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Forex Forum Archive for 12/03/2007

Pick a date from the header above to view forum postings for that day.
Click here to join the Live Forex Forum.

Gen dk 23:51 GMT December 3, 2007 Reply   
Trading Signals Updated: CLICK HERE for more Gen dk information

ABHA FXS 23:48 GMT December 3, 2007 Reply   
TARGET 102.02
TARGET 100.68
TARGET 99.34
[[[[ BUY LIMIT AT 98.00 ]]]]
[[[[ SELL LIMIT AT 96.54 ]]]]
TARGET 95.20
TARGET 93.86
TARGET 92.52

Stockholm za 23:40 GMT December 3, 2007 Reply   

Paris ib 22:55 >>>Availability H.
FX Trade off ??
We make a judgment based on what we can remember, rather than complete data. In particular, we use this for judging frequency or likelihood of events.
Because we remember recent experiences or reports. !!
When making important decisions, pause and think why you are deciding as you are. Is it because of information you have recently received? Who from? Why did they give it to you?...CM.
Happy trades to you.......

Livingston nh 23:38 GMT December 3, 2007 Reply   
dc CB - this Paulson Plan is the financial equivalent of wage and price controls - the extent of the problem is unknown - if you don't let the market clear it is more likely that other unforeseen issues will arise - it's not the truck you see that turns you into roadkill

dc CB 23:33 GMT December 3, 2007 Reply   
Re: the Paulson rescue. Even if he is sincere, he may be done in by an administration that has consistantly "talked the talk" but never really manage to deliver on the "walk"ing part.

pd cumino 23:24 GMT December 3, 2007 Reply   
Paris ib 22:55 GMT December 3, 2007
Lockout option is another name for no-touch option. Often in currency market is used the double no-touch, also named range-bet. As you see many ways to name the same thing, as well as kamasutra is many ways to make the same thing....

ABHA FXS 23:08 GMT December 3, 2007 Reply   
START 03 DEC END 07 DEC 2007


TARGET 234.37

TARGET 232.59

TARGET 230.81

[[[[ BUY LIMIT AT 229.03 ]]]]

[[[[ SELL LIMIT AT 227.32 ]]]]

TARGET 225.54

TARGET 223.76

TARGET 221.98


quito_ecuador_valdez 22:57 GMT December 3, 2007 Reply   
I would recommend light trading or even minilots right now, if not none, until mkt stabilizes in April. What, no FX? A lot of seasoned traders obey that schedule...includin' Ceasar's Ides of March. Sessions like these mean mkt is adjusting and not trading per se. You'll see dumps dips and blips before New Year, weird spikes/dips as yards of possies are liquidated to make accounts "play out" before Santa's sleigh arrives. This is for the newer traders. the old guys already are hip..some are even enjoying vacation cocktails with little umbrellas in them on topless sunny beaches as I type.

quito_ecuador_valdez 22:49 GMT December 3, 2007 Reply   
Actually nyc3, that can easily happen. Look back over the last 20 years of currencies. You'll see wild cycles. It is GOOD USD is tanking for yankee export biz. USD has been high enough over the past years to hurt Yank exports considerably and clout US domestic absorption of manufactured goods ("Everything's made in dam China now" is heard often in USA) due to high USD values. And some oil deals are -now- done in Euros, it doesn't have to wait for EUR/USD @ 1.60-1.70.

EZ is getting fed up with an over valued EUR in the first place and Asia is not happy with cheap USDs either...losing a bit of market for their wares. So it all points to me at least as we're either at, or close to, a peak or level-off of USD's plunge. Frankly if EUR/USD goes any further than 1.60 I think it's going to be conversion to EUR time at the Treasury Dept. That's more greenbacks. It's headed that way as far as I am concerned, question is, "when?". How else can Frankfurt gain the world's precious metal stashes? Dem Euros have to be purchased with gold, not by a handshake and a smile, you know.

nyc nyc3 21:59 GMT December 3, 2007 Reply   
daily US output is 39BILLION.

nyc nyc3 21:55 GMT December 3, 2007 Reply   
IDEALLY mideast petro $$$ will swap to euros at 150-160.

