Re: Sivs become favored asset

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Posted by warren mosler (65.113.90.26) on 10:32:38 10/24/07

In Reply to: Re: Sivs become favored asset posted by Winslow R.

: I have had a difficult time finding a public 'market' for debt. Etrade, Zion's bank seems to have a market yet the spread between buyer and seller is often large (2-3%) on yield.

NOT A 'PROBLEM' IN MY BOOK

Often there are only sellers and no buyers so it is impossible to price.

NOT ALL THAT CRITICAL FOR THIS POINT, SEE BELOW.

: http://www.zionbank.com/zd_bonds_less.jsp
:
: 85% seems a small haircut given 3% spread on buying/selling a 9% bond is over 30% markdown. There are also no volumes published that I see to indicate depth of market.

IF THE BANKS GO INSOLVENT THE SHAREHOLDERS LOSE ALL AND THE GOVT LOSES THE REST ANYWAY. AND THE SECURITIES IN QUESTION AREN'T A LARGE % OF ASSETS ANYWAY.

:
: Any ideas for access to a better market information?

NO

:
: : : What more would you do to help facilitate the proceess?
: :
: : DROP THE DISCOUNT RATE TO THE FED FUNDS TARGET RATE, REMOVE THE STIGMA, AND ACCEPT ANY COLLATERAL AT 85% OF MARKET VALUE FROM MEMBER BANKS IN GOOD STANDING.
: :
: : THIS WOULD STABILIZE FED MEMBER BANK $US FUNDING WHICH IS POTENTIALLY ALL GOVT GUARANTEED VIA DEPOSIT INSURANCE ANYWAY, AND WON'T INTERFERE WITH 'REAL ECONOMIC VALUE' (WHATEVER THAT MEANS). THAT IS, IT WON'T PROTECT SHAREHOLDERS FROM TAKING HITS DUE TO DEFAULTS, BUT WILL PROVIDE 'NORMAL' BANK FUNDING FOR BANK ASSETS
: : THAT NEED TO BE 'QUALIFYING' ANYWAY AS A MATTER OF CURRENT REGULATION
: :
:

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Re: Sivs become favored asset - Winslow R. 16:28:59 10/30/07 (0)

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Subject:	Re: Sivs become favored asset
Comments:	: : I have had a difficult time finding a public 'market' for debt. Etrade, Zion's bank seems to have a market yet the spread between buyer and seller is often large (2-3%) on yield. : : NOT A 'PROBLEM' IN MY BOOK : : : Often there are only sellers and no buyers so it is impossible to price. : : NOT ALL THAT CRITICAL FOR THIS POINT, SEE BELOW. : : : http://www.zionbank.com/zd_bonds_less.jsp : : : : 85% seems a small haircut given 3% spread on buying/selling a 9% bond is over 30% markdown. There are also no volumes published that I see to indicate depth of market. : : IF THE BANKS GO INSOLVENT THE SHAREHOLDERS LOSE ALL AND THE GOVT LOSES THE REST ANYWAY. AND THE SECURITIES IN QUESTION AREN'T A LARGE % OF ASSETS ANYWAY. : : : : : : : : : Any ideas for access to a better market information? : : NO : : : : : : : What more would you do to help facilitate the proceess? : : : : : : DROP THE DISCOUNT RATE TO THE FED FUNDS TARGET RATE, REMOVE THE STIGMA, AND ACCEPT ANY COLLATERAL AT 85% OF MARKET VALUE FROM MEMBER BANKS IN GOOD STANDING. : : : : : : THIS WOULD STABILIZE FED MEMBER BANK $US FUNDING WHICH IS POTENTIALLY ALL GOVT GUARANTEED VIA DEPOSIT INSURANCE ANYWAY, AND WON'T INTERFERE WITH 'REAL ECONOMIC VALUE' (WHATEVER THAT MEANS). THAT IS, IT WON'T PROTECT SHAREHOLDERS FROM TAKING HITS DUE TO DEFAULTS, BUT WILL PROVIDE 'NORMAL' BANK FUNDING FOR BANK ASSETS : : : THAT NEED TO BE 'QUALIFYING' ANYWAY AS A MATTER OF CURRENT REGULATION : : : : : :
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