International Banking :

[bimetalaupt]

Jan 30, 2011 23:48:24 GMT -5 Aman A.K.A. Ahamburger said:

B.. The FT has this to say..

www.ft.com/cms/s/0/48dae2e4-2c9d-11e0-83bd-00144feab49a.html?ftcamp=rss#axzz1CaKGChNd

Europe’s banking system is returning to health amid signs that financial institutions are no longer hoarding cash, according to key indicators.

Euro overnight bank lending rates have “normalised”, while banks have scaled back the amount of money held at the European Central Bank above reserve requirements – known as excess liquidity.

This has raised hopes that institutions are lending to each other again as fears of counterparty risk and a deepening of the eurozone debt crisis recede.

Is this what you have heard? IF this is true, good news for the Austrian banks. It's also a bullish indicator, isn't it??

It looks like they are working the Japan/China bond selling angle.. Like the WWI bonds from the UK.. Few in the next 100 years will be paid off. Do You remember the press in New York as Japan bought huge RE deals at the top.. Telling them how "Brilliant the deals were" Made two time more profit on the investment then in Tokyo.. Sounds like kick the can...

Jan 28 (Reuters) - European Union officials are considering extending euro zone bailout loans to Greece and Ireland to 30 years in a bid to draw a line under the bloc's debt crisis, two euro zone sources said on Friday.

The sources said European Central Bank Governing Council member Axel Weber, head of Germany's influential Bundesbank, had suggested stretching out the maturities from three years for Greece and seven for Ireland as part of a comprehensive package to overcome the crisis. WEBER IS SUGGESTING MAKING THE BONDS LONGER.. HIS DAYS AT THE BUNDESBANK WILL BE OVER BY 2041 AND HE WILL HAVE A GREAT GERMAN RETIREMENT WITH LOTS OF GERMAN MARKS..MARK MY WORD...BY 2041!!!

The idea surfaced in intensive talks among euro zone ministers, central bankers and officials on the sidelines of the World Economic Forum in Davos this week, the sources said.

"There are all sorts of ideas. I don't know how much weight this one carries. But of course it's not unheard of. Britain and some other countries only paid off some World War One bonds just recently," a senior euro zone source said. iT SOUND LIKE A VERY GOOD DOG AND PONY SHOW AT DAVOS.. I KNOW GEORGE AND FABOR DO NOT BUY THIS ONE LINER.. IT IS KICK THE PROBLEM DOWN THE STREET... MERKEL AND WEBER WERE TALKING ABOUT LETTING THE BANKS TAKE A HAIRCUT ON THE BOND JUST LAST WEEK. JUST WHAT I HAVE HEARD,,Bi Metal Au Pt

Debt-laden Greece was the first country to receive a 110 billion euro EU/IMF bailout last May, and Ireland was granted 80 billion euros in emergency loans in December due to the huge cost of rescuing its shattered banking sector.

Euro zone leaders agreed in principle last month to extend the maturity of the Greek loans to the same duration as the Irish package.

EU officials say they are also considering reducing the interest rates on the euro zone portion of the loans, which carried a 300 basis point surcharge intended to deter moral hazard and punish what Germans call "debt sinners".

However, economists and some politicians in Greece and Ireland have said the punitive rates could contribute to making the assisted countries' debts unsustainable, requiring them to achieve nominal growth rates of nearly six percent just to stabilise the debt level.

Greece's bailout loans will represent about one-third of its total debt in 2013. A very long maturity at a lower interest rate could help it avoid having to restructure its debt to the private sector, much of which is held by French and German banks.

Just last month the ECB was crying to get the swap line increased ..again.. now they are going to sell bonds to Japan!!! they are out of cash.. esp with huge retirement turning into embitterment for 20 years of recession. Just a thought,
Bi Metal Au Pt

Attachments:

[bimetalaupt]

A++,
In checking with fact I found the LIBOR rate for the EURO is 0.96% vs 0.24% for the USA.. Also the Swiss LIBOR is 0.09%,, Hard to call that normal...German head of Bundesbank was saying before the events of the week end that the bonds could be allowed to default like they did after WWI....Merkel backed that up with strong warnings of her own.

It is also funny that there are some banks talking about selling COCO bonds.. It sounds like a lot of from FT.. They offer not data to support the article. I think the new deal with Greece said it all.. If things were that good why would they need to change the deal so soon???

It sounds like a deal to sell bonds to Japan to me.. Hope they do not buy it!!!javascript:adds("%20%20")

Just a thought,
Bi Metal Au Pt

[Aman A.K.A. Ahamburger]

Mitsubishi got hosed on Rockefeller I remember that. I did hear just this past summer that some war bonds were finally being paid off, amazing.

I agree backtracking already says it all!

....and the band-aid continues to be slowly pulled off!!

[bimetalaupt]

Bundesbank chief Axel Weber has pushed his attack on EMU’s policy elites one step further.

This time he has undercut the triumvirate – ECB chief Jean-Claude Trichet, Eurogroup chief Jean-Claude Junker, and Commission chief Jose Barroso – with an op-ed for the Financial Times excoriating their plans to head off another round of the debt crisis by giving real teeth to the eurozone’s €440bn bail-out fund.

He claimed that the latest EFSF proposals – which investors had already pocketed as a done deal – would amount to “eurobonds more or less through the back door”.