I think that is exactly what the Treasury wants.

Then in 5 yrs at 96, maybe they will want USDs again.

Tallinn viies 21:48 GMT December 3, 2007 Reply   
Im expecting one more test to 1,4710-15 before new downside attack under 1,4620-25 toward 1,4520-25.

quito_ecuador_valdez 20:46 GMT December 3, 2007 Reply   
Since NY is about to close session in a few minutes, I'd like to thank Jay and John of Global View for their long list of this year's (2007) update work(s) on this web site. Nice new logo too! Good work, fellas.

Como Perrie 19:53 GMT December 3, 2007 Reply   
Monkey's are those who decide upon data minings techniques :))

Como Perrie 19:46 GMT December 3, 2007 Reply   
stocks went down today as previously thought, so far the whole is yet shallow..I'll see tomorrow, for now was just reading some key fundamental notes showing that P/E is set for huge drops from several sectors... hence yet overvalued the whole...

time will tell

good nite

Gen dk 19:43 GMT December 3, 2007 Reply   
Trading Signals Updated: CLICK HERE for more Gen dk information

Como Perrie 19:32 GMT December 3, 2007 Reply   
NYC jr 17:52 GMT December 3, 2007

I saw that rumored out into US opening. So far doubt the guys there know the complex assets structuring from GS or any other so easily. Interesting was months ago former GS Paulson was rumored to give em in advance speeches..think It was the new yorker printing far Paulson does not call me and so have to do my old honest way by working

Como Perrie 19:27 GMT December 3, 2007 Reply   
guess nothing happens,, maybe just yen strenghtens again into asean and the other pairs go into some distribution..

reading lending stats and some posts seen earlier system is more ill than It shows out to be

hence some central banks yet risk assessing

London NYAM 19:04 GMT December 3, 2007 Reply   
got home and found my long limit eurgbp .7088 was hit (bid so long at .7092). nice. think were seeig bottoming now but i have some more to add down to .7056 if the banks are kind enough to keep converting.

Como Perrie 19:01 GMT December 3, 2007 Reply   
Too Aged

tor Pumpkin 18:53 GMT December 3, 2007 Reply   
what's a lock out?

Stockholm za 18:22 GMT December 3, 2007 Reply   

Double lock out or short strangle ??

The Netherlands Purk 18:04 GMT December 3, 2007 Reply   
Pattern 2 is still valid but for tomorrow. 14740 or higher till 20. If we see 14580 tomorrow pattern 2 is off.
I am afraid that 9980 is too high for a stop to long.

NYC jr 17:52 GMT December 3, 2007 Reply   
The Long and Short of It at Goldman Sachs -Ben Stein - NYT Sunday - interesting for its dissection of Hatzius' bearishness on the us economy - sorry if it's already been posted.

NYC jr 17:26 GMT December 3, 2007 Reply   
seems like not many have the desire to put on new risk when we're about to get so much new information. All very muted with the exception of the bid in treasuries. The attitude today absent any new drivers appears to be stay out of trouble with a month till year end.

isr is 17:22 GMT December 3, 2007 Reply   
HK I am still seller CAD...stop to sell more at 9880

HK Kevin 16:49 GMT December 3, 2007 Reply   
isr is 15:58 GMT, USD/CAD has shifted from sell high to buy low. Above 1.0060 more to come, but better wait till tomorrow BOC Meeting.

NYC 16:10 GMT December 3, 2007 Reply   
jr, Gulf news over the weekend seemed to point to no change so don't think it is news even if market reacts

Gen dk 16:10 GMT December 3, 2007 Reply   
Trading Signals Updated: CLICK HERE for more Gen dk information

lkwd jj 16:05 GMT December 3, 2007 Reply   
qindex 15:15 119.86 typo if you could clarify sir .thanks.

