Friday, July 25, 2014

CPO - Update


All basic tools did not show a bull run. That doesn't mean that a bear run will not have rebounds and dive all the way down.

Until the trend shifts direction, I will not call the bear trend is over.

Are we in a situation where the diving submarine comes to the surface occasionally to see the light before diving deeper to the deepest part of the Indian Ocean suddenly?

If there is no panic in the market,  sudden vertical reactions is unlikely in a chaotic manner.

My strategy is to identify location for shorts after a good rise and longs after a bad fall!

Wednesday, June 25, 2014

Fed looks at exit fees on bond funds

 http://www.schiffradio.com/b/The-Bond-Trap/-641416973848578483.html

http://www.ft.com/cms/s/0/290ed010-f567-11e3-91a8-00144feabdc0.html#axzz35eEsPJwp

How will all these new measure could and potentially rock the financial markets? I really don't know. But I do not think any positive outcomes is the result!

Another bank run in Europe???? Bulgaria

http://uk.reuters.com/article/2014/06/24/bulgaria-bond-sale-idUKL6N0P54EA20140624?feedType%3DRSS%26feedName%3DrbssFinancialServicesAndRealEstateNews


SOFIA, June 24 (Reuters) - Bulgaria will go ahead as planned with a 1.5 billion euro bond sale despite a sovereign credit rating downgrade and an expected state rescue of a local bank as these will not push yields up to unattractive levels, two sources familiar with the sale said.
Bulgaria kicked off a European investor road show in Germany on Monday to raise money needed to repay global bonds that mature in January and to finance a budget deficit the government targets at 1.8 percent of gross domestic product this year.

The road show, which also travels to London, Paris and Vienna this week, has been overshadowed by a run on Corporate Commercial Bank (Corpbank) by depositors rattled by media reports of suspect deals at Bulgaria's No.4 lender.

Both the bank and its main shareholder deny any wrongdoing.

Bulgaria's central bank has taken control of Corpbank and a recently acquired subsidiary and has outlined a plan for a state rescue of the lender if talks with existing shareholders to prop up the bank with more capital fail.

The bank run followed on the heels of a sovereign downgrade by global ratings agency Standard and Poor's earlier in June to one notch above junk, citing ongoing political turmoil that has put the brakes on reforms needed to spur economic growth.

(Borrowing to pay outstanding debts .... 10 dustbins with 9 covers)

Is another potential financial crisis bigger than GFC on the horizon?



What if another crisis sets off ....from one of the major member of the EUROZONE? In the past we saw musical chair being pass around called the CRISIS chair. Time will tell who is next! 

Reuters
Tuesday, Jun 24, 2014

SINGAPORE - Singapore is to bring in new rules to ensure all banks operating in the city-state have enough liquid assets to withstand a sudden shock to the financial system, falling in line with the global regulatory trend for tougher liquidity rules.

DBS, Oversea-Chinese Banking Group and United Overseas Bank, and foreign banks with a major local presence will have to meet a requirement proposed by the Basel Committee on Banking known as the liquidity coverage ratio (LCR) by 2015, Lim Hng Kiang, Singapore's trade and industry minister, said in a speech on Tuesday.

Regulators proposed the LCR in the wake of the 2008 financial crisis to ensure banks have a big enough buffer of top quality assets such as cash and government bonds so they can withstand 30 days of outflows at a time when it is tough to get funding on the wholesale markets.

Under the rules formulated by Singapore, the three local banks will have to meet the full LCR requirement for Singapore-dollar assets by January 2015 and an all-currency LCR of 60 per cent. They will then have to meet the all-currency LCR in full by 2019, meaning they will need to have enough assets to withstand a sudden outflow of deposits and other liabilities, regardless of the currency.

Foreign banks will have to meet a Singapore dollar LCR of 100 per cent and an all-currency LCR of 50 per cent. These rules for foreign banks will apply from January 2016.

Lim did not specify which assets will be regarded as "high quality", an issue that has been of concern, as assets regarded as liquid in western markets, such as domestic government bonds, are scarce in Singapore due to a low level of public debt.

DBS Group CEO Piyush Gupta told Reuters that initially the central bank was proposing a separate liquidity requirement for the US dollar alone, which they have done away with due to opposition from the banking industry.

The industry is comfortable with the new rules because now it covers all currencies and it is easy to meet the liquidity requirements, he said. "The crisis experience shows how the buildup of risks can severely destabilise even the most developed and sophisticated financial markets," Lim, who is also the deputy chairman of the Monetary Authority of Singapore (MAS), told a banking event. "Securing the safety and robustness of our banking sector must be an ongoing process," he added.

NEW FRAMEWORK

Lim also said the central bank will come up with a new framework of rules for local and foreign banks with a large retail presence in Singapore, to ensure the domestic banking system is protected in the event they run into difficulties.

This will include ensuring they have a well-developed recovery and resolution plan, so they have a clear blueprint of what to do in the event they were to become distressed.

MAS proposes to regard a bank as having a significant retail presence if its market share of resident non-bank deposits is 3 per cent or more, and if it has 150,000 or more depositors with accounts under S$250,000.

This suggests these rules will apply not only to Singapore's three main banks, but also to international lenders such as Citigroup, Standard Chartered and Malaysia's Maybank.

- See more at: http://business.asiaone.com/news/singapore-unveils-new-liquidity-rules-banks#sthash.KLaDCQm6.dpuf

Tuesday, June 24, 2014

Are you USA citizen or dual nationality?

Today I got a call from my Relationship Manager to confirm if I am a USA citizen and verify if I am a dual citizen!!! Well the hunt for USA citizen and entity offshore accounts is confirm ON!!!

My guess is probably all this will settle in a year or less and by then the funds that is needed to be force repatriated will be back in USA. Where these offshore funds will end up is anybody guess!!!

With Europe Negative interest rate to deflect deflation and USA tracking offshore funds, we are in for a year or less of merry go round. If there is a flow back to USA equity markets, probably DJIA will stand for a year or less before we see a major correction. Timing is always an issue but we all know it is long overdue. With such many interventions, all these attempts refer back to support financial markets.

In the past the hunt was for illegal terrorism funding. Today, I do not know what to call it since it is targeting USA citizens and enterprises!

Now you start to wonder if being USA citizen has its privilege!!!