They would “result in a weakening of the responsibility of financial market participants and member states, diminished incentives for sound fiscal policies, and again a shifting of risks to the taxpayers of other member states.”

I have no doubt that Dr Weber genuinely believes what he wrote. He is a passionate, almost romantic, defender of the Bundesbank ideal. But he must also know that the judges of the Verfassungsgericht will weigh these words very carefully as they prepare to rule on the legality of the EU’s bail-out machinery.

He may have scuppered any chance of a deal to boost the fund at next month’s EU summit. The markets are not going to like that.

While I have been more hopeful about Spain lately – willing to accept that it is getting a grip on its twin deficits, and the cajas – a benign outcome in Spain is contingent on Germany doing what it has promised to do: defend EMU, against its own demons.

Specifically, he slammed proposals to cut the penal rate of interest rate charged on the rescue for Greece, Ireland, and any other supplicants. He called it a “danger”, no less.

He slammed the idea of buying the bonds of debt-stricken states, saying “such purchases would run into significant operational governance problems regarding their volume, timing and conditions”.

He opposed lending to states so that they can buy back their own debt at a discount (ie, a ’soft debt restructuring’), saying the plans “would not only be a very inefficient way of reducing the debt burden, requiring very large volumes to achieve a sizeable effect, but they would also constitute a transfer from other member states.”

And he reminded market naifs that these policies might backfire as “the risks of the remaining private bondholders would increase sharply, thereby significantly heightening the pressure to sell.”

May I hold your coats, gentlemen?

Messrs Trichet, Juncker, and Barroso are entirely correct – from their own standpoint – in calling for a much more powerful rescue fund. Given the circumstances in which EMU now finds itself after years of structural North-South divergence, Germany no longer has the POLITICAL luxury of sticking to Bundesbank orthodoxy.

If Germany insists – as the FDP and the CSU demands, and Angela Merkel seems inclined to do for now – it more or less ensures that monetary union drifts from one crisis to another, at constant risk of disaster. It invites very lively bond action in March.

My view has always been that Germany did not understand what its signed up to at Maastricht (nor did any other country), and is now in a position where it has to choose between a Transferunion and letting EMU die.

By Transferunion, I mean full fiscal union: handing power to set taxes, draw up budgets, etc, to an EU government, which can outvote Germany, just as Dr Weber been outvoted by the majority on the ECB council. This means the end of Germany as a self-governing sovereign nation.

That is what the euro always meant, and why I have always viewed the Project as the malign – chiefly, but not only, because any such European government created to back up EMU would lack a democratic counterweight rooted in legitimacy, and would be inherently authoritarian. Might the European Parliament become such a counterwieght? No, it has no single language, and responds to no unified politcal debate. It is fragmented, a plaything of the EU executive.

Needless to say, the political class as a whole has never faced up to implications of EMU. Events are now forcing them to face up.

Dr Weber understands the Morton’s Fork perfectly. It is clear to me which outcome he prefers, but I hope he recognizes how messy this could be.
To those readers of yesterday’s blog who insist that Mrs Merkel’s crushing defeat in Hamburg was purely due to local issues, I can only say that is a matter of conjecture since none of us actually know.

Merkel’s CDU is looking battered across the country, even in her bastions such as Baden-Württemberg. Something bigger is clearly afoot, as is usually the case in these regional elections.

To what degree irritation over serial bail-outs and rising inflation is playing a part is an open question. Anybody who covers elections – and I covered a great number as a foreign correspondent for 20 years, especially ‘No’ votes against further EU integration – learns that voters rarely articulate the actual reason for their decision. You have to tickle it out.

And now back to Libya, which I watch with close interest since my father wrote a book about the country, The Sanusi of Cyrenaica. He worked closely with the Sanusi leader Idris (later king) in 1941-1943, and played a role in helping to create what later became the independent state of Libya.

He would have been heartened to see the old flag flying once again in Benghazi, but saddened that so much went wrong.

[bimetalaupt]

WEBER SAID BONDS HOLDERS SHOULD SHARE RISK OF SEVERN DEBT DEFAULT,, THERE GOES CHEAP INTEREST!!!CHECK OUT THE PIGGS!! JUST A THOUGHT, BRUCE

The German economy will likely grow by around 2.5 percent this year, Bundesbank President Axel Weber said on Wednesday, suggesting the central bank has raised its growth forecast for Europe's largest economy.

This year's growth would take German gross domestic product (GDP) back to its pre-crisis level, said Weber, whose outlook was more upbeat than a forecast for 2.0-percent growth the Bundesbank gave last December.

Weber said Germany's trend growth rate is around 0.5 percentage points lower after the global economic crisis than before it. He also called for government deficits to be reduced.

A closely watched survey released on Monday showed German business morale rose to a record high in February, signaling a strong rebound in Europe's dominant economy still carries momentum despite spending cuts and slower growth abroad.

Turning to debt markets, Weber called for private bondholders to share in the cost of any future debt crisis.

"We need rules that require there to be clauses in new (debt) contracts that make possible the involvement of private bondholders in the case of a crisis," Weber said at an event at the University of Zurich.

[scaredshirtless]

Thanks Bruce.

Axel was smart to duck the impossible job.

GO IRELAND!!!!!!!

[bimetalaupt]

Feb 24, 2011 8:18:46 GMT -5 @scaredshirtless said:

Thanks Bruce.