NYC jr 16:01 GMT December 3, 2007 Reply   
Apparently the UAE guy is saying they will not decide to de-peg at the GCC summit. Could sweep kick a few more usd shorts.

isr is 15:58 GMT December 3, 2007 Reply   
view on USDCAD:::breaks figure????

isr is 15:53 GMT December 3, 2007 Reply   
enjoy your reading!!!!

NYC jr 15:46 GMT December 3, 2007 Reply   
So far equity friendly..


Lahore FM 15:45 GMT December 3, 2007 Reply   
Maribor,the low for today is 1.4619.might do just as well.

San Jose Team FA 15:41 GMT December 3, 2007 Reply   
Vote for censored

Yes, censored needs your votes and reviews. Post a short, honest review of your experience with censored @

madrid mm 15:32 GMT December 3, 2007 Reply   

London NYAM 15:32 GMT December 3, 2007 Reply   
is//I don't put much stock into black box subscripttion services.
Hard to imagine more of a boring day. Only getting real joy out of my long XAU.
Took a small long CADJPY at 109.99 and add at 109.66 with stop at 108.99.
I'm taking an early day home to read a book. Good luck.

isr is 15:25 GMT December 3, 2007 Reply   
madrid, has to do with beckam wanting to get paid in CAD$ instead of hollywood stars on

Maribor 15:21 GMT December 3, 2007 Reply   
Lahore FM 14:46 GMT December 3, 2007

Hi FM, isn't it needed(in other words would be logical) to print 1,4614 for advance of xxxUSD pairs? Just wondering if we have similar results...

madrid mm 15:19 GMT December 3, 2007 Reply   
Why did the Spice Girls chose Canada in first of reunion concerts ?

Do they know something about currencies like Giselle the top model and David Copperfield ?


Hong Kong Qindex 15:15 GMT December 3, 2007 Reply   
USD/JPY : The market is going to challenge 119.86.

isr is 15:14 GMT December 3, 2007 Reply   
NYAM, i will ley u know where it is...saw it announced on
Here it is....
just wonder the track record...

madrid mm 15:08 GMT December 3, 2007 Reply   
On Monday, Boston Fed President Eric Rosengren will speak on subprime mortgages at 8 a.m. (1300 GMT) and San Francisco Fed Presiden Janet Yellen will offer her economic outlook at 3:30 p.m. (2030 GMT). Rosengren is a voting member of the Fed's rate-setting group this year, but Yellen is not.

Traders are fully pricing in the prospects that the Fed would lower the key federal funds rate by a quarter percentage point to 4.25 percent next week. Some are even betting on a half point cut, according to U.S. interest rate futures.

Gen dk 14:49 GMT December 3, 2007 Reply   
Trading Signals Updated: CLICK HERE for more Gen dk information

Lahore FM 14:46 GMT December 3, 2007 Reply   
Lahore FM 09:36 GMT December 3, 2007
LA BFL 09:32 GMT December 3, 2007
helo LM,

any comment for gbp/usd and gbp.jpy for this moment?
2.0650 and 2.11,in that order.can't say of gbpjpy at this time.

isr buy gold.
2.0650 done.let us see if we get 2.11.

London NYAM 14:21 GMT December 3, 2007 Reply   
is//Who has this automated FX system you are speaking of?

madrid mm 14:13 GMT December 3, 2007 Reply   
China's Market Mood Swing!

madrid mm 14:09 GMT December 3, 2007 Reply   
National Debt Grows $1.4B A Day!

isr is 13:53 GMT December 3, 2007 Reply   
wanted to know how is it working results'wise...

PK Wazir 13:46 GMT December 3, 2007 Reply   
Hello Wat about using an autometic trading system?

isr is 13:38 GMT December 3, 2007 Reply   
how is the FX automatic strategy doing?

