New York State's proposal to start regulating part of the credit-default swaps market may accelerate oversight of an industry blamed for helping to almost bring down the U.S. financial system.
New York Governor David Paterson said in a statement yesterday that the state will consider contracts sold to investors who own bonds they are trying to protect from default as insurance. The plan won't apply to contracts purchased by speculators who only want to bet on an increase or decrease in a borrower's creditworthiness and don't own bonds.
Calls for greater regulation of the $62 trillion market have grown after the U.S. had to take over American International Group Inc. and provide the New York-based insurer with an $85 billion loan to cover obligations at a unit that sold protection on securities through the credit-default swap market. The AIG subsidiary was required to post collateral against more than $400 billion of contracts after its credit rating was downgraded.
``I think it's clear to everyone that there's going to be more regulation coming'' said Brad Golding, managing director at Christofferson Robb & Co., New York-based money management firm. ``Is every swap dealer in the world going to have to apply to New York for an insurance license? The bottom line is: good luck with that.''
Claims Paying Ability
Under Paterson's plan, the New York State Insurance Department would require entities selling credit-default swaps to bondholders to show they can actually pay the claims if there is a default. The new guidelines will become effective in January.
``The absence of regulatory oversight is the principal cause of the Wall Street meltdown we are currently witnessing,'' Paterson said. ``I urge the federal government to follow New York's lead once again by regulating the rest of the credit- default swap market.''
Credit-default swaps, which are traded between banks, hedge funds, insurers and other investors, are financial instruments based on bonds and loans that are used to speculate on a company's ability to repay debt or to hedge against losses.
They pay the buyer face value in exchange for the underlying securities or the cash equivalent should the borrower fail to adhere to its debt agreements. The market has grown 100-fold over the past seven years to cover $62 trillion of debt, or more bonds than there are outstanding.
Market Disruption
New York regulators threaten ``to disrupt global derivatives markets'' through this action, said Robert Pickel, chief executive officer of the International Swaps and Derivatives Association. The New York-based industry group represents dealers and investors, and sets standards for trading.
``The state of New York should proceed very cautiously and in consultation with federal regulators before acting in a way that may ultimately cause more harm than good,'' Pickel said in a statement.
Until now, the state hasn't regulated the credit-default swap market even as bond insurance companies expanded into the business of guaranteeing securities through contracts rather than insurance policies.
Five of seven formerly AAA rated bond insurers, including Armonk, New York-based MBIA Inc. and Ambac Financial Group Inc. in New York, lost their top rankings after writing credit-default swap contracts on more than $100 billion of so-called collateralized debt obligations backed by subprime mortgages.
`Further Dislocation'
Insurance companies, which are prohibited from entering into derivative transactions directly, created special purpose vehicles to create credit-default swaps they could sell to investors. These SPVs were minimally capitalized because their obligations in the event of a security defaulting were guaranteed by the insurance company.
``We are concerned that this plan has not been well thought through,'' Tim Backshall, chief strategist at Credit Derivatives Research LLC, said in a note to clients about the New York state plan yesterday. ``These ad hoc actions are more likely to cause further dislocation than help any realignment and normalcy.''
Until New York State Insurance Department Chairman Eric Dinallo provides more details about the plan, the effort may obscure rather than clarify some of the regulatory obstacles, said Ed Grebeck, chief executive officer of Tempus Advisors, a debt consulting firm in Stamford, Connecticut.
``How is Dinallo going to say who is adequately capitalized?'' Grebeck said. ``I don't think this thing is clearly thought out. Parties buying protection in the credit default swap market are all international investors. I don't see how New York State can address what is an international issue.''
The Federal Reserve Bank of New York has been the most involved in trying to reduce risks in the credit swaps market, starting with demands in 2005 from New York Fed President Timothy Geithner that banks reduce a backlog of unconfirmed trades that threatened to undermine the market.
After the collapse of Bear Stearns Cos. in March the Fed intensified its demands, engineering a list of efforts among the 17 largest dealers including creation of a clearinghouse overseen by the Fed that would absorb the failure of a market-maker.
