SINGAPORE_STI BLOG

Trader fined $200k for market manipulation

noreply@blogger.com (Amy 杨钰萍) — Sat, 25 Jun 2011 05:46:00 +0000

Sim Tee Yang, 44, was fined $200,000 over four counts of market manipulation.

A TRADER was fined a total of $200,000 on Tuesday on four counts of market manipulation.

Sim Tee Yang, 44, was working at securities firm CIMB-GK Securities when he created a false or misleading appearance on the price of CapitalMall Trust (CMT) warrants in 2005.

He had access to real-time trade data including bids and asking prices for any particular stock in the course of his work. He used the information to quickly sell large quantities of a certain share. This pushed down the price of warrants, which are financial products linked to the shares.

He snapped up the warrants at the lower price, then pushed their value back up by buying shares, and sold the warrants for a profit. Deputy Public Prosecutor James Lee said that Sim earned a $25,209 net profit over 12 days of trading between May and August in 2005.

Defence counsel Andy Yeo said in mitigation that his client's trades had no significant adverse impact on the market; the trades were limited and carried out over only a few days. He added that his client had been trading for more than 15 years and had kept a clean record.

Sim, who had eight other charges taken into consideration, could have been fined up to $250,000 and/or jailed for up to seven years on each charge.

Bloomberg: Madoff Says Entire U.S. Government a `Ponzi Scheme'

noreply@blogger.com (Amy 杨钰萍) — Mon, 02 May 2011 06:59:00 +0000

http://www.bloomberg.com/video/67122488/

Feb. 28 (Bloomberg) -- Bernard Madoff, convicted for organizing a Ponzi scheme, criticized the U.S. during a recent telephone interview with New York Magazine. Bloomberg's Betty Liu reports in today's Movers & Shakers. (Source: Bloomberg)

10 Scary Financial Scams That Target the Elderly

noreply@blogger.com (Amy 杨钰萍) — Mon, 02 May 2011 06:53:00 +0000

Financial scams can target people at any age, but seniors are often favorite targets of scammers because most are homeowners, have substantial savings, are more trusting and may not know enough about the latest technology and laws to protect themselves. These scams cost older Americans millions, if not billions, every year — and despite crackdowns, they aren’t likely to stop anytime soon. So how can you protect your loved ones or yourself? Through education and proactivity, of course! If you’re unsure if any company is legit or committing fraud, contact the Better Business Bureau or the FTC and look for these common schemes — it just might save your financial future.

Low-risk, high return investment scams. These kinds of scams seem like an opportunity that can’t be missed, but they’re really much more of a risk and a potential for serious loss than perpetrators would have the elderly believe. Nearly all scams that target the elderly use this idea in some form or another, promising a sage investment with ridiculous returns. Yet the old adage holds true: if it sounds too good to be true, it probably is. Always, always check up on any investment opportunity or consult a financial professional before making any moves with your money.

Charitable gift annuity scams . Charitable annuities in and of themselves can actually be a good thing when done right, but unfortunately many scammers take advantage of elderly using just this idea. Scammers create a fake charity and solicit donations from elderly individuals, promising a return on their investment through an annuity. Do not ever give money to a charity without researching it first to make sure that it’s legitimate. Additionally, you should only set up a charitable annuity through a trusted financial advisor, not anyone who contacts you randomly over the phone.

Fake high-return CD scams. Like other investment scams, these frauds play on the all-too-human desire to get something for nothing, with a safe, reliable "opportunity" that’s supposed to pay big dividends. Scammers will fool seniors into thinking they’re legit by saying the CDs are sold through major banks (when really they have no affiliation) or by choosing a name that’s very similar to an existing one. The fake company takes your money, but no investment is made. Instead the money goes into their pockets – and disappears just as quickly as the company soon will.

Prize and sweepstakes frauds. Who wouldn’t want to pick up the phone and hear that they’ve won a free trip, money or prizes? Unfortunately, most of these calls and mailings are simply scams. In order to get your prize, scammers will tell recipients they’ll have to pay taxes or fees on them first and they’ll be mailed to them later. Unfortunately, the prizes rarely (if ever arrive). If you have genuinely won a prize, there should be no tax or fee to get the item. Ever. Any taxes due will be paid to the government at the end of the fiscal year, not upon receiving the prize.

Home, auto repair or medical equipment scams. Finding the money to make major home repairs can be hard, especially for seniors on a fixed income – and scammers know that. They offer up deals to finance your home and auto repairs or medical equipment purchases for you. Sounds like a great deal, right? It isn’t so great when you find out the interest rates the loans come with, making it nearly impossible to repay and garnering thousands in debt in a few months. Protect yourself by not getting loans through companies that solicit over the phone– anyone reputable won’t have to come to you– and avoid anyone targeting those with credit score problems.

"I need your help" scams. Whether it’s a Nigerian prince or a person down and out, these kinds of scams have been around for ages and are still fooling many Americans into sending cash to scammers. Often, they promise a return on a cash donation but others are more sinister, posing as credit examiners, police officers or bank employees. Victims of these scams are tricked into giving money or even providing account information, a mistake that can cost thousands. A rule of thumb to keep you safe is to delete all emails from unknown addresses and to remember that a bank or regulatory institution will never ask for your personal information over the phone. If you have your suspicions, it’s always better to be safe than sorry.

Reverse mortgage scams. Reverse mortgages can spell disaster for many homeowners who don’t do their research. While it is possible to get a legit reverse mortgage, it’s much more likely that you’ll be falling into a scam. These deals are created by scammers in order to steal the equity from a property and frequently target seniors. Victims may be lured in through the promise of free property, investment returns or other benefits that will never materialize. Any real reverse mortgage deal will be insured by the Federal Housing Authority. Any that isn’t you can assume is a scam.

Credit repair scams. No one wants to live with bad credit. It can make getting a house, credit card or loan pretty darn hard. In these scams, a company promises to help an individual repair their credit– for a fee of course. While it sounds like a good deal, it’s entirely fraudulent. There is no easy way to repair your credit other than time, paying bills promptly and making good on any debts. If anyone promises to help you repair your credit overnight, they’re trying to scam you.

Loss recovery scams. These kind of scams target those who’ve already been scammed once, making them twice as sinister. Elderly individuals who’ve been tricked into thinking they’ve won a prize who’ve paid money without receiving it are targeted by these fraudsters. They claim they can help you get your hands on that prize, often posing as government agents working on your case. They ask for a large sum of cash to help conduct the investigation (which should be a red flag), which victims will never see again. A government employee will never, under any circumstances ask for cash to do their job, so if you’ve already been scammed once, don’t let it happen again.

Help you pay your bills scams. There are few people out there who wouldn’t love a little assistance in paying their bills, but these kinds of scams will show you that there really is no such thing as free money. These scammers have no intention of helping you pay your bills and may actually make it impossible for you to do so by robbing you of thousands of dollars. How does this kind of scam work? Fraudsters will convince you to make them joint account holders on your accounts, with the idea that they’ll help you pay your bills and manage your finances. Unfortunately, this kind of access lets them take every penny you have or claim your entire account when you die. Never, ever let someone have this kind of power over your finances unless it’s someone you know and trust.

World faces oil supply crunch by 2015, warn British business leaders

noreply@blogger.com (Amy 杨钰萍) — Sun, 03 Apr 2011 10:57:00 +0000

LONDON: The world faces an oil supply crunch within the next five years, British business leaders led by Virgin tycoon Richard Branson warned on Wednesday.

The rate at which oil is produced risks hitting a peak by 2015, sparking a surge in crude prices and living costs, said a report from the UK Industry Taskforce on Peak Oil & Energy Security (ITPOES), of which Branson is a member.

The report, entitled 'The Oil Crunch - a wake up call for the UK economy', urged the formation of new organisation to address the issue, with members representing the British government, businesses and consumers.

"The UK Industry Taskforce on Peak Oil and Energy Security (ITPOES) finds that oil shortages, insecurity of supply and price volatility will destabilise economic, political and social activity potentially by 2015," the report said.

"Peak oil refers to the point where the highest practicable rate of global oil production has been achieved and from which future levels of production will either plateau, or begin to diminish.

"This means an end to the era of cheap oil," added the report from the taskforce, whose members include British tycoon Branson and Ian Marchant, head of Scottish & Southern Energy.

ITPOES forecast global oil output would reach a plateau at fewer than 95 million barrels per day potentially by 2015. That compared with 2008 global production of 85 million bpd.

"The taskforce states the impact of peak oil will include sharp increases in the cost of travel, food, heating and retail goods," the report added.

"It finds that the transport sector will be particularly hard hit, with more vulnerable members of society the first to feel the impact."

With Britain facing a national election by June, the grouping also warned that any new government must deal with the looming oil crunch.

"The taskforce warns that the UK must not be caught out by the oil crunch in the same way it was with the credit crunch and states that policies to address peak oil must be a priority for the new government formed after the election."

It added: "Unless we do so, we face a situation during the term of the next government where fuel price unrest could lead to shortages in consumer products and the UK's energy security will be significantly compromised."

Supply-side constraints - lack of construction capacity, oil rigs and skilled manpower - would all contribute towards peak oil, according to the taskforce.

The group also called for the development of alternative methods to powering transport.

Branson, founder of Virgin Group, added that businesses and the government must work alongside each other.

"Working together, we must ensure that the government takes action to address the impact of the oil crunch and ensure the UK is better prepared to withstand higher and more volatile oil prices," Branson said.

"UK competitiveness will be hampered unless we can develop viable, affordable and secure long term sources of alternative energy."

In recent years, oil prices have been extremely volatile, spiking to record heights above 147 dollars per barrel in July 2008, before plunging to 32 dollars per barrel as a global recession slammed energy demand.

World oil prices have since recovered ground to trade between 70-80 dollars as the market was boosted by signs of global economic recovery. - AFP/de

Beware 金迪生物科技全年净利审计后少1620万元

noreply@blogger.com (Amy 杨钰萍) — Wed, 22 Dec 2010 13:33:00 +0000

金迪生物科技（Bio-Treat）经审计后的全年净利，比之前发布的未经审计业绩当中的净利，少了8323万人民币（1620万新元），原本报3亿零528万人民币，审计后为2亿2205万人民币。
　　审计前后净利数据出现如此巨大的差别，主要因为销售成本、特别账项收益以及财务成本的差异。销售成本比原本呈报的高出7689万人民币，特别账项收益则比之前少4166万人民币，而财务成本比之前高出1937万人民币。

it make me feel that Bio-treat is swindling their investors.

China Angel Food may delist in SGX

noreply@blogger.com (Amy 杨钰萍) — Sat, 20 Nov 2010 08:23:00 +0000

Nov. 18, 2010 (China Knowledge) - China Angel Food Ltd, which principally operates food business in Guangdong Province, may delist from the Singapore Stock Exchange mainly due to extremely small transaction volume, sources reported.

According to the privatization offer launched by Fine Alley that holds a 49.82% stake or 159.59 million shares of China Angel Food, the latter firm is suggested to be delisted at an exit offer price of S$0.17 apiece, a price 13.33% higher than the closing price of S$0.15 on Nov.12.

In the past 12 months, China Angel Food's daily transaction volume accounted for only 0.05% to 0.07% of its total shares. Thus, Fine Alley hopes to delist the firm to avoid high listing cost.

