|
Post by JoeRockss on Jul 3, 2014 5:32:28 GMT -5
odyssey Diamond Finder and Miner ***
odyssey Avatar
Posts: 1,367 6 hours ago QuotelikePost Options Post by odyssey on 6 hours ago Time bomb laid in foreign currency credit market
June 30, 2014
VietNamNet Bridge – The dollar lending interest rate is lower by at least 3-5 percent annually than the dong interest rate, which is the reason for the sharp increase in the ratio of the dollar outstanding loans on dollar deposits from 84.3 percent in early 2014 to 99.5 percent in early May 2014.
Weaker liquidity – the imminent worrycredit market, foreign currency
A report of the National Financial Supervisory Council showed that by early May, while deposits in foreign currencies had decreased by 9.1 percent in comparison with the end of 2013, outstanding loans in foreign currencies had increased by 7.2 percent.
The report also noted that, since early April, the interbank dollar interest rate has increased from 0.3 to 0.5 percent annually.
Meanwhile, the dong interest rate curve has moved in the opposite direction: while dong-based outstanding loans increased by 2.6 percent, dong deposits increased by 3.5 percent, lowering the ratio of dong outstanding loans to dong deposits from 82.4 to 79.9 percent.
There exists a big gap between the dong and dollar lending interest rates. According to the State Bank, in the week of June 9-13, the dong short term interest rate hovered around 9-10 percent, with the long term interest rate at 10.5-12 percent per annum. Meanwhile, the dollar interest rates were 3-6 percent and 5.5-7 percent, respectively.
The low dollar interest rate obviously has made dollar loans more attractive.
The director of a major bank in Hanoi said he received a report indicating that the foreign currency loans of the whole banking system in the first half of 2014 surged by 10 percent over the end of 2013, but that the mobilized capital growth rate was negative during the same time.
The banker himself admitted that the high growth rate of foreign currency lending is not good at all.
“If banks’ loans exceed their capital mobilization capability, they will surely face a liquidity risk,” he said, adding that the State Bank is not equipped to offer support to banks which run into problems with foreign currency liquidity.
Banks slash dong interest rates, hesitantly
The State Bank has admitted to high risks for the national economy when businesses continue to prefer foreign currency loans.
At a government meeting in May, governor of the State Bank Nguyen Van Binh said that economists have urged the central bank cut the dong interest rate further, in order to ease the capital cost burden on businesses’ shoulders. However, Binh said, the State Bank still needs to consider the issue thoroughly, because this may affect the dong’s position in the long term.
The central bank, therefore, has had its reasons for maintaining a high dong deposit interest rate vis-à-vis the dollar interest rate. This has made it more profitable for people to keep dong, thus prompting them to sell dollars to banks in exchange for dong.
Read more: dongtalk.com/forums/index.php/topic/13949-time-bomb-laid-in-foreign-currency-credit-market/#ixzz36FYE54uI
dongtalk.com/2014/07/01/time-bomb-laid-in-foreign-currency-credit-market/
|
|
|
Post by JoeRockss on Jul 6, 2014 5:57:50 GMT -5
guruaphobia DIAMOND JEDI *** guruaphobia Avatar Member since: December 2006 Posts: 522 14 hours ago sogwap, latteplease and 1 more like this. QuotelikePost Options Post by guruaphobia on 14 hours ago BNP CASE WILL ENCOURAGE ‘DIVERSIFICATION’ FROM DOLLAR www.zerohedge.com/news/2014-07-04/punishing-france-us-just-accelerated-demise-dollar-0Not even we anticipated this particular "unintended consequence" as a result of the US multi-billion dollar fine on BNP (which France took very much to heart). Moments ago, in a lengthy interview given to French magazine Investir, none other than the governor of the French National Bank Christian Noyer and member of the ECB's governing board, said this stunner at the very end, via Bloomberg: NOYER: BNP CASE WILL ENCOURAGE ‘DIVERSIFICATION’ FROM DOLLAR Here is the full google translated segment: Q. Doesn't the role of the dollar as an international currency create systemic risk? Noyer: Beyond [the BNP] case, increased legal risks from the application of U.S. rules to