Showing posts with label Plan. Show all posts
Showing posts with label Plan. Show all posts
2008-09-21
Yen Falls on Possible US Bailout Plan and Financial Trading
If you have a desire for pecuniary trading, then come and have.
The cash was generally lessen in explosive trading Thursday but later pared losses as US stocks rose on prospects the government is formulating a plan to steady economic markets and regulators and annuity funds took steps to restrain rapid promotion. The yen floor as attempt hate decreased after NY Senator Charles Schumer proposed a new charity to pump assets into disturbed monetary companies and help home owners. The greenback reversed past losses ..[more].
Do not suppose for a moment that I am open to be successful to finish almost every waking hour by not working at a feature brief that I passion.
The collapse of so many foremost financial institutions in the history year, and over the ancient few days especially, is hard to fathom in its atrocity. Sometimes you ought a good visual to put stuff in perspective. The New York Times has an interactive full up on its position that sweet greatly says it all. It shows that $4 trillion has been wiped off the full bazaar capitalization of the U.S. provide advertise because last October. Of that, virtually $1 trillion is from the decline in the monetary sector.
It describes, in meticulous specify:
Der Spiegel: Is chronicle repeating itself? That's certainly a question many Russians must be asking themselves. Almost exactly 10 time after the economic bang of 1998, Russian markets are once again in unrest. On Sept. 16, Moscow's chief stockpile replace, MICEX, fell by a jaw-falling 17.5 percent, the principal one-day defeat in a decade, while the rival RTS chat was down by 11.5 percent. The unbound drop sustained on Sept. 17, causing Russia's pigs promote manager to suspend trading on ..
The cash was generally lessen in explosive trading Thursday but later pared losses as US stocks rose on prospects the government is formulating a plan to steady economic markets and regulators and annuity funds took steps to restrain rapid promotion. The yen floor as attempt hate decreased after NY Senator Charles Schumer proposed a new charity to pump assets into disturbed monetary companies and help home owners. The greenback reversed past losses ..[more].
Do not suppose for a moment that I am open to be successful to finish almost every waking hour by not working at a feature brief that I passion.
The collapse of so many foremost financial institutions in the history year, and over the ancient few days especially, is hard to fathom in its atrocity. Sometimes you ought a good visual to put stuff in perspective. The New York Times has an interactive full up on its position that sweet greatly says it all. It shows that $4 trillion has been wiped off the full bazaar capitalization of the U.S. provide advertise because last October. Of that, virtually $1 trillion is from the decline in the monetary sector.
It describes, in meticulous specify:
Der Spiegel: Is chronicle repeating itself? That's certainly a question many Russians must be asking themselves. Almost exactly 10 time after the economic bang of 1998, Russian markets are once again in unrest. On Sept. 16, Moscow's chief stockpile replace, MICEX, fell by a jaw-falling 17.5 percent, the principal one-day defeat in a decade, while the rival RTS chat was down by 11.5 percent. The unbound drop sustained on Sept. 17, causing Russia's pigs promote manager to suspend trading on ..
2008-09-19
US rescue plan boosts UK markets
Financial shares made spectacular gains after news of a US rescue plan and a ban on short-selling boosted the ailing sector.
The FTSE 100 Index was up by more than 6% - or 300 points - after bluechips including Royal Bank of Scotland and Lloyds TSB rose in excess of 30%.
The turnaround in sentiment came after the Financial Services Authority banned "short-selling" of listed financial firm stocks - in which traders look to profit from falling share prices - to try to quell the turmoil in the market.
And the mood for markets worldwide was boosted after US Treasury Secretary Hank Paulson said he was hatching a plan to rescue banks from the "toxic" assets that have led to the crisis.
New York's main share index responded by posting its biggest gain for nearly six years - up 410 points or nearly 4%.
Matt Buckland, a dealer at CMC Markets, said central government intervention had boosted markets worldwide. He said: "The combined efforts are so great that there seems to be a coherent belief that this could actually be sufficient to draw a line under what has been a tumultuous 18 months for the markets."
The ban on short-selling in financial shares looked to have removed uncertainty facing shares across the beleaguered banking sector.