Registered in British Virgin Islands, Fine Alley is partly owned by Liang Qiusheng who is also the chairman of China Angel Food.

In the third quarter of this year, China Angel Food booked S$4.8 million in net earnings, boosted by high sales, but the amount dropped 20% year on year.

At present, China Angel Food, which owns three well-recognized brands, namely Angel, QiWang and Yongtai, has a maximum annual output capacity of 7,200 metric tons of moon cakes, 3,786 metric tons of pastry products and 3,000 metric tons of cookies.

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The company may actually would looking for more money by raising IPO on other exchange in Asia or other part of the world.... greed is good?

Most of the Chinese company are like that....

Political odds stacked against ASX and SGX merger

noreply@blogger.com (Amy 杨钰萍) — Sat, 20 Nov 2010 08:05:00 +0000

FORGET the solemn Canberra talk of the need to follow FIRB processes in weighing the proposed Singapore stock exchange-ASX deal.

This will come down to a political decision -- a very fraught one. And in its current form, the proposal has no chance of receiving approval.

Instead, the Gillard government will want to loudly proclaim it is protecting the national interest on such a sensitive issue. The main question is what changes the government will demand and whether Singapore will be willing to amend the agreement sufficiently.

But as the deal is now formulated -- as a clear takeover by the Singapore exchange and where Australia has only four of 15 directors -- the politics are overwhelmingly stacked against it.

At the very least, the government will want a deal that looks far more like a merger than a complete takeover. Presumably backed by advice from the Foreign Investment Review Board, Wayne Swan will demand more equal board representation as well a range of other commitments.

That need for "give" is certainly understood by the ASX and its advisers at UBS, even if they won't want to acknowledge it. Just how much give is necessary or available is less certain.

The main hurdle in Canberra was never going to be the predictable criticism of the authoritarian Singapore government by the Greens or the outrage of independents such as Bob Katter. It is the need to get support from both Labor and the opposition to render those minor players irrelevant in the passage of legislation.

But doubts within both major parties about the risks and rewards of the deal won't be easily resolved. Against the background of political populism and financial jitters -- just look at the debate over interest rates -- any suggestion of loss of national control creates problems.

Even in the market, the particulars of this deal have as many critics as adherents. So to the extent that Canberra does actually listen to financial players, it won't necessarily find reassurance about the merits of such a tie-up.

For the ASX, however, the priority was getting the highest financial equation on the table first and worrying about the political equation second. In terms of money, this approach worked well. The $8.4 billion offer from Singapore Exchange was at a 37 per cent premium to the last trade share price of ASX on October 22. The political equation is not so neatly calculated.

Certainly Canberra is going to reject any notion that a good deal for ASX shareholders implies a good deal for the country. It will only be more suspicious that self-interest, rather than national interest, is driving the deal. But the basic ASX argument is to suggest this will be win-win.

It maintains that the crucial regulatory infrastructure, including licensing, clearing and settlement and listings rules, will continue to be controlled in Australia so there will be no change to the standards and integrity of the market. In addition, the ASX maintains that the only alternative to linking up with another exchange is an Australian stock exchange that becomes progressively less significant in global terms and less able to provide necessary liquidity and capital as other exchanges consolidate. It points to the fate of a shrinking New Zealand stock exchange after it refused to link up with Australia. And it says the Singapore deal gives Australian companies and investors much better exposure and access to Asia, the world's fastest-growing region.

It also suggests that the decision of the government to allow competition next year in the form of Chi-X Australia means that the ASX had no choice but to look internationally.

Unfortunately, this was just at the time when that same prospect of domestic competition had driven down the ASX's own relative market cap and restricted the ability to do a merger of equals.

Outgoing chief executive Robert Elstone expressed those sentiments in announcing the deal on October 25. "Policies of governments to fragment their domestic markets to open them up to competition means the importance of scale and technology, product offering, tapping into the largest possible savings pool -- all of these parameters take on far more significance," he declared.

"I think the choice for the government will be a stark one -- is the national interest best served by boxing the domestic exchange into its existing strong but confined to Australia franchise or should it allow its domestic exchange to truly internationalise?"

For the moment, that stark choice is being deliberately, if temporarily, downplayed publicly by the government, the opposition and the ASX following the initial excitement around the announcement of the deal.

The ASX is waiting to rev up its own arguments until the Singapore exchange formally lodges its FIRB application, now expected in the first week of next month.

The ASX has appointed David Gazard, who was an adviser to former treasurer Peter Costello and unsuccessful Liberal candidate for Eden Monaro, to work on the Liberals and National Party. It has appointed Cameron Milner, former Queensland state Labor party secretary, to work on the Labor side of politics.

But the lobbying will remain relatively light-handed while the FIRB process continues, probably for several months. The ASX wants to be seen to follow the rules. It also knows that to do otherwise would be counterproductive anyway, given the mood in Canberra.

The government is likewise attempting to contain the issue within FIRB and to chloroform a potential confrontation into next year before considering what sort of conditions and changes might be acceptable.

After all, it has plenty of other more urgent crises to deal with beforehand. Labor would also have to be convinced any revised deal is worth arguing for in terms of long-term benefits to the Australian economy -- and that it will not open up its flank to the Liberals.

The opposition has likewise pulled back on its virulent criticism, now insisting that it needs to see the implications of "potentially ceding control over an institution which is really at the heart of our financial system".

In reality, the Liberals want the onus of the decision to be on the government and don't want to be accused of blocking a deal before it is properly considered. But the opposition will be ready to criticise the deal as soon as it perceives political advantage.

And so far the ASX is yet to sell a persuasive political case. It was prevented from informally prepping the politicians ahead of time because it, of all companies, had to follow procedure on continuous disclosure. Even so, it wasn't ready to go with a strong national interest argument immediately, leaving the territory open for a few days of xenophobic attack.

Some political insiders say this sort of political furore was inevitable no matter what. The rationale is that this is a long game that will play out over many months so the first few days of hysteria didn't matter in the context of calmer consideration.

This all sounds logical on one level. But logic in Canberra is in short supply and the main political poker game will only start once the FIRB advice officially gets into Swan's hands next year. Certainly if FIRB advised against the proposal, it would be all over. But the predisposition in favour of foreign investments means that is almost certainly not going to happen.

More likely will be an outcome where FIRB suggests conditions while the government hardens those up and adds to them. This would avoid the political embarrassment of outright rejection undercutting the government's credibility while turning the focus on Singapore's willingness to compromise. It's the ultimate political bet on the market.

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Who do you think you are that you want to merger with ASX?...
Unless SGX belong to American that should not be a problem.

Singapore urged to host rice futures and spot exchange in SGX

noreply@blogger.com (Amy 杨钰萍) — Sat, 20 Nov 2010 07:11:00 +0000

Hosting rice future and spot exchange maybe will have the "ERP effect" on selling the rice on the market.

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Singapore could play a leading role in regional food security and help stabilize rice prices if it took up the opportunity to host a rice futures and a spot exchange, which includes the actual buying and selling of rice for immediate delivery.

In the report Never an Empty Bowl: Sustaining Food Security in Asia, produced by a high-level international task force on rice-based food security, the need for a rice futures market is highlighted.

The report says that, “Under normal circumstances, a robust and deep rice futures market should add substantial stability and transparency to the formation of rice prices, which would help build confidence in the reliability of the world rice market.

“However, the successful development of a commodity futures market depends heavily on the legal structure of the contracts (and their perceived enforceability) and on access to modern financial markets to provide the underlying liquidity that makes a futures market useful to traders. Singapore seems a logical place for a rice futures market because it can satisfy these criteria.”

Ambassador Ong Keng Yong, member of the task force and member of the International Rice Research Institute (IRRI) Fund Singapore Board that promotes and facilitates support for rice science, agreed with the report, highlighting Singapore’s potential to play a role in helping to secure the food supply of the region.

“The fact that we don’t grow rice commercially in Singapore means we have added impetus to take an active interest in the security and sustainability of our rice supply,” said Amb. Ong, who is the director of the Institute of Policy Studies at the National University of Singapore and ambassador-at-large in the Singapore Ministry of Foreign Affairs.

Other notable members of the task force were World Food Prize recipient M. S. Swaminathan, Director General of the United Nations (UN) Economic and Social Commission for Asia and the Pacific Noleen Heyzer, Executive Director of the UN World Food Programme Josette Sheeran, and Director of the Centre for Chinese Agricultural Policy Jikun Huang.

The report, organized by the Asia Society and IRRI, and launched on 27 September 2010, says that climate change mitigation research, farming infrastructure, and market price stability are all needed to ensure reliable rice supplies. This could improve food security in Asia and decrease the number of people living in poverty there by 15% by 2030.

Also on the task force was Dr. Robert Zeigler, the director general of IRRI and the chairman of the IRRI Fund Singapore Board. Dr. Zeigler pointed out that Singapore was specifically mentioned in the report as a potential location for a rice futures market given its strong legal structures and transparent access to financial markets.

“The size of the Asian rice economy is approximately US$160 billion and Singapore is well equipped to handle this,” said Dr. Zeigler. "Significant storage and port facilities for handling very large volumes of grain will probably also be required to meet the needs of a regional or even global rice exchange.

“Singapore also has great potential as a regional leader in research investment, contributing to the next generation of plant scientists, and further strengthening its engagement with the wider region,” he added.

US$100 per Barrel of crude oil?

noreply@blogger.com (Amy 杨钰萍) — Sat, 20 Nov 2010 02:36:00 +0000

Weak US dollar could trigger rise in the price of crude oil, sending the crude over $100 next year.

Crude oil prices have hovered around $78 per barrel most of the year, providing little excitement as other commodities, including copper, gold, and cotton, have enjoyed record runups. Global economic growth has not been brisk enough to drive up Crude oil demand substantially, U.S. inventories have been ample, and the Saudis have been pumping enough to guarantee a plentiful supply.

A change in the crude oil markets may now be upon us. Crude may climb past $100 next year as central banks pump cash into their economies to revive growth, predict JPMorgan Chase (JPM) and Bank of America Merrill Lynch (BC). The Federal Reserve's decision to buy $600 billion of Treasuries from commercial banks should lower U.S. interest rates and weaken the dollar further. Investors may turn increasingly to oil and other commodities to get a decent return.

The Federal Reserve's actions are "likely to push prices upwards," says Antoine M. Halff, head of energy research at Newedge USA in New York and former principal administrator at the International Energy Agency. "The past few years have shown that the more cheap money in the system, the more money flows into commodities, in particular energy." Since the start of September, oil prices have climbed 17 percent, to a recent $86.96.

Crude Oil analysts are also watching OPEC for signs of its intent. Cartel members may seek a higher price as the depreciation of the greenback erodes the profitability of their dollar-denominated exports. Saudi Arabia's Oil Minister, Ali Al-Naimi, said in Singapore on Nov. 1 that a range of $70 to $90 a barrel should be satisfactory for consumers. The kingdom had previously indicated a target of $75 a barrel. "Al-Naimi spoke of a $70-to-$90 range for the first time," says Francisco Blanch, head of global commodity research at Bank of America Merrill Lynch Global Research in New York. "The next threshold is $90 if Al-Naimi says he won't be putting any more oil in the market until we get to that level." Later, however, OPEC's secretary-general said the group was satisfied with a range of $70 to $85.

