to assure continued economic activities in In

NEW YORK (Dow Jones)–Steep losses Monday in bank stocks reflect the dire straits the banking industry may face if politicians reach no agreement on the financial rescue package. “All of us are just numb,” said Frank J. Barkocy, the director of research at Mendon Capital Advisors Corp. Asked if he fears more big banks might not pull through the crisis, [...]

LONDON (MarketWatch) — Banks remained afraid to lend to each other Tuesday, leaving money markets in a deep freeze that economists warned could lead to a wider economic collapse. “Money markets are in a state of extreme distress,” said Neil Mackinnon, chief economist at ECU Group, a research firm. The overnight London interbank offered rate, or Libor, posted a record [...]

Editorial Reviews Review “Equity Markets in Action should be required reading for all aspiring traders and equity money managers. The computer simulation model should further enlighten the reader.” — Financial Analyst Journal, January/February 2005 An in-depth look at the nature of market making and exchanges [...]

This “ liquidity crisis” was patent back in September of 2007. We then discussed whether it was a real liquidity crisis or confidence crisis, but that was just an academic exercise. The point is that what happened last week and prompted the President’ “There is nothing to fear… Fear!!! Panic!!! Oh my god we all are [...]ShareThis

WELLINGTON, Sept 19 - The Reserve Bank of New Zealand said on Friday the current turmoil in global markets was having an adverse effect on liquidity in New Zealand, but the country's banking system... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Despite today’s massive co-ordinated central bank action to pump dollars into the markets the continued extreme liquidity pressures deteriorated further. This is evidenced by another sharp rise in 3 month Libor, which increased today by 0.11% to 5.98%, making a rise of 0.28% so far this week. Another key point from today's market movements is that although short dated gilt yields fell, the corre

In a strong showing of confidence in the European money markets and to calm fears of liquidity issues, six European Central Banks have injected $110 billion to fund the US dollar. In the past two days the Bank of Japan has infused about 5.5 trillion yen or just over $52 billion to both lessen the fallout from the Lehman Brothers announcement on Monday and to shore up the Japanese money market. Wit

HONG KONG, Sept 16 - Lehman Brothers' bankruptcy filing will have a negative impact on Hong Kong markets but the city's central bank will provide liquidity if needed, said Joseph Yam, chief executive... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

The Fed has been testing investment banks to see what will become of their balance sheets and liquidity if the credit markets signal another hurricane watch.... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

- Operating and related actions to generate approximately $10 billion in cash improvements - More than 20 percent reduction in salaried employment cash costs - Dividend on common stock suspended - Asset sales and capital market activities to raise $4-7 billion of additional liquidity Read more...

Real estate industry keeps facing the trauma of policy changes… The recent cash crunch in real estate sector has led to major impacts on real estate companies in India. The liquidity crunch is making it impossible for realty companies to organize for funding. The recent slowdown in demand, high interest rates, rising input costs and meltdown of realty stocks have only added to their problems. It

The stock market showed signs of life last week, and investors are expecting more improvement in the coming days. The VN Index broke its 25 day downward trend on Thursday with a 0.1 point increase, and another 2.13 point increase was added on Friday to close at 372.68. With these increases, the week’s losses were... [[ This is a content summary only. Visit my website for full links, other cont

The State Bank of Viet Nam (SBV) has confirmed its continued intervention to ensure the liquidity for the market. The SBV said in the third quarter of the year, it will set up inspection teams to inspect and make comprehensive assessments of the operation of credit institutions nationwide, especially those in Hanoi... [[ This is a content summary only. Visit my website for full links, other cont

Liquidnet today announced BATS TradingInc. (BATS) has become its 22nd Streaming Liquidity Partner (SLP). Thisliquidity alliance enables Liquidnet's nearly 500 Member firms, via LiquidnetH2O(TM), unique access to approximately 700 million additional shares ofliquidity per day(1). BATS has integrated the ability to cross with LiquidnetH2O via its new Dark Scan order type and joins Liquidnet H2O's

Dark Liquidity PoolsDark Pools VideoHere is a recent video I found on the state of dark liquidity pools from Reuters."Dark liquidity pools are basically internal systems for trading stocks privately, off of public exchanges and out of the public eye. They are growing rapidly, both in number and in volume of trades.Behind the boom in dark pools are large hedge funds and institutional clients that w

Greater liquidity and investor confidence are key to helping the stock market develop, said participants at a seminar held in Ha Noi yesterday by the Viet Nam Association of Securities Businesses. Loosening the daily trading band on the stock market would help boost liquidity, said Ngo Phuong Chi of Bao Viet... [[ This is a content summary only. Visit my website for full links, other content, an

A good friend and past client just sent me this National Public Radio podcast that explains how the Liquidity Crisis was born. I had listened to this on the radio the other day. It gives a real ground level, human perspective of how we ended up where we are today. You can download the pod cast for $.95 [...]