London NYAM 12:53 GMT December 3, 2007 Reply   
Out of short USDJPY from 111.10 at 110.46. I would like to see how ISM comes out. Perhaps add at a higher level if seen.

Como Perrie 12:33 GMT December 3, 2007 Reply   
excerpt from previous link

Office for National Statistics data sourced to the Bank of England shows the volume of market loans in the banking system plunged from L640 billion at the onset of the credit crunch in August to L249 billion by the end of September, suggesting British lenders have been hit even harder than US banks in relative terms. Total sterling assets dropped from L3,244 billion to L2,876 billion.

"This is one censored of a shock to the financial system," said Professor Tim Congdon, a leading monetarist at the London School of Economics.

isr is 12:29 GMT December 3, 2007 Reply   
short on usdcad at 1.0033...tks

Como Perrie 12:27 GMT December 3, 2007 Reply;jsessionid=20HPPQFO1501TQFIQ...

The sterling interbank market has collapsed at the fastest rate in modern history, prompting pleas for immediate rate cuts from a chorus of top British economists.

London NYAM 12:25 GMT December 3, 2007 Reply   
Starting to sell USDCAD now small short at 1.0030 adding at 1.0055 and stop just above 101.00. Out of sghort XAU from 806 at 778.10 and reversing.
Your welcome is, It may take a few tries...

isr is 12:21 GMT December 3, 2007 Reply   
tks for notice NYAM....keep it up!!!
GBP heading lower

hk ab 12:18 GMT December 3, 2007 Reply   
bc, do u see carry worth continue here or wait till the correction finishes? TIa.

munich st 12:16 GMT December 3, 2007 Reply   
bc, many thanks!

shanghai bc 12:12 GMT December 3, 2007 Reply   
munich st 10:10 GMT December 3, 2007

Expecting a range market for the month, roughly in the range of Eur/usd 1.4850-1.4450..Good trades..

GVI john 12:00 GMT December 3, 2007 Reply   
Updated Daily Chart Points...
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London NYAM 11:03 GMT December 3, 2007 Reply   
isr is 10:52//Good morning. My stop level is at the 2.0830 high im low leveraging points up to 2.0770 started with a short at 2.0630 adding at 2.0675 and 2.0720 as well. GBPJPY started short last night and t/pd at the end of the formation started rer-shorting at 228.30 adding at 228.90 and 229.66 stop around 230.70.

isr is 11:00 GMT December 3, 2007 Reply   
just exited on my IBEX longs. Still see it higher....up to 810 maybe...

Sgp Ash 10:55 GMT December 3, 2007 Reply   
Hong Kong Qindex - Sir, you still see chances of 160.70/30 in euryen. What are your thoughts on USD/JPY? pls TIA

isr is 10:52 GMT December 3, 2007 Reply   
NYAM, good morning....
Any stop level on GBPUSD?
R U shorting GBPJPY?tks....

Maribor 10:47 GMT December 3, 2007 Reply   
GBPCHF turn 2,338, EURAUD 1,66 archived, next 1,681

London NYAM 10:13 GMT December 3, 2007 Reply   
t/p on my eurgbp short at .7108. Not ready to reverse just yet as the risk to sub .7100 still pretty high so ill start buying if we go under. Looking for more shorts on GBPUSD and holding shorts from earlier on USDJPY.

munich st 10:10 GMT December 3, 2007 Reply   
bc, would you care to share your view concerning eurusd after recent moves? What do you expect until year end?
(I know you are not in for short term comments, but still your views highly appreciated) TIA

Como Perrie 09:57 GMT December 3, 2007 Reply   
So maybe better think to stay almost flat ahead of previous.

Como Perrie 09:55 GMT December 3, 2007 Reply   
ISM today is seen more important than usual data release in US, given the strange datas developing we have seen last week. A big guess It might become if It confirms the jobless trend rising.