Growth in emerging markets will help reduce stockpiles of crude oil in 2011, says David Greely, head of energy research at Goldman Sachs (GS) in New York. The Paris-based IEA figures global oil demand will climb from 86.9 million barrels a day this year to 88.2 million in 2011. Hedge funds and other large speculators are getting into the act: They increased their wagers on rising crude prices in late October, according to the Commodity Futures Trading Commission.

There are still skeptics about $100-a-barrel oil, such as Sarah A. Emerson, managing director of Energy Security Analysis in Wakefield, Mass. There's plenty of crude to satisfy world demand without spurring a dramatic climb in prices, says the energy analyst. "This is a well-supplied market, and that won't be changing anytime soon," Emerson says. "At the end of the day, fundamentals matter."

The bottom line: After several years in the doldrums, oil prices are creeping upward. Some analysts are projecting prices at $100 a barrel by next year.

News:- Double Blow for American Oil Dependency Hopes

noreply@blogger.com (Amy 杨钰萍) — Sun, 31 Oct 2010 06:56:00 +0000

From WSJ.com

EPA
The last few days have seen a double blow to American hopes for reducing its heavy dependence on imported oil.

1st, on Tuesday the U.S. Geological Survey cut by 90% its estimate of the undiscovered hydrocarbon reserves beneath the National Petroleum Reserve on Alaska’s North Slope–the richest region for onshore oil production in the country.

2nd, one of the largest oil and gas producers in the American, Royal Dutch Shell, revealed that the Deepwater Horizon accident and subsequent drilling moratorium will significantly reduce for several years its oil output from the Gulf of Mexico–the richest offshore area in the American It also unveiled its third quarter results.

Already unrealistic hopes that the American could mitigate the profound economic and security implications of weaning itself off foreign oil by dramatically boosting domestic output are more remote than ever.

The news from Alaska is actually even worse than its seems on first reading. The USGS cut its oil reserve estimate for the NPRA from 10.6 billion barrels of oil to 896 million barrels, because new wells show that much of what was assumed to be oil reservoirs in fact contain gas, which has a lower energy content.

Of course, gas reserves have value, but their development can be very difficult to justify in such remote locations. Two major Alaska oil producers, ConocoPhillips and BP, have been debating for years how to monetize the huge gas reserves they hold in North Slope oil fields, but have so far failed to find an economic solution. Their plans to build a $35 billion pipeline to carry the gas to towns and cities in the lower 48 states are being reassessed and may never come to pass.

The reappraisal of the NPRA also raises questions about how much oil really lies beneath the perennial bargaining chip in the contest between environmentalism and energy security, the Arctic National Wildlife Refuge.

On Thursday, Shell revealed that the moratorium on drilling imposed on the Gulf of Mexico in the wake of the Deepwater Horizon disaster will have an impact on its ability to produce oil from the region for several years.

The company’s output is already 10,000 barrels of oil equivalent (boe) a day lower than it would have been without the moratorium, because it has been prevented from doing development drilling to boost output at existing fields. That shortfall will be at least 40,000 boe a day in 2011, a fall of 15% from the expected level, and could rise further because of anticipated delays in the issuance of new permits now that the moratorium has been lifted, said Shell’s Chief Financial Officer Simon Henry.

Other companies have yet to disclose whether they will also suffer a 15% cut in their potential production from the region, but everyone has suffered similar effects from the moratorium.

The impact of this on the American economy could be profound. The Gulf of Mexico produced 1.6 million barrels of oil a day in 2009, almost 30% of total American crude oil production.

Shell’s operations in Alaska have also taken a hit. Its plans to drill in the promising Beaufort Sea off Alaska’s north slope are on hold for at least 12 months after permits to drill this year were withdrawn after the Deepwater Horizon disaster. Applications have been resubmitted, but the process may take longer than expected, Henry said.

Shell has not even resubmitted its even more contentious applications to drill in the neighboring Chukchi Sea.

The prospects of a dramatic boost in domestic American oil production look slimmer by the day. If the country is serious in its intention to wean itself off foreign oil, it’s time to switch the focus from billion-barrel reserves to miles per gallon.

Is Vietnam Fund really a good bet?

noreply@blogger.com (Amy 杨钰萍) — Fri, 29 Oct 2010 22:17:00 +0000

It will be depend more on Vietnam Govt. to stop intervention of her currency then your Vietnam Fund will look good. Do you think you're smart? See below is a news article from Bloomberg.

Vietnam May Devalue Dong Twice in 2011, Credit Agricole Says

Oct. 12 (Bloomberg) -- Vietnam’s dong is about 2 percent cheaper to buy in the black market than the rate banks pay and devaluations are likely in 2011 to bring the official exchange rate into line, according to Credit Agricole CIB.

The dong was trading at between 19,820 and 19,880 per dollar at money changers in Ho Chi Minh City this morning, according to a telephone information service run by state-owned Vietnam Posts & Telecommunications. The rate in the interbank market was 19,485 as of 9:35 a.m. in Hanoi. The Vietnamese central bank permits the currency to trade up to 3 percent on either side of its reference rate, currently set at 18,932.

Dollar liquidity has dried up because of the disparity between the official rate and market rate, forcing importers that need foreign exchange to buy euros instead, according to an Oct. 11 research note written by Dariusz Kowalczyk, a Hong Kong- based senior economist and strategist at Credit Agricole.

“The foreign-exchange market in Vietnam is distorted by all the regulations and by all the methods that companies are forced to use to circumvent them,” Kowalczyk said in a phone interview yesterday. “But the big picture point to make is that relatively soon after the last devaluation, the implied exchange rate is already 2 percent weaker than the official rate.”
Devaluations Coming
The last devaluation of 2 percent on Aug. 18 was “not large enough to balance the market,” Kowalczyk wrote in the note. The dong will probably be devalued by another 2 percent in February and by a further 3 percent in the northern hemisphere’s summer or autumn of 2011, bringing the official exchange rate to 20,500 per dollar, he wrote.

Vietnam’s inflation accelerated in September to 8.9 percent, the fastest in four months. The trade deficit widened to $1.05 billion in September from $395 million the previous month, according to preliminary General Statistics Office figures.
The currency’s weakness is being driven by Vietnam’s “large and persistent” trade deficit and by inflation, wrote Kowalczyk. The trade shortfall is putting “pressure on Vietnam’s balance of payments, requiring further devaluation in order to at least partially restore exports’ competitiveness,” he wrote.

We are now on the "currency war", every of the exporting country like to price cheaper in their currency. one good example is Vietnam and Vietnam Fund. You can see the different from there.

Beware of "High Yield Investment Programs"

noreply@blogger.com (Amy 杨钰萍) — Sun, 11 Jul 2010 07:24:00 +0000

Date: 11 July 2010

Below is a real case that happened before and is good to learn from it. Is good to know more about investment fraud, Ponzi schemes like an example that "Bernard Madoff" the US$65 billions investment scandal, the latest largest investment fraud so far. it will alway happen in anywhere anyplace if there is people tend to think of high yield high return investment with no risk, this is too good to be truth.

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In other instances, victims are persuaded to invest in sophisticated or exotic-sounding schemes commonly known as high yield investment programs ("HYIP"). Such investment schemes are usually offered via the internet with promises of high returns. Usually, the investment and withdrawals are made via e-currency, such as e-gold, e-bullion and INTGold. Many HYIP have turned out to be ponzi scams, where the invested funds from new entrants are used to pay existing investors. HYIP usually discloses little or no details on their management and the underlying investment to generate the promised returns.

The public should be wary of HYIP. Even if you receive your returns, it is often paid from the investment of newer entrants. Furthermore, most of such schemes operate anonymously over the Internet and could operate outside the jurisdiction of Singapore, making it difficult to investigate and recover monies when such scheme collapses.

Members of public should be suspicious of any deals that promise unrealistic returns with little risks. Avoid making hasty or immediate decisions. Find out more about the firm, salesperson and investment through independent and credible sources and seek professional advice if necessary.

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Alway ask more question before invest your money in the fund, if you don't you will be sorry for NOT doing your own due diligence.

Further reading: How to smell a rat, by Ken Fisher.

Double dip recession maybe coming to us.

noreply@blogger.com (Amy 杨钰萍) — Sun, 27 Jun 2010 05:17:00 +0000

Still remember we had the "Financial Tsunami" during 2008 the 2nd half of that year. I still remember that was ignited by the banker Lehman brother's bankrupt. This time around what will be the star of event?

The recently Tell-tale signs:-

1. After the Financial Tsunami had ignited most of the world government and central bank had inject tons of money into the market, during 2008 and 2009 period.

2. There is news article on Double dip recession from economist like an example Prof. Nouriel Roubini

3. The selling signal on last May, that's what American said "Sell May and go away".

4. Whole Asia had an asset bubbles as many peoples hoping for a economy recovering for this year.

I have some evident on that US treasury bond probably show the double dip recession is coming to us.

you can probably do some researching to know more on the coming crisis that maybe benefit yourself better than I did.

just help yourself to avoid from getting hurts in finanical market.

转基因水稻缘何起风波

noreply@blogger.com (Amy 杨钰萍) — Fri, 09 Apr 2010 18:46:00 +0000

基因水稻缘何起风波 (is Genetically Modified rice safe?)

http://www.greenpeace.org/international/campaigns/genetic-engineering/hands-off-our-rice

Rice photoessay traditional China:-
http://www.greenpeace.org/international/photosvideos/greenpeace-photo-essays/rice-photoessay-traditional-china

The big issue!

Rice is the world's most important staple food - with more than half of the global population eating it every day. It has been grown around the world for over 10,000 years and is cultivated in 113 countries. Rice is also a key ingredient in a wide variety of processed foods ranging from baby food to the more obvious rice noodles. But all this is under threat as genetic engineering (GE) continues to creep up on our most valuable food.

Today, gentically modified (GM) rice only exists in field trials. But all that could change tomorrow as agri-chemical companies and some governments around the globe are trying to commercialise it. Ecological farming is the safest solution to the food crisis and looming climate change disasters. Keeping rice GE-free is not just about consumer choice or the environment - it's a lot bigger than that. It's a matter of global food security, human rights and survival.

Stand up for your rice!

Risky business
The German chemical giant Bayer is trying to sell a herbicide resistant variety of GM rice to countries - for commercial planting. Conventional and organic rice is at great risk from being contaminated by GM strains and controlled by multinational corporations and governments.

The rice made by Bayer (called LL62) has been genetically engineered to withstand high doses of glufosinate, a herbicide sprayed on rice fields to control a wide range of weeds. It's no surprise that Bayer also makes the glufosinate. Any use of the GM rice will boost their chemical sales as a consequence. While this is a nice set up for Bayer shareholders it places farmers, consumers and the environment at risk. Glufosinate is considered to be so dangerous to humans and the environment that it will soon be banned in Europe in accordance with recently-adopted EU legislation.

The Bayer GM rice has been shown to have a different nutritional composition than its natural counterpart. It also has a high risk of producing superweeds by transferring its new gene to weedy relatives. Rice traders and producers worldwide reject the GM rice, because of high economic risks. The global rice industry lost some 1.2 billion dollars in 2006, when another GM rice variety from Bayer contaminated global food supplies.