Liquidity shortages are becoming more severe in Viet Nam's banking system, as citizens withdrew funds in increasing amounts to seek higher returns. This situation gives control of the economy to the informal lending sector and removes a major macro policy tool from the State Bank of Viet Nam (SBV). As a result, the... [[ This is a content summary only. Visit my website for full links, other conte

The State Bank of Viet Nam (SBV) will provide funds to ensure commercial banks maintain adequate liquidity as it tightens monetary policy, it said in a statement posted on its Web site late Tuesday. The central bank will help commercial banks obtain funds by mortgaging their securities with it and through credit... [[ This is a content summary only. Visit my website for full links, other content

REGENERX BIOPHARMACEUTICALS, INC. (AMEX: RGN) filed for a secondary offering late yesterday to sell some $60 million in a secondary offering of stock and... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

The State Bank of Viet Nam (SBV) has sent a document to commercial banks, affirming that SBV will strengthen the refunding of capital, in the form of guaranteed loans, to commercial banks to ensure their payment capacity, especially small-scale ones. Together with the refunding capital, the SBV will also continue its... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Philip Morris International Inc. (NYSE: PM) has just filed a shelf registration that would allow the international tobacco giant to sell debt securities and... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

CURRENCY TRADING SUMMARYU.S. Dollar Trading (USD) was softer against the other majors other than sterling despite no significant data being released, leaving the market to find its own direction based on sentiment. US Fed officials Kroszner and Evans both spoke on Monday, avoiding the topic of monetary policy in their comments. Kroszner touched on transparency in lending standards and standardization aiding the sub-prime mortgage market, but suggested the financial markets remained “bogged down by unease.” Troubled news continues to flow from the financial sector as the second largest U.S bank, Bank of America Corp., reported a 77% drop in Q1 profit brought about by US$6bn of credit write-downs. Speculation has mounted that Citigroup may cut its dividend again following on from billion

WASHINGTON (Dow Jones)–The global liquidity crisis could begin to resolve itself over the next six to nine months but continued market turmoil will likely result in a “bumpy” year, MBIA Inc. (MBI) Chairman and Chief Executive Joseph Brown said Monday. Speaking at Georgetown University in Washington, Brown said the current housing crisis could stretch longer, not reaching a bottom for [...]

CURRENCY TRADING SUMMARYU.S. Dollar Trading (USD) was again volatile on Thursday as it reached a new record low against the Euro before pairing back following Luxembourg Finance Minister Juncker’s comments suggesting financial markets have misunderstood the G7’s position on currency volatility, hinting that the major concern is perhaps not in U.S weakness, rather in Euro strength. He went to say the Euro’s recent advance against the dollar is not “desirable.” This triggered a knee-jerk reaction to buy back the dollar. U.S initial jobless claims rose by 17k to 372k, however this was slightly less than forecast. The four-week average of new jobless claims remained largely unchanged at 376k. The Federal Reserve Bank of Philadelphia’s general economic index fell to -24.9 for the mo

While 1.60 barrier continues to hold in EURUSD, we observe the lack of liquidity causing unexpectedly large swings in emerging market currencies and majors alike. MAJOR HEADLINES – PREVIOUS SESSIONSZ Adjusted Retail Sales YoY (Feb) out at 3.3% vs. 1.6% expected. SZ ZEW Survey – Expectations (Apr) out at -71.4 vs. -60 expected. E-Z Trade Balance (Feb) out at 0.8B vs. -3.5B expected. E-Z Construction Output MoM/YoY (Feb) out at 1.2%/4.3% vs. 1.6%/1.6% prior. CA CPI MoM/YoY (Mar) out at 0.4%/1.4% vs. 0.5%/1.5% expected. CA CPI Core MoM/YoY (Mar) out at 0.2%/1.3% vs. 0.3%/1.4% expected. US Initial Jobless Claims out at 372K vs. 375K expected. US Continuing Claims out at 2984K vs. 2950K expected. US Leading Indicators (Mar) out at 0.1% as expected. US Philly Fed (Apr) out at -24.9 vs. -15 e

The Viet Nam Banking Association late last week proposed that the State Bank of Viet Nam strictly punish any commercial banks that charge excessive interest rates, association representative Truong Dinh Song told Viet Nam News. Some banks believed, however, that the central bank would refrain from imposing any administrative measures following the Prime Minister’s recent order against further