Axel was smart to duck the impossible job.

GO IRELAND!!!!!!!

DUCK!!! the keep one eye on the west and one eye on the east.. Great vision except someting you see too much.. You are correct he got out when the getting is good. Bet he misses the fact that he was correct about the future cost of this to the hard working German worker that saves 15% of his earning every month!! Best M2 in the world is Saarland.. Home to the Coal and Steel centre in the European Union!!!

Now a high tech centre based on the vast superstructure infrastructural Bismarck Built via Prussia.

Just a thought,Bruce

On the other hand.. The Hammer head Duck is the highest flying bird in the World.

[neohguy]

www.hellenicshippingnews.com/index.php?option=com_content&view=article&id=10115:india-says-economy-may-grow-as-much-as-925-next-year-amid-inflation-risk&catid=33:world-economy-news&Itemid=97
India Says Economy May Grow as Much as 9.25% Next Year Amid Inflation Risk PDF Print E-mail
Saturday, 26 February 2011 00:00
India’s economy may grow as much as 9.25 percent in the next financial year and officials need to tighten monetary and fiscal policies to slow inflation, the finance ministry said before next week’s budget statement.

“The economy is expected to revert to pre-crisis growth levels next year,” the annual Economic Survey prepared by advisers to Finance Minister Pranab Mukherjee said. “Inflation is clearly the dominant concern.” Mukherjee on Feb. 28 is scheduled to unveil the budget for the year starting April 1.
India needs to narrow the fiscal deficit alongside interest- rate increases to curb inflation that has been “uncomfortably high” this year, the ministry said. The gap in the nation’s finances will be the highest in 2011 among the so-called BRIC economies that include Brazil, Russia, India and China, according to the International Monetary Fund.
“The signal is that growth is intact and the budget will focus on reducing the fiscal deficit and taming inflation,” said Jay Shankar, chief economist at Religare Capital Markets Ltd. in Mumbai. “The government may unwind the fiscal stimulus announced during the global financial crisis.”
Shankar expects Mukherjee to raise excise and service taxes, both currently at 10 percent, by one percentage point....
....‘Unacceptable’ Inflation
Thou“The present level of inflation is unacceptable,” Kaushik Basu, the chief economic adviser in the finance ministry told reporters in New Delhi today. “We want to bring it down much further.”
Prime Minister Manmohan Singh’s government is under pressure to contain price gains as inflation erodes the spending power of the more than three-quarters of Indians the World Bank estimates live on less than $2 a day. Thousands of workers from across India rallied by trade unions marched toward the country’s parliament in central New Delhi on Feb. 23 protesting rising food prices, low wages and job insecurity.The Reserve Bank of India, which has raised its benchmark repurchase rate seven times in the past year, estimated last month that inflation will slow to 7 percent by March 31. The repurchase rate is 6.5 percent. The central bank on Jan. 25 signaled it will raise borrowing costs further.....

[scaredshirtless]

Remember when we stimulated like living heck and instead of the multiplier effect it just flowed out of the country as imports?

Well - the same thing seems to happen with Ben's attempt to cause inflation. It flows right out of this country too!

Now... Was was that his thinking or did he get lucky? Or is he lucky?

And Ireland had a very interesting election. Go Ireland!

A couple of years ago someone said - and I can't remember who said it but: "You watch - in the end it will be all the emerging economies who get crushed."

It made little sense to me at the time.

Now?

[bimetalaupt]

Feb 27, 2011 10:56:06 GMT -5 @scaredshirtless said:

Remember when we stimulated like living heck and instead of the multiplier effect it just flowed out of the country as imports?

Well - the same thing seems to happen with Ben's attempt to cause inflation. It flows right out of this country too!

Now... Was was that his thinking or did he get lucky? Or is he lucky?

And Ireland had a very interesting election. Go Ireland!

A couple of years ago someone said - and I can't remember who said it but: "You watch - in the end it will be all the emerging economies who get crushed."

It made little sense to me at the time.

Now?

SS,
Again, it looks like the Too Big to Fail banks are getting a better deal then the local banks.
Now BIS will let them sell CoCo Bonds.. Bet I will get hounded with sales calls on these DUCKS!!

Bruce
International regulators will next week consider allowing contingent convertible bonds to count toward additional capital requirements for systemically important banks whose failure would roil the global economy.

The Basel Committee on Banking Supervision will discuss the potential for the securities -- nicknamed CoCo bonds -- to contribute to regulatory capital as an alternative to issuing shares or retaining more earnings, which banks say may stymie economic recovery by cutting their ability to lend.

The extra capital “has to be available to absorb losses before the bank fails, and obviously common equity meets fully that standard,” Stefan Walter, the Basel group’s secretary general, said in an interview ahead of the March 8-9 meeting of the committee. “We’re now also assessing CoCos and the possibility of this type of instrument fulfilling part of the loss-absorbency requirement.”

A global agreement by the Basel committee may expand the market for CoCos, following Credit Suisse Group AG’s sale of $2 billion worth of the securities last month. A Swiss government- appointed panel recommended last year that Zurich-based Credit Suisse and UBS AG should hold as much as 9 percent of their risk-weighted capital in CoCos by 2019.

