I think it is better to monitor first..before panic buying on monday.
I hate surprises on Friday....when you start to see greenery.
:embrass: 
Subprime issue in the financial markets and your shares
- Thread starter NorthernLights
- Start date
- Status
I think it is better to monitor first..before panic buying on monday.
I hate surprises on Friday....when you start to see greenery.
:embrass: raincool2005
Senior Member
I think it is better to monitor first..before panic buying on monday.
I hate surprises on Friday....when you start to see greenery.
taken profits this morning.
sold them into strength..based on technical analysis as of today, sti is still looking down at 2800-2900.
taken profits this morning.
based on technical analysis as of today, sti is still looking down at 2800-2900.
As expected, STI rallied. All those who purchased the stocks last Friday will make handsome profits today.
One of my friends just made thousands from futures today.
STI stands at 3,297+ today, if go down to 2,900 like what people said, that means another close to 400 points plunge. But is that possible in the short term?
Fundamentals are strong cited by our PM during the National Day rally.
STI stands at 3,297+ today, if go down to 2,900 like what people said, that means another close to 400 points plunge. But is that possible in the short term?
Fundamentals are strong cited by our PM during the National Day rally.
raincool2005
Senior Member
raincool2005
Senior Member
market is still very unstable, very volatile. :think:
me took advantage of dips and invested into ocbc bank, hopefully things turned out good in 2008.
me took advantage of dips and invested into ocbc bank, hopefully things turned out good in 2008.
raincool2005
Senior Member
market is recovering, rumours suggest that US Fed may issue a rate cut earlier than 18 Sept.
Swee ! :thumbsup:
Swee ! :thumbsup:
raincool2005
Senior Member
i know, the problem is still alive and spreading, we just making use of rate cut to take profits in the rebound.
i know, the problem is still alive and spreading, we just making use of rate cut to take profits in the rebound.
Rebound is short-lived i believed.
Lehman Brothers Shuts Down Subprime Unit, Fires 1,200 Employees
August 22, 2007 14:35 EDT
Citigroup, JPMorgan, Banks Borrow $500million From Fed Window
August 22, 2007 13:05 EDT
Accredited halts lending, HSBC Close Offices as Subprime Crisis Spreads
will cut 1,600 jobs
August 22 2007: 9:32 AM EDT
SunTrust Banks to cut 2,400 jobs
August 20 2007: 12:03 PM EDT
Luminent Mortgage announces bailout
Mon August 20.10:40AM ET
Capital One to Cut 1,900 Jobs and Close Its Wholes Mortgage Biz
Mon August 20 2007 7:03PM ET
Countrywide Taping,Customer Run,Layoffs
August 16-20
Nova Star Reduce 37% Work Force or 500 employees Fri
August 17 2007 3:19PM ET
Radian Group Inc Facing Massive Losses 11:11PM ET
Fri August 17 2007 3:19PM ET
First Magnus Big Mortgage Lender, Halts Loans
Thu August 16 2007 5:09PM ET
More than a thousand workers tio retrenched.
Even the 4 major banks need to borrow $$$ from FEDup.
I don't think we will see a bright light ahead mid-term.
You will see more bad news coming up one by one.
:sweat: Fed rate cut? Don't bank on it
Investors betting a Fed rate cut is a lock could end up getting badly burned.
By Chris Isidore, CNNMoney.com senior writer
August 22 2007: 2:11 PM EDT
NEW YORK (CNNMoney.com) -- Investors who are counting on the Federal Reserve to cut interest rates sometime in the next month may end up badly disappointed.
The credit crunch of the past month has convinced many on Wall Street that a cut in the central bank's key short-term interest rate is basically a lock.
Many economists argue that Fed Chairman Ben Bernanke would like to leave rates on hold at the central bank's next meeting, unless there are further signs of economic weakness.