In lieu of the recent predictions that the Prince made for future investment banking regulation, there are new developments that warrant his commentary.  First, by and large, the predictions made by the Prince ended up being part of Paulson’s plan for more regulation of the financial services industry.  The idea the Prince would most like to focus on here is the thought that regulators, which could be the Fed in the future, are going to demand more capital and lower leverage on investment bank’s balance sheets. The regulators are going to make these demands in light of the bailout of Bear Stearns and the perception that leverage combined with non liquid assets on an investment bank’s balance sheet could lead to another investment bank getting killed in the futur

Short Selling & LiquidityShort Selling & Liquidity is a video interviews with an Australian hedge fund manager discussing global rules and differences in the uptick rule related to short selling. They also discuss the definition of a hedge fund and how a hedge fund could be low risk: -yqM2w&hl=en- RichardSubscribe To this Blog via Email | Or RSSRelated Articles:1. Investment Blogs2. Top 50 Hedge Fund Websites3. Hedge Fund Company4. Hedge Fund Jobs5. Hedge Fund ManagersPermanent Link: Short Selling & LiquidityTags: Shorty Selling & Liquidity, Hedge Fund Shorts, Hedge Fund Shorting, Hedge Fund Liquidity, Hedge Fund Long/Short Risks

SEC Chairman Cox Backs Updating Guidance On Bank Liquidity Last Update: 3/20/2008 8:15:38 PM By Judith Burns Of DOW JONES NEWSWIRES WASHINGTON (Dow Jones)–Securities and Exchange Commission Chairman Christopher Cox on Thursday endorsed updating guidance on bank liquidity in light of the collapse last week of Bear Stearns Cos. (BSC), a collapse he said [...]

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The Fed Can Provide Liquidity, But Not Solvencyby Hussman Funds - snips:With the Carlyle Group (one of the world's largest private equity groups) and Bear Stearns (one of the world's longest existing investment banks) suddenly plunging into chaos last week, investors should be braced for more trouble. What we observed last week is clearly a liquidity problem – the solvency problems are only beginning... But I've also emphasized that the Fed has a legitimate and essential role as a “lender of the last resort” during banking crises and other financial panics. In my view, the recent interventions by the Federal Reserve – $100 billion in “Term Lending” financing and another $200 billion “Securities Lending Facility” - are, in fact, large interventions. But investors should full

Dramatic moves may extend even further as market frets the next Bear Stearns. Fed likely to cut 100 bps tomorrow.MAJOR HEADLINES – PREVIOUS SESSIONOvernight developments: * US Fed Announces dramatic weekend measures of financing Bear Stearns buyout and lowering discount rate 25 bps. * New Zealand Feb. Performance of Services Index out at 55.6 vs. 51.9 in Jan.THEMES TO WATCH – UPCOMING SESSIONKey event risks today (all times GMT): * Switzerland Jan. Retail Sales (0815) * EuroZone Q4 Employment (1000) * US Q4 Current Account Balance (1230) * Canada Jan. Manufacturing Shipments (1230) * US Mar. Empire Manufacturing (1230) * US Jan. TICs Data (1300) * US Feb. Industrial Production and Capacity Utilization (1315) * Switzerland SNB's Roth to speak (1700) * US Mar. NAHB

On Friday US market was down even after getting a good economic data because of the news that New York Fed and J P Morgan chase will provide emergency funding to bear Stearns to stave off liquidity problems arising from the credit crisis. They almost down by 50 percent and also it [...]

Bharatbook.com is proud to announce the new report “Understanding Volatility and Liquidity in the Financial Markets” ( Introduction Based on intensive research projects conducted at a range of commercial and investment banks, Understanding Volatility and Liquidity in the Financial Market provides an in-depth and practical guide to the implementation of a risk management system. Understanding Volatility and Liquidity [...]

Regional markets get a fillip from Fed’s liquidity offer -Singapore Plan welcomed but opinions differ over its long-term impact on US economy and markets By R SIVANITHY (SINGAPORE) Asian stock markets yesterday rebounded sharply in line with Wall Street’s Tuesday reaction to the US Federal Reserve’s latest credit market bailout plan, led by a 1.9 per cent jump [...]

The Fed’s move yesterday to lend Treasury securities to primary dealers in exchange for mortgage-backed securities as collateral was the latest attempt to prevent the financial crisis deepening. Whilst it has given liquidity to the inter-bank market, it does nothing fundamental to restore wealth. The Fed has simply created a financial “fog of war”; intentional or [...]

