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US Fed slams SHUT the exit door

The Fed will “keep constant” its securities portfolio, reinvesting the principal payments from agency and mortgage-backed securities (MBS) in long-term Treasuries, according to the statement released following Tuesday’s meeting.

The New York Fed, which conducts open market operations for the system, put out a qualifying statement saying its Treasury purchases would be concentrated in the two- to 10-year sector.

Much of the economic commentary coming over the transom following the meeting suggested that the Fed had embarked on a second round of quantitative easing, or QE2.

Quantitative easing occurs when central banks pump lots of money into the banking system to promote lending. This is done by buying large quantities of securities from banks’ balance sheets, giving them plenty of new money to lend.

So how can this be quantitative easing when the quantity remains the same?

What the Fed committed to, for the moment, is to maintain the size of its securities portfolio at US$2.05 trillion ($2.79 trillion) rather than engage in passive tightening by allowing the balance sheet to shrink due to principal payments and maturing debt.

The Fed had been letting its mortgage portfolio shrink ever-so-slightly in recent months, even though the balance sheet has been stable since mid-April.

Now, the Fed will buy US$100 billion to US$200 billion of Treasuries a year to offset the shrinkage, estimates Mr Neal Soss, chief economist at Credit Suisse in New York, based on the normal pre-payment and amortisation schedule on a similar-size mortgage portfolio.

Will the Fed will decide, next month or next year, to expand its US$2.3 trillion balance sheet?

Nothing in Tuesday’s statement indicates what lies ahead. The Fed’s current assessment of the economy (not so hot) is backward-looking, based on the most recent economic data and just as reliable.

The data was weak enough to “shake their confidence in the forecast”, Mr Soss says.

Earlier this year, the exit strategy was all the rage. Policy makers were focused on how to unwind the Fed’s bloated balance sheet without causing dislocations in the housing market and the economy at large.

That noise you hear is the sound of the exit door being slammed shut. On Tuesday, the Fed put us on notice that it is oiling the hinges on the entry door. The decision to substitute Treasuries for maturing MBS will be welcomed by Fed officials who want the central bank to get out of the credit business and return to a “Treasuries only” policy.Downgrading its assessment of the pace of the economic recovery from “moderate” in June to “more modest than anticipated”, the United States Federal Reserve took a symbolic step toward additional easing of monetary policy.

‘TRICKLE-OUT’ ECONOMICS

Credit policy pertains to what the Fed buys.

Quantitative easing tells us how much.

The first round of quantitative easing led to an explosion in excess reserves, the reserves banks choose to hold over and above what they were required — US$1 trillion, up from a pre-crisis range of US$1 billion to US$2 billion.

If the Fed wants to put some oomph into QE2, it needs to get the reserves out of the banks and into the economy. One way would be to raise the cost of not lending.

Banks now earn 0.25 basis points on their reserves. (It was not so long ago that paying interest on excess reserves was seen as a way to prevent an inflationary expansion of credit.) Reducing or eliminating the interest on reserves would, at the margin, entice banks to buy securities or make loans, expanding the money supply. That was one of two other options — aside from the one chosen on Tuesday — that Fed chief Ben Bernanke laid out at his semi-annual monetary policy testimony last month.

The second was tinkering with assurances of “exceptionally low” rates for an “extended period”. How the Fed can guarantee a longer “extended period”, both verbally and practically, when its outlook changes from one meeting to the next, is beyond me. Then again, I’m still trying to figure out where the Q is in QE2.

Bloomberg

The writer, author of Just What I Said, is a Bloomberg News columnist. The opinions expressed are her own.

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SHORT

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Alliance H1 profit up 36%

By Doris Dumlao
Philippine Daily Inquirer
First Posted 19:42:00 08/11/2010

Filed Under: Company Information, Housing & Urban Planning, Real Estate, Economy and Business and Finance

TYCOON ANDREW Tan’s Alliance Global Group Inc. posted a 36-percent year-on-year increase in its first semester net profit P4.83 billion on robust growth in real estate and consumer businesses.

Net income attributable to shareholders also rose by 43 percent to P3.69 billion over a year ago, AGI disclosed to the Philippine Stock Exchange Wednesday.