Where it's at
Use this map to find out what is happening with rice accross the world. This map will be updated as events and government decisions happen.
(see this link: http://www.greenpeace.org/international/campaigns/genetic-engineering/hands-off-our-rice)

Keeping it real
We are campaigning to keep rice GE-free for the following reasons:

Genetic engineering is a threat to food security, especially in a changing climate. GM crops repeatedly failed under extreme weather conditions, and some GE plants yield consistently less than their natural counterparts. Earlier this year, GE farmers in South Africa, for example, lost more than 80,000 hectares of corn for unknown reasons. The best insurance policy against climate change and erratic weather conditions is diversity.
The introduction of genetically modified organisms (GMOs) by choice or by accident grossly undermines sustainable agriculture and in so doing, severely limits the choice of food we can eat.
There have been over 140 documented cases of GM crop contamination in the past 10 years. Once GMOs are released into the environment, they are out of control. If anything goes wrong, if crops fail, human health risks are identified or the environment is harmed, they are impossible to recall.
GMO contamination threatens biodiversity. Biological diversity must be protected and respected as the global heritage of humankind, and one of our world's fundamental keys to survival.

Find out what's wrong with GM crops in more detail (facts and references).
Find out how sustainable global rice production can be achieved without genetic engineering.
Life is not an industrial commodity

A young volunteer plants conventional rice in Thailand to create 'rice art' as a symbol against GM-rice.
Take action now to protect the world's most important food.
Read more about Bayer's GM rice.

US Market Outlook: 2009 Will Be the Year of the Bankruptcies

noreply@blogger.com (Amy 杨钰萍) — Sun, 28 Dec 2008 11:06:00 +0000

Will 2009 Will Be the Year of the Bankruptcies affect Singapore Market?
This maybe the 2nd Wave of Finanical Crisis after the 1st Wave in Oct. 2008.

Japan to go down zero-rate road again

noreply@blogger.com (Amy 杨钰萍) — Fri, 19 Dec 2008 19:09:00 +0000

BOJ expected to cut rate today while it seeks to rein in power of yen

THE Bank of Japan appears set to cut interest rates today, returning in effect to the zero rate policy it pursued from 2000 to 2006 to counter deflation and to stabilise the Japanese financial system.

This time, Japan will join the US, where the Federal Reserve cut rates this week to near zero, and probably Britain where Bank of England deputy governor Charles Bean said yesterday that zero rates were possible.

Official warnings meanwhile grew louder in Japan yesterday of intervention by the BOJ in foreign exchange markets to stem the surge in the value of the yen, which yesterday hit a new 13-year high of near 87 yen to the US dollar. But such intervention could be neutralised by a tsunami of private capital now flowing back into Japan, analysts warned.

'We have conducted currency intervention in the past, and we will take appropriate measures, which includes that (option),' Japan's Chief Cabinet Secretary Takeo Kawamura said yesterday.

Japan's leading motor vehicle and electronics makers have already seen their profits savaged by the strength of the yen and yesterday chairman of the Japan Automobile Manufacturers Association Satoshi Aoki called for measures to restore stability in foreign exchange markets.

Japan has conducted intervention (via the Bank of Japan, acting as agent for the Ministry of Finance) on numerous occasions in the past when the yen was subjected to sudden and sharp appreciation. But some economists say that such a move now by Japan could trigger competitive currency devaluations elsewhere in Asia and beyond.

The BOJ's Policy Board will end its latest two-day meeting around midday today and is expected to announce a cut in the central bank's short-term overnight policy lending rate from its current level of 0.3 per cent to 0.1 per cent. This is in effect a zero interest rate level as dealers say it is difficult to hold the rate at precisely zero.

Such a move is not expected to have any measurable impact on Japan's economy, which is officially in recession and which is expected to continue contracting well into next year. But it would have the symbolic effect of signalling Japan's solidarity with monetary authorities that are pushing rates down to zero to counter deepening economic recession.

What Japanese authorities appear to be hoping for through a combination of cutting rates and launching a unilateral dollar-buying operation in foreign exchange markets is to deter speculation in the yen and to re-ignite the so-called yen carry trades which had pushed the yen down to very low levels until recently.

These carry trades, which involved hordes of Japanese and other speculators selling yen and buying assets denominated in higher yielding currencies and areas - thereby pushing the yen down - have reversed in the face of the story that has swept through global financial markets and some analysts doubt they can be re-ignited in the current climate of fear and volatility.

Recently, Japanese portfolio investors have begun to sell foreign assets and repatriate capital. This appears to be an actor behind the rise of the yen, in spite of the fact that foreign investors have been selling Japanese assets.

The Nikkei 2225 stock average (up some 0.6 per cent yesterday to 8,667.23) appears stable despite selling by foreign investors, indicating that Japanese investors feel safe now with yen assets, analysts say.

Bernanke may not stay in office to see fruits of his labour

noreply@blogger.com (Amy 杨钰萍) — Fri, 19 Dec 2008 19:02:00 +0000

Dated on 19-12-2008

(WASHINGTON) The fruits of Federal Reserve chairman Ben Bernanke's aggressive and unprecedented moves to fight off a major US recession may come too late to cement his legacy and ensure him a second term.

Mr Bernanke gets high grades from many analysts for recognising relatively quickly that the credit crunch spreading from defaulting mortgages to banks to businesses could have broader impact, and for taking bold measures in response.

'Once Bernanke realised how serious and severe his problem was, he moved quickly, and he moved aggressively,' said Bernard Baumohl, of the Economic Outlook Group in Princeton Junction, New Jersey.

In a Reuters poll, economists said the US central bank chief was early to acknowledge the scale of the crisis, especially when compared to his counterparts in Europe and Japan, and they gave his performance high marks.

Mr Bernanke looked prescient compared with European Central Bank president Jean-Claude Trichet who in July worried enough about inflation to raise rates, only to reverse direction three months later when the financial crisis intensified.

Perhaps no one has been better equipped to handle the crisis than Mr Bernanke, who studied how central bank complacency in the 1920s set the stage for the Great Depression, and whose speeches in 2002 and 2004 laid out a detailed map for monetary policy when a central bank's interest rate drops to zero.

On Monday, the Fed pushed on into uncharted terrain, dropping its benchmark interest rate to a range at or near zero for the first time and promising to keep rates low for a long time.

The central bank went further, promising to use untested weapons to boost growth as its conventional ammunition was spent. Mr Bernanke opened the door to expand purchases of debt issued and guaranteed by government-sponsored mortgage agencies and to buying longer-dated Treasury securities.

The response in markets was largely positive, with a rally in stocks on Tuesday, albeit followed by a fall on Wednesday, and a tumble in yields on longer- dated Treasury debt.

Mr Bernanke has said the Fed is willing to bypass banks and directly provide funding to specific market areas where activity has stalled, including consumer and small business loans. Commercial real estate may follow.

The Fed's moves are likely to foster private sector risk-taking and lead to appreciation of asset prices, fuelling a recovery, said Zach Pandl, an economist with Barclays Capital.

'Our view is that these policies will gain traction,' he said. 'We've been impressed with the speed and scale, and the Fed has rarely been behind the curve. We think they've been creative, nondogmatic.'

However, there is the possibility that the Fed's actions could backfire since the rate cut has lowered the value of the US dollar, and other countries may try to lower the value of their currencies to make them more stable, said Richard Bove, an analyst for Ladenburg Thalmann.

In addition, the Fed's rate cuts have failed to lower some private sector borrowing costs, Mr Bove said. 'The Fed is not impacting the private sector,' he said in a note to clients.

But most economists don't expect the economy to show signs of rebounding until the second half of next year.

Unemployment rates, which lag an economic recovery, may be peaking next autumn, right around the time the administration of current President-elect Barack Obama needs to announce whether they want Mr Bernanke to stay on for a second four-year term.

'If by fall of 2009 there's no improvement in the economy, and indeed, if it's even worse, I can see case being made for replacing the chairman of the Federal Reserve,' said Campbell Harvey, a professor at Duke University's Fuqua School of Business. 'Politically, you would have to shake the team up.'

Mr Bernanke's detractors also point to the decision in September to let Lehman Brothers fail as a serious error of judgment. Authorities including Mr Bernanke have said they could not find a buyer for the investment bank, but the event was seen as triggering an acceleration of the economic downturn.

Mr Obama's naming of former Treasury secretary Lawrence Summers, a highly regarded economist, to a senior White House economics coordination post also raises the possibility that the President-elect is grooming him to replace Mr Bernanke. -- Reuters

明年才是真正的“严冬”

noreply@blogger.com (Amy 杨钰萍) — Thu, 18 Dec 2008 07:20:00 +0000

Dated on 18-12-2008

《货币战争》作者、提前半年预警美国“两房”灾难和金融海啸爆发的旅美华裔学者宋鸿兵，昨天上午接受本报记者采访时称，明年没有春天，金融海啸将在明年4至9月间升级为第二波，届时将爆发对冲基金和保险公司的倒闭潮。他同时解释，这不是理论性的推断或凭空的猜测，而是通过数据分析得出的时间触点。

　　提前半年预测次债危机

　　“《货币战争》一书问世时，美国次债危机未正式发生，而您却作出预测，请问您的依据是什么？”当记者抛出这个提问时，他解释，是通过大量数据统计分析到的。他同时强调，他都能预测到，相信美国一些大的投行机构以及权威部门，应该知道金融危机的到来。

　　宋鸿兵称，目前情况来看，“危机最严重的时刻还没到来”。也即说，2008年还不是金融海啸危害最大的年头，明年才是真正的“严冬”，2009 年没有春天。明年将是金融海啸的第二波段，美国的商业银行体系会遭受前所未有的冲击，多家商业银行巨头或会在这一波海啸中倒下。

　　他说，这次国际金融危机将有四个波段，现在仅仅是第一波。明年4-9月间，还会有第二波袭来，冲击力将甚于现在。第二波金融海啸的引爆点 ,将从目前的房贷市场转向“企业债和地方政府债券”，尤其是企业债中的垃圾债。因为历史规律是：美国经济一旦步入衰退，首当其冲的就是垃圾债。

　　他说：“到明年，美国经济正式确认步入衰退，在实体经济下滑的冲击下，垃圾债券的违约率将急速爬升，预计到9月底违约率将急升500%,从目前的2.68%飙升至12%以上。在 62兆美元的信用掉期市场中，有20兆余美元在对赌垃圾债券，垃圾债违约率大幅飙升的直接后果是这种对赌行为将大规模失败。”

　　“第二波金融海啸下，将有多至上百家对冲基金、保险公司等金融机构血本无归、最终倒闭；而商业银行资产负债表的问题也将暴露无遗，直接冲击美国商业银行系统，美国五大商业银行倒掉几家是有可能的。”

　　外向型经济肯定受冲击

　　广东外向型经济占比大，美国经济衰退对我省乃至全国都将受到影响。宋鸿兵认为，明年美国经济会出现比较严重的衰退。在金融海啸的冲击下，中国经济尤其是广东的外贸企业，当然会受到较大的影响。不过，据他估计，明年上半年实体经济恐怕会出现较大冲击。