US Trade Deficit Widens Less Than Expected The US trade deficit widened less than expected in January to -$58.2 billion, a 0.6 percent increase from December, as exports grew 1.6 percent while the... More at: http//moneymakinglounge.blogspot.com

Commodity currencies may remain under pressure if key support falls. EURJPY headed for a tumble?MAJOR HEADLINES – PREVIOUS SESSIONOvernight developments: * Japan Jan. Machine Orders rose 11.4% YoY vs. -4.5% expected * China Feb. PPI out at +6.6% YoY vs. +6.9% expected * China Feb. Trade Balance out at +8.56B vs. +22.5B expected * Japan Feb. Eco Watchers Survey Outlook rose to 39.5 vs. 35.8 in Jan.THEMES TO WATCH – UPCOMING SESSIONKey event risks today (all times GMT): * Germany Jan. Trade Balance (0700) * France Jan. Industrial and Manufacturing Production (0745) * Sweden Industrial Production and Orders (0830) * Norway Feb. PPI and CPI (0900) * UK Feb. PPI Input/Output (0930) * UK Jan. Industrial and Manufacturing Production (0930) * Canada Feb. Housin

There are two aspects of liquidity: A. How readily an asset can be turned into cash (the ease with which buyers and sellers can be brought together and can agree on a price) is called liquidity. An important consideration in assessing risk is how liquid various financial assets are. Therefore, assets that are less liquid tend to have a wider spread between the "bid" (the price offered by a would-be buyer) and the "ask" (the seller's asking price). Cash is King! You need cash and liquidity for freedom and security. The cash in reserve provides money for not only emergencies but opportunities as well. A cash reserve provides the foundation for your entire financial position. You should get your cash reserve in order before taking on any risky investments with money you can n

Smart Buyers Collection is a collection of words of wisdom by various Singapore property watchers.By: rob_502Posted: 18-10-2007I think the goverment is doing all that they can do relieve the short term supply crunch. What I am worried is that they may over do it and there will be an oversupply in a couple of years. I am sure they are controlling the media, notice that it is not so much hyped up as 6 months ago. The hyped up it is, the more people will panic. Market is everywhere is too hot to touch, property, stocks, china, you name it. However the ELEPHANT (US) is definitely going to slow down. Let's see how this will affect the EASTERN superpower. I have never seen anything like it in my lifetime. Property prices goes up as fast a the stock market. This market is definitely driven by gre

LONDON, Jan 18 (Reuters) - UK insurer Standard Life (SL.L: Quote, Profile, Research) said on Friday it had not prevented retail investors from withdrawing cash from its flagship UK property fund, as liquidity in the fund remains sufficient."The situation is the same as in December. There's sufficient liquidity and there are no queues in place," to exit the firm's pooled pension property fund, said a Standard Life spokesman.

The USD gained for a 2nd straight week against the EUR as accelerating inflation encouraged traders to reduce bets that the Fed will cut its target lending rate of 4.25% at its next months’ meeting. Meanwhile, the U.S. Commerce Department report spurred concerns that the most successful shopping season in 5 years may have already pushed the economy into a recession. According to the report, the U.S. consumers spent more than they had made during the month of November. This caused Personal Savings to dip into negative territory for the first time in 15 months. With high inflation still a problem, the Fed is running out of options. The housing slump has deepened since the subprime mortgage crisis in August led to a worldwide credit shortage. New Home Sales fell in November, signaling no end to the housing recession that threatens to stall economic growth. December’s New Home Sales figure is also expected to set a low mark this Friday. Furthermore; According to several large

As 2007 draws to a close, the USD is making a nice comeback. Yesterday the greenback continued to gain ground against most of the majors. Even though the Fed estimates that the economic growth will be weak into next year, the USD was bought anyway as risk aversion continues to seep through the market. The U.S. currency appreciated against the EUR and surged to a 3 month peak against GBP amid signs that financial market turmoil was starting to threaten economic growth beyond U.S. borders. In mid-afternoon trading, the USD was 0.3% higher at $1.4365. Analysts say that the greenback continues to draw strength from last week’s unexpectedly strong U.S. Retail Sales and inflation data that was seen limiting the need for the Federal Reserve to cut interest rates further next year. Meanwhile, the U.S. Financial markets are continuing to be a significant source of uncertainty. The Federal Reserve warns that the overall economic growth will be slowed down into next year as the housing

No. thebankruptcynewsdotcom Short article today. In the above chart, an ascending line shows gold acting as a hedge against the mad emission of currency by the fed. A descending line show gold losing value against the “currency inflation.” As you can see, gold is not a particularly apt instrument to hedge against liquidity injections by the Federal Reserve (which eventually produce inflation). The flat line at the left of the chart is the period during which the US used the gold standard (the fed could not print more money than the gold it had in its reserves and the price of gold was regulated). The periods of accelerated injection of currency are marked by steep down lines. If the current conditions persist, and history can provide any lessons, we shall be in a period of high inflation in the next 2 to 5 years. The following chart shows the same data (adjusted for scale), where you can see how the price of gold does not correlate to the injection of money by the Fed