Under the Financial Services Authority (FSA) ruling, traders are not allowed to "short" positions in listed financial companies - a practice known as "short selling". The ban came into force at midnight and will last for at least the next four months.
"Short-selling" is when investors borrow stocks in a company to sell them, hoping to buy them back at a cheaper price later on and return them, pocketing the difference as profit.
The practice has been blamed for a run on HBOS shares this week, which led to the group agreeing a £12 billion takeover offer from rival Lloyds TSB.
The FTSE 100 Index was up by more than 6% - or 300 points - after bluechips including Royal Bank of Scotland and Lloyds TSB rose in excess of 30%.
The turnaround in sentiment came after the Financial Services Authority banned "short-selling" of listed financial firm stocks - in which traders look to profit from falling share prices - to try to quell the turmoil in the market.
And the mood for markets worldwide was boosted after US Treasury Secretary Hank Paulson said he was hatching a plan to rescue banks from the "toxic" assets that have led to the crisis.
New York's main share index responded by posting its biggest gain for nearly six years - up 410 points or nearly 4%.
Matt Buckland, a dealer at CMC Markets, said central government intervention had boosted markets worldwide. He said: "The combined efforts are so great that there seems to be a coherent belief that this could actually be sufficient to draw a line under what has been a tumultuous 18 months for the markets."
The ban on short-selling in financial shares looked to have removed uncertainty facing shares across the beleaguered banking sector.
Under the Financial Services Authority (FSA) ruling, traders are not allowed to "short" positions in listed financial companies - a practice known as "short selling". The ban came into force at midnight and will last for at least the next four months.
"Short-selling" is when investors borrow stocks in a company to sell them, hoping to buy them back at a cheaper price later on and return them, pocketing the difference as profit.
The practice has been blamed for a run on HBOS shares this week, which led to the group agreeing a £12 billion takeover offer from rival Lloyds TSB.
2008-07-27
Proof 6 - Ponder God’s Plan
"God's plan" is the way that Christians traditionally explain things like amputations, cancer, hurricanes and car accidents. For example, if a Christian dies a painful and tragic death because of cancer, she dies as part of God's plan. Her death has a purpose. God called her home for a reason. Even if something bad happens to a Christian, it is actually good because it is part of God's plan.You can see how pervasive "God's plan" is by looking in Christian inspirational literature. For example, if we look in the book A Purpose Driven Life by Rick Warren, we find this remarkable paragraph in Chapter 2:
Because God made you for a reason, he also decided when you would be born and how long you would live. He planned the days of your life in advance, choosing the exact time of your birth and death. The Bible says, "You saw me before I was born and scheduled each day of my life before I began to breathe. Every day was recorded in your book!" [Psalm 139:16] There is also this:
Regardless of the circumstances of your birth or who your parents are, God had a plan in creating you. Under this view of the universe, God plans everything.Take a moment and think about what Rick Warren said. Rick said, "He planned the days of your life in advance, choosing the exact time of your birth and death." Let's examine one simple implication of this statement. What this means is that God has pre-planned every abortion that has taken place on our planet.If the concept of "God's plan" is true, you can first of all see that God wants us to be aborting children. Every single abortion is planned by God, so God must be doing it for a reason. Second, you can see that both the mother who requests the abortion and the doctor who performs it are blameless. Since it is God who planned the abortion of the child (God chose the "exact time" of the death, according to Rick Warren), the mother and doctor are simply puppets who are fulfilling God's plan, are they not? What about all the Christians who are fighting against abortion? If abortion is part of God's plan, why are they fighting it? God is the all-powerful ruler of the universe, and his plan is for more than a million children a year to die in the United States through abortion. [ref] If God's plan is true, then each one of those abortions was meticulously planned by God.If God does not intend for us to perform abortions, is Rick Warren then wrong that God has a plan? If God has a plan, is he not the direct cause of every abortion? Simply think it through, and you will begin to see the problems in Rick's proposition.Think about Adolph Hitler. He was evil incarnate, and Hitler is well known for the atrocious things he did. What I would like you to do right now is to consider this statement: "Hitler is part of God's Plan." Think about what Rick said:
He planned the days of your life in advance, choosing the exact time of your birth and death. The Bible says, "You saw me before I was born and scheduled each day of my life before I began to breathe. Every day was recorded in your book!" [Psalm 139:16] Rick also says:
God never does anything accidentally, and he never makes mistakes. He has a reason for everything he creates. Every plant and every animal was planned by God, and every person was designed with a purpose in mind. If God has a divine plan for each of us, then he had a divine plan for Hitler too. It is when you stop to think about it deeply that the contradictions hit you.Now let's imagine that you say a prayer in this sort of universe. What difference does it make? God has his plan, and that plan is running down its track like a freight train. If God has a plan, then everyone who died in the Holocaust died for a reason. They had to die, and each death had meaning. Therefore, Holocaust victims could pray all day, and they would still die. The idea of a "plan" makes the idea of a "prayer-answering relationship with God" a contradiction, doesn't it? Yet Christians seem to attach themselves to both ideas, despite the irresolvable problem the two ideas create.Think about what God's plan means for you personally. If the plan happens to say that you will get hit by a bus tomorrow, or that terrorists will blow you up, or that you will be shot in the head four times, then that's what will happen. It would be the same with any disease. If you contract cancer this afternoon and die three months later, that is God's plan for you. Praying to cure the cancer is a waste. God plans for you to die, so you will die. He has pre-programmed the exact time of your death. There is nothing you can do to change the plan -- no amount of prayer will help -- because your death will have meaning and your death will cause side-effects that are also part of the plan.Who will you marry? You actually have no choice in the matter. God has pre-planned your wedding in minute detail. Rick Warren says, "God knew that those two individuals [your parents] possessed exactly the right genetic makeup to create the custom 'you' that he had in mind. They had the DNA God wanted to make you." Therefore, your spouse was pre-chosen by God for you so that you would create the children who are a part of his plan. You also have no choice in the number of children you will have -- God has pre-planned their births.In addition, this sort of universe means that Hitler is blameless. Hitler was not "evil," because Hitler had no free will at all. Hitler was simply an actor forced to play his role in God's plan. God planned for millions of people to die in the Holocaust -- he planned their deaths in exact detail according to Rick Warren. Hitler had to kill those people. Hitler was God's puppet in making that those millions of deaths happen right on schedule.In the same way then, every murderer is blameless. Since God has planned each of our deaths in exact detail, murderers are actually essential to God's plan. Why do we punish them? We should be rewarding them for doing their God-planned duty. What if you get raped tomorrow and get pregnant? God did that because he planned the exact time of that child's birth and death. God actually pre-planned your rape, and the rapist was God's puppet. Rather than hating the rapist, we should celebrate God's plan.Do you believe that murderers and rapists should be rewarded? Do you believe that Hitler was sent by God to kill millions of people in the Holocaust? Do you believe that God is the direct cause of every abortion on this planet? Do you believe that you have no choice in your spouse or the number of children you have? Probably not. But that is what you are saying when you state that Hitler or cancer or anything else is part of "God's plan."If you think about it as an intelligent person, you will realize that the statement "It is part of God's plan" is one of those meaningless palliatives. When you sit down and think it through using your common sense, the statement makes no sense. That lack of sense shows us how imaginary God is.