　　有何良策规避风险呢？他提出，目前最重要的是按照中央经济工作会议的部署，扩大内需，拉动经济，做足各方面工作，有准备地度“严冬”。至于如何扩大内需，他认为，目前最大的问题是生产过剩而消费不足。因此，我们提倡扩大内需，还要各级政府拿出切实可行的措施，才能将口号变为现实行动。特别是要想方设法解决当前农村存在的问题，设法增加农民的收入，让农民敢于消费，消费得起。

　　我们黄金储备太少

　　这次金融危机的爆发，美国债务危机是导火索。宋鸿兵预测，这一危机可能持续3年以上，并可能演化为美元危机，而黄金在这个时候应该得到我国上至国家下至平民百姓的重视。他认为，目前我国的黄金储备太少了。应该设法储备，越多越好，从战略上考虑，应该做到“藏金于国、藏金于民、藏金于市、藏金于未来”。

　　他阐述我国储备黄金的必要性后指出，金融危机将引发美元危机，而黄金是美元定价的。美元越发越多，黄金石油这些美元定价的商品就会不断上涨。美元贬值，即是让全世界来为美国买单。因为他是最大的债务国，供应货币就等于是在还债。他还称，目前的黄金价格是低估了。以房子为例，在同样的时间里，房产价格已涨了10倍以上，而黄金价格最多为1倍。

　　对于普通投资者来说，在金融危机来临时，首先是保护财富不要被这种振荡所吞噬，这是首要的。而赚钱是次要的。在危险的情况下，更重要的是守住自己的钱袋子。至于投资的方向，他认为还是黄金。在目前黄金价格被低估情况下，可以大胆买入。他认为，越是美元疲软，被全世界看空，黄金的走势就会越好。据他预测，国际黄金价格超过1000美元/盎司只是时间的问题。

　　南方日报记者朱桂芳

　　金融海啸明夏将更猛烈

　　“危机最严重的时刻还没到来。”因编着畅销书《货币战争》而闻名、并提前预警美国“两房”灾难和金融海啸的经济学者宋鸿兵，再次预言：金融海啸将在明年4至9月间升级为第二波，届时或将涌现企业倒闭潮，美国商业银行系统更会遭受前所未有的冲击，多家商业银行巨头或会在此波海啸中倒下……

　　最近，宋鸿兵应邀做客建设银行佛山市分行举办的财富名家讲座。他以《金融海啸下中国经济的发展方向》为主题演讲，并预言“目前仿佛一切风平浪静——金融市场稳定了，人心安定了，但实际上现在正处于两波金融海啸之间的波底，第二波正在积蓄力量！”

　　危机解读：根源在于资产膨胀依赖型经济增长模式不可持续

　　伴随着《货币战争》长期雄霸各大畅销书榜前三名，该书作者宋鸿兵迅速从一个默默无名的旅美华人变为备受瞩目和争议的经济学者。

　　在书中，他指出有美国政府背景的“两房”机构将因不合理操作而引致灾难，并预言“两房”危机恐将在今年6至8月间爆发。今年6月，宋鸿兵再次预言次贷危机将演变成金融海啸。一个月后，“两房”股价腰斩、美国政府宣布接管，进而雷曼等投资银行陷入困境，危机，正朝着他的预言发展。

　　由于他原来在房地美和房利美工作，他有大量的数据。他预言，6、7、8三个月是次贷危机暴发的高峰，美股将会进入快速下跌阶段，A股难以独善其身。后来发生的一切，证明了他的看法。

　　“这次次贷危机从根本上来说是美元机制长期失衡下的爆发。”宋鸿兵表示，长期以来，美国是过度消费和较低储蓄率，2007年美国储蓄率仅为1.7%，创下了1933年大萧条时代以来的历史最低记录。然而由于各种金融创新手段如雨后春笋般冒出来，使美国得以吸纳来自其他国家的储蓄来弥补自身储蓄的不足。

　　在宋鸿兵看来，资本的膨胀在长期失衡累积下必然会有一阵调整。他认为此次金融海啸实质是虚拟经济的财富分配导致实体经济无法持续有效运作，根源在于资产膨胀依赖型经济增长模式不可持续。

　　危机预测：金融海啸明夏升级第二波

　　“金融海啸远没有结束，2009年夏，它将会开始第二波的冲击，冲击力度也将是第一波的三倍。”宋鸿兵将此次危机分为4个阶段，次贷地震——违约海啸——利率火山——美元冰河。目前，正处于两波中间的低谷，明年6、7、8三个月危机将会殃及美国五大商业银行。宋鸿兵表示，2009年夏，企业债及公债等违约问题，尤其是企业垃圾债，将导致大数额的CDS市场（CDS为信用违约掉期）发生违约危机，金融海啸将开始第二波的有力冲击。他预计，美国垃圾债券的违约率将急速爬升，而这一切将给美国五大商业银行猛力冲击。

　　“明年信用掉期市场会发生违约危机。从美国商业银行资产负债表上看，其主要投向了表外的SIV资产、按揭抵押债券，两房债券、CDO、 CDS，以及垃圾债券，在信用违约掉期市场违约率飙升过程中，而这些放贷中的大部分将永远无法偿还了，将冲击更多的对冲基金、保险公司等金融机构，而美国五大商业银行也将遭受前所未有的冲击，可能会在此波海啸中倒下。”

　　不仅如此，宋鸿兵认为金融海啸的冲击波远远未止，将会迎来第三波、第四波。第三波的利率火山危机，即信贷全面紧缩造成长期贷款利率飙升，触发利率掉期市场危机，以及第四波的“美元冰河”危机。全球美元资产将出现信心危机，从而动摇美元世界储备货币的地位。

　　危机应对：游戏规则或将有新调整

　　然而，在最近美元走强形势下，有专家开始对美国经济形势看好，他们认为美元走强是由于美国经济处于复苏之中，美国与欧洲其它国家相比，目前经济状况有所好转，已经过了最艰难时期。

　　对此，宋鸿兵另有看法，他认为目前的金融衍生品等资产是以美元计价的，市场在大量抛售这些美元资产，从而引起美元稀缺，导致美元走强。他认为，美国的形势依然不看好，一旦每年创造的GDP全部增加值还偿还不了债务利息，美元体系可能最后会崩溃。

　　“不过，美国是游戏规则的定义者，所以并无法肯定美元体系最终一定会崩溃。但可以说的是目前这种美元体系面临着游戏规则的改变。会有新的调整。”宋鸿兵认为。

　　问及如何评价我国对金融海啸的应对措施时，宋鸿兵承认，全球金融海啸对我国会产生不利影响，但他认为我国的金融体系仍是安全的。对于中国政府的4万亿救市方案，他表示很有帮助，但至于力度和效果如何，还有待实际情况验证。

　　一旦关于第二波海啸袭来的预言不幸被验证，中国将如何应对？宋鸿兵坦言，目前国家出台的救市政策对稳定经济发展能产生有利的影响，但届时我国金融市场将遭遇一系列更新的问题，大家应提前有心理预期，着手思考新的应对之策。

　　佛山日报记者李琳、罗超

所有文章只代表作者观点，与本站立场无关！

Invest in Gold and KISS US Dollar bye bye

noreply@blogger.com (Amy 杨钰萍) — Thu, 18 Dec 2008 03:09:00 +0000

There is a few ways to invest your money in Gold:-

1) Buy physical Gold coin.

2) Invest in SGX ETF Gold (GLD 10US$).

3) invest in US market on those Gold ETF:-

a) PowerShares DB US Dollar Bearish Fund (UDN)

b) PowerShares DB Gold Double Long (DGP)

c) Market Vectors Gold Miners ETF (GDX)

Once the gold price hit ever high it will have a gold Rush effect on the Gold price as a result of world currency printed more and more that may lead to hyperinflation that are in the long term future. We cannot stop Govt. from printing Dollar notes but we can bought some gold for hedging the loss of the currency value due to dilution of dollar notes in all part of the world.

Invest in SGX ETF Gold (GLD 10US$).

For invest in SGX ETF Gold, you can used your CPF Gold investment account to invest on SGX ETF GOLD 10US$ or you used your own saving that are in Singapore Dollar (that come without CPF check)

Please click the picture to to learn to know how to fill the order for purchase the Gold ETF in SGX.

Reference:-

http://en.wikipedia.org/wiki/Reserve_Currency

http://en.wikipedia.org/wiki/Foreign_exchange_reserves

Falling of US Dollar may have a short term effect this will have to watch Bank of Japan (BOJ) action on Japanese YEN as they are the one of the major US Dollar reserves Holder and their economy is getting hit very badly due to ever highest high Japanese Yen.

There are few thing to watch out in the investment of GOLD:-

1) China's interest rate, China currency, China's money supply.

2) Japanese Yen exchange rate, BOJ intervention of US Dollar and rate cut etc.

3) Gold supply in this market, central banks that are going to sell more Gold in the market.

4) Singapore MAS further devalue Singapore dollar. (coming April 2009)

Those Govt. have their own reason to devalue their own currency, they have to walk out of the crisis as the jobless rate in their country is getting ever high and there will be a social unrest threat to those Govt. if they don't anything at all or do too little.

Next year 2009 will be the year of currencies turbulence. we shall watch it the news for update.

Fed Cuts Rates to Near 0%, Vows to Bolster Economy

noreply@blogger.com (Amy 杨钰萍) — Wed, 17 Dec 2008 01:12:00 +0000

The Federal Reserve slashed its target for overnight interest rates to a record low of zero to 0.25 percent, and said it would employ "all available tools" to battle a year-long recession.

The surprise move to lower its target for the benchmark federal funds rate from one percent puts the Fed in uncharted territory. Financial markets had expected the Fed to lower rates by no more than three-quarters of a point, to 0.25 percent.

In its statement, the Fed underscored its committment to use extraordinary measures, including using its balance sheet to support the credit markets.

"The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability," the Fed said.

The cut in the federal funds rate pushes it to its lowest level on records dating to July 1954, and the central bank said it would likely keep it at "exceptionally low levels for some time."

"There is no more room to cut rates, as the target cannot go negative," said economist Chris Rupkey of Bank of Tokyo-Mitsubishi. "Quantitative easing will be the new way for the Fed to stimulate the economy going forward."

In addition to the rate cut, the Fed said it was prepared to expand already announced large purchases of debt issued by government-sponsored mortgage agencies to support the battered US housing market.

The program to buy $600 billion in debt and mortgage-backed securities from mortgage giants Fannie Mae and Freddie Mac already has helped pushed mortgage rates down.

The Fed, however, remained cautious about another unusual measure, which Fed Chairman Ben Bernanke first floated two weeks ago. The statement said the central bank was still "considering" buying long-term Treasury securities, which is also thought to be aimed at lowering borrowing costs by going around commercial banks.

By boosting the quantity of money in the financial system, the Fed has engaged in so-called "quantitative easing" to provide economic relief. The Fed's balance sheet has ballooned to $2.2 trillion, from close to $900 billion in September, reflecting efforts to mend the financial system.

"With this statement the Fed embarks on a no-holds barred posture to help the economy." said Robert Brusca, chief economist at Fact & Opinion Economics. "The rate cut is the least of what the Fed is doing."