” The premiums that lenders demand from each other for loans are on the rise this week, signaling that banks are very nervous about having enough funds ahead of the year-end.The Federal Reserve and European Central Bank have gone to great lengths to assure lenders they will maintain strong liquidity in overstressed capital markets as the year moves to its finish. But this has not been enough to persuade banks to lend to each other at attractive rates, so London interbank offered rates have reached sharp highs.” This is a signal that banks’ immediate funding worries are so severe that even extraordinary measures taken by central banks to maintain liquidity are not sufficiently reassuring to the lenders. Banks appear to be hoarding cash in the event they will need to write down more bad debt backed by souring mortgage collateral. “There is a definite liquidity crisis,” said Mirko Mikelic, a portfolio manager for Fifth Third Asset Management. “There is

Yesterday, the USD posted a mixed performance ahead of today’s Thanksgiving holiday in the US, remaining relatively unchanged against major currency counterparts. The greenback continued to hover around record lows against the EUR as expectations that further Federal Reserve interest rate cuts were reinforced by the Fed’s projection that the U.S. economic growth will probably slow next year. Federal Funds futures now show that traders predict a 90% chance of a 25 basis point rate cut during the FOMC’s December 11th meeting. Such clear interest rate expectations can only hurt the dollar further through short-term currency trading. The sentiment regarding the U.S. dollar continues to worsen after the Fed stated that tighter credit conditions and high energy costs would likely slow the U.S. growth next year by between 1.8% and 2.5%, sharply below its previous forecast. Today, all U.S. financial markets are closed due to the Thanksgiving. During the holiday, relatively narr

The foreign exchange market is unique because ofits trading volume,the extreme liquidity of the market,the large number of, and variety of, traders in the market,its geographical dispersion,its long trading hours: 24 hours a day (except on weekends),the variety of factors that affect exchange rates.the low margins of profit compared with other markets of fixed income (but profits can be high due to very large trading volumes)According to the BIS,[1] average daily turnover in traditional foreign exchange markets is estimated at $1,880 billion. Daily averages in April for different years, in billions of US dollars, are presented on the chart below:This $1.88 trillion in global foreign exchange market "traditional" turnover was broken down as follows:$621 billion in spot transactions$208 billion in outright forwards$944 billion in forex swaps$107 billion estimated gaps in reportingIn addition to "traditional" turnover, $1.26 trillion was traded in derivatives.Exchange-traded forex futures

Financial emergencies may sprout at any time in your life. They need no permission from you. If you are a salaried person and you have to meet an emergency in between the month seeking your financial attention and in such testing conditions if your pockets are waiting for the next payday, you may find yourself ill-prepared and helpless. You search for some reliable and quick financial backups to patch up your financial plight. But getting quick funds is quite difficult which puts you in frustrating situations. Cash till payday loans prove to be a savior in disguise for you in these conditions. The pros and consThese are short term loans specially provisioned to meet the needs of salaried class persons seeking quick funds to meet their emergencies in between the month. These loans are usually of unsecured types. You need no collateral to place while applying for these loans. You have to pay the loan amount back on your next payday, so these loans have a very short repayment schedule of

The European Central Bank (ECB) has added 55 billion Euros "liquidity" in its latest regular one-week tender on Wednesday. Bids for 218 billion Euros were accepted at a minimum rate of 4.12% and the weighted average rate came in at 4.16%, still above the reference rate of 4%. In so called "other operations" the ECB drained 24.5 billion Euros. As the ECB website information painstakingly avoids to list its money market operations in chronological order (as the Fed NY does) I am at a loss to explain where this was drained from. Single data points only are not exactly the kind of transparency Europe's high priests of ever expanding credit always like to praise so much.It is ECB policy though. Only a day earlier ECB president Jean-Claude Trichet had told the European Parliament, Euro bankers should apply "verbal discipline." I would say, a sound policy would help more to calm markets which bid cash gold to a new 28-year high at $743.In order to find out how much "liquidity" is currently c

