World Banking Situation

bkkandrew · 22-10-2008, 01:57 PM

Originally Posted by Marmite the Dog

Originally Posted by bkkandrew

we have some months of pain prior to the inevitable and steep decline of the Baht

Isn't the Baht (unofficially) linked to the Dollar?

Not really....

Source:

U.S. Dollar to Thai Baht Exchange Rate - Yahoo! Finance

**baldrick** · 22-10-2008, 06:16 PM

Originally Posted by Butterfly

CDS are "unregulated" private insurance contracts

all tens of trillions of dollars worth of dodgy insurance contracts.

what happens when some one can't pay because thay can't get credit ?
as all the earnings decline , maybe it is time to start getting realistic.

**William** · 22-10-2008, 06:26 PM

Originally Posted by Butterfly

CDS are "unregulated" private insurance contracts, they just fucks up the investors and trades OTC, don't see how they can create a bigger panic as they are swaps, not priced instruments or securities (unless they are terminated before expiration and settled in cash). If they default, it fucks the investors, end of story. No need for bailout etc... all parties knew the risk when they entered that contract, and the default usually damages the credibility of the party more than it does financially as those contracts are usually carried at terms by both parties. Default could be partial for a few interests payments until the underlying bond recovers, or they could be terminated with a cash settlement.

What you say is strictly true. However, following the "naked" derivatives melt-down in 1987, the Regulators should have had this red flagged a long time ago. Indeed, Buffett had written to Congress in 1982 stating that this type of investment needed to be regulated as it mis-led un-informed investors. Instead, Congress decided that the rating agencies could regulate this by means of providing ratings on this type of debt instrument (notwithstanding my previous comment that I agree, in the case of CDS, that they are OTC) - and the rating agencies were relying on the issuers to pay their fees.

In my game, that's called a conflict of interest and I would likely be dis-barred.

**baldrick** · 23-10-2008, 05:51 AM

"The crisis has moved up in scale, from companies to countries, and this is a logical progression of the same theme," said Philippe Gijsels, strategist at Fortis in Brussels.
"Everybody is deleveraging and as the water level goes down, the rocks are more apparent," he said. "The banks are being hit by fears that countries could start to default and quite a lot of bad loans will emerge."

De Standaard Online - Analistenblog Fortis

bkkandrew · 23-10-2008, 11:57 AM

^Correct, as I said on another thread, we currently have a race on between Iceland, Pakistan and Argentina for the 'first to default' prize...

**Blake7** · 23-10-2008, 12:17 PM

^ or Ukraine?

bkkandrew · 23-10-2008, 01:11 PM

^Coming up on the rails, lagging the front runners, but yet may show a strong finish!

**ItsRobsLife** · 24-10-2008, 04:03 AM

Beijing: With the omens of a global recession swirling around them, leaders from 45 Asian and European countries will meet here Friday to discuss a collective response to the ongoing international financial crisis. The seventh summit of the Asia-Europe Meeting (ASEM) was scheduled a while ago but its entire agenda has been overtaken by the need for an emergency response to the liquidity and credit squeeze radiating outwards from the United States that has seen stock market values, commodity and asset prices plummet in recent weeks across every continent.

Arriving here from Tokyo on Thursday night, Prime Minister Manmohan Singh said he hoped “the meeting of minds between Europe and Asia will produce a solution to many global problems, including the international financial crisis.” Other leaders — like Nicolas Sarkozy of France, Gloria Macapagal Arroyo of the Philippines and Somchai Wongsawat of Thailand — also arrived in Beijing with ideas for an emergency response to the crisis. But if ASEM stalwarts like France, China, Germany and Japan — now joined by India for the first time — agree that the old Bretton Woods system has come to an end and needs to be replaced by a new financial order, no one has yet come up with a concrete alternative, let alone a road map for an orderly transition from the current anarchy that has taken hold of the international capitalist system.