all dollar transactions around the world will encourage a diversification from the dollar. BNP Paribas was the occasion for many observers to remember that there has been a number of sanctions and that there would certainly be others in the future. A movement to diversify the currencies used in international trade is inevitable. Trade between Europe and China does not need to use the dollar and may be read and fully paid in euros or renminbi. Walking towards a multipolar world is the natural monetary policy, since there are several major economic and monetary powerful ensembles. China has decided to develop the renminbi as a settlement currency. The Bank of France was behind the popular ECB-PBOC swap and we have just concluded a memorandum on the creation of a system of offshore renminbi clearing in Paris. We have very strong cooperation with the PBOC in this field. But these changes take time. We must not forget that it took decades after the United States became the world's largest economy for the dollar to replace the British pound as the first international currency. But the phenomenon of U.S. rules expanding to all USD-denominated transactions around the world can have an accelerating effect. In other words, the head of the French central bank, and ECB member, Christian Noyer, just issued a direct threat to the world's reserve currency (for now), the US Dollar. Putting this whole episode in context: in an attempt to punish France for proceeding with the delivery of the Mistral amphibious warship to Russia, the US "punishes" BNP with a failed attempt at blackmail (recall that as Putin revealed, the BNP penalty was a used as a carrot to disincenticize France from concluding the Mistral transaction: had Hollande scrapped the deal, BNP would likely be slammed with a far lower fine, if any). Said blackmail attempt backfires horribly when as a result, the head of the French central bank makes it clear that not only is the US Dollar's reserve currency status not sacrosanct, but "the world" will now actively seek to avoid USD-transactions in order to escape the tentacle of global "pax Americana." And, the biggest irony of all is that in "punishing" France for dealing with Russia, that core country of the Eurasian alliance of Russia and China, the US merely accelerated the gravitation of France (and all of Europe) precisely toward Eurasia, toward a multi-polar (sorry fanatic believers in a one world SDR-based currency) and away from the greenback. Or shown visually (as we have ever since 20120). Meanwhile, somewhere Putin is still laughing.
|
|
|
Post by imSINGLEruRICH on Jul 12, 2014 5:44:20 GMT -5
peterg2000 DIAMOND JEDI MASTER 8 hours ago regrider, Endless and 1 more like this. QuotelikePost Options Post by peterg2000 on 8 hours ago
Another way to look at the need for a derivative crash...
These past few years er I mean this past DECADE has been pretty discouraging in the fact we kept getting dates and amounts thrown at us and confusing the heck out of many of us. We've all asked the question " Why not pay us now." we've tossed around numbers too. .$7.40 $.54 , $.05 etc.
For a good while I though the amounts were absurd and would have been happy with a penny or 2. But if you look at what is happening and the fact that the derivative seem to be ready to implode, I have to wonder the role we've played. In order for a fiat monetary system to work it needs seed capital which it can then multiply a ridiculous amount of times, creating money from next to nothing. But it still needed the seed money for that to happen. When the sting or whatever you want to call it happened and it does make sense even though its mind blowing, it took out a HUGE chunk of that seed capital leaving the house of cards far more exposed that it could ever have been. If we were paid before the house of cards comes down then that money would be used to prop up the house of cards once again. So we have no choice but to wait. And I guess we'll be in for a surprise when its over, because this wouldn't work if all we were owed was a penny a share. It had to hurt. Think well north of $.54 . Interest adds up.
They knew it would take a lot of time and probably a lot longer than expected. They were creative in their attempts to keep us occupied ( ACCA etc ) but I too think we're close. I might even dare to use the word .......
