Comments on naked capitalism: UBS Raises Concern About Negative Non-Borrowed Ban...

I don't like deleting comments, but the two expung...

2008-03-30T20:44:00.000-04:00

I don't like deleting comments, but the two expunged were the same excessively long rant (the substance wasn't terrible, truth be told) that was made on six separate posts and per above, twice on this one. I haven't published a formal policy re comments, but if in doubt, look here and here to get an idea of what will get your comment deleted. Multiple listings of the same content is one of them.

So a degradation in the quality of the reserves of...

2008-02-09T21:55:00.000-05:00

So a degradation in the quality of the reserves of the banking system is of no consequence? Unless some earnings appear to replace those subprime assets (not likely for a couple of years) then the permanent capital for the US banking system are subprime loans that are running roughly 20% delinquencies & 50% severities. Since the Fed won't disclose who is borrowing or what the collateral looks like, we have to assume that the banking reserve system is on a fairly rapid deflationary descent. To borrow a phrase, got popcorn?

Incredible! Now the Fed is aiding and abetting the...

2008-02-09T02:19:00.000-05:00

Incredible! Now the Fed is aiding and abetting the Ponzi scheme, bank fraud, and cover-up of bank losses.

The Fed is knowingly debasing lending standards...taking the subprime borrower's...er, bank's toxic collateral ...precisely the reckless behavior that created the subprime fiasco. The Fed is supposed to set the standard for good behavior, for a sound and sober central bank.

The banks now are subprime borrowers. Now the Fed is a perp in the Ponzi scheme.

It's a silly concern.It's a function of TAF, which...

2008-02-09T00:15:00.000-05:00

It's a silly concern.

It's a function of TAF, which is about redistributing reserves. Of course the non-borrowed may be negative as a result.

Re: "Ok, so things might not be quite as bad as t...

2008-02-08T21:43:00.000-05:00

Re: "Ok, so things might not be quite as bad as that"

Im looking at planting a garden and just bought energy saving light bulbs and thinking of general survival, which includes allowing enough cash for chocolate chip cookies and wine a few times here and there, but I am looking into dandelions as a source of sugar for future (Spring) fermentation possibilities, which may be very necessary for starting my carrier as a flapper during The Next Great Depression. I actually dont think flappers made much per say, but Im a little unsure which way to head right now, other than to have more wine.

Simon, honey - I think the precise technical term ...

2008-02-08T19:57:00.000-05:00

Simon, honey - I think the precise technical term you're looking for is, um, paper money. :-)

I do like the phrase "subprime standard," however...

Yves,Your earlier post on negative non-borrowed ba...

2008-02-08T18:02:00.000-05:00

Yves,

Your earlier post on negative non-borrowed bank reserves shows the NFORBRES graph dipping to around minus $14bn. The current graph from the St. Louis Fed shows a dip to minus $2bn. Why the discrepancy?

Also, I noticed this at the bottom of the Fed's page:
Prior to 2003-01-01, the data are calculated as excess reserves minus total borrowings plus extended borrowings.
From 2003-01-01 till 2007-11-01, the observations reflect excess reserves minus total borrowings plus secondary borrowings.
From 2007-12-01, the definition changes to excess reserves minus discount window borrowings plus secondary borrowings.

Are they moving the goal posts?

People who don't like the Gold Standard end up wit...

2008-02-08T17:53:00.000-05:00

People who don't like the Gold Standard end up with the pile-of-steaming-ordure standard.

EU's McCreevy warns ratings agencies on structured...

2008-02-08T16:42:00.000-05:00

EU's McCreevy warns ratings agencies on structured finance

http://www.reuters.com/article/FSCONS/idUSN0663830720080206

"I am not going to be prescriptive today but I will say this: strong independent professional oversight of the credit professionals within the rating agencies...and of the operation of the ratings function is absolutely essential if market and regulator confidence is to be restored with respect to the effective management of the conflict of interest inherent in the rating agencies' business models," McCreevy told the audience in London.

In the wake of the near collapse of U.K. mortgage lender, Northern Rock (NRK.L: Quote, Profile, Research), during last summer's credit and liquidity squeeze in world markets, McCreevy also expressed concern about the lack of regulatory framework in Europe for dealing with bank failure.

McCreevy noted there were 44 institutions doing cross border banking in Europe, but it was not clear who the lender of last resort would be should any of them be hit by trouble.