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They'll need more than a sledgehammer to force the banks to loan in this
climate....
major magazines bankrupt, all 'net hosting services going bankrupt (PSINet,
Exodus, Excite@xxxx), internet consultants and developers - all going
bankrupt.
remember, Japan is hurting and interest rates are zero there. Now they are
waiting for negative interest rates....hmmm....how does that work again ?
The Fed's "rudder" is broken.......the next sound you'll hear is the
explosion of cash from major banks as they attempt to squeeze it into their
all-ready-full vaults.
> -----Original Message-----
> From: Timothy Morge [mailto:tmorge@xxxxxxxxxxxxxxx]
> Sent: Tuesday, October 02, 2001 12:23 AM
> To: realtraders@xxxxxxxxxxxxxxx
> Subject: Re: [Fwd: [RT] Adjusted Reserves Sept 19, 2001]
>
>
> Stuart:
>
> Actually, in situations like this, the Fed has a great tool--they
> call the
> main players at major money center banks and tell them to loan
> aggressively. It isn't a tool they use often, but when they do call, the
> major players listen, because the tool can work both ways. You
> may need the
> Fed to help you on a short reserve day or with a major problem,
> so it pays
> to listen, especially because all of your peers will be getting the same
> call and the same cheap money.
>
> That doesn't mean the Fed will have an easy time of it. They know
> they are
> pushing a wet noodle. It just means that they will use tactics they
> normally wouldn't take out of their tool box.
>
> Best,
>
> Tim Morge
> Blackthorne Capital
>
>
> At 11:14 PM 10/1/2001 -0400, you wrote:
> >Bruce
> >Does that mean money is tight now in the USA because comercial
> and industrial
> >loans are crashing along with commercial paper.
> >Stuart
> >
> >bruce.larson@xxxxxxxxxxxxx wrote:
> >
> > > The Fed injects liquidity by buying back mainly short treasuries. So
> > > now the banks are sitting on alot of cash. The only way this is
> > > distributed through the system is if the banks are willing to lend
> > > this excess cash out and if borrowers see leveraged investment
> > > possibilites. Japan loosened in the 90s but it didn't do the
> > > domestic economy any good because domestic borrowers were perceived
> > > uncreditworthy. I'm sure the borrowers and investors were already
> > > drowning in a tide of debt and stock market losses. Initally the
> > > liquidity went offshore to Southeast Asian ventures which pretty much
> > > all bit the dust. Now all the money is parked in long Japanese
> > > government bonds which last time I looked yielded about 1.4%. Who in
> > > their right mind would buy long-term debt in the world's most
> > > indebted nation suffering through a severe recession and doing
> > > everything it can to weaken its own currency? Better off putting
> > > your money under a mattress.
> > >
> > > --- In realtraders@xxxx, profitok <profitok@xxxx> wrote:
> > > > Hello
> > > > Attach is the latest m3 money supply as reported by the fed
> > > > ----- Original Message -----
> > > > From: "STUART AUSLANDER" <u.stuart-auslander@xxxx>
> > > > To: <realtraders@xxxx>
> > > > Sent: Monday, October 01, 2001 10:05 PM
> > > > Subject: [RT] Adjusted Reserves Sept 19, 2001
> > > >
> > > >
> > > > > Adjusted reserves of the banking system which have varied from 60
> > > to 70
> > > > > billion for the last 3 years(except during Y2K) grew from 68 bil
> > > on
> > > > > September 5 to 107
> > > > > billion on September 19. (These are the Fed StLouis measures of
> > > the
> > > > > required reserves need by the banking system to support their
> > > > > deposits.) I would say the FED has taken out all the stops and
> > > intends
> > > > > to dramatically stimulate the economy with money.
> > > > >
> > > > > It is my feeling (I would love feedback on this) that money has
> > > been
> > > > > tight despite declining interest rates. Declining interest rates
> > > do not
> > > > > necessarily make money loose. I suspect we have just seen a major
> > > > > change in FED policy.
> > > > >
> > > > >
> > > > > To unsubscribe from this group, send an email to:
> > > > > realtraders-unsubscribe@xxxx
> > > > >
> > > > >
> > > > >
> > > > > Your use of Yahoo! Groups is subject to
> > > http://docs.yahoo.com/info/terms/
> > > > >
> > > > >
> > >
> > >
> > > To unsubscribe from this group, send an email to:
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> > >
> > >
> > >
> > > Your use of Yahoo! Groups is subject to
http://docs.yahoo.com/info/terms/
>
>
>
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