“It looks like Basel is taking a leaf out of the Swiss book,” Monika Mars, a director at PricewaterhouseCoopers AG in Zurich, said in a telephone interview. “Not necessarily for how much extra capital” systemically important financial firms, or SIFIs, must hold, she said, “but at least with the structure of how the SIFI surcharge is going to work.”
Tougher Rules

The Group of 20 nations agreed in November that lenders whose collapse would threaten the wider financial system should face tougher capital rules than other banks, increasing their ability to take losses without failing. The Basel committee has been tasked by the Financial Stability Board with drafting the requirements.

Cocos are “a more focused instrument that should limit the need” for losses to be imposed on senior bondholders of distressed banks, said Jesper Berg, senior vice president at closely held Nykredit Realkredit A/S in Copenhagen. “The big issue, however, is developing a market for CoCos.”

Berg said banks and regulators would also “need to develop a special instrument” for mutually owned banks, “in order to have a level playing field.”
Minimum Criteria

Regulators are examining “possible concrete minimum criteria that CoCos would have to fulfil,” to form part of the extra reserves for SIFIs, Walter said. “We’re already reviewing some preliminary proposals” next week and “we will have much more concrete proposals for the committee and the FSB to review in June.”

Lloyds Banking Group Plc, which was bailed out by the U.K. taxpayer, swapped existing notes for CoCos in November 2009, Bloomberg data show.

CoCos alone may not be enough to provide the extra reserves systemically important banks need to guard against their failure, said Patricia Jackson, head of prudential advisory at Ernst & Young LLP. Holders of other bonds may also be required to suffer writedowns, known as bail-ins, at troubled lenders.

“Given the depth of market for CoCos it probably doesn’t provide the full solution,” said Jackson. “The indications have been that a combination of CoCos, bail-in and capital are being considered by the Basel Committee.”

Systemically Important

The possible use of CoCos only concerns additional rules for systemically important banks that go beyond capital and liquidity standards agreed on by the Basel group last year, Walter said.

The use of CoCos is “not being considered for the minimum Requirement,” or for an extra capital buffer agreed by the Basel group that would apply during credit booms, Walter said. “It’s really for the additional loss absorbency of SIFIs.”

Stephen Miller, a partner at law firm Allen & Overy LLP in London, said guidance would be needed “on criteria for setting the trigger and guidance on how to determine the number of shares per CoCo.”

Separately, the Basel committee will draw up standards requiring banks to disclose what instruments are included in their capital reserves, Walter said.

“All components of the capital base have to be fully transparent,” Walter said. Investors should be able to look at different banks’ “capital composition and compare them in terms of their capital structure, something that today is not possible.”

Bruce

[scaredshirtless]

Of course the big banks are getting a killer deal. It is absolutely killing our Main St. banks! Imagine that...

And we should be failing Main St. banks at a considerably higher rate than we are currently.

I follow the FDIC closure reports. I watch the ratings measures too.

What's the average over valuation of "assets" at takeover? Typically the FDIC part? 32%? Higher?

So whats the over valuation in the big banks - or our international banking system for that matter? The same? Higher (much more likely)?

That would make them all - more than insolvent.

[bimetalaupt]

Mar 7, 2011 9:09:28 GMT -5 @scaredshirtless said:

Of course the big banks are getting a killer deal. It is absolutely killing our Main St. banks! Imagine that...

And we should be failing Main St. banks at a considerably higher rate than we are currently.

I follow the FDIC closure reports. I watch the ratings measures too.

What's the average over valuation of "assets" at takeover? Typically the FDIC part? 32%? Higher?

So whats the over valuation in the big banks - or our international banking system for that matter? The same? Higher (much more likely)?

SS, M3 has had zero growth or large negitive growth over the last 3 years.. M2 is up some 3.9% year over year... GDP has not been effected by QE2 as has the M2 in Japan and EU.


Now they are talking infaltion.. the economy has weaken very much.. great cure for inflation: depression!!... AUSTERITY ANY ONE.. WILL THIS SOLVE OUR PROBLEM FROM FT..
The Federal Reserve will cease reporting Money Supply M3 on March 23rd. At that time, M2 will become the broadest monetary aggregate published by the Federal Reserve.
As to M3, we have been looking at ways to estimate or model the components that will cease to be published, so that an M3 estimate could be published on at least a monthly basis. While efforts continue, the prospects for a meaningful M3 replacement do not look promising. This circumstance will be discussed in the April newsletter’s money supply section.
While it is not as strong an indicator as M3, particularly as to indicating monetary inflation pressures, M2 does generate reasonably good signals of pending recessions, enough so as to be used as one of the traditional leading economic indicators. It is the relationship between M2 and GDP growth that is explored this month.
The historical relationship between M2 and GDP growth rates can be seen in the following graphs. Shown is the three-month moving average of year-to-year growth in real (inflation-adjusted) M2, plotted against year-to-year growth in quarterly, real GDP.



In both graphs, M2 is shown with two deflations. The solid red line is deflated by the Pre-Clinton CPI-U, which is net of methodological changes introduced in the early 1990s to suppress inflation reporting. The dotted red line is M2 deflated using the official CPI-U. In both instances, the M2 in the current period has seen historically low real annual growth.
The second graph is the same as the first, except the plot of M2 growth has been moved, shifted nine months into the future against the GDP, so as to show the best correlation with GDP. Slowing M2 growth in the second graph — that already has taken place — suggests that annual real GDP growth is going to slow for at least the better part of 2006.
While current real M2 growth patterns are consistent with recession, other periods of similar growth in the mid-1990s did not result in an official recession, although that may be more a GDP-reporting than M2-relationship problem.
Since we have the benefit of having had M3 (no false alarms there) previously signaling a current recession, however, the M2 signal also can be taken as one for recession and one where the already weakened real GDP growth patterns will slow over at least the next nine months.