Central banks have shored up financial markets again with freshly digitized money. New money that has no corresponding value in the economy and is solely used to support unsupportable prices of illiquid investment instruments.After the give-in of the Bank of England earlier this week, which came to the rescue of financial institutions where managers are obviously not worth their money but still want to cash bonuses before bankruptcies. After this 10 billion pounds stint in the UK the European Central Bank said its discount window has handed out 3.9 billion Euros on Wednesday.According to the Wall Street Journal,the heavy use of the marginal lending facility -- the highest since October 2004, when banks borrowed €7.9 billion -- surprised money-market dealers, as it is regarded as lending of last resort."It is most remarkable, because it happened not at the end of the statement period but in the middle of it," said Jose Alzola, chief European economist at Citigroup.The rate at which ba

From ReutersSHANGHAI, Sept 25 (Reuters) - China Construction Bank (CCB) the country's second-largest bank by assets, will curb its loan growth due to monetary tightening by the Chinese government, its chairman said on Tuesday.The bank, partly owned by Singapore's Temasek Holdings [TEM.UL] and Bank of America Corp has taken 1 trillion yuan ($133 billion) in new deposits so far this year and issued 300 billion yuan in new loans, said Chairman Guo Shuqing."This shows our bank has very ample liquidity," Guo told a group of reporters after a ceremony for the listing of the bank's shares at the Shanghai Stock Exchange."Meanwhile, we will control the growth of loans because the state has its considerations of macroeconomic adjustments," he said.[Read more]

Ok - Here's the question of the month.  Why are we going through a liquidity crunch and why is affecting lenders the way it does? Starting with a bit of history.  In the old days, our grandparents time, there were mainly Savings and Loans institutions that received savings from a large amount of people, paying them a smaller interest rate, then lending out the money to a smaller number of people for a higher interest rate.  This difference in rates allowed the banks to make their money. Think "It's a Wonderful Life" starring Jimmy Stewart.  Banks were able to stay in business over a long time due to the assets of their loans being right in their community.  This is still done in some areas of the country. (Even in my hometown).Move forward to the present.  Banks want to make more money.  Deregulation occurs, banks start buying each other out, more deregulation occurs and banks are able to move across state lines. Banks and other

Long dated US Treasuries reversed part of their dramatic gains on Monday, dragged down by worries that foreign investors were actually dumping US debt paper in last week's run-up. According to a Bloomberg report America's creditors actively pursue a diversification of their assets, shifting away from the Federal Reserve Dollar. The next Treasury Inflow Capital data will bring more clues about the amounts moved.Investors are correct by doing so. Last week's flight into US Treasuries was a flight into liquidity but certainly not a flight into safety unless one is satisfied with nominal and not real returns.It appears a bit illogic to consider debt obligations from the biggest debtor the world has ever seen as a safe investment. Let us not forget that the AAA rating for US IOU's has never changed since debt has been rated. The paramount difference is, though, that the USA was the world's biggest creditor when it aquired its AAA rating. Now it is the biggest debtor and to keep the US

Why the Fed Will Not Stop Deflation by HoweStreet - 8/26/07 snips:We hear it every day: "What about the Fed?" The vast majority of investors and commentators seem confident that the Fed's machinations make a stock market collapse impossible. Every hour or so one can read or hear another comment along these lines: "the Fed will provide liquidity," "the Fed is injecting money into the system," "the Fed will be forced to bail out homeowners, homebuilders, mortgage companies and banks," "the Fed has no choice but to inflate," "the government cannot allow deflation," "the Fed will print money to stave off deflation" and any number of like statements. None of them is true... The Fed did not give out money; it offered a temporary, collateralized loan. The Fed did not inject liquidity; it offered it. The Fed did not lend against worthless sub-prime mortgages; it lent against valuable mortgages issued by Fannie Mae (the Federal National Mortgage Association), Ginnie Mae (the Government Nationa

Thu, Aug 30 2007, 08:38 GMTby Benny MenasheThe market will open with Trichet’s speech and the clues regarding a September rate hikeEvent risk on Monday will be contained to US housing data, and the release may only exacerbate current risk aversion trends. The National Association of Realtor’s measure of existing home sales during the month of July is anticipated to have fallen back 0.9 percent to a nearly five-year low of 5.70M. Such a weak figure will not come as much of a shock to the markets, as the dour status of the US housing sector is well known, especially when it comes to the sub prime mortgage crisis that has sparked fears of a global liquidity crunch.While Friday’s significantly stronger-than-expected new home sales report for the same month spurred optimism that declining prices are finally bringing homes to a more affordable level, there are other factors to consider. First, new homes only represent a small portion of the housing market as whole, with existing home s