Lahore FM 09:51 GMT December 3, 2007 Reply   
Mumbai NS 09:47 GMT December 3, 2007
yeahhh! let us see.

Mumbai NS 09:47 GMT December 3, 2007 Reply   
FM tks n gud luck ham mein se koi ek hi sahi hoga umeed karta hoon aap hi ho jao gl gt

Lahore FM 09:41 GMT December 3, 2007 Reply   
Mumbai NS 09:38 GMT December 3, 2007
gud day NS,yep there is one.

hk ab 09:38 GMT December 3, 2007 Reply   
Trichet is speaking right?

Mumbai NS 09:38 GMT December 3, 2007 Reply   
FM gud day mate ...if i get u rite u have a bullish signal on gbp rite gl gt

Lahore FM 09:36 GMT December 3, 2007 Reply   
LA BFL 09:32 GMT December 3, 2007
helo LM,

any comment for gbp/usd and gbp.jpy for this moment?
2.0650 and 2.11,in that order.can't say of gbpjpy at this time.

isr buy gold.

isr jweb 09:34 GMT December 3, 2007 Reply   
hi lahore and all - am back after a long visit to the uk. any tips on gold or jpy?

Como Perrie 09:32 GMT December 3, 2007 Reply   
but eurusd and cable upside chances still do exist If I see It correctly

LA BFL 09:32 GMT December 3, 2007 Reply   
helo LM,

any comment for gbp/usd and gbp.jpy for this moment?

Como Perrie 09:32 GMT December 3, 2007 Reply   
very squeeze the whole imo.. I'll see later...wild card is this usdjpy if tries back 111 or so imo... eurjpy stops lowered 162 for now

Lahore FM 09:31 GMT December 3, 2007 Reply   
uk pmi 54.4 vs forecast 52.2.

tokyo ginko 09:31 GMT December 3, 2007 Reply   
uk pmi 54.4

hk ab 09:26 GMT December 3, 2007 Reply   
nt, add eur long here?

Syd .. 09:23 GMT December 3, 2007 Reply   
Morristown GG 07:31 GMT not been completely in touch with everything the last few days so wouldnt want to be the one giving out any advise GT.

Como Perrie 09:22 GMT December 3, 2007 Reply   
Politics getting weird globewide apparently

By James Rainey
Los Angeles Times
Saturday, December 1, 2007,0,2618291,full....

The late-fall night fairly crackled with energy -- from a persistent Santa Ana wind, the high-tension power lines overhead, and, especially, from the crowd packed inside the living room of a ranch house at the west end of the San Gabriel Valley.

Eighty people sat elbow to elbow on tight rows of folding chairs, chattering with enthusiasm and ideas. They would produce wall calendars and a concert. They would reenact the Boston Tea Party on the Santa Monica Pier. They would write to every independent voter in Iowa.

The foot soldiers of the Ron Paul Revolution, Pasadena Division, were only getting started.

Hong Kong Qindex 09:12 GMT December 3, 2007 Reply   
EUR/JPY : Short term targeting points are 160.21 - 160.62.

hk ab 09:10 GMT December 3, 2007 Reply   
Dr. Q, the target has almost met. Do u think it's over?

Hong Kong Qindex 09:06 GMT December 3, 2007 Reply   
EUR/JPY : Heading towards 161.31.

The market is under pressure when it is below 162.23. It is heading towards 161.31.

tokyo ginko 09:03 GMT December 3, 2007 Reply   
UK PMI manuf in 30 mins, exp 52.6 , prev 52.9

hk ab 09:00 GMT December 3, 2007 Reply   
data anyone?

tokyo ginko 08:55 GMT December 3, 2007 Reply   
close cad shorts , will look to resell again if cad rally

Jerusalem ML 08:55 GMT December 3, 2007 Reply   
Good morning all

Tip of the day -

SELL GBP/USD , target 2.0490

good luck

Gen dk 08:50 GMT December 3, 2007 Reply   
Trading Signals Updated: CLICK HERE for more Gen dk information

The Netherlands Purk 08:36 GMT December 3, 2007 Reply   
Greed factor taken out by the rangetrader... flat now. Pips in the pocket is really important.