Stocks jumped Friday after the Fed announced a surprise cut in the little used discount rate that the central bank charges on loans made directly to banks - and again on Tuesday on bets the Fed will cut its other key rate, the fed funds rate, by the central bank's next meeting on Sept. 18, if not beforehand. The fed funds rate is the more important rate since it affects many consumer loans.
But a number of economists believe that the Fed will hold rates steady next month.
"The Fed would like to do everything possible under the sun but make a cut in the fed funds rate," said Bernard Baumohl, an economist and author of the textbook "The Secrets of Economic Indicators."
The Fed had raised rates 17 times over two years to get the fed funds rate to 5.25 percent in an effort to keep the economy from overheating and letting prices get out of hand.
But the easy credit available during the 15 months that the funds rate stood at only 1 percent helped spark a housing boom and rapid growth in risky mortgage products.
Baumohl said that before the Fed will move to cut rates, it will need to see some new signs of weakness in consumer spending or employment. He does not believe the turmoil in the credit markets alone will be enough to convince Fed Chairman Ben Bernanke and other Fed governors to cut rates.
"He very much believes the main job of the Fed is to control prices and inflationary expectations," said Baumohl "He wants to be viewed as a chairman vigilant in not letting prices get out of control. It all depends on what economic indicators point to from this point on. Assuming nothing else changes, I do not see the Fed cutting rates, even on the 18th."
Still, some economists believe the turmoil in the credit markets poses a severe enough threat to the economy that the Fed could move to cut rates even without further signs of economic weakness. But even some economists with that view concede the Fed would prefer to stay put, given the opportunity to do so.
"I think Bernanke still feels this is a financial markets issue, this is not an issue for the overall economy, and that financial market illiquidity should be addressed by opening the discount rate liquidity window, not with by cutting the fed funds rate," said David Wyss, chief economist with Standard & Poor's.
But Wyss argues that a Fed cut is nevertheless justified, even without other signs of weakness.
"Even if he's right, and this is a microeconomic issue and not a macroeconomic issue, I think the Fed is better served being out ahead of the problem than waiting for it to occur," said Wyss.
But several economists said there are big risks for the economy, and even for the financial markets, if the Fed blindly follows market expectations and cuts rates despite fresh signs of economic strength. One problem could be a continued slide in the value of the dollar, which could spark inflation by making some imports more expensive. It also could lead to a sell-off in the Treasury bond market on expectations of a jump in inflation.
"If the Fed does cut, it will be inviting serious inflation pressure that could send the long-bond yield skyward," said Rich Yamarone, director of economic research at Argus Research. "That could cause serious problems for mortgage rates, that would trigger the resets [of adjustable-rate mortgages], and then you've got the calamity you're looking for."
Major U.S. stock indexes have essentially hung onto the gains they posted on Friday. Art Hogan, the chief market strategist for Jefferies & Co., said he's worried that the stocks will sell off if they don't get the rate cut investors are now expecting.
"I think the market is making what may turn out to be an irrational assumption, that the Fed has decided to do something they haven't been inclined to do yet," said Hogan. "Investors are hell-bent to believe they're going to cut and they're trading like it's already happened."
Wyss and the other economists said that if the Fed is leaning toward leaving rates unchanged, Bernanke and other Fed policymakers have plenty of time to signal to the markets that there is no rate cut in the works.
"This opinion [of a rate cut in the works] can change on a dime, and it will," said Wyss. "Two weeks ago the markets were convinced the Fed wouldn't move until March. It can change back just as quickly. The lesson from the problems we saw under [1970's Fed chairman Arthur] Burns is you want the markets to know ahead of time. Greenspan was very good at telegraphing it and Ben learned Morse Code from him."
But Hogan and others said there there is likely to be another sell-off in stocks if and when investors become convinced they aren't getting a hike.
"Back in March 2006, the market became convinced the Fed was done raising rates when it reached 5 percent. It got ugly when they realized they were going to 5.25 at the next meeting. We could see that again."