|
|
|
Post by mygirlwantsarock on Jul 16, 2014 12:53:55 GMT -5
|
|
|
Post by mygirlwantsarock on Jul 27, 2014 10:46:21 GMT -5
|
|
|
Post by imSINGLEruRICH on Jul 29, 2014 6:23:01 GMT -5
|
|
|
Post by imSINGLEruRICH on Jul 29, 2014 6:24:40 GMT -5
#2039458 tuscan20129 hours ago in 12 years of watching the Financial World like a hawk... we have never seen the litigation occurring like we see at present....It's a TSUNAMI down Wall Street and over the Pond and the Toxic Derivative Mess being addressed in words on MSM along with the skimming off the top of the $$$ being hidden in accounts round the world.. being nabbed by the IRS
|
|
|
Post by mygirlwantsarock on Aug 3, 2014 16:19:17 GMT -5
|
|
|
Post by imSINGLEruRICH on Aug 20, 2014 13:38:39 GMT -5
haney Junior Miner yesterday at 8:23am Post by haney on yesterday at 8:23amI say we are still one year away, but its coming!www.prisonplanet.com/the-latest-in-the-derivative-nightmare-on-the-horizon.htmlThe Latest in the Derivative Nightmare on the Horizon Martin Armstrong Armstrong Economics August 18, 2014The entire problem with derivatives being structured by banks has been the complex nature and the fact that such structures remain untested and perpetually blow up in everyone’s face. The Wall Street Journal reported on Sunday reported that Credit Suisse helped put together billions of dollars in securities that were issued by offshore investment vehicles of Banco Espirito Santo SA and then sold to the Portuguese bank’s unsuspecting retail customers. The Wall Street Journal has cited corporate filings and no doubt the complex nature meant that most customers didn’t know that the investment vehicles were actually fully loaded with debt issued by various Espirito Santo companies. This covertly served as a mechanism to finance the entire Portuguese conglomerate. WSJ.com said representatives of Credit Suisse and Espirito Santo declined to comment on the article as well. We have to understand that these types of products are designed by young people who are very smart in numbers, but lack any experience whatsoever in respect to market movements. Back in the day of Orange County in 1994, they came up with the idea of using leverage to buy 30 years bonds and then sell 10 years against. The difference between the two rates when taken back to the actual amount of money invested will dramatically increase the interest earned on those funds. The problem, when rate ticked up, your losses are also leveraged. Merrill Lynch was pitching this scheme to universities. Temple University told them to show it to me. Two young kids flew in from Chicago and showed me this scheme. The assumptions were dangerous and were (1) presuming liquidity always existed, and (2) the presumption that rates would decline. I told them I could not approve the deal for the trust funds of the University that rates would rise and their scheme would blow-up. They went back and reworked their numbers returning saying if rates rose, they would break-even. They fatal flaw – the presumption of liquidity and that the market would not run exponentially. When I still refused to recommend the investment to Temple University, they told the board I was “too old” and did not know the “new way to make money.” These schemes are always the same. It is using a leveraged position trying to create the guaranteed trade and these scheme simply ALWAYS blow-up because they do not comprehend how markets even move. They create such complexity that in a panic, they melt-down and nobody even understands how to exit the trade. No matter what – these schemes will fail with time.
|
|
|
Post by mygirlwantsarock on Oct 11, 2014 11:08:00 GMT -5
www.zerohedge.com/news/2014-10-10/why-oil-plunging-other-part-secret-deal-between-us-and-saudi-arabiaThe cover story for public consumption. I am surprised this garbage of a piece was posted on ZeroHedge. Interesting points but all with the wrong slant. The key point is the break up of OPEC but not for the reasons stated. 1. China has been selling military equipment to the Saudis 2. Around July, Saudi agreed to loan Egypt 5 Billion USD to buy Russian military equipment and not US 3. It is becoming widely known that ISIS is a by product of the US/Israel. Even the ultimate dove Jimmy Carter came out this week and let known as much 4. Russia last week announced they were looking at contingencies for about $60 dollar a barrel crude. Nice number they threw out in this article. Kind of like Russia already knew, huh? 5. The Saudis signed August 10th a "renewable energy" agreement with the Chinese. The Saudis are already looking at a new energy world that no longer uses oil as its primary fuel. 6. The USD is already being greatly reduced in oil exchanges with other currencies. I can add multiple more points. This supposed "strategy" does nothing but kills the petrodollar as the "oil peg" with OPEC dismantling. This will cause a "hyper-inflation" event stateside as the unused USD gets sent back home and cause a glut of fiat paper with no money velocity. The writing is on the wall boys and girls. More very publicly visual signs of the implosion of the old system into the new. D Dan
|
|