Monday, March 17, 2008

Tarred with the same brush as the Fed?

BOE Offers Banks Emergency Cash to Ease Money Markets

"The Bank of England said it will offer extra cash to banks in the first such emergency operation in six months to alleviate tensions in money markets".

Posted by alan @ 11:36 AM (1615 views)
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16 thoughts on “Tarred with the same brush as the Fed?

  • QUICK, PRINT MORE MONEEEEEYYYYYYYYY!

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  • That’s the gross national debt for the US. Nice little javascript thing going on there …

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  • The West is on the alert for physical terrorist attacks, dirty bombs etc. All the ‘security’ involves physical checks/passport checks etc. Destroying the monetary system of the West would be much more of a coup. Just who is behind what is going on I wonder?

    http://en.wikipedia.org/wiki/Bin_Laden_family

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  • we keep having a go at the FED and BoE for flooding the market with funds, but haven’t the ECB been doing it all along?…………..and didn’t the ECB dump 500Bln dollars into the financial markets only a few months ago? This smacks of a one sided hedge against sterling and the dollar, orchestrated by whom, Crash and Bush, Bernanke and King?? or the real players in this the Forex traders???

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  • The Pounds going down the toilet with the Dollar, so it would seem….

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  • The fire’s burning too quick, put more wood on it!

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  • The MOST important thing in the next few weeks / days / hours or even minutes (not seconds though thats just silly) is whether, to what extent and how successfull Central bank intervention is in the currency markets. The USD is oversold – fact. HOW oversold it becomes is the issue BUT i strongly believe there will be intervention soon. (and actually the more comments i see as handle_it the more i believe that to be the case. If that comes in soon (led by the Fed but co-ordinated later after the Feds goes alone in the first round to test the water) then the short speculators are going to get (in the words of Taggart) Mhuderd. I am NOT saying that the Dollar wont fall further eventually but only after a sharp correction, occassioned by Bank intervention. Clearly if the market absorbs that $ buying then we could be on the way to a Soros- type sell off, but really i dont think thats on the cards right now. As for the £ thats a bit of a bystander (not in the namesake blogger sense!) for now.

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  • “The USD is oversold – fact. HOW oversold it becomes is the issue BUT i strongly believe there will be intervention soon. ”

    If the USD is oversold – why does there need to be central bank intervention? Seems a little odd to me.

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  • I AM a little odd ;-). Ok so my head is in the noose the question is who wants to open the trap door! Harold – The markets think the $ is a one way bet, the destiny of the exchange rates (for better or worse) is held (so they would have you believe) in the hands of the central banks. They may wish to see a weaker dollar (regardless of the rhetoric of a “strong dollar” policy) BUT they dont want to be held hostage to the market (you have to know whose boss). The RSI is through the roof, the Euro has an overthrow of the top of the channel and i would be very surprised if the COT didnt show a majority of the Euro longs (effectively $ shorts) held by small specs. Gold has come down from 1032 to just over 1000 this morning…… The cetral banks are probably waiting on the sidelines to intervene. They will only intervene when the market is at an extreme, because then the market is more likely to go the other way sharply and quickly because the shorts are in weak hands.

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  • Markets are sometimes a little unstable after a major event (like NR or Bear). The best way to judge the impact of central bank intervention is to wait 3 or 4 days and see how the market is working.

    It may be the intention of the Fed to gradually devalue the dollar, if so, they will wish to do it slowly, and over a long period in order to maintain stability. I don’t think Ben is a cowboy!

    I therefore don’t see the dollar or the pound dropping much more vs the Euro this week, if at all (unless A&L or Lehman Bros cries for Help).

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  • …by the way has anyone seen the price of Crude?

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  • techieman – I agree, there will be significant intervention this week, and a correction. There is still much further to go versus the yen. Expect 175 to the pound or worse by the end of the year.

    Sadly, I was shorting the GBP versus the JPY earlier last week, but closed my position on the morning of the 13th, under the belief that the interest rate cut on Tuesday would give the market a lift, and that there would be support for 100 yen to the USD would hold…just goes to show how wrong one can be and that there is no second guessing the news. I wasn’t expecting a full blown collapse until later this month. Darn. Darn, darn darn!

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  • Crude and gold are returning back to 100 and 1000 respectively. The latter will probably drop lower once the interest rate cut is announced, in the short term…

    techiman – I wrote a reply to you a while ago, but forgot to put my password in – I think you are correct. There will be a rebound this week. Sadly, I closed my short positions in GBP vs Yen on the 13th and my long position on gold, believing that nothing would happen before the Fed interest rate announcement on the 18th, which would strengthen the dollar temporarily, based on past performance. How wrong one can be…£20k worth of profit missed. D’oh!!!!!!!

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  • “Crude and gold are returning back to 100 and 1000 respectively.”

    Equities have been tanking, what’s the betting that banks are (reluctantly) having to sell their commodity longs in order to ass-cover. Don’t forget, everyone’s waiting for the next shoe to drop.

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  • D’oh we ALL make mistakes and are all wrong some of the time! At least its not £20k of losses assumed :-). They will be there tomorrow and the day after – now the day after that? – thats a joke by the way! – No intervention yet. Harold – think you are right they have to get some liquidity from somewhere. Think the intervention if/when will be both US and potentially sterling to a lesser extent or on its coat-tails. Although perhaps 160 Eur will be the level to defend. I am itchy about my (cash) Euro holdings to be honest – i.e. looking to hedge it against the £, here or hereabouts, but need to do a bit more work. Pound have plunged through Swissy 2. I was actually in Zurich this morning when i wrote the first few comments at the airport. Weather was great over the weekend – ski-ing was a bit naff though. Think we are near the bottom for the share markets too, although maybe just in terms of time – not neccesarily price. Think i will relax until Easter – but those damn septics are bound to catch us out over the long w/end! – Interesting times!!

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