Forex Blog - Underappreciated Collateral Risks - How bad is the Plumbing?
Collateral Risks - How bad is the Plumbing?
If there is any one figure
in the entire credit crisis that has been more responsible for the education of
so many in the market, myself among them, on the finer workings or more like
failures of the banking system it is James Aitken from UBS London. The
IMF has published a working paper, co-authored by James, on one of those finer
details, rehypothecation (post-Lehman), essential to the smooth functioning of
the banking system (click on the link below â€“ may need to do Ctrl (control)
click to open). James more recently has been in the forefront of
expressing concern over a potential insufficient quantity of quality collateral
in the financial system which drives the repo market, the plumbing of global
On a separate note, there is
a growing view in the market that the AIG FP Salem witch trial underway in Washington is a killer for any buy side participant to cowboy
up to the US government in TALF or a private/public SIV for
buying toxic assets.
I think this view is
misplaced. No doubt the show trial underway in Washington turns the stomachs of many, mine too, it is a
necessary, if dirty, part of the democratic process in the USA. Heads on a pike are demanded, not by smarmy
legislators, but by the angry mob that is phoning into every member of Congress
in an unprecedented rate. I feel badly for the people at AIG FP, many most surely innocent, and doing their utmost
to recoup US taxpayer dollars. However, in the world when private market
failures demand public solutions, there is no way around this kind of
nonsense. It is the equivalent of collateral damage in war. Anyone
who thinks government can ride to the rescue for trillions of dollars of
taxpayer money (future liabilities) and do so unobtrusively is living in a
fantasy and is not a student of history.
Yes I think the enablers
need to be held accountable not just the pushersâ€¦the intermediaries or
counterparties now being made whole with taxpayer dollars in the billionsâ€¦what
did they know and when did they know it and what did they do about what they
knew (of AIGâ€™s implausible capital position to support its casino
Does anyone think PIMCO, for
the purpose of example, is not going to participate in TALF or a private/public
US government sponsored SIV because US Congress and the White House is tar and
feathering AIG FP personnel when there are billions of dollars to be made at
low cost (thank you Fed and Treasury) and low risk (thanks again)? Greed
may be in hiding but it has not left the human condition. And cash is
king so if the buy side was not happy with intrusive term sheets and agreements
from dealer banks responsible for distributing upcoming TALF backed ABS then
guess whatâ€¦form a CDO and get on with it. The government
needs the likes of PIMCO more than PIMCO needs the government and PIMCO needs
great risk reward and there will be no better risk adjusted returns ahead than
cowboying up with government sponsored investment vehicles.
One lesson from the last 18
months that many in the markets refuse to accept (not a secret) is that we are
living through a massive market failure and when the market fails (and as we
learned the real economy or private output follows) there is only the
government to keep the system alive. Is this an admission that capitalism
is dead and socialism is triumphant? Not in the least. It is
confirmation in the 100 year flood, government, with all its warts, has to step
in and sort or a major disaster to prevent an even greater disaster. So I
ask in this context whether putting Barney Frankâ€™s head on a pike which many in
the market seem to want to do is any different than what is happening to many
at AIG FP? I think it is time for some humility in markets â€“ where would
we be without TARP, AIG bailout, massive if imperfect government stimulus, an
explosion in the Fedâ€™s balance sheet and similar measures across G20? I
have many complaints about what could be done differently by the government and
still think some measures may in the end prolong the agony rather than bring it
to a less-prolonged end. And this is a good thing â€“ be critical of
government policy, but be constructive. And be realistic marketâ€¦none of
us would be working right now if not for the government. The
capital markets failed, private real GDP has collapsed. It is government
for the time being and it may never go back to what it was (largely free to
choose), not in my lifetime. But stop viewing the policy response and
politics of the moment in a prism of a functioning capital market and private
sector. For better or worse Barney Frank, Harry Reid, Nancy Pelosi, John Boehner, Eric Kantor, Mitch McConnell, Ben Bernanke, Tim Geithner, and
Barack Obama are our only hope.
Forex Trading News
Daily Forex Market News Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Forex News Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."
Actionable trading levels delivered to YOUR charts in real-time.
Mon 10 Sep 2018 AA 08:30 GB- GDP, Trade, Output Tue 11 Sep 2018 AA 08:30 GB- Employment Decision A 09:00 DE- ZEW Survey Wed 12 Sep 2018 A 12:30 US- PPI A 14:30 US- EIA Crude A 18:00 US- Beige Book Thu 13 Sep 2018 A 1:30 AU- Employment AA 11:00 GB- Bank of England Decision AA 11:45 EZ- European Central Bank Decision A 12:30 US- Weekly Jobless AA 12:30 US- CPI Fri 14 Sep 2018 A 08:30 GB- GDP AA 12:30 US- Retail Sales A 13:15 US- Industrial Production AA 14:00 US- prelim University of Michigan
John M. Bland, MBA co-founding Partner, Global-View.com
Global-View Affiliate Program
We are starting an affiliate program to market some of our products.
Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.
Put the word "affiliate" in the email subject line.
Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.
looking for your first broker or do you need of a new one? There are
more critical things to consider than you might have thought.
We were trading long before there were online brokers. Global-View
has been directly involved with the industry since its infancy. We've
seen everything and are up-to-data with recent regulatory changes.
The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.
The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.
Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.
The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.
Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.
Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.
Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.
WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES
CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN
EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE
PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE
INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC
REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL
SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR
SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.