Because God made you for a reason, he also decided when you would be born and how long you would live. He planned the days of your life in advance, choosing the exact time of your birth and death. The Bible says, "You saw me before I was born and scheduled each day of my life before I began to breathe. Every day was recorded in your book!" [Psalm 139:16] There is also this:
Regardless of the circumstances of your birth or who your parents are, God had a plan in creating you. Under this view of the universe, God plans everything.Take a moment and think about what Rick Warren said. Rick said, "He planned the days of your life in advance, choosing the exact time of your birth and death." Let's examine one simple implication of this statement. What this means is that God has pre-planned every abortion that has taken place on our planet.If the concept of "God's plan" is true, you can first of all see that God wants us to be aborting children. Every single abortion is planned by God, so God must be doing it for a reason. Second, you can see that both the mother who requests the abortion and the doctor who performs it are blameless. Since it is God who planned the abortion of the child (God chose the "exact time" of the death, according to Rick Warren), the mother and doctor are simply puppets who are fulfilling God's plan, are they not? What about all the Christians who are fighting against abortion? If abortion is part of God's plan, why are they fighting it? God is the all-powerful ruler of the universe, and his plan is for more than a million children a year to die in the United States through abortion. [ref] If God's plan is true, then each one of those abortions was meticulously planned by God.If God does not intend for us to perform abortions, is Rick Warren then wrong that God has a plan? If God has a plan, is he not the direct cause of every abortion? Simply think it through, and you will begin to see the problems in Rick's proposition.Think about Adolph Hitler. He was evil incarnate, and Hitler is well known for the atrocious things he did. What I would like you to do right now is to consider this statement: "Hitler is part of God's Plan." Think about what Rick said:
He planned the days of your life in advance, choosing the exact time of your birth and death. The Bible says, "You saw me before I was born and scheduled each day of my life before I began to breathe. Every day was recorded in your book!" [Psalm 139:16] Rick also says:
God never does anything accidentally, and he never makes mistakes. He has a reason for everything he creates. Every plant and every animal was planned by God, and every person was designed with a purpose in mind. If God has a divine plan for each of us, then he had a divine plan for Hitler too. It is when you stop to think about it deeply that the contradictions hit you.Now let's imagine that you say a prayer in this sort of universe. What difference does it make? God has his plan, and that plan is running down its track like a freight train. If God has a plan, then everyone who died in the Holocaust died for a reason. They had to die, and each death had meaning. Therefore, Holocaust victims could pray all day, and they would still die. The idea of a "plan" makes the idea of a "prayer-answering relationship with God" a contradiction, doesn't it? Yet Christians seem to attach themselves to both ideas, despite the irresolvable problem the two ideas create.Think about what God's plan means for you personally. If the plan happens to say that you will get hit by a bus tomorrow, or that terrorists will blow you up, or that you will be shot in the head four times, then that's what will happen. It would be the same with any disease. If you contract cancer this afternoon and die three months later, that is God's plan for you. Praying to cure the cancer is a waste. God plans for you to die, so you will die. He has pre-programmed the exact time of your death. There is nothing you can do to change the plan -- no amount of prayer will help -- because your death will have meaning and your death will cause side-effects that are also part of the plan.Who will you marry? You actually have no choice in the matter. God has pre-planned your wedding in minute detail. Rick Warren says, "God knew that those two individuals [your parents] possessed exactly the right genetic makeup to create the custom 'you' that he had in mind. They had the DNA God wanted to make you." Therefore, your spouse was pre-chosen by God for you so that you would create the children who are a part of his plan. You also have no choice in the number of children you will have -- God has pre-planned their births.In addition, this sort of universe means that Hitler is blameless. Hitler was not "evil," because Hitler had no free will at all. Hitler was simply an actor forced to play his role in God's plan. God planned for millions of people to die in the Holocaust -- he planned their deaths in exact detail according to Rick Warren. Hitler had to kill those people. Hitler was God's puppet in making that those millions of deaths happen right on schedule.In the same way then, every murderer is blameless. Since God has planned each of our deaths in exact detail, murderers are actually essential to God's plan. Why do we punish them? We should be rewarding them for doing their God-planned duty. What if you get raped tomorrow and get pregnant? God did that because he planned the exact time of that child's birth and death. God actually pre-planned your rape, and the rapist was God's puppet. Rather than hating the rapist, we should celebrate God's plan.Do you believe that murderers and rapists should be rewarded? Do you believe that Hitler was sent by God to kill millions of people in the Holocaust? Do you believe that God is the direct cause of every abortion on this planet? Do you believe that you have no choice in your spouse or the number of children you have? Probably not. But that is what you are saying when you state that Hitler or cancer or anything else is part of "God's plan."If you think about it as an intelligent person, you will realize that the statement "It is part of God's plan" is one of those meaningless palliatives. When you sit down and think it through using your common sense, the statement makes no sense. That lack of sense shows us how imaginary God is.
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