Chile Forum

Well, USD/CLP exchange swings from a high of ~615 or so back down to 590. I'm assuming mostly because of this "rally" in stocks? So if things REALLY went well in the stocks for consecutive weeks the peso could, theoretically, be driven down towards below 500? What are the chances that we see 500 and sub-500 CLP/USD rates in 2009?

I'd guess the opposite, Greg: if the American equity markets do well, international investors will be attracted. Their need to buy dollars should push the dollar upward -- much the same as pushing the Chilean peso upward when international buyers want more copper or fresh fruit.

Looks like the Chinese are starting to swing that big hammer they've got (USD reserves) or at least they're thinking about it.
http://www.telegraph.co.uk/finance/fina ... debt..html

Working through the real problems? JAAA!! Yeah if you believe the MSM.

Maybe a dead cat bounce that reverses first thing next week, maybe not.

Or maybe the first signs that all that paper is slowly but finally starting to re-inflate things which I guess cold be considered a success if avoiding a deflationary depression was the objective. If so, get ready for the hyper-inflationary ride of your life for the next 5 years or so.

Kudos to those making bets with their own honestly earned funds.

admin wrote:I bet they drop market to market.

Yes, that is a relatively safe bet. The FASB committed to this yesterday I believe. When it will happen is another story, the FASB is notoriously slow, they are likely doing this kicking and screaming. They had basically been put in a corner with the option of letting legislators make accounting rules (my opinion aside, most corporate execs still blister at the mention of the last time this happened with SOX)... or putting out something of their own.

To me it seem likes its a classic problem of different needs for different users. The accounting method still isn´t the causing the problem, its the regulation. As I understand it, banking regulation says that these banks need to have a certain amount of assets for every dollar of loan. When the asset prices crash per the market, the amount of loans they can have out goes down.. which is causing the credit markets to seize up. If they change the rules and keep the assets at historical cost they only have to do permanent impairments to measure the value of the asset, which is a bigger hurdle to jump than following market pricing.

My gut says that for the banking regulation side this is a reasonable move. Accountants should be able to make a decision as to whether the asset is permanently impaired or a victim of a temporarily spooked and non-functioning markets. Perhaps a separate set of legal- reg books that use the historical cost with permanent impairment principal, but keep mark to market for the investors... different set of rules for different users. It implies a higher cost of doing business, but seems to me a small price to pay in the big picture.

If they do go forward with suspending mark to market, I would hope it would only affect the lending industry.

Well-considered comments, "IR". As a non-banker (though the son of one, and a lawyer with some slight accounting background who deals with bankers frequently), I largely agree with the wisdom of such a course; no need for dual accounting, I think, if disclosure were made through footnotes or ancillary statements readily available to investors and in annual reports.

China is worried about the US Treasury and its $1 Trillion investment..

http://www.nytimes.com/2009/03/14/world ... na.html?hp

No real reaction from stocks, apparently?

Oops its the same thing MikieO posted

The market goes up because people buy. The market keeps going up because more people buy. The shorts are being careful because they're being scrutinized these days. The uptick rule will be restored and that's bad news for short sellers. And really. the stock market and the economy are not the same thing. A million danger symbols in the economy and a bull market until fairly recently(Bush's last year). See Jon Stewart's CNBC/Jim Cramer videos:

http://www.thedailyshow.com/

And the one thing no investment manager or stockbroker wants is to "miss the market."

Did You Just Miss the Bottom?

Posted Mar 13, 2009 10:56am EDT by Henry Blodget in Investing, Recession, Banking

From The Business Insider, March 13, 2009:

Did the Wall Street Journal scare you out of the market with that DOW 5000 cover? Sucker!

After an 11% three-day pop, the DOW's over 7000 again. The higher it goes, the more people will turn bullish. In fact, we expect to hear the mantra on CNBC to become "we're in a bottoming process" any day now.

(In December, when the market soared off the November lows, pundit after pundit said we were in a "bottoming process." In the past two months, they came to the same conclusion the WSJ did: DOW 5000. Now, if the market keeps rising, they'll get more bullish again.)

So which is it?

Are you convinced this is just yet another sucker's rally and holding out for DOW 5000? Or did we just see the start of a great new bull market, that many folks have just missed the first 11% of?

I have for a long while been following the Spot US Dollar Index on the NYBOT (NY Board of Trade symbol 'DX-Y.NYB'). A couple of days ago (maybe 3 or 4 market days ago), the quote stopped working. Further research has revealed no reason why as the futures for the spot quote still exist not to mention the spot prices for their other currency contract products.

Makes one go hmmmm as the futures can be manipulated much easier versus the here and now, 24 hour, spot market price. The disappearance also coincides with the renewed dive in the dollar and the negative press the dollar has been receiving in the MSM.

Gotta love plain speech.
http://www.youtube.com/watch?v=94lW6Y4tBXs
HANNAN!! CARE FOR A JOB IN THE US TREASURY?