That would make them all - more than insolvent.

ENGLAND,GERMANY,FRANCE AND THE OBAMA NATION ACCROST THE POND ARE ALL TALKING AUSTERITY.. BUT IS THIS FOR REAL ;D ;D ;D cust retirment by increasing the amount of work needed to retire and retire at an older age like 70.5 years for full retirement in the USA

Just a thought,
Bruce

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[tyfighter3]

By the time a 18 year old enters the work force the age limit for them when they can retire will probably be around 100. That way the Government won't have to cut spending. LOL

[Aman A.K.A. Ahamburger]

More people will need to save and invest to make sure they have a retirement. Darn hey.

[bimetalaupt]

Mar 9, 2011 1:08:19 GMT -5 Aman A.K.A. Ahamburger said:

More people will need to save and invest to make sure they have a retirement. Darn hey.

Yes.. savings.. I think Generatuion Y will be saving!!! 10%.. Sorry about the average future return on stocks of about 6.42% with junk crashes like 2007 are factored in at the 2.5% rate and major international problems that lead to 9-11 are also charged at 1% rate...

Come to think of it when you add these numbers to bonds you get a 7.877% average return for 100 years.. savings vs investing!!! save at 36% tax rate retire at 0% rate from savings makes a lot of "CENTS"

Just a thought,
Bruce

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[Aman A.K.A. Ahamburger]

savings vs investing!!! save at 36% tax rate retire at 0% rate from savings makes a lot of "CENTS"

The nice thing is that savings is at a very low risk It's nice to have money, even if it COULD have been more

No worries about the returns. The savvy ones will always beat the street!!! Got love the hedge that bonds are gong to bring with high intrest rates 5-6 yrs out!! ;D

[bimetalaupt]

Mar 9, 2011 1:03:12 GMT -5 tyfighter3 said:

By the time a 18 year old enters the work force the age limit for them when they can retire will probably be around 100. That way the Government won't have to cut spending. LOL

Ty,
That sounds like France.. Never cut the budget...Never say no to bigger retirements and enjoy your 2.5 hour lunch with good Merlot from the right bank.. of hard working winemakers...

Louie is looking for that Red-head...What else to do in a 2.5 hour Lunch??

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[bimetalaupt]

Mar 9, 2011 2:29:35 GMT -5 Aman A.K.A. Ahamburger said:

savings vs investing!!! save at 36% tax rate retire at 0% rate from savings makes a lot of "CENTS"

The nice thing is that savings is at a very low risk It's nice to have money, even if it COULD have been more

No worries about the returns. The savvy ones will always beat the street!!! Got love the hedge that bonds are gong to bring with high intrest rates 5-6 yrs out!! ;D

A++,
I tried to post this last night... GDP vs M2.. We have little growth and it is compounded by lack of M2 growth.. Last number I saw for year over year was 3.9%... (H.6)

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[Aman A.K.A. Ahamburger]

BTI, I see that your chart has 06 twice at the end. Is that supposed to be '09??

[bimetalaupt]

Mar 9, 2011 22:35:41 GMT -5 Aman A.K.A. Ahamburger said:

BTI, I see that your chart has 06 twice at the end. Is that supposed to be '09??

Yes.. But that was not the graft I should have posted.. Savings vs Economy.. Looks like we are headed for 10% savings for Generation X.. and Z!!!

Saving = lower GDP!!! Less spending = Better retirements.. Gen now should be at 25% savings for the retirement in 10 years to make up!!!

So max savings for 402 is 16,500 or for the 415 max savings are now $49,000..
it is all about a new generation of savers.. change by action!!!

Just a thought,
Bruce

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[Aman A.K.A. Ahamburger]

Between '90 and '93 are perfect examples of how we can save, and have consumerism. So 10% Savings AND 3.5% GDP are possible. 3.5% over 50 years leaves lots of expansion. What are the numbers on that for annual GDP??? .. NA feeds a lot of people, Eco farming could be a big hit here. Why not double yields??

A far as the other graph. If 2009 was at 0% m2 and 2010-2011 is at 3.9%, doesn't that signal expansion??

[bimetalaupt]

Mar 9, 2011 23:41:15 GMT -5 Aman A.K.A. Ahamburger said:

Between '90 and '93 are perfect examples of how we can save, and have consumerism. So 10% Savings AND 3.5% GDP are possible. 3.5% over 50 years leaves lots of expansion. What are the numbers on that for annual GDP??? .. NA feeds a lot of people, Eco farming could be a big hit here. Why not double yields??

A far as the other graph. If 2009 was at 0% m2 and 2010-2011 is at 3.9%, doesn't that signal expansion??

A++, Great Point about growth.. it is all about savings and how do you count bonds..Now if VL can get those banksters to lend!!.. OK they tell me they need capital. For what, to build more fancy bank building to impress each other!!!
With more CO2 and better farming systems .. yes we could double corn and wheat production.. for the record we could triple the rice yields...