Como Perrie 08:33 GMT December 3, 2007 Reply   
I do read Gulf currency is set for the year 2010. Decision was taken yesterday. By doing so they confirmed to depeg from the Usd.

slv sam 08:33 GMT December 3, 2007 Reply   

slv sam 08:32 GMT December 3, 2007 Reply   
for pips traders buy euro now at 4660 or 30 pips within today!GT

Como Perrie 08:29 GMT December 3, 2007 Reply   
Morn.. anyone follows what ruble is doing after elections

as well the new gulf currencies if anyone there


hk ab 08:27 GMT December 3, 2007 Reply   
someone wants to cap the e/j

The Netherlands Purk 08:06 GMT December 3, 2007 Reply   
Half of the short taken out. Rest for a free ride, target 1 removed. Pattern 1 is working of well.... Range so far 72 pips in e/u.

The Netherlands Purk 08:01 GMT December 3, 2007 Reply   
Shorts are in at 14704. Alredy at b/e, because another pattern says that we might hit 14740ish.
1 pattern targets 14650.

madrid mm 07:47 GMT December 3, 2007 Reply   
I am near Valencia at the moment

* Putin's United Russia Party wins 63.3% of the vote in the Russian parliamentary elections after 80% counted.

* BoJ's Fukui: rates currently too low for economic conditions-needs to raise rates decisively at appropriate time.

* A story from the UAE's state-run news agency, suggesting that it would press for and end to the USD pegs, was withdrawn after other states said that such a move was not even on the agenda. The Saudi Finance Minister Ibrahim al-Assaf was quoted as saying 'we will not drop it - that's it'.

* UK Independent reported an analysts note suggested that the RBS subprime related write-down (including ABN's wholesale business) was likely to be between GBP1.6-GBP1.9bn. The broker, (Sanford Bernstein) described the likely write-down as significant but not cataclysmic.

* AUD October trade balance at AUD-2.98bn vs mkt AUD-1.86bn. Driven by 3% export decline.

* AUD Q3 inventories +1.3%q/q, operating profits -2.1%q/q.

* On the exchanges, the morning appeared to be led by JPY buying versus the USD and all the majors, with some citing the RBS report, though the most of the trade appeared led by a Tokyo bank often associated with exporter business. USD/JPY down from the 111.00 area to close to 110.50.

* Choppy trade in cable between 2.0550 and 2.0580, but no real direction.

* AUD lost ground from the 0.8850 area after the trade numbers, but saw some good support in the 0.8785/95 area from a large German name, helping the rate recover to the 0.8805/10 region.

* Nikkei traded in a choppy fashion, and at 05:30 gmt was standing at 15652.66.21, -0.18%.

madrid mm 07:44 GMT December 3, 2007 Reply   
Hello and good morning from the Mediteranean coast of Spain


HK RF@ 07:34 GMT December 3, 2007 Reply   
Morristown GG 05:59 GMT December 3, 2007

Sorry I meant "undervalued". Chart formation suggests by this time not to be Yen long, so tere is a risk to keep to see below 110 as I suggested B4. Ideal time to be out of the Mkt.

Morristown GG 07:31 GMT December 3, 2007 Reply   
Good Morning Syd,
I'm about to turn in here in NJ, USA, but wanted to seek your insight regarding AUD/Yen and GBP/Yen. If you read my posts last couple hours, you can see I'm watching the financial stocks and Moody's downgrades. What are your thoughts? Thanks, G

Syd .. 06:55 GMT December 3, 2007 Reply   
Bank of Japan Gov. Toshihiko Fukui expressed concern Monday that a downturn in the U.S. economy could slow global growth, suggesting that the BOJ is unlikely to raise interest rates anytime soon.