Investors betting a Fed rate cut is a lock could end up getting badly burned.
By Chris Isidore, CNNMoney.com senior writer
August 22 2007: 2:11 PM EDT
NEW YORK (CNNMoney.com) -- Investors who are counting on the Federal Reserve to cut interest rates sometime in the next month may end up badly disappointed.
The credit crunch of the past month has convinced many on Wall Street that a cut in the central bank's key short-term interest rate is basically a lock.
Many economists argue that Fed Chairman Ben Bernanke would like to leave rates on hold at the central bank's next meeting, unless there are further signs of economic weakness.
Stocks jumped Friday after the Fed announced a surprise cut in the little used discount rate that the central bank charges on loans made directly to banks - and again on Tuesday on bets the Fed will cut its other key rate, the fed funds rate, by the central bank's next meeting on Sept. 18, if not beforehand. The fed funds rate is the more important rate since it affects many consumer loans.
But a number of economists believe that the Fed will hold rates steady next month.
"The Fed would like to do everything possible under the sun but make a cut in the fed funds rate," said Bernard Baumohl, an economist and author of the textbook "The Secrets of Economic Indicators."
The Fed had raised rates 17 times over two years to get the fed funds rate to 5.25 percent in an effort to keep the economy from overheating and letting prices get out of hand.
But the easy credit available during the 15 months that the funds rate stood at only 1 percent helped spark a housing boom and rapid growth in risky mortgage products.
Baumohl said that before the Fed will move to cut rates, it will need to see some new signs of weakness in consumer spending or employment. He does not believe the turmoil in the credit markets alone will be enough to convince Fed Chairman Ben Bernanke and other Fed governors to cut rates.
"He very much believes the main job of the Fed is to control prices and inflationary expectations," said Baumohl "He wants to be viewed as a chairman vigilant in not letting prices get out of control. It all depends on what economic indicators point to from this point on. Assuming nothing else changes, I do not see the Fed cutting rates, even on the 18th."
Still, some economists believe the turmoil in the credit markets poses a severe enough threat to the economy that the Fed could move to cut rates even without further signs of economic weakness. But even some economists with that view concede the Fed would prefer to stay put, given the opportunity to do so.
"I think Bernanke still feels this is a financial markets issue, this is not an issue for the overall economy, and that financial market illiquidity should be addressed by opening the discount rate liquidity window, not with by cutting the fed funds rate," said David Wyss, chief economist with Standard & Poor's.
But Wyss argues that a Fed cut is nevertheless justified, even without other signs of weakness.
"Even if he's right, and this is a microeconomic issue and not a macroeconomic issue, I think the Fed is better served being out ahead of the problem than waiting for it to occur," said Wyss.
But several economists said there are big risks for the economy, and even for the financial markets, if the Fed blindly follows market expectations and cuts rates despite fresh signs of economic strength. One problem could be a continued slide in the value of the dollar, which could spark inflation by making some imports more expensive. It also could lead to a sell-off in the Treasury bond market on expectations of a jump in inflation.
"If the Fed does cut, it will be inviting serious inflation pressure that could send the long-bond yield skyward," said Rich Yamarone, director of economic research at Argus Research. "That could cause serious problems for mortgage rates, that would trigger the resets [of adjustable-rate mortgages], and then you've got the calamity you're looking for."
Major U.S. stock indexes have essentially hung onto the gains they posted on Friday. Art Hogan, the chief market strategist for Jefferies & Co., said he's worried that the stocks will sell off if they don't get the rate cut investors are now expecting.
"I think the market is making what may turn out to be an irrational assumption, that the Fed has decided to do something they haven't been inclined to do yet," said Hogan. "Investors are hell-bent to believe they're going to cut and they're trading like it's already happened."
Wyss and the other economists said that if the Fed is leaning toward leaving rates unchanged, Bernanke and other Fed policymakers have plenty of time to signal to the markets that there is no rate cut in the works.