I do think the German model of 10% savings is doable and real interesting for the Next generation of retires.. Generation X.. and Generation NOW!!!! You have noted VL and I have a going discussion about Farming vs City.. If we are going to eat some one has to grow the food. That takes a lot of money up front before the crop is sent to the market. The Farm Credit Bank of Texas is one of the best funded banks in the world.. That is why we eat so well.

Just a thought,
Bruce

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[Virgil Showlion]

I have to admire your optimism, Bruce.

[Aman A.K.A. Ahamburger]

OK they tell me they need capital. For what, to build more fancy bank building to impress each other!!!

LOL.. No doubt. I honestly think it's becasue they are afraid of the toxic asset situation. There is an issue there.

There are lots of people that like to farm where I live, how about U?? My Uncle and aunt are working toward organic certification. Bigger yields. The way of the future. I see you talk about volcanoes a lot. How about the CO2 from Japan recently.. You only live twice.

[bimetalaupt]

Mar 10, 2011 0:23:04 GMT -5 Aman A.K.A. Ahamburger said:

OK they tell me they need capital. For what, to build more fancy bank building to impress each other!!!

LOL.. No doubt. I honestly think it's becasue they are afraid of the toxic asset situation. There is an issue there.

There are lots of people that like to farm where I live, how about U?? My Uncle and aunt are working toward organic certification. Bigger yields. The way of the future. I see you talk about volcanoes a lot. How about the CO2 from Japan recently.. You only live twice.

for those who want to watch what A++ is talking about ..
www.bbc.co.uk/news/world-asia-pacific-12334825

Our French- German side of the family are mixed on the subject.. I have cuttings from Regent grapes that are Organic Producers of Very fine Red wine that Germany will allow but France will not allow. I also have some Merlot that are Organic and the field has never been broken. We planted without tilling and added some real strong low growing buffalo grass. Great wine but only makes about 1 ton per acre.. Great flavour concentration!!!

So you cross a grape with a banker= great red wine... I love the shot of “Japan’s Shinmoedake volcano, known by James Bond aficionados as the lair of one of 007’s enemies, scattered thick ash over a wide area, toppled trees, and shattered windows in buildings and cars five miles away.”

Just a thought,
Bruce

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[Aman A.K.A. Ahamburger]

love the shot of “Japan’s Shinmoedake volcano, known by James Bond aficionados as the lair of one of 007’s enemies, scattered thick ash over a wide area, toppled trees, and shattered windows in buildings and cars five miles away.”

[/size]

I luv watching Bond in hidef. Sounds great with Canadian made speakers. Luv the bass from my 1000 watt sub.. Take that environment!!!

Mother nature.. There is no greater equalizer!!!

[tyfighter3]

It only takes one valcano to end Global Warming.

[bimetalaupt]

Mar 10, 2011 1:09:31 GMT -5 Aman A.K.A. Ahamburger said:

love the shot of “Japan’s Shinmoedake volcano, known by James Bond aficionados as the lair of one of 007’s enemies, scattered thick ash over a wide area, toppled trees, and shattered windows in buildings and cars five miles away.”

[/size]

I luv watching Bond in hidef. Sounds great with Canadian made speakers. Luv the bass from my 1000 watt sub.. Take that environment!!!

Mother nature.. There is no greater equalizer!!! [/quote]
Weber is the only one that can pull the IMF back to solvent
Submitted by BiMetalAuPt on Mon, 05/16/2011 - 19:28.

It is just my thoughts but I did get positive feedback from the Idea.. Question is will Greek bonds have enough backing from the IMF and ECB to make it to 2013 when the emergency fund is in full power to carry for any needed rescue. As before the ECB is only supporting banks but it is the banks that buy bonds in Europe not pention funds and Well healed investors as has been the case in the USA market for years.. USA has had a run for world finance that no one else can duplicate. The world loves the $$$$$. My bet is on Alex Weber.. Can it a dream team for Merkel if he can pull it off.. Here is more about the Merkel/Weber debate.. IMHO Weber is the man for the IMF!!!He may take the job as a Temp.. But what is more long lasting??? the only other one I can find is from Finland...Erkki Liikanen.. The Greeks would love to talk to him.( Joke)

Just a thought,
Bruce

Reuters) - Bundesbank chief Axel Weber will meet Chancellor Angela Merkel and her finance minister at 2 p.m. British time on Friday and they are expected to confirm Weber has pulled out of the race to be next head of the European Central Bank. I WILL BET THAT THIS ALSO WILL NOT PASS THE STRESS TEST FOR MERKEL... AXEL WEBER HAS AN ACE HE DID NOT KNOW ABOUT .. IMF PRESIDENT.. HE IS THE CAN DO MAN!!HE IS ALL ABOUT HARD SIMPLE SINGLE MINDED DIRECT CONTROL OF THE SYSTEMS.. OLD KNOW SYSTEMS WITH CURRENT AND SOVEREIGN FINANCES BACKED WITH INFLATION CONTROL.
BI METAL AU PT...

"This afternoon we will be able to put an end to the speculation," Merkel's spokesman Seibert told reporters, adding that a written statement would follow the meeting between Weber, Merkel and Finance Minister Wolfgang Schaeuble.