  Thanks Mrs. Reed for this photo. I just closed a home for a spectacular deal. The home was as we say in the industry, “real estate owned.” A better name might be bank owned, because the property was owned by a large bank which had acquired the property in a foreclosure. What really made me think about this transaction was a call from a local appraiser who was looking for comparable properties in the neighborhood and said, “Why did this sell for so cheep!” This call coupled with my knowledge of the current liquidity crisis made me think. Are banks so worried that they are giving properties away for bargain basement prices or was the property just marketed poorly at a bad time in the market? The property in question is located on Skyline Boulevard in the Oakland hills. It was sold just a year ago for $1,900,000. The lore behind the property is that both of the owners who bought the home in March of 2006 passed away shortly after acquiring the home and the prope

EUR/USD hit its new significant bottom near 1.3455 level after dollar continued to grow on the high Euro liquidity level and good economical releases from U.S. Next technical support for EUR/USD lies near 1.3330 mark, so it is reasonable to expect some more USD rallying by the end of this week or next week.Consumer Price Index (CPI) report, released by Bureau of Labor Statistics, showed 0.1% growth in July (as expected) compared to 0.2% growth in June. Industrial Production report didn't make any surprises too and came out with a 0.3% growth in July (in June it grew by 0.5%).Net Foreign Purchases in July fell by $5.2B compared with June number and came out at $120.9B level, which is still historically high.

There are more reports of world central bank interventions today. The European Central Bank stepped... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

The Bank of Canada intervened a bit more than usual today in an attempt to help investors suffering from the high turbulence in both Canadian and American stock markets. Canada’s central bank took the rare step of publicly reassuring investors that it will help provide stability to financial markets and the domestic financial system - the last time the Bank provided this type of assurance was following the Sept. 11 terrorist attacks in New York and Washington. “In light of current market conditions, the Bank of Canada would like to assure financial market participants and the public that it will provide liquidity to support the stability of the Canadian financial system and the continued functioning of financial markets,” the central bank said in a brief statement. BoC (Bank of Canada) also intervened to the tune of $1.455 billion by buying government securities from market participants, and would sell them back the next day. It also had made $1.64-billion available to Canad

What is Market Maker and Market Liquidity ?Market maker is a security company which passes term and condition that has been stated by an stock exchange. Why security company agreed to be market maker?Because market maker is important to increase market liquidity in the exchange. Volume of trading liquidity based on how easy to convert the stock to be money in market.It is supported by highly enough trading volume and frequency also reasonable market price.Below are the advantages of market maker for triggering stock liquidity trading :Insert quotation (bids or offers) continously with amount that has been stated by the stock exchangeDoing transaction at least as stated by stock exchangeObligate to keep quotation range price at the reasonable particular pointWilling to starts trading in the market at the market dayetc ...The effect of market maker activities is to get investor interest to enter the market or transact on the exchange. In the end, it will causes stock exchange to be liqui

By the liquidity of a bank is meant its capacity to meet promptly demands that it pay its obligations. As noted earlier, commercial banks must pay more attention to liquidity than must many other types of financial institutions, such as life insurance companies. This results from the very high ratio of their debt liabilities. A [...]

Sometimes I encounter people with good credit—but very little wealth—who have recently come into a substantial cash windfall. More often than not, they are very eager to put every last penny of that windfall into a new home. If you happen to find yourself in this situation, take a moment to consider the value of [...]

From Gulf NewsBeijing: Excess liquidity will keep driving China's share prices higher even though the market is already in bubble territory, according to some economists.The benchmark Shanghai Composite Index has risen 40 per cent this year on top of a 130 per cent leap in 2006. Domestic A shares now trade at an average of more than 40 times their 2006 earnings, compared with around 14 times for Hong Kong blue chips.Zhong Wei, director of the Finance Study Centre at Beijing Normal University, said he expected the price-earnings ratio to reach 50 "without any problem"."There is a possibility that the bubble in the capital market will swell further," Zhong said at a bi-monthly gathering of Chinese economists and researchers hosted by Reuters, adding Chinese firms' strong profitability and an appreciating yuan would also help push up domestic shares.Zhong said there was already a bubble in China's property market, pumped up by a gusher of cash in the global financial system.Sheng Hong,

From Japan TimesMore than a month has passed since the Shanghai stock market plunge sent shock waves throughout global markets in late February. Although share prices have since stabilized, volatility rife in foreign-currency markets, with the dollar-yen rate sometimes fluctuating nearly 2 yen a day.Stock markets are prone to synchronized global downturns when new types of shock arrive. But it should be noted here that the biggest factor behind the markets' recent problems is excess liquidity.Even in a global chain reaction, different reasons particular to each country work to push down share prices, and the size of the decline varies.In the United States, share prices are under downward pressure from pessimism over the U.S. strategy for Iraq, and the possibility that tons of housing loans extended by subprime mortgage lenders will go sour.In Japan, political uncertainty over local elections and the House of Councilors elections in July are casting a pall over the stock market.In Chin