"This opinion [of a rate cut in the works] can change on a dime, and it will," said Wyss. "Two weeks ago the markets were convinced the Fed wouldn't move until March. It can change back just as quickly. The lesson from the problems we saw under [1970's Fed chairman Arthur] Burns is you want the markets to know ahead of time. Greenspan was very good at telegraphing it and Ben learned Morse Code from him."
But Hogan and others said there there is likely to be another sell-off in stocks if and when investors become convinced they aren't getting a hike.
"Back in March 2006, the market became convinced the Fed was done raising rates when it reached 5 percent. It got ugly when they realized they were going to 5.25 at the next meeting. We could see that again."
With more than 30,000 jobs lost for this subprime issues and banks borrowing money from Fed.
Current stock rally is depending the HOPES that Fed will cut rates.
If by Sept18, answer is no.
You will see the next correction coming real fast.
Whatever small profits you have now...lock it in first.
Left some bullets for the next 4 weeks.
Subprime issue is NOT over yet.
Trade with caution.
Current stock rally is depending the HOPES that Fed will cut rates.
If by Sept18, answer is no.
You will see the next correction coming real fast.
Whatever small profits you have now...lock it in first.
Left some bullets for the next 4 weeks.
Subprime issue is NOT over yet.
Trade with caution.
raincool2005
Senior Member
STI manage to break above 3,400 level in intra-day but closed at 3370.91 due to profit taking. Tomm is Friday, expect more profit taking. :sweat:
raincool2005
Senior Member
yep.
As always, fri is profit taking day.
Wonder who is dare enuff to short any blue chip counter down.
:think:
Hedge Funds ; they will come back once they are ready. :think:
raincool2005
Senior Member
Rebound is short-lived i believed.
Lehman Brothers Shuts Down Subprime Unit, Fires 1,200 Employees
August 22, 2007 14:35 EDT
Citigroup, JPMorgan, Banks Borrow $500million From Fed Window
August 22, 2007 13:05 EDT
Accredited halts lending, HSBC Close Offices as Subprime Crisis Spreads
will cut 1,600 jobs
August 22 2007: 9:32 AM EDT
SunTrust Banks to cut 2,400 jobs
August 20 2007: 12:03 PM EDT
Luminent Mortgage announces bailout
Mon August 20.10:40AM ET
Capital One to Cut 1,900 Jobs and Close Its Wholes Mortgage Biz
Mon August 20 2007 7:03PM ET
Countrywide Taping,Customer Run,Layoffs
August 16-20
Nova Star Reduce 37% Work Force or 500 employees Fri
August 17 2007 3:19PM ET
Radian Group Inc Facing Massive Losses 11:11PM ET
Fri August 17 2007 3:19PM ET
First Magnus Big Mortgage Lender, Halts Loans
Thu August 16 2007 5:09PM ET
More than a thousand workers tio retrenched.
Even the 4 major banks need to borrow $$$ from FEDup.
I don't think we will see a bright light ahead mid-term.
You will see more bad news coming up one by one.
the last thing we ever want to hear is a bank from Mainland China or Japan on the victim list. The impact will be devastating...
btw, the German banks were hit quite badly and Germany is the biggest economy in Europe.
Yah...just read a german bank had 1/4 loans in subprime...looking bad.
What if mainland sell out USD....this will cause US into recession.
but
then again, highly impossible.
Tnight DOW will be interesting.
Let see is a true rally.
BTW: sidetrack abit.
Genting looks quite attractive for its price now..after the rights issue.
Might fall below 0.65-0.62 range tmlo.
:think: Aug. 23 (Bloomberg) -- Bank of China Ltd., the nation's second largest, said it has almost $9.7 billion of securities backed by U.S. subprime loans, the largest holding announced by any Asian bank.
The Beijing-based company set aside 1.15 billion yuan ($152 million) in the first half related to holdings linked to risky home loans, it said in a statement today. The securities are rated ``A'' or higher, Bank of China said. Bigger rival Industrial & Commercial Bank of China Ltd. today said it had $1.2 billion of subprime-related securities.