Weber has not yet commented on the news, first reported by Reuters on Wednesday, that he was withdrawing from the contest to succeed Jean-Claude Trichet at the helm of the ECB.

The prospect of a hardline inflation fighter like Weber no longer being top contender to succeed Trichet when his term ends in October has fed unease in financial markets about the ability of divided European policymakers to solve the euro zone crisis.

The ECB has had a crucial role in responding to the crisis, buying the bonds of debt-stricken peripheral euro zone countries as part of a concerted push to try to calm markets. Weber's public criticism of that decision may have cost him the top job.

The Frankfurt-based central bank stepped in again for the first time in two weeks to buy Portuguese bonds on Thursday, traders said, after yields hit euro-era highs on concerns about perceived slow progress on solving the year-long debt crisis.

Weber's withdrawal is a blow to Merkel's drive to secure the ECB post for a German and could raise pressure on her to impose strict German-style fiscal rules on Berlin's euro zone partners to satisfy voters at home in a year of seven state elections.

The news comes ahead of two crucial summits -- on March 11 and March 24-25 -- at which European leaders want to agree a comprehensive package to resolve the debt crisis.

Seibert said there was no cause for concern that the German central bank would neglect its duties because of doubts over the future of Weber, who could also give up his position as head of the Bundesbank which was due to expire next year.

"The Bundesbank will continue to represent our convictions about a stable currency policy. That does not depend on one individual," said Seibert.

Leaders from the 17-nation euro zone are expected to approve a successor to Trichet by summer and will take their lead from Merkel and French President Nicolas Sarkozy.

A French source said Merkel and Sarkozy had not discussed the ECB succession yet.

Italy is pushing the candidacy of Mario Draghi, governor of the Bank of Italy and a member of the ECB's governing council. Other contenders include Luxembourg's Yves Merch and Finnish central Bank chief Erkki Liikanen, a monetary policy moderate.

But Merkel may still seek another German candidate, partly because it is widely seen as Germany's turn to head the ECB and partly because surrendering the post could be unpopular with German politicians and voters.
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Attachments:

[bimetalaupt]

Principles for Reform

Finance & Development, June 2010, Volume 47, Number 2

William Poole

PDF version

In designing new policies for the financial sector, old-fashioned ideas are important

THE financial crisis has caused widespread reevaluation of public policy toward the financial sector and financial regulation. Many reform plans have been proposed, but little has been settled. Political pressure on legislatures in many countries around the world is substantial, portending a collision between industry lobbying and popular conceptions, including misperceptions, of the nature of needed reforms.

Reform issues facing developing economies may seem different from those confronting advanced economies, but they are fundamentally the same. Policymakers in developing countries must maintain a vision of the financial sector they desire to foster, to avoid policies today that will make it difficult to achieve that vision. Too often policies viewed as short-term expedients create vested interests that are difficult to dismantle. The issue is particularly serious when it comes to regulatory constraints, which shape and distort the structure of financial services industries. Protected segments fight to retain their advantages, and regulatory agencies fight to retain influence. In general, there is a long record of establishing government agencies, but the record of their dismantling is woefully short.

It is also essential to have a vision of the financial structure of the future, because finance is inherently competitive around the globe, making it difficult and costly to prevent domestic nonfinancial firms from obtaining financial services abroad. Therefore, nurturing a domestic financial services industry requires attention to international competition, and that means attention to the characteristics of the most sophisticated types of financial services. Financial and nonfinancial industries face the same issues: a developing economy that aims to join the advanced economy club must be open to practices and technologies that raise productivity and income.

The financial crisis in the United States and Europe demonstrates that the financial system was defective and cannot be the basis of the financial vision for developing economies. What follows is my view of the core principles that ought to guide thinking about how to direct public policies toward financial services industries in all types of economies. I will speak loosely of central bank powers and regulators’ powers, with the understanding that institutional arrangements differ from one country to another.
Price-level stability

The most important goal of a central bank should be maintenance of reasonable stability of the economy’s general level of prices. Price-level stability aids economic development and helps maintain domestic and international confidence in an economy. Domestic markets, especially capital markets, function more efficiently when prices are stable.

A central bank that is successful in maintaining price stability will gain prestige and influence. Moreover—a point often neglected—when a central bank maintains price stability, it is in a position to pursue countercyclical monetary policy that will help stabilize employment at a high level.
Payments are paramount

No economy can function without a reliable mechanism for making and receiving payments. Neglecting the old-fashioned monetary functions of banks is a recipe for disaster. A commercial bank is simultaneously a monetary firm, accepting and transferring deposits, and a credit firm, making and administering loans. When the credit activities of banks create the potential for insolvency, their monetary functions are seriously impaired.

There are two defenses against the risk of bank insolvency. The first, and most important, is a requirement that commercial banks maintain a large capital cushion in exchange for the benefits of a bank charter. The recent financial crisis demonstrates that traditional standards of bank capital were not adequate. Banks should be required to maintain minimum equity capital of 10 percent of assets. In addition, 10 percent of total liabilities should be in the form of subordinated long-term debt, which the bank may convert into equity on maturity (sometimes called “contingent capital”).

A stiff capital requirement serves several purposes. It maintains market confidence in the solvency of the banking system, imposes substantial market discipline over the activities of banks, and provides a large cushion to protect taxpayers from the risk being called on to bail out failing banks.