From Value Discupline As my profile indicates, I have been in this business for more than 25 years, in fact come April, it will be thirty years. I suspect I may be one of the older bloggers around, but I still look at myself as someone who still has a long career ahead, God -willing. I would love nothing better than continuing to come into my office well into my golden years, following the examples of Buffett and Munger, or others you may not know such as Irving Kahn, or Roy Neuberger. Despite many years of experience, having influenced billions (yes with a B) of dollars of assets, having faced numerous investment committees, and many individual clients, I still view myself as someone who is still involved in continuous learning. I would far rather think about an investment issue, or read a 10-K or Q than watch most sporting events...a tough admission for a guy, but a very honest one. What makes a good portfolio manager? In my view, there is a passion for excellence and learning. But m

Today we got a nice influx of liquidity that may be just the exlixir that this market needed. We got 16.25 BN in Fed Temporary OMO's, 1.3 BN in Permanent OMO's, plus the Treasury department pumped in a whopping 18 BN in Term Investment Options.

Another $8.25 BN TOMO from the Fed today, and another $3 BN in TIO's from the Treasury adds some further liquidity fuel for the short-term. This is a typical seasonal phenomenon and may be a significant factor behind the seasonal Santa Rally.

I count about $30 Billion in cash buyouts announced today. Plus the Fed did a Permanent Open Market Operation to inject liquidity, and we got another TIO from the Treasury. All this liquidity ought to be supportive of higher stock prices short-term.

The above charts are the same ones I posted in this weekend's missive titled "The Bull Case". They are now updated with this week's data, but nothing has changed. Liquidity continues to explode higher as the MZM uptrend gets steeper and steeper. All that money has to find a home somewhere. And since the speculative bubble in all things commodity related appears to have been pricked in a big

From China Daily As the debate on liquidity-caused bubbles on the domestic stock market intensified, the regulators remained silent until late last month, when the China Banking Regulatory Commission (CBRC) ordered commercial banks to stop making loans used to trade stocks.The CBRC said if any violation of the rules occurred, the banks will be held responsible.The CBRC move aims to curb financial risks as an increasing amount of money is rushing into the stock market. But the policy may not work as effectively as expected.As the stock market remained bullish for most of January, investors remained optimistic. Some took out bank loans to buy stocks.This caused market risks to rise and the bubbles to keep swelling.[Read more]

Markets are known to get more predictable as more players participate. It's like statistics: they're most accurate when they are made on large numbers of people.Here's what I wrote to one of my readers in a letter todayBe careful this Monday, US markets are closed so liquidity will be thin. This means that it's easier for big players to move the markets, so it won't be easy to predict where price is going. Just be careful.

From Daily Reckoning"Bubbles Brewing in Shanghai, Tokyo, and London," writes Gary Dorsch, editor of the Global Money Trends newsletter.We will hear the evidence in a moment, but first we will render judgment: too much liquidity."There is a bubble growing. Investors should be concerned about the risks," said Cheng Siwei, vice-chairman of China's National People's Congress in a February 1st interview with the Financial Times. "But in a bull market, people will invest relatively irrationally. Every investor thinks they can win. But many will end up losing. But that is their risk and their choice," Cheng warned.The Shanghai Composite "A" share Index has gone up over 200% in the last 16 months. The market is limited to Chinese nationals, which just goes to show that the Chinese can be as silly as Americans."On the smaller Shenzhen market," Dorsh continues, "three new IPOs soared into orbit, suggesting that the Chinese stampede into stocks hasn't run its course. N

I'm not buying it .... literally, posted April 25, 2007 by dal, I don't get it - I really don't … or then again, maybe I do.. Let's see, it took more than 6 years for the Dow to go from 11,000 to 12,000, but then just 6 months (127 trading days, to be precise) to ...

  Actuality March 11, 2008 Large western investors get interested in the Russian credit bureaus again. According to the information, one of three leading players of the American credit histories market - Equifax - buys the stake in Global Payments Credit Services (GPCS). Experts consider that ...

The RBI announced the following measures yesterday: 1% cut in CRR with retrospective effect (for the first time) from 11/Oct. the CRR now stands at 6.5% and this move will release another Rs.... ...

The Indian stock markets have opened lower in line with other markets. The Sensex is down 254 points at 11,228 and Nifty is down 77 points at 3,441. The US markets closed lower yesterday despite the... ...

The Indian stock markets opened after a holiday and have surged today as a catch-up to what the other markets did yesterday. The Sensex is now 623.78 points up (6.90%) at 9,668.29 and Nifty is 151.65... ...