“We are quite pleased that our results show strong revenue growth across all lines of business. Our results confirm that our strategy to focus on key industries and accelerate growth, particularly in the tourism industry, is working,” said AGI president Kingson Sian.

Earnings before interest, taxes, depreciation, and amortization in the first half of 2010 amounted to P6.3 billion, up by 21 percent year-on-year. Consolidated revenue rose by 22 percent to P21.26 billion over the same period.

Revenue growth was driven by AGI’s real estate development arm, Megaworld Corp., which accounted for 46 percent of earnings during the period.

The consumer business, mainly liquor maker Emperador Distiller and Golden Arches Development Corp., contributed 44 percent of revenue.

Emperador Distillers produces leading brandy labels Emperador and Generoso.

Golden Arches is the master franchise holder of McDonald’s in the Philippines.

AGI’s fourth business leg, Travellers International Hotel Group Inc., contributed earnings of P595 million.

Travellers International is the developer and operator of Resorts World Manila (RWM), the country’s first integrated tourism estate in Newport City located across Terminal 3 of the Ninoy Aquino International Airport. It is a joint venture between AGI and Genting Hong Kong Limited (formerly named Star Cruises Limited of Hong Kong), the third largest cruise line operator in the world and is part of the Malaysian conglomerate Genting Berhad.

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Alliance H1 profit up 36%
Inquirer.net
It is a joint venture between AGI and Genting Hong Kong Limited (formerly named Star Cruises Limited of Hong Kong), the third largest cruise line operator ...

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Genting

Moving Average is a popular indicator that will allow us to detect the trend of any stock. An uptrending stock can be detected from a Moving Average that is sloping upwards steadily. Next, we will lookout for the best buying opportunity before the stock stages another round of rally. Combining Moving Average with another powerful indicator called the Moving Average Convergence Divergence (MACD) allows us to spot such winning trade set-ups.

On 14th June 2010, a bullish signal was detected from a Moving Average and MACD on Genting before she had a magnificent rally of 23%.

Interestingly, another similar signal was spotted again in Genting on 10th August 2010 (yesterday)!

The next step for you is to determine the profit target, entry price and stop-loss level for Genting.

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WHEN did PL UNload ? ? ? ?

WHAT did PL UNload ? ? ? ?

devilboy4488 ( Date: 11-Aug-2010 11:02) Posted:

Why PL want to unload when he want to be a shareholder of informatics?

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Will Singapore be a glObal fInancIal centre ? ? ? ?

hOw tO ? ? ? ?

when sIngapOre banks are makIng ALL the FARCES ? ? ? ?

this DREAM had been tOO lOng Overdue ? ? ? ?

iMpOssIble ? ? ? ?

Hulumas ( Date: 10-Aug-2010 20:59) Posted:

Singapore will become one of the global financial hub. . . so the Bank operation can't simply run by private limited. I presume!

pharoah88 ( Date: 10-Aug-2010 20:53) Posted:

BUY One Get TWO FREE ? ? ? ?

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Two Questions came up :

Insurance companies cannOt find better investments On their Own ? ? ? ?

Temasek cannOt find better Financing sOurces Overseas ? ? ? ?

ALL these are iNSiDE the SingapOre bOx ? ? ? ?

PeOple are always asked tO thInk OutsIde the bOx ? ? ? ?

WaLK the tAlk ? ? ? ?

pharoah88 ( Date: 11-Aug-2010 16:57) Posted:

<>

Temasek makes history with its 40-year bond

Siow Li Sen

Fri, Jul 23, 2010
The Business Times

(SINGAPORE) Temasek Holdings has pulled off another trailblazing fund raising exercise, bringing more depth to the local debt market. Yesterday, it sold $1 billion of bonds with a 40-year tenor, double the length of the longest dated Singapore government bond.

Demand, especially from insurance companies, was strong and came in at $1.7 billion, said Clifford Lee, DBS managing director and head of fixed income, global financial markets.

The latest Temasek Bond which matures in August 2050 will pay 4.2 per cent interest. Investors will be paid every six months, at a coupon rate of 4.2 per cent per annum.