Syd .. 06:52 GMT December 3, 2007 Reply   
syd 05:10 GMT December 3 not sure who you are but the handle you are using is taken and has been for some time please use another

The Netherlands Purk 06:50 GMT December 3, 2007 Reply   
Va Raven 17:36 GMT December 2, 2007

Thank you for this. May the smile be with you.

The Netherlands Purk 06:43 GMT December 3, 2007 Reply   
Pattern says that we might see 14704 today in e/u.

Morristown GG 05:59 GMT December 3, 2007 Reply   
RF, Did you mean to say "undervalued" - room for further strengthening? Comments from Fukui have been less hawkish and looks like rates will soon rise very slowly. I'm a carry bear now, watching for equities in Europe and US to drop on neg financial stocks - Moody's dramatic downgrades coming

HK RF@ 05:50 GMT December 3, 2007 Reply   
Japan's November new vehicle sales up 3.9 pct for second straight monthly rise
Mon, Dec 3 2007, 05:31 GMT

So Yen is not a problem for Japan car manufacturers and Yen is still overvalued.

Blore RKG 05:16 GMT December 3, 2007 Reply   
Navin - found this on web as a good explanation to Level 3

LEVEL 3 ASSETS - Level 3 assets are those that trade so infrequently that there is virtually no reliable market price for them, and valuations for these assets are based on management assumptions.
Now, what we do know is that brokerages, banks, hedge funds, and other institutions are holding very complicated assets whose actual value has virtually vanished. The key word here is actual, or real market value. But these level 3 assets are NOT being marketed to the real market! They are being held, hidden on the books of major corporations and institutions, as management places their best-guess valuations that are almost always grossly overvalued!
Round 3 of the credit crunch will be the 'coming out' of sorts of the adjusted valuations of these level 3 assets leading to the uncovering of major losses to the most exposed corporations and institutions. I think this process will take months to play out and we are heading right into the heart of storm from November 15th.
From November 15, we will have a new tool for figuring out how much toxic waste is in investment banks' balance sheets. The new US accounting rule SFAS157 requires banks to divide their tradable assets into three "levels" according to how easy it is to get a market price for them. Level 1 assets have quoted prices in active markets. At the other extreme Level 3 assets have only unobservable inputs to measure value and are thus valued by reference to the banks' own models.

hk ab 05:16 GMT December 3, 2007 Reply   
nt, will e/j go the same direction as e/u?

Morristown GG 05:16 GMT December 3, 2007 Reply   
Here is a definition of the various classes: The big issue now is how even a slight reduction in valuation will affect the capital reserves of the big banks. ETrade just sold a portfolio of mortgages at 11 percent of the face value. If that happened with Citigroup's Level 3, it would reduce capital by $120 billion. Another 10 or discount on level 2 assets would reduce capital by another say $100 billion. That would make them insolvent. Period simple math.

In Citigroup Fighting For Its Financial Life I noted Citigroup had $134.8 Billion in level 3 assets and a whopping $939 billion in level 2 assets. Here is the chart again for convenience:

Citigroup Assets By Class

In a quarterly regulatory filing Monday Citigroup reports $134.8 billion in 'level 3' assets.

Level 3 assets are holdings that are so illiquid, or trade so infrequently, that they have no reliable price, so their valuations are based on management's best guess. The investment bank said its total liabilities related to level 3 assets at quarter-end were $40.36 billion, according to the Form 10-Q. Citigroup said it often hedges its level 3 positions.

Citigroup uses these Descriptions

Level 1: Quoted prices for identical instruments in active markets.
This is usually known as marked to market

Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
This is usually known as marked to matrix.

Level 3: Model derived valuations in which one or more significant inputs or significant value drivers are unobservable.

This is usually known as marked to model. MarketWatch called it "Best Guess" accounting. Another terms frequently associated with Level 3 accounting is "Marked to Fantasy".