Mickey Levy, chief economist at Bank of America, said the Fed emphasized its intention to focus on "open market purchases of agency mortgages and debt, which will involve allowing the federal funds rate go toward 0%."

Prices for US stocks and government debt shot higher, while the dollar slipped, on the Fed's announcement.

"It's a highly unorthodox and creative step," said Michael Woolfolk, senior currency strategist, at the Bank of New York-Mellon in New York. "We think it's the best possible move for the U.S. consumer and for the financial market."

The Fed's unusual decision to establish a target range for the federal funds rate rather than a set level is a clear response to recent market conditions, where the rate has actually traded well below the one percent target.

The Fed is "acknowledging that", Bob Doll of BlackRock told CNBC. In recent days, the rate has been solidly below 0.25 percent.

In its statement, the Fed signaled its intentions by saying circumstances "warrant" keeping interest rates low for "some time." The Fed empoyed a similar telegraphing approach during the 2003 period when there were worries about inflation. That successfully managed the market's expectations.

"He [Bernanke] took the conventional funds rate out of play," says David Jones, of DMJ Advisors. "He's saying I'm going to use everything in my power."

Doll says the Fed is trying to get investors to buy a broader range of debt products than Treasuries, which have benefitted from an enormous flight to safety in recent months.

If successful, investors will move to government agency securities and then corporate bonds, which market strategists say is a necessary precondition to any sustainable improvement in stock prices.

Though economists and money managers welcomed the Fed's latest innovation, it did raise some concen about the state of the economy.

"The economy must be in pretty bad shape if the Fed needs to jump market expectations and push rates just a hair above the zero line," said Rupkey.
One veteran economist—among those who thought the Fed had already eased more than enough—said the central bank may have created an interesting predictament for itself and the markets going forward.

"What will the statement at the end of January say other than offer a litany of all the risky assets they are buying," asked Ram Bhagavatula of Combinatorics Capital. "How does that indicate whether monetary policy is more or less easy?"

—AP and Reuters contributed to this story.

-----------------------------------------------------------------------------------------------

US Dollar is expected to drop over the long term, Fed have cut the Fed fund rate to the lowest ever seem in US history. you have to buy Gold for hedging against Dollar falling. The reason to buy Gold is simple because Gold in this earth is limited as the US Dollar is unlimited, Fed needed to print as much Dollar note to bail out those Banks and companies that needed the money to finance their business operation.

Next year 2009 Singapore Dollar may will depreciate by printing more Singapore dollar, this is to invite more direct investment to Singapore, to simulate the export for income. In this method the depreciate of Singapore Dollar will maintain the US strong Dollar policy. There may have a side effect in the future economy growth that is inflation. The inflation actually come from US but all over the world central banks will print more their currency notes, in another word, this wil import US inflation to their own country so inflation in future cannot be avoided if MAS want to depreciate Singapore Dollar by printing more notes the amount of monies to be print in order to maintain that strong US Dollar policy to a standard will be huge. So what do you think about the gold price in the future will be?

Sell These Assets Before The Ground Gives Way Beneath Them.

noreply@blogger.com (Amy 杨钰萍) — Tue, 16 Dec 2008 02:52:00 +0000

Publish Post

Bill Bonner - Mon 15 Dec, 2008

The ground is giving way beneath our feet: Sell the dollar... Sell Treasuries...

Sell these assets before the ground gives way beneath them Sell the Dollar and Sell Treasuries London, England

The ground is giving way beneath our feet: Sell the dollar...Sell Treasuries.

People still stand their ground...they do not panic. They do the right thing. But then, they go into work – but find they have no jobs. They look at their pension account – wisely invested in a diversified portfolio – and find that it has lost half its value. And their houses lose 20% of their value. In places such as San Diego, Las Vegas and Miami, the losses are more like 30%- 40%.

The ground gives way...and they find themselves in Hell.

Friday, the Dow registered a 61 point improvement, after much disappointment the day before. Is the rally on or off? We don’t know...

But what MUST happen, WILL happen. Fish gotta swim. Birds gotta fly. And bubbles gotta pop. The bubble in private debt has popped already. And now, the bubble in public debt has to pop too. And the dollar’s got to go down. That’s when the ground will really give way... For many people, the collapse of the dollar will wipe out what is left of their assets. Pension funds and insurance companies will be devastated. Savers will be unsaved.

Investors have rushed from risky investments of all sorts – emerging markets, mature markets, real estate, commodities – into the strong, welcoming arms of the US Treasury market. “Give me your tired, your poor huddled masses of dollars...yearning for protection from capitalism,” says Uncle Sam. “And I’ll give you 2.58% return over 10 years. Give me your money for 91 days, and I’ll give you nothing.”

Is that a good deal, dear reader? It depends on how solid the ground is under the US Treasury market. So far, as the ground gives way under other asset classes, the Treasury market has held solid.

But here is why the word “must” was invented. When something’s gotta happen, it’s gotta happen. The US Federal government already has an official national debt over $10 trillion. The deficit for next year will likely exceed $1 trillion...and could reach up to $2 trillion by 2010 – or more than 4 times the biggest deficit the country has ever run...and more than the entire US budget only 7 years ago. At this rate, in a couple of years, US debt will exceed US GDP.

Is it likely that the feds can so greatly increase the quantity of US debt without reducing the quality of it? Is it likely that the last IOU issued by the federal government will be as valuable as the first? No, it’s not likely. Something’s gotta give.

And we are talking about big money. A business or a small government can sometimes borrow more than its annual revenues. It’s borrowing can be funded by a small percentage of the world’s reckless savers. Lending to US government on such a scale is another matter. It takes up a large percentage of the world’s total savings, effectively shouldering other borrowers out of the way, and actually reducing the world’s capacity for economic growth.

Everybody, except bankers of course, knows that lending large amounts to a small country is extremely speculative. But lending to the US for ten years at 2.58% has a nasty stink of certainty about it. You can’t borrow that kind of money without some consequences...and the consequences of that much debt are bound to be bad.

To us, it seems almost inevitable that it will turn out to be a bad place to put your money. Because the ground is almost sure to give way beneath the feet of Treasury-market investors. How so? Ben Bernanke has already told us. When the borrowing gets tough, the Fed will turn to other forms of liquidity – buying US treasury bonds itself. In other words, instead of borrowing from savers – thus leaving the net money supply unchanged – the Treasury will borrow from the Fed. Where will the Fed get trillions of extra dollars? It will create them out of thin air.

That’s why the dollar has turned down.

“Greenback’s haven status thrown into doubt,” reported the Financial Times.

Last week, the euro jumped to $1.33 – a level it hasn’t seen in many months. And gold keeps edging up. It’s up to $820 an ounce as of last week.

The dollar is Hell-bound, dear reader. Sell it. And sell Treasuries too. We might be early with this advice. But we won’t be wrong.

*** If you want to own gold coins, you’ll pay $870 - $890 an ounce. Coins are scarce. People are looking for something solid to hold onto. Coins are solid. They are portable. They have no hidden liabilities.

And you won’t pick up the paper and find that a crook like Bernard Madoff has stolen away the value of your gold coins. The latest Wall Street desperado took investors for some $50 billion. And now the FBI, SEC and all the gumshoes and hacks are making a big deal of it.

Of course, in purely financial terms it is a big deal. The press has labeled it a “ponzi scheme.” But Charles Ponzi took in only $10 million. Peanuts compared Madoff’s scheme.

Another important difference. Ponzi took money from ordinary investors, widows and orphans. But Madoff went for bigger game – hedge funds, banks, and professionals. Today’s news tells us that the world’s largest bank – HSBC – was a victim. Banks in Geneva said they were out $4 billion. The Fairfield Greenwich Group said it had invested $7.5 billion with Madoff.

Of course, we don’t like to see widows and orphans get scammed. But hedge funds? Banks? Who can honestly say that they don’t enjoy seeing these mighty moneymen tripping over their own greedy delusions? Here at the Daily Reckoning...the news of Wall Street’s losses cheers us up...like reading the obituaries and finding no mention of our own name.

But when you own a gold coin you won’t have to wonder if the balance sheet is made up...or if the trades were fictitious...or why the SEC was asleep at the switch. A gold coin is what it is...no more, no less.

When the ground gives way...gold coins stay right where they were – or go up in value.

Not that we’re urging you to buy gold coins. We did that for the last 8 years. Now, you’re on your own.

*** Word from the Washington Post is that autoworkers are “angry.” Why should they be angry? They’ve been paid far too much (compared to autoworkers in, say, India) for far too long. Now their gravy train seems to be stalled on a sidling and they want the government to “do something” to get it going again.

It isn’t fair for the feds to bail out Wall Street but not Detroit, they say.

Elsewhere in the news, Bloomberg has asked the Fed to reveal what it did with the $2 trillion in emergency loans it passed out. Surely, the money went to the Fed’s clients – banks, and financial institutions generally. How? To whom? What were the terms? The Fed wouldn’t say. It refused the Freedom of Information Act petition on several grounds.

“Blank check for banks, pink slips for Detroit,” is how Gretchen Morgenson explains it in the New York Times.

The UAW (United Auto Workers) has a point, of course. Neither industry should be bailed out. But if you’re going to throw money around in Manhattan, why not toss some to Detroit?

But the autoworkers can stop kvetching. Detroit will get its bailout too. Just wait.

*** “What Hell Really is...” said the sign in front of a church in Arizona. “Choir practice at 4 PM!” was the next line.

Angry Citi investors to unveil new court complaint

noreply@blogger.com (Amy 杨钰萍) — Sat, 29 Nov 2008 17:05:00 +0000

NEW YORK - After Citigroup shares tumbled last year on the bank's subprime mortgage woes, angry investors sued for fraud.

Now, stockholders are due to file a new version of their lawsuit as their losses have become much more stark.

A lot has changed for the worse for Citigroup stockholders since the lawsuit about its subprime debt exposure was first brought in November 2007. The bank's shares are trading at around US$6 apiece compared with US$31 a year ago - even after two government bailouts in the last two months.

The US government this week agreed to inject US$20 billion of capital and shoulder nearly US$250 billion in potential losses on about US$306 billion of the bank's risky assets - after injecting US$25 billion of taxpayer money in October.

A consolidated shareholder complaint in the case is scheduled to be filed in US District Court in Manhattan by Monday. An earlier version accused Citigroup and several individuals, including former CEO Charles Prince, of violating securities law by artificially boosting the bank's stock price by concealing its exposure to subprime-linked debt.

Citigroup believes the lawsuit 'is without merit, and will defend against it vigorously,' company spokesman Mike Hanretta said on Tuesday.

The lawsuit, which seeks class-action status on behalf of a large group of stockholders, could be among the biggest subprime-related cases moving through US courts, given Citigroup's huge stock market declines.

The company was once the biggest US financial institution based on stock market value, but shares have plummeted and are down 54 per cent this month alone. Shareholder lawsuits can take years to litigate, and many are ultimately thrown out by courts or settled.

The lead plaintiff is a group of former employees and directors at closely held Automated Trading Desk (ATD) who received Citigroup stock in exchange for selling their electronic trading firm to the bank in a US$680 million deal announced in July 2007.