In the absence of well-formulated proposals, the only firm suggestion that has been made so far is for more meetings. Thus, at U.S. President George Bush’s invitation, the G-20 countries — the G-8 plus Argentina, Brazil, Mexico, China, India, Indonesia, Saudi Arabia, South Korea, South Africa, the European Union, Turkey and Australia — will meet in Washington, D.C. on November 15 to discuss the crisis. Indian officials said Prime Minister Singh had been invited to attend but that the government would take a final decision based on how the discussions at the ASEM summit proceed on Friday and Saturday.
Having been caught on the wrong foot during the 1997 crisis, East and South-East Asian countries seem anxious to play a leading role in crafting both the emergency response as well as the scaffolding of a new system.

Thus, at Tokyo’s urging, Japan, China and South Korea are likely to announce the creation of a well-funded joint financial regulatory body to help stabilise Asian financial markets, the Yomiuri Shimbun reported on Thursday. Thailand, the current chair of Asean, is proposing an Asian financial pool of $350 billion to be set up and managed by the Asean countries plus Japan, China and South Korea to bolster regional markets and fund infrastructure projects. Ms. Arroyo has also suggested a similar fund, drawn on a fraction of the region’s foreign exchange reserves, to be deployed for making soft loans to Asian banks holding non-performing assets.

Most of these emergency measures involve the redeployment of Asian surpluses from dollar-denominated instruments to those in yen and the euro. Insofar as the Bretton Woods system has been underpinned by the centrality of the dollar, it is likely that the restructuring generated by the current financial crisis will involve a shift in the relative hierarchy of currencies. This, apart from tighter oversight and regulation of money and capital markets whose unfettered excesses caused the current meltdown in the first place.

A two-day summit is unlikely to provide answers to all of these questions. But the fact that ASEM leaders will be discussing a crisis that is essentially of America’s making underlines the fact that any overhaul of international financial architecture is bound to have profound geopolitical implications as well.

© Copyright 2000 - 2008 The Hindu

Date:24/10/2008 URL: The Hindu : Front Page : Financial crisis to dominate Asia-Europe summit

**baldrick** · 24-10-2008, 06:45 AM

Originally Posted by ItsRobsLife

Most of these emergency measures involve the redeployment of Asian surpluses from dollar-denominated instruments to those in yen and the euro.

bye bye USD

**xpress69** · 30-10-2008, 03:27 PM

This has to be the biigest domino effect I have seen.
George Bush is to blame and the US government for poor regulations, and allowing a total free enterprise with no controls whre finance companies only boundary is make a profit and nothing else matters.
In Australia we have superanuation where millions of policy holders money is invested overseas and if they take a loss they pass it onto the policy holder this should be outlawed and the finance company responsible for losses this would make them more careful in what they are doing.
There needs to be more government regulation and ethical behaviour by the finance companies in order to go ahead obviously there are more requirements needed but this is a start

**William** · 30-10-2008, 03:43 PM

Originally Posted by xpress69

In Australia we have superanuation where millions of policy holders money is invested overseas and if they take a loss they pass it onto the policy holder this should be outlawed and the finance company responsible for losses this would make them more careful in what they are doing.

In Australia you are told, in the Financial Disclosure Statement, exactly where your Super will be invested. If you don't like, you should change to another Super

**Norton** · 30-10-2008, 05:13 PM

Originally Posted by xpress69

George Bush is to blame and the US government for poor regulations, and allowing a total free enterprise with no controls whre finance companies only boundary is make a profit and nothing else matters.

Too easy to put the blame on Dubya. How about putting the blame where it belongs. On the individuals and companies that opted to borrow money to speculate on rising real estate or buy that new car. Nobody twisted their arms.

**Spin** · 30-10-2008, 08:11 PM

Originally Posted by xpress69

George Bush is to blame

No he isnt. A more suitable candidate to blame is Alan Greenspan, leaving the interest rate at 1% after the 2001 recession for too long created this free money credit bubble. There are plenty of other to point fingers at too, of course.

**baldrick** · 31-10-2008, 08:29 AM

Originally Posted by William

In Australia you are told, in the Financial Disclosure Statement, exactly where your Super will be invested. If you don't like, you should change to another Super

which is probably very similar to the old super .
I have always said it will not be there by the time I reach 65

there was a loophole in the beginning where you could have your own superannuation company and that would invest in your house.

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