3 replies to this topic

[nimblebear]

(The following commentary is from Justin Oliver at Canaccord Adams.) The unprecedented spread between US TBill and LIBOR rates is suggesting a heretofore unseen attack on the global financial system. There is clearly something going on that the large banks are privy to, that we are not as they are clearly not willing to lend to each other without a massive risk premium. It is inconceivable that equities can continue to trade relatively unaffected by a complete backing up of the credit markets. Watch that $80 U.S. dollar level (support for 30 years) for DXY, if the dollar falls, Long rates will go up and this will be a huge negative for the market. Short Retail/Banks and Long Gold and Monetary Metals If there is no money to lend there is no money to spend – Hand in hand with the 3% increase in same story sales yet 17% increase in credit card sales by Walmart! Justin Oliver CA Institutional Equity Sales CanaccordAdams 161 Bay Street, Suite 3000, Toronto, ON, M5J 2S1

[humble1]

nimblebear: please keep me/us informed on this aspect of the credit market. i agree with the writer on the significance of the LIBOR action. and it is not only uncertainty that the t-bill/libor spread is indicating. many consumer loans (including HEL's) are BASED on the libor rate. this is a rate THE FED HAS NO CONTROL OVER. and this is why paulsen looked so tired and frightened this morning on CNBC.

[flyers&divers]

If I am not mistaken most credit card rates and almost all ARMS are pegged to LIBOR. F&D

[bullshort]

This is not directly on your topic but what I don't understand is why there is so much focus on the Fed lowering the discount rate. What about the fact that when the Fed lowered the discount rate it also made it clear that it would accept subprime mortages as collateral for any loans it made at the discount window. Isn't this saying in effect that you banks can value those subprime loans at face; that's what we will do in accepting them as collateral. And if they aren't worth face to the market, give us a couple of minutes, we'll make them worth face. Be happy, don't worry, we're going to refill the punch bowl.