Through that deal, group members acquired more than 3.9 million Citigroup shares, which were valued at about US$52 a piece at the time the buyout was being negotiated, according to a January court filing from the ATD plaintiffs.

The group said its members had suffered losses of about US$76.8 million as of January, a figure that is much higher now given Citigroup's stock declines this year.

A lawyer for the shareholders, Ira Press of law firm Kirby McInerney LLP in New York, declined to comment about the specifics of the new court complaint, saying it is still being drafted.
'If last week is any indication, the story may still be unfolding,' he said. 'We are obviously continuously monitoring the unfolding events.'

The original lawsuit was filed by an individual investor. Other shareholders have competed to become lead plaintiff, a role that allows investors to help set strategy in litigation and play a role in any possible settlement talks.

US District Judge Sidney Stein, who is overseeing the case, appointed the ATD Group as the lead plaintiff in August.

The End--

Recession’s Grip Forces U.S. to Flood World With More Dollars

noreply@blogger.com (Amy 杨钰萍) — Tue, 25 Nov 2008 17:26:00 +0000

news retrieve from Bloomberg (date: 25 Nov. 2008)

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The world needs more dollars. The United States is preparing to provide them.

In an all-out assault on capitalism’s worst crisis since the Great Depression, the U.S. is taking on the role of both lender and borrower of last resort for the global economy.

The Federal Reserve, which has already pumped out hundreds of billions of dollars, might formally adopt a policy of flooding the world financial system with even more money. The Treasury, on course to borrow some $1.5 trillion this fiscal year, may tap global capital markets for even more to finance a fiscal stimulus package of as much as $700 billion and provide additional bailout money for banks.

“You want to do everything you can when you’re facing the threat of a deflationary breakdown of the economy,” says Michael Feroli, a former Fed official who is now an economist at JPMorgan Chase & Co. in New York. He sees the central bank cutting the overnight lending rate to zero in January and holding it there throughout the year.

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson are being forced to pull out the stops because the extraordinary actions they’ve taken so far have failed to gain much traction. Credit markets are collapsing, stock prices are plunging and the world economy is sinking into a recession.

As the economy deteriorates, deflation -- a sustained decline in wages and prices -- is emerging as a new threat. U.S. government figures last week showed that consumer prices excluding food and fuel costs fell in October for the first time since 1982.

Shell-Shocked

Investors, shell-shocked by the turmoil, are piling into super-safe Treasury securities, even as the U.S. government ships more supply out the door. Three-month bill rates dropped last week to 0.01 percent, the lowest since at least January 1940, and yields on Treasuries maturing in two through 30 years all fell to the least since the government began regular sales of the securities.

And the dollar has risen as loss-ridden banks worldwide husband their resources, even after receiving generous dollops of liquidity from the Fed. The U.S. currency has surged about 17 percent against the euro -- signaling demand for still more dollars -- in the two months since the crisis deepened after the failure of Lehman Brothers Holdings Inc. Meanwhile, gold is down almost 25 percent from its peak in March.

Swap Lines

To help fight the worldwide dollar squeeze, the Fed has set up currency swap lines with more than a dozen other central banks. Some arrangements, including those with Europe, Britain and Japan, are open-ended, allowing the Fed’s counterparts to draw as many dollars as they need. The U.S. has also established individual $30 billion swap lines with Brazil, Mexico, South Korea and Singapore.

In a speech to a banking conference on Nov. 14, Bernanke characterized these efforts as an “internationally coordinated approach” among central banks to fulfill their function as lenders of last resort.

As the Fed has stepped up its efforts to combat the credit crisis, its balance sheet has mushroomed. Assets rose to $2.2 trillion on Nov. 19 from $924 billion on Sept. 10, just before the bankruptcy of Lehman Brothers shook the global financial system.

The central bank’s holdings are likely to increase further. “I would not be surprised to see them aggregate to $3 trillion -- roughly 20 percent of GDP -- by the time we ring in the new year,” Dallas Fed President Richard Fisher told the Texas Cattle Feeders Association on Nov. 4.

Only the Start

That may be only the start if the Fed cuts its benchmark rate, now at 1 percent, to zero and adopts what economists call a policy of “quantitative easing.” Under such a strategy, it would concentrate on expanding the amount of reserves in the banking system because it could no longer reduce the cost of that money.

The Bank of Japan followed this policy in the early part of the decade as it struggled to rescue the world’s second-largest economy from the grip of deflation. Its balance sheet eventually rose to the equivalent of about 30 percent of gross domestic product, says Tom Gallagher, head of policy research for International Strategy and Investment Group in Washington.

“The Fed could blow through the BOJ’s ceiling,” he adds - - ballooning the central bank’s holdings to more than $4 trillion.

The Treasury is also heading into uncharted territory as it taps capital markets for cash to help finance its bailout fund for the banking system and plug holes in the federal budget caused by the weak economy.

Money From Abroad

Much of that money will come from abroad. “Foreigners don’t seem to be interested in any kind of risky U.S. asset,” says Brad Setser, a former Treasury official now at the Council on Foreign Relations in New York. So, “instead, they are buying Treasuries.” That includes China, which recently passed Japan as the biggest holder of Treasuries.

On Nov. 3, the department tripled its estimate of planned debt sales in the final three months of the year to a record $550 billion. Paulson told a conference in Washington Nov. 17 that the U.S. will issue some $1.5 trillion worth of Treasury securities in the fiscal year that began Oct. 1.

That number, too, could grow. Lawrence Summers, Treasury secretary under President Bill Clinton and an adviser to President-elect Barack Obama, told the same conference that the U.S. needs a “speedy, substantial and sustained” stimulus package to aid the economy.

More Government Spending

“Government may have to spend $600 billion to $700 billion next year to reverse the downward cycle,” Robert Reich, another Obama adviser and a professor at the University of California at Berkeley, wrote in his personal blog Nov. 9.

Kenneth Rogoff, a professor at Harvard University in Cambridge, Massachusetts, and former chief economist at the International Monetary Fund, says the new administration will also have to ask Congress for more money to repair the financial system, over and above the $700 billion already authorized for Paulson’s Troubled Asset Relief Program.

“By the time all this ends, the TARP is going to be closer to $2 trillion than $1 trillion,” ISI’s Gallagher says.

Paulson has already committed $290 billion from the program to buy preferred shares in banks and troubled insurer American International Group Inc.

There’s always a danger the Fed and Treasury may go too far, setting the stage for a big rise in inflation or another asset bubble down the road as the economy revs up and investors get back their nerve. That’s what happened in the early part of the decade as ultra-easy Fed policy and Treasury tax cuts helped fuel a credit boom since gone bust.

Bernanke and Paulson might welcome a bit of that exuberance right now -- even at the risk of higher inflation later -- as they try to prevent the biggest credit catastrophe in decades from sending the economy into a deflationary nosedive.

“It’s true that, over the long run, too much money creates inflation,” says Lyle Gramley, a former Fed governor now at the Stanford Group Co. in Washington. “But they’re trying to keep the economy from going over the precipice and into the abyss.”

Geithner Struggled to Get Movement on Swap Dangers

noreply@blogger.com (Amy 杨钰萍) — Tue, 25 Nov 2008 17:12:00 +0000

news retrieve from Bloomberg (Date: 25 Nov. 2008)

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Timothy Geithner was among the first policy makers to shine a light on the unregulated $47 trillion credit-default swap market back in 2005. The New York Federal Reserve president has struggled since then to get dealers to carry out reforms.

The industry has yet to launch a structure to safeguard against market-wide losses in case a dealer fails, though its leaders expect to get one off the ground by the end of the year. Geithner, selected yesterday by President-elect Barack Obama to be his Treasury secretary, has made clear that such a step is crucial to help contain the mushrooming credit crisis.

“In classic Tim and New York Fed style, the work has been done behind the scenes, among technocrats, largely by consensus,” said Adam Posen, a former Fed official who is now at the Peterson Institute for International Economics in Washington. “The downside is that it takes awhile to get consensus.”

Geithner may not have the luxury of time in his new job as he faces a credit crisis that has morphed into a global recession. As Obama’s chief economic spokesman, it will be up to Geithner to take the lead in quelling the turmoil in financial markets and turning the economy around.

A protégé of former Treasury Secretary and Citigroup Inc. director Robert E. Rubin, Geithner worked on the Asian financial crisis of 1997-1998 and helped stave off a Mexican default earlier that decade.

Bank Capital

In the current crisis, Geithner, 47, was the Fed’s point man in the rescues of Bear Stearns Cos. and American International Group Inc., and tried to stem market turmoil after the decision to allow Lehman Brothers Holdings Inc. to fail. In August, he put his staff to work figuring out how much capital major banks would need if the economy worsened, foreshadowing the steps Treasury Secretary Henry Paulson later took to invest some $125 billion in the country’s largest banks.

Geithner’s skills and limitations as a consensus-builder perhaps show up most clearly, though, in his handling of credit- default swaps, where he played a leading role in trying to make the market safer and more stable.

Trading in credit-default swaps, which were conceived to protect bondholders against default, exploded 100-fold the past decade as investors increasingly used them to speculate on creditworthiness. The contracts pay the buyer face value in exchange for the underlying securities or the cash equivalent should the borrowers fail to adhere to their debt agreements.

Unregulated Market

The big problem Geithner faced in trying to get a handle on the market: It was unregulated, so he lacked authority to make changes on his own and had to depend on his powers of persuasion.

The New York Fed chief began pressing banks in September 2005 to reduce trading backlogs that could prove dangerous should a crisis hit. An average 17 days’ worth of unsigned trades had piled up on dealers’ books, threatening to undermine the market if a wave of defaults hit. A lax system for unwinding and reassigning trades left dealers at times unsure of who was on the other side of their trade.

It took dealers a while to respond. A year later, they had cut the backlog of unsigned trades by 70 percent and doubled the number of deals that were electronically processed.

“It was like herding cats,” said Brad Bailey, director of business development at Jersey City, New Jersey-based brokerage Knight Capital Group and a former derivatives trader, who praised Geithner for making the effort and getting results.

Absorb Losses

The New York Fed chief has run into similar problems in trying to get the industry to set up a central counterparty that would absorb losses on trades in the event a dealer went bust.

After the collapse of Lehman Brothers in September sent market participants scrambling to cover an estimated $2 trillion of trades, the New York Fed chief stepped up pressure on the dealers to act.

On Oct. 7, he summoned the dealers and fellow regulators to the New York Fed. This time, he included futures exchanges at the meeting -- Chicago-based CME Group Inc., Intercontinental Exchange Inc., NYSE Euronext and Frankfurt-based futures exchange Eurex -- in a bid to put competitive pressure on the dealers to come up with a satisfactory plan.

The strategy worked. After three meetings in two weeks, the dealer-owned Clearing Corp. agreed to be acquired by Intercontinental Exchange, one of the exchanges vying for a piece of the market. That paved the way for the launch of at least one clearinghouse by the end of the year.

‘Ahead of Game’

“The Fed can only be commended for being ahead of the game among regulators globally,” said Mark Yallop, chief operating officer of London-based ICAP Plc, the world’s biggest broker of trades between banks and a minority owner in Clearing Corp.

Not everyone agrees. Julian Mann, a mortgage- and asset- backed bond manager at First Pacific Advisors LLC in Los Angeles, criticized Geithner for not doing enough.

