Forex Futures Forum Archive for 06/1/2009

dc CB 21:12 GMT June 1, 2009
Bank regulators have expressed concern about letting private-equity firms gobble up too many pieces of this vital part of the banking system


NY Post reports a wave of bank failures this year is expected to create a feeding frenzy among would-be buyers, with private-equity cos likely edged out as relatively healthy banks swoop in to pick the bones of their battered, smaller brethren. While the FDIC has a list of more than 300 so-called problem banks, Phil Colaco, a managing director at investment banking firm McColl Partners, estimates there are as many as 780 mostly small banks that are in jeopardy of going under over the next 24 months thanks to souring loans eating into their meager deposit bases. While many of the bank failures from this year have been soaked up by private-equity cos like, sources said bank regulators and the FDIC have expressed concern about letting private-equity cos gobble up too many pieces of this vital part of the banking system. With that in mind, the FDIC, which is typically appointed to oversee liquidations of banks and thrifts, is considering encouraging healthier banks to purchase part or all of a troubled institution's deposits and bank branches.

dc CB 21:11 GMT June 1, 2009
Troubled bank loans hit a record high -

NY Times reports overall loan quality at American banks is the worst in at least a quarter century, and the quality of loans is deteriorating at the fastest pace ever, according to statistics released this week by the FDIC. The report highlighted that even as the government and major banks have scrambled to deal with the impaired securities the banks own, the institutions have been plagued by an unprecedented volume of old-fashioned loans going bad. Of the entire book of loans and leases at all banks — totaling $7.7 trillion at the end of March — 7.75% were showing some sign of distress, the F.D.I.C. reported. That was up from 6.9% at the end of 2008 and from 4.1% a year earlier. It also exceeded the previous high of 7.26% set in 1990 and 1991, during the last crisis in American banking.

dc CB 21:04 GMT June 1, 2009 Reply   
Black Swan fund makes a big bet on inflation

WSJ reports a hedge fund co that reaped huge rewards betting against the market last year is about to open a fund premised on another wager: that the massive stimulus efforts of global governments will lead to hyperinflation. The co, Universa Investments L.P., is known for its ties to gloomy investor Nassim Nicholas Taleb, author of the 2007 bestseller "The Black Swan," which describes the impact of extreme events on the world and financial markets. Unlike last year's sudden market implosion, inflation isn't an unimaginable event that few currently anticipate. In fact, many fear inflation right now amid government efforts to goose the economy. Universa's bet, however, is that inflation will reach levels few expect. By opening the inflation fund, Universa is trying to capitalize on a wave of investor demand for its products, which when they're right can protect investors from extreme market moves. The new strategy, designed by Mr. Spitznagel, aims to post big gains if inflation and interest rates take off as they did in the 1970s. Universa will invest in options tied to commodities such as corn, crude oil and copper, as well as options on stocks such as oil drillers and gold miners. "We think these things are going to see massive volatility," Mr. Taleb said in an interview. The fund will also bet against Treasury bonds, which tend to weaken in inflationary environments.

dc CB 20:48 GMT June 1, 2009
Taxpayer underwater...of course.

Fed mortgage efforts prove costly.

WSJ reports the U.S. Federal Reserve's program to keep mortgage rates low by buying securities and Treasury bonds so far has been costly and seems to be having a fleeting impact. An analysis of the timing of the Fed's purchases of mortgage-backed securities by J.P. Morgan Chase shows the Fed is "under water" on its portfolio by about 10%, and it would have to take about $5 billion in losses if it were to mark its portfolio to the market. The Fed has spent about $2,500 per borrower, by J.P. Morgan's analysis -- more than it costs a typical mortgage borrower to refinance their debt. Higher fees and adjustments based on a borrower's credit score or home's value have been an impediment to borrowers looking to refinance a mortgage, damping the refinancing wave the Fed hoped for, analysts say.

dc CB 20:32 GMT June 1, 2009
Briefing.com: 1 minute after cash close.


Federal Reserve outlines criteria it will use to evaluate applications to redeem U.S. Treasury capital from participants in Supervisory Capital Assessment Program

The Federal Reserve Board outlined the criteria it will use to evaluate applications to redeem U.S. Treasury capital from the 19 bank holding companies (BHC) that participated in the Supervisory Capital Assessment Program (SCAP). Redemption approvals for an initial set of these large bank holding companies are expected to be announced during the week of June 8. Applications will be evaluated periodically thereafter. Any banking organization wishing to redeem U.S. Treasury capital must first obtain approval from its primary federal supervisor, which then forwards approved applications to the Treasury Department. Any BHC seeking to redeem U.S. Treasury capital must demonstrate an ability to access the long-term debt markets without reliance on the Federal Deposit Insurance Corporation's Temporary Liquidity Guarantee Program (TLGP), and must successfully demonstrate access to public equity markets. In addition, the Federal Reserve's review of a BHC's application to redeem U.S. Treasury capital will include consideration of the following: Whether a BHC can redeem its Treasury capital and remain in a position to continue to fulfill its role as an intermediary that facilitates lending to creditworthy households and businesses; Whether, after redeeming its Treasury capital, a BHC will be able to maintain capital levels that are consistent with supervisory expectations; Whether a BHC will be able to continue to serve as a source of financial and managerial strength and support to its subsidiary bank(s) after the redemption; and Whether a BHC and its bank subsidiaries will be able to meet its ongoing funding requirements and its obligations to counterparties while reducing reliance on government capital and the TLGP. Finally, all BHCs must have a robust longer-term capital assessment and management process geared toward achieving and maintaining a prudent level and composition of capital commensurate with the BHC's business activities and firm-wide risk profile.

dc CB 20:27 GMT June 1, 2009
American Express announces $500 mln common stock offering

Co announced that it has commenced a public offering of $500 million of its common stock for sale to the public. American Express will also grant the underwriters a 30-day option to purchase up to an additional $75 million of its common stock. The company will use the capital raised through the equity offering for general corporate purposes which may include, subject to regulatory approval, the partial funding of a repurchase of $3.4 billion of preferred shares issued to the U.S. Treasury as part of the Capital Purchase Program (CPP).

dc CB 20:14 GMT June 1, 2009
S&P closed above 200dayMA. this will bring more buying .
Banks will use this to raise more capital -----so far successfully using Free Tax Dollars to trade the market high enough to force Money Managers back into the market. When the end of June comes, no one will want to be underinvested at the end of the 2nd Quarter/1st Half. IMHO
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JPM JP Morgan Chase confirms it will raise $5 bln in common equity to satisfy a supervisory condition for TARP repayment

Co announced that it intends to raise $5 bln in common equity to satisfy a supervisory condition that the largest bank holding companies redeeming TARP (Troubled Asset Relief Program) preferred capital demonstrate access to the equity capital markets. While approval has not been granted, the company believes that upon completion of this capital raise it will have satisfied the criteria for fully redeeming the TARP preferred capital and expects to do so before the end of June. JPM expects to have Tier One Capital of approximately $118 bln or 9.3% and Tier One Common of approximately $93 bln or 7.3% at the end of the second quarter, after the capital raise and the TARP preferred capital redemption. The company also expects to maintain its extremely strong capital ratios, even in the event of a more highly stressed environment over the next two years.

kl kl 20:11 GMT June 1, 2009
ok out another 1/4 8705 abd rest stop profit 8733...will reshort more later...now HSI33 Pop 500 again for my earger ninjas to attack?? 19188.....no fear days are here again...fielss of dream are here again...soon all the currency...carry trade

GVI Forex john 20:11 GMT June 1, 2009