The collapse in securities backed by subprime mortgages has caused losses at lenders from Japan to Australia, helping send Asian banking stocks lower in the past month. Bank of China, which accounts for more than two-fifths of foreign currency advances by Chinese banks, was also weighed down by 1.2 billion yuan in foreign-exchange losses in the period.
``The foreign exchange exposure adds complexity and uncertainty to earnings, and it's why they're more exposed to those problems in the U.S.,'' Simon Ho, an analyst at ABN Amro Holding NV in Hong Kong, said before the announcement. ``The impact of subprime may be sizable in the second half.''
Net income climbed 51 percent to 29.5 billion yuan in the first half from a year earlier, Bank of China said in its statement to the Hong Kong exchange. That beat the 26.6 billion yuan average estimate of six analysts in a Bloomberg News survey.
Minimal Default Risk
``It's not good news, but compared with the profit, the impairment charge is manageable,'' said Winson Fong, who helps oversee $2.5 billion at SG Asset Management. He declined to say whether he owns the stock.
Defaults on U.S. subprime loans are rising after originations reached a record $805 billion in 2005, according to JPMorgan Chase & Co. estimates.
Mitsubishi UFJ Financial Group Inc., Japan's biggest bank, said this month it has about 300 billion yen ($2.6 billion) of investments that incorporate subprime loans. Sixteen Taiwanese banks held a total $1.2 billion in securities linked to such home loans, the island's financial regulator said Aug. 9.
The MSCI Asia-Pacific Financials Index has lost 8.1 percent in the past month. The measure has recovered after plunging 17 percent between July 24 and Aug. 17.
At the end of last year, Chinese banks had about 6 percent of their assets invested in dollar-denominated debt, according to Citigroup Inc. analyst Tracy Yu. Most of it is in credits with minimal default risk, she wrote in a report this month.
Government Backing
The overall impact on state-controlled Bank of China from losses on those assets ``should be small,'' Fitch Ratings said yesterday in a statement, citing its $54 billion of equity capital.
``In any case, from our perspective, the Chinese government stands behind those banks, so probably it isn't going to be enough to adversely affect their credit ratings,'' David Marshall, managing director at Fitch, said today in an interview.
Bank of Communications Ltd. said last week it has no investments in subprime-related assets. China Merchants Bank Co. this month announced it sold all its holdings of such assets last year at a profit.
Economic growth that reached 11.9 percent in the second quarter has allowed Chinese banks to increase profits by extending more loans and selling products ranging from credit cards to mutual funds. In addition, fees from stock trading have soared as the CSI 300 Index jumped 147 percent this year, the best performance among world benchmarks.
Opening Up
That hasn't sparked enthusiasm for Bank of China's shares, which have trailed those of Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp. in Hong Kong. The stock trades at 17.6 times estimated 2007 profit, a 23 percent discount to the average among Hong Kong-traded mainland banks, according to data compiled by Bloomberg.
Bank of China, founded in 1912 by Sun Yat-sen, known as the father of modern China, serves 118 million retail customers and 41,000 corporate clients. It held a monopoly on foreign-exchange dealings and overseas banking from 1949 to 1994 and was the first to engage in foreign currency-denominated loans, international syndicated loans, project financing and export credit.
The company has more than 600 overseas branches, about five times more than larger rival ICBC. It has outlets in 27 countries, including the U.S., U.K., Japan and Australia. International operations accounted for a quarter of its profit last year.
China's currency regulator this week said it will let Chinese citizens with a Bank of China account in the northern city of Tianjin buy Hong Kong stocks for the first time, opening the gate for China's $2.2 trillion of household savings to flow offshore.