'The 2050 maturity set a new SGD benchmark, being the longest dated SGD bond yet issued,' said Aaron Russell-Davison, head of Asian debt syndicate, Standard Chartered Bank

DBS was the global coordinator for the issue. Joint lead managers and bookrunners were DBS and Stanchart.

'It's an accomplishment by Temasek in many fronts,' said Mr Lee. 'They're opening up new markets for themselves and others and only very strong credits can do that . . . (and) tapped 40-year money at a 30-year rate.'

In December, Temasek sold $300 million of 30-year bonds at a coupon rate of 4.2 per cent when interest rates were a lot higher.

Since then, interest rates have fallen and a top quality issuer such as Temasek becomes very attractive.

The 40-year bonds were sold in less than two hours with 88 per cent demand from Singapore and 12 per cent from Hong Kong.

In the end, 97 per cent of the bonds went to Singapore-based investors and only 3 per cent to Hong Kong. 'Allocation was different because we would like to place more of the bonds to long term investors,' said Mr Lee.

Insurance companies were allocated the lion's share of 89 per cent, followed by funds with 9 per cent and banks with 2 per cent. There were 53 accounts in all.

This is Temasek's eleventh bond issue under its US$10 billion guaranteed global medium term note programme.

With Monday's ??pounds;700 million (S$1.47 billion) of bonds sold to UK investors, the total Temasek bonds amount to S$10.4 billion, or just over 70 per cent of the US$10 billion programme.

For long term investors, such as insurance companies, hungry for high quality bonds, there may be more to come from Temasek.

'We remain flexible depending on our objectives,' said Temasek spokesman Tan Yong Meng when asked if there would be another bond programme when the current one ends.

Said Mr Russell-Davison: 'The fact that Temasek could access a new, extended maturity in SGD just days after completing their inaugural GBP deal demonstrates the depth of investor demand for their credit. Very few issuers could tap such diverse investor interest so effectively.'

DBS's Mr Lee expects more corporates to issue longer date bonds in Temasek's wake. 'This year, we have seen a historically high level of bond issuance,' he said.

Data from Bloomberg shows that in the first half of 2010, total SGD bond issuance came to S$10.5 billion, more than double that in the same six months of 2009.

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Price And Price [PAP]

Raise And Raise [RAR]

bUt nO

Up And Up [UAU]

GDP is the WRONG National Performance Indicator nOt related tO TRUE MARKET ECONOMY

STi is the RIGHT National Performance Indicator [NPi]

artng25 ( Date: 11-Aug-2010 16:51) Posted:

So its still always we, the man on the street who has to 'pay' for everything

Isolator ( Date: 11-Aug-2010 16:49) Posted:

What is this? YOG or STI.... Need to sell STI to pay overbudget YOG... lol... Smiley

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top GDP growth ? ? ? ?

WHAT fOr ? ? ? ?

iF there is nO TOP STi ? ? ? ?

peOple are pOOrer ? ? ? ?

alooloo ( Date: 11-Aug-2010 16:55) Posted:

GDP = x + y + z + ... + "government spending"

GDP growth will affect civil servant bonus and also Singapore's face (top GDP growth for FY2010)

you tell me what you would do, if you are at their position?
In summary, what they did is reasonable...

artng25 ( Date: 11-Aug-2010 16:51) Posted:

So its still always we, the man on the street who has to 'pay' for everything

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STi in cOrrectIOn mOde ? ? ? ?

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Genting Singapore

also conducting a

national day GAG ? ? ? ?

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<>

TEMASEK is CASHLESS ? ? ? ?

WHERE dId ALL the prOfits gO tO ? ? ? ?

<>

Temasek makes history with its 40-year bond

Siow Li Sen

Fri, Jul 23, 2010
The Business Times

(SINGAPORE) Temasek Holdings has pulled off another trailblazing fund raising exercise, bringing more depth to the local debt market. Yesterday, it sold $1 billion of bonds with a 40-year tenor, double the length of the longest dated Singapore government bond.

Demand, especially from insurance companies, was strong and came in at $1.7 billion, said Clifford Lee, DBS managing director and head of fixed income, global financial markets.

The latest Temasek Bond which matures in August 2050 will pay 4.2 per cent interest. Investors will be paid every six months, at a coupon rate of 4.2 per cent per annum