The second defense against bank insolvency is regulatory oversight. Banking systems generally enjoy government-provided deposit insurance. Oversight is necessary to protect the deposit insurance fund. Banking authorities should be charged with the single function of maintaining safety and soundness of banks. Banks should not be used to provide government-directed development finance. Strong banks are central to the development process, but their credit activities should be motivated by private-market considerations.

There are dangers to using banks as development agencies. One is that banks will be pressured into making loans that are not safe. A second is that government-directed bank credit activities are off budget. A government that wants to encourage development lending should do so transparently through government credit agencies whose resources are provided through the usual legislative process. Alternatively, governments can choose to subsidize private development firms. Because of the critical importance of banking stability, banks should not be a directed part of development finance.
The poison of excessive leverage

The primary cause of the current financial crisis was excessive leverage, especially in the banking system. In the context of U.S. experience over the past decade, it is interesting to compare the dot-com stock bust early in the decade with the subprime mortgage bust that started in 2007. Both episodes were characterized by a mania for risky assets that wound up visiting large losses on investors; however, only the subprime bust resulted in a financial crisis. Common stock was held largely in unleveraged accounts—in individual and mutual fund portfolios. Subprime mortgages and the securities issued against them were held in highly leveraged accounts in commercial and investment banks and some hedge funds.

Despite the poison of excessive leverage, tax systems generally subsidize debt by making interest a deductible business expense but not dividends on equity. Public policies that subsidize leverage make no sense. Individual and business income tax systems should phase out deductibility of interest and reduce tax rates to compensate, so that the reform is revenue neutral.
Regulatory discretion

Most regulators, most of the time, believe they can function more effectively if they have broader powers. That view needs to be challenged.

Every official in a democratic society functions under political constraints. A central bank governor, for example, knows that the position does not carry unlimited power, no matter how broad the statutory authority. At issue is always which actions can be pursued in the current political environment. Equally important, clear thinking about financial structure calls for consideration of the powers a central bank should not want to exercise, but might feel compelled to use if such power is contained in the controlling legislation.

For example, should a central bank buy obligations of private firms and local governments? If the answer is, as I believe it should be, that the central bank should not provide such loans, then it should not have the power to do so. Loans to entities other than banks should be the responsibility of the elected government. Emergency authority should be narrowly drawn, perhaps requiring formal assent from the prime minister or president to ensure that central bank resources are not misused. The issue is not that central banks will routinely misuse their lending powers but that political authorities will misuse central bank powers. Requiring political assent increases the transparency of central bank lending to nonbanks and places responsibility for such loans with political authorities, where it belongs.

Central bank lending ultimately depends on the power to create money; exercising that power wisely is necessary to maintain the purchasing power of the currency. Central bank independence from day-to-day political control is the best protection from inflationary finance. This is why a narrow definition of central bank powers and responsibilities is essential.

It is helpful to think through in advance which powers agencies need and should have. Arguing for extremely broad and vague power in the name of flexibility can be, I fear, a result of the failure to think issues through clearly. Every scholar knows how valuable the teaching experience is in sharpening ideas. Every regulator should be asking questions of this kind: If X happens, what should my agency do? What powers are needed? If Y happens, will those same powers be subject to abuse through the political process?

Over time, senior leadership in every agency changes. How confident can we be that future leaders will exercise broad authority wisely? When contemplating legislative changes, a good rule is to presume that future leaders will not have the same competence and motives they have today. Controlling legislation should constrain rather than enable future leaders, which is the only way to provide markets reasonable assurance of sound policies.
Old-fashioned, but important

The financial crisis demonstrates the continuing importance of some old-fashioned ideas. Because a banking crisis creates a general economic crisis, the laws and regulations that govern the financial sector must above all maintain stability in the commercial banking sector. Banks must focus on relatively low-risk lending and maintain substantial capital. The powers of regulatory agencies must be carefully designed; excessive power invites political misuse and creates market uncertainty about authorities’ actions.

There must be much more effort to change the incentives for financial firms. Changing tax laws to encourage less leverage and larger capital requirements for banks will lead to a more stable financial system. Although financial crises have been a staple of market economies for centuries, we know enough about their causes to design policies to make such instabilities much less common in the future.

William Poole, former president of the Federal Reserve Bank of St. Louis, is Senior Fellow at the Cato Institute and Distinguished Scholar in Residence at the University of Delaware.
Finance & Development
THIS IS FROM THE IMF SITE.. SEE www.imf.org/external/pubs/ft/fandd/2010/06/poole.htm

JUST A THOUGHT,
BI METAL AU PT...

[Aman A.K.A. Ahamburger]

Post #59 is great info BTI!! I really like this part..

Banks should be required to maintain minimum equity capital of 10 percent of assets. In addition, 10 percent of total liabilities should be in the form of subordinated long-term debt, which the bank may convert into equity on maturity (sometimes called “contingent capital”).

USA has had a run for world finance that no one else can duplicate. The world loves the $$$$$.

Amen BTI...

Axel head of the IMF, eh? Now that makes things interesting Enough with the sleazy Frenchmen already..(my wife is French so settle down).. ;D

Greece is in an armbar if that happens. With Japan hit hard(USA IsM ), even Axel knows it will have to be 2012.. Maybe those euro junk 50 yr bonds won't be.. nah.. they will still be bad.