The Beijing-based company set aside 1.15 billion yuan ($152 million) in the first half related to holdings linked to risky home loans, it said in a statement today. The securities are rated ``A'' or higher, Bank of China said. Bigger rival Industrial & Commercial Bank of China Ltd. today said it had $1.2 billion of subprime-related securities.
The collapse in securities backed by subprime mortgages has caused losses at lenders from Japan to Australia, helping send Asian banking stocks lower in the past month. Bank of China, which accounts for more than two-fifths of foreign currency advances by Chinese banks, was also weighed down by 1.2 billion yuan in foreign-exchange losses in the period.
``The foreign exchange exposure adds complexity and uncertainty to earnings, and it's why they're more exposed to those problems in the U.S.,'' Simon Ho, an analyst at ABN Amro Holding NV in Hong Kong, said before the announcement. ``The impact of subprime may be sizable in the second half.''
Net income climbed 51 percent to 29.5 billion yuan in the first half from a year earlier, Bank of China said in its statement to the Hong Kong exchange. That beat the 26.6 billion yuan average estimate of six analysts in a Bloomberg News survey.
Minimal Default Risk
``It's not good news, but compared with the profit, the impairment charge is manageable,'' said Winson Fong, who helps oversee $2.5 billion at SG Asset Management. He declined to say whether he owns the stock.
Defaults on U.S. subprime loans are rising after originations reached a record $805 billion in 2005, according to JPMorgan Chase & Co. estimates.
Mitsubishi UFJ Financial Group Inc., Japan's biggest bank, said this month it has about 300 billion yen ($2.6 billion) of investments that incorporate subprime loans. Sixteen Taiwanese banks held a total $1.2 billion in securities linked to such home loans, the island's financial regulator said Aug. 9.
The MSCI Asia-Pacific Financials Index has lost 8.1 percent in the past month. The measure has recovered after plunging 17 percent between July 24 and Aug. 17.
At the end of last year, Chinese banks had about 6 percent of their assets invested in dollar-denominated debt, according to Citigroup Inc. analyst Tracy Yu. Most of it is in credits with minimal default risk, she wrote in a report this month.
Government Backing
The overall impact on state-controlled Bank of China from losses on those assets ``should be small,'' Fitch Ratings said yesterday in a statement, citing its $54 billion of equity capital.
``In any case, from our perspective, the Chinese government stands behind those banks, so probably it isn't going to be enough to adversely affect their credit ratings,'' David Marshall, managing director at Fitch, said today in an interview.
Bank of Communications Ltd. said last week it has no investments in subprime-related assets. China Merchants Bank Co. this month announced it sold all its holdings of such assets last year at a profit.
Economic growth that reached 11.9 percent in the second quarter has allowed Chinese banks to increase profits by extending more loans and selling products ranging from credit cards to mutual funds. In addition, fees from stock trading have soared as the CSI 300 Index jumped 147 percent this year, the best performance among world benchmarks.
Opening Up
That hasn't sparked enthusiasm for Bank of China's shares, which have trailed those of Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp. in Hong Kong. The stock trades at 17.6 times estimated 2007 profit, a 23 percent discount to the average among Hong Kong-traded mainland banks, according to data compiled by Bloomberg.
Bank of China, founded in 1912 by Sun Yat-sen, known as the father of modern China, serves 118 million retail customers and 41,000 corporate clients. It held a monopoly on foreign-exchange dealings and overseas banking from 1949 to 1994 and was the first to engage in foreign currency-denominated loans, international syndicated loans, project financing and export credit.
The company has more than 600 overseas branches, about five times more than larger rival ICBC. It has outlets in 27 countries, including the U.S., U.K., Japan and Australia. International operations accounted for a quarter of its profit last year.
China's currency regulator this week said it will let Chinese citizens with a Bank of China account in the northern city of Tianjin buy Hong Kong stocks for the first time, opening the gate for China's $2.2 trillion of household savings to flow offshore.
raincool2005
Senior Member
today is profit taking day ! STI has rebound a lot within just one week.. ;p
- Status
Similar threads
