Does this mean $ demand will remain strong?

[Supercilious]

Re: Does this mean $ demand will remain strong?

The real question is, how do we get updated stats on current liabilities?

The simple answer is that we can't. There is some good private and proprietary research on this subject, but it's heavily covered by confidentiality agreements and it is expensive. Plus there is that little thing called copyright. Those who have access to such reports can't (and have no interest) to make public any details.

Other than that, there are very few leaks of useful and usable information in the public or low priced domain (BIS and IMF reports, snippets of data presented by Setser and other bloggers with inside access... and that is about it)

No doubt those numbers will tell us a pretty interesting story on the direction of the USD..

No doubt about that. These days accurate and real-time actionable information is gold. One cannot expect to find gold for free on the street... only the occasional lost little piece of jewelry, or a nugget that fell from a pocket ...

[FRED]

Re: Does this mean $ demand will remain strong?

The simple answer is that we can't. There is some good private and proprietary research on this subject, but it's heavily covered by confidentiality agreements and it is expensive. Plus there is that little thing called copyright. Those who have access to such reports can't (and have no interest) to make public any details.

Other than that, there are very few leaks of useful and usable information in the public or low priced domain (BIS and IMF reports, snippets of data presented by Setser and other bloggers with inside access... and that is about it)


No doubt about that. These days accurate and real-time actionable information is gold. One cannot expect to find gold for free on the street... only the occasional lost little piece of jewelry, or a nugget that fell from a pocket ...

We get reports from Barclays (was Lehman), Goldman Sachs, and many other sources but for obvious reasons keep them behind the pay wall in the subscription area.

[Guest]

Re: Does this mean $ demand will remain strong?

No one on the outside has any idea of the lurid stuff lurking behind iTulip's "pay wall". Lurid. Horrid. Ghastly details of financial necrosis, all writhing like a mess of vile worms behind the pay wall. :cool:

We get reports from Barclays (was Lehman), Goldman Sachs, and many other sources but for obvious reasons keep them behind the pay wall in the subscription area.

[renewable]

Re: Does this mean $ demand will remain strong?

There is a certain type of British (C/c)onservative who are rabidly Europhobic. Evans-Pritchard is one of these people. That is not to say that his assertions are not correct, but there is considerable baggage there which most probably colours his reading of the various reports he summarises.

[Master Shake]

Re: Does this mean $ demand will remain strong?

The short positions are derived from the dynamics of their liabilities roll-over on a deflationary background. I'll try to put it in simple terms. Let's say I'm a bank and Lukester needs a $1000 loan in dollars to buy a new safe box for his gold. I arrange for a one year 5% loan for him, but I don't have enough capital. Luckily you have $1000 you want to place in a 2% one month CD with my bank (you are essentially a money market equivalent).

I as a smart european banker, believe in SIV type leverage and I get your money and give it to Lukester for one year making money on the interest differential. When the month ends, I have to return your $1000, but I can't recall Lukester loan. Therefore I get first another $1004 from Mega (on another one month CD) in order to pay you. If I cannot find quick enough someone else to give me money, I need to bridge the loan rollover with my own capital. So far, we have a maturity mismatch hit by a liquidity crunch. I'm in trouble although the loan given to Lukester is a good quality asset and was well collateralized.

The problem is what is happening when Mega has his money in pounds not in dollars and I can't find anybody else to give me dollars?

I take the corresponding amount of pounds and sell them to get dollars for the rollover. Here the maturity mismatch is compounded by the forex mismatch. In such a case massive short term borrowing by the European banks in domestic currencies in order to finance long term dollar loans, can make things extremely messier and can put a downward pressure on the domestic currencies especially if it involves a change in the currency composition of the short term liabilities. This can generate a spiral default effect as it happens in a few East European countries.

A lot of folks got cheap mortgage loans in yen (or dollars) and their national currencies fell. The yen loans become more expensive and the short term rollover of yen liabilities from the domestic market, puts further local pressure, more chance of default ... and so on.

These dollar short positions is just the result of the fact that european banks are very leveraged and there is a dollar liquidity crunch. Add to that bad loans and shrinking profits and , voila ,... they need a gazillion dollars to convert back from semi-SIV's into the normal banks. You can consider that some Europeans have experienced a partial run on the banks, but instead deposits vanishing, the short term dollar liquidity is vanishing.

Thanks for the lucid explanation.

[FRED]

Re: Does this mean $ demand will remain strong?

No one on the outside has any idea of the lurid stuff lurking behind iTulip's "pay wall". Lurid. Horrid. Ghastly details of financial necrosis, all writhing like a mess of vile worms behind the pay wall. :cool:

Remember this one from two years ago?

"A total 1% decline in GDP will be produced by a 5% decline in housing price appreciation."

If that's true, then what does a 30% decline in housing price appreciation do?

[Guest]

Re: Does this mean $ demand will remain strong?

Uhm, (channeling Meredith Vieira and "who wants to be a millionaire") - I'll go with "Ephemeral GDP Growth Going Forward" for $50.00 b0nars, and one lifeline please? :rolleyes:

If that's true, then what does a 30% decline in housing price appreciation do?

[Mega]

Re: Does this mean $ demand will remain strong?

Fred
Quick Question, some how i been given a higher grade Access on Itulip, is this AAA grade or am i to understand that there is a "Higher Place" i am yet to visit?

Mike