This hierarchy requires the use of observable market data when available.

Items valued using internally generated models are classified according to the lowest level input or value driver that is most significant to the valuation. Thus, an item may be classified in Level 3 even though there may be significant inputs that are readily observable.
Read that last paragraph carefully. My interpretation is that if the most significant weighting of valuation is at say 35%, then even if 65% could be marked as level 1 or level 2, Citigroup may use level 3 accounting for valuing the asset. The same applies between level one and level 2 decisions. Rest assured there is no strong desire to use marked to market pricing for any assets that have declined in value.

hong kong nt 05:11 GMT December 3, 2007 Reply   
EUROqueen -- long some Euro at 1.465 this morning. Hope your target 1.50** may come true soon...

syd 05:10 GMT December 3, 2007 Reply   
level 3 assets are complicated structures that do not have a liquid and transparent market for pricing....the value of the structure is not easily determined

Mumbai Navin 05:03 GMT December 3, 2007 Reply   

Can someone explain what exactly are Level 3 Assets? tia

Morristown GG 04:31 GMT December 3, 2007 Reply   
CB, Thats interesting. The problem isn't just with sub-prime borrowers, but many who are highly qualified who were extended loans regardless of income based on rapid appreciation. Im an architect and my clients often borrow against equity. I wonder if there are many more borrowers stressing out now with dropping income, higher inflation, and difficulty making those payments. Lots of for sale signs around NJ in nice neighborhoods - with lowered asking prices etc. I think this week will be bad for the financial sector.
Citibank, Wachovia and many other big names have been hiding the extent of the problem, hoping that they can fake out the market into thinking it has bottomed out. I believe there is a Plunge protection team, but even their capital isn't limitless. At some point they will all hedge and let everything go down to where the numbers take it. The carry will crash with it, and possibly before it as they try to raise cash to satisfy new capital rules, to soften the landing. MVHO -

dc CB 04:21 GMT December 3, 2007 Reply   
The End of Consumer Credit as we know it

Peter Schiff
Dec 3, 2007

In an article last week that examined the troubles brewing in Citigroup's mortgage business, the Wall Street Journal focused on Natalie Brandon, a 51 year old married woman from Granada Hills, CA, who is currently unable to make the payments on her $625,000 adjustable rate home loan from Citigroup, despite the fact that the rate will not even reset higher until June of next year. Amazingly, the Journal reported that Mrs. Brandon bought the house in 1985 for just $105,000, but had chosen to refinance five times over the past seven years, borrowing more than $500,000 and spending every single penny.

saopaulo cg 03:02 GMT December 3, 2007 Reply   
it is very clear that Moodys wait that markets were closed friday afternoon to do the anouncement related to Citibank. That's only shows the magnitude of the anouncement.

HK RF@ 02:13 GMT December 3, 2007 Reply   
hk ab 02:03 GMT December 3, 2007

Or profit taking before the uncertain week. Yen may peep below 110... corrective stage, not easy to guess directions, but only for day traders. hehe

hk ab 02:03 GMT December 3, 2007 Reply   
a day for carry unwinding again....GL.

Rye, NY et 00:23 GMT December 3, 2007 Reply   
Rye, NY et 02:02 GMT November 23, 2007
Rye, NY et 19:57 GMT September 18, 2007
re: Eur/Usd...
I think we'll go up the the $1.50 Psychological Barrier and Discomfort Level for the ECB....fwiw........
As we approach the $1.50 line, I would expect...intra-day volitility to pick up with the possibility of a "Blow-off Top" or a sharp pull-back... I expect the market will fall back into a Bearish Channel
No evidence yet to change my view on this. I think we will drop some more ($1.4450) to define a Channel Bottom and then rise over the next few weeks without breaking $1.50. All, of course, imvho...GL/GT

Atlanta South 00:07 GMT December 3, 2007 Reply   
nj jf
Tks ref E/$. Have a good week.


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