“He oversaw the massive expansion in the credit-default swaps market, which arguably is what is behind much of the crisis today,” said Mann, whose firm manages about $9 billion.

Vincent Reinhart, a former senior Fed official now at the American Enterprise Institute in Washington, said that Geithner was quick to recognize some of the problems with the swaps market, though it was tough for him to persuade the industry to carry out reforms while business was booming.

“It shows the limits of what he could do,” Reinhart said, referring to the fact that the market is unregulated. “He had to try to induce good behavior rather than command it.”

U.S. Pledges Top $7.7 Trillion to Ease Frozen Credit.

noreply@blogger.com (Amy 杨钰萍) — Tue, 25 Nov 2008 16:39:00 +0000

news retrieved from Bloomberg (Date: 24 Nov. 2008)

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The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago.

The unprecedented pledge of funds includes $3.18 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis.

When Congress approved the TARP on Oct. 3, Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson acknowledged the need for transparency and oversight. Now, as regulators commit far more money while refusing to disclose loan recipients or reveal the collateral they are taking in return, some Congress members are calling for the Fed to be reined in.

“Whether it’s lending or spending, it’s tax dollars that are going out the window and we end up holding collateral we don’t know anything about,” said Congressman Scott Garrett, a New Jersey Republican who serves on the House Financial Services Committee. “The time has come that we consider what sort of limitations we should be placing on the Fed so that authority returns to elected officials as opposed to appointed ones.”

Too Big to Fail

Bloomberg News tabulated data from the Fed, Treasury and Federal Deposit Insurance Corp. and interviewed regulatory officials, economists and academic researchers to gauge the full extent of the government’s rescue effort.

The bailout includes a Fed program to buy as much as $2.4 trillion in short-term notes, called commercial paper, that companies use to pay bills, begun Oct. 27, and $1.4 trillion from the FDIC to guarantee bank-to-bank loans, started Oct. 14.

William Poole, former president of the Federal Reserve Bank of St. Louis, said the two programs are unlikely to lose money. The bigger risk comes from rescuing companies perceived as “too big to fail,” he said.

‘Credit Risk’

The government committed $29 billion to help engineer the takeover in March of Bear Stearns Cos. by New York-based JPMorgan Chase & Co. and $122.8 billion in addition to TARP allocations to bail out New York-based American International Group Inc., once the world’s largest insurer.

Citigroup received $306 billion of government guarantees for troubled mortgages and toxic assets. The Treasury Department also will inject $20 billion into the bank after its stock fell 60 percent last week.

“No question there is some credit risk there,” Poole said.

Congressman Darrell Issa, a California Republican on the Oversight and Government Reform Committee, said risk is lurking in the programs that Poole thinks are safe.

“The thing that people don’t understand is it’s not how likely that the exposure becomes a reality, but what if it does?” Issa said. “There’s no transparency to it so who’s to say they’re right?”

The worst financial crisis in two generations has erased $23 trillion, or 38 percent, of the value of the world’s companies and brought down three of the biggest Wall Street firms.

Markets Down

The Dow Jones Industrial Average through Friday is down 38 percent since the beginning of the year and 43 percent from its peak on Oct. 9, 2007. The S&P 500 fell 45 percent from the beginning of the year through Friday and 49 percent from its peak on Oct. 9, 2007. The Nikkei 225 Index has fallen 46 percent from the beginning of the year through Friday and 57 percent from its most recent peak of 18,261.98 on July 9, 2007. Goldman Sachs Group Inc. is down 78 percent, to $53.31, on Friday from its peak of $247.92 on Oct. 31, 2007, and 75 percent this year.

Regulators hope the rescue will contain the damage and keep banks providing the credit that is the lifeblood of the U.S. economy.

Most of the spending programs are run out of the New York Fed, whose president, Timothy Geithner, is said to be President- elect Barack Obama’s choice to be Treasury Secretary.

‘They Got Snookered’

The money that’s been pledged is equivalent to $24,000 for every man, woman and child in the country. It’s nine times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office figures. It could pay off more than half the country’s mortgages.

“It’s unprecedented,” said Bob Eisenbeis, chief monetary economist at Vineland, New Jersey-based Cumberland Advisors Inc. and an economist for the Atlanta Fed for 10 years until January. “The backlash has begun already. Congress is taking a lot of hits from their constituents because they got snookered on the TARP big time. There’s a lot of supposedly smart people who look to be totally incompetent and it’s all going to fall on the taxpayer.”

President Franklin D. Roosevelt’s New Deal of the 1930s, when almost 10,000 banks failed and there was no mechanism to bolster them with cash, is the only rival to the government’s current response. The savings and loan bailout of the 1990s cost $209.5 billion in inflation-adjusted numbers, of which $173 billion came from taxpayers, according to a July 1996 report by the U.S. General Accounting Office, now called the Government Accountability Office.

‘Worst Crisis’

The 1979 U.S. government bailout of Chrysler consisted of bond guarantees, adjusted for inflation, of $4.2 billion, according to a Heritage Foundation report.

The commitment of public money is appropriate to the peril, said Ethan Harris, co-head of U.S. economic research at Barclays Capital Inc. and a former economist at the New York Fed. U.S. financial firms have taken writedowns and losses of $666.1 billion since the beginning of 2007, according to Bloomberg data.

“This is the worst capital markets crisis in modern history,” Harris said. “So you have the biggest intervention in modern history.”

Bloomberg has requested details of Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit against the central bank Nov. 7 seeking to force disclosure of borrower banks and their collateral.

Collateral is an asset pledged to a lender in the event a loan payment isn’t made.

‘That’s Counterproductive’

“Some have asked us to reveal the names of the banks that are borrowing, how much they are borrowing, what collateral they are posting,” Bernanke said Nov. 18 to the House Financial Services Committee. “We think that’s counterproductive.”

The Fed should account for the collateral it takes in exchange for loans to banks, said Paul Kasriel, chief economist at Chicago-based Northern Trust Corp. and a former research economist at the Federal Reserve Bank of Chicago.

“There is a lack of transparency here and, given that the Fed is taking on a huge amount of credit risk now, it would seem to me as a taxpayer there should be more transparency,” Kasriel said.

Bernanke’s Fed is responsible for $4.74 trillion of pledges, or 61 percent of the total commitment of $7.76 trillion, based on data compiled by Bloomberg concerning U.S. bailout steps started a year ago.

“Too often the public is focused on the wrong piece of that number, the $700 billion that Congress approved,” said J.D. Foster, a former staff member of the Council of Economic Advisers who is now a senior fellow at the Heritage Foundation in Washington. “The other areas are quite a bit larger.”

Fed Rescue Efforts

The Fed’s rescue attempts began last December with the creation of the Term Auction Facility to allow lending to dealers for collateral. After Bear Stearns’s collapse in March, the central bank started making direct loans to securities firms at the same discount rate it charges commercial banks, which take customer deposits.

In the three years before the crisis, such average weekly borrowing by banks was $48 million, according to the central bank. Last week it was $91.5 billion.

The failure of a second securities firm, Lehman Brothers Holdings Inc., in September, led to the creation of the Commercial Paper Funding Facility and the Money Market Investor Funding Facility, or MMIFF. The two programs, which have pledged $2.3 trillion, are designed to restore calm in the money markets, which deal in certificates of deposit, commercial paper and Treasury bills.

Lehman Failure

“Money markets seized up after Lehman failed,” said Neal Soss, chief economist at Credit Suisse Group in New York and a former aide to Fed chief Paul Volcker. “Lehman failing made a lot of subsequent actions necessary.”

The FDIC, chaired by Sheila Bair, is contributing 20 percent of total rescue commitments. The FDIC’s $1.4 trillion in guarantees will amount to a bank subsidy of as much as $54 billion over three years, or $18 billion a year, because borrowers will pay a lower interest rate than they would on the open market, according to Raghu Sundurum and Viral Acharya of New York University and the London Business School.

Congress and the Treasury have ponied up $892 billion in TARP and other funding, or 11.5 percent.

The Federal Housing Administration, overseen by Department of Housing and Urban Development Secretary Steven Preston, was given the authority to guarantee $300 billion of mortgages, or about 4 percent of the total commitment, with its Hope for Homeowners program, designed to keep distressed borrowers from foreclosure.

Federal Guarantees

Most of the federal guarantees reduce interest rates on loans to banks and securities firms, which would create a subsidy of at least $6.6 billion annually for the financial industry, according to data compiled by Bloomberg comparing rates charged by the Fed against market interest currently paid by banks.

Not included in the calculation of pledged funds is an FDIC proposal to prevent foreclosures by guaranteeing modifications on $444 billion in mortgages at an expected cost of $24.4 billion to be paid from the TARP, according to FDIC spokesman David Barr. The Treasury Department hasn’t approved the program.

Bernanke and Paulson, former chief executive officer of Goldman Sachs, have also promised as much as $200 billion to shore up nationalized mortgage finance companies Fannie Mae and Freddie Mac, a pledge that hasn’t been allocated to any agency. The FDIC arranged for $139 billion in loan guarantees for General Electric Co.’s finance unit.

Automakers Struggle

The tally doesn’t include money to General Motors Corp., Ford Motor Co. and Chrysler LLC. Obama has said he favors financial assistance to keep them from collapse.

Paulson told the House Financial Services Committee Nov. 18 that the $250 billion already allocated to banks through the TARP is an investment, not an expenditure.

“I think it would be extraordinarily unusual if the government did not get that money back and more,” Paulson said.

In his Nov. 18 testimony, Bernanke told the House Financial Services Committee that the central bank wouldn’t lose money.

“We take collateral, we haircut it, it is a short-term loan, it is very safe, we have never lost a penny in these various lending programs,” he said.

A haircut refers to the practice of lending less money than the collateral’s current market value.

Requiring the Fed to disclose loan recipients might set off panic, said David Tobin, principal of New York-based loan-sale consultants and investment bank Mission Capital Advisors LLC.

‘Mark to Market’

“If you mark to market today, the banking system is bankrupt,” Tobin said. “So what do you do? You try to keep it going as best you can.”

“Mark to market” means adjusting the value of an asset, such as a mortgage-backed security, to reflect current prices.

Some of the bailout assistance could come from tax breaks in the future. The Treasury Department changed the tax code on Sept. 30 to allow banks to expand the deductions on the losses banks they were buying, according to Robert Willens, a former Lehman Brothers tax and accounting analyst who teaches at Columbia University Business School in New York.

Wells Fargo & Co., which is buying Charlotte, North Carolina-based Wachovia Corp., will be able to deduct $22 billion, Willens said. Adding in other banks, the code change will cost $29 billion, he said.

“The rule is now popularly known among tax lawyers as the ‘Wells Fargo Notice,’” Willens said.

The regulation was changed to make it easier for healthy banks to buy troubled ones, said Treasury Department spokesman Andrew DeSouza.

House Financial Services Committee Chairman Barney Frank said he was angry that banks used the money for acquisitions.

“The only purpose for this money is to lend,” said Frank, a Massachusetts Democrat. “It’s not for dividends, it’s not for purchases of new banks, it’s not for bonuses. There better be a showing of increased lending roughly in the amount of the capital infusions” or Congress may not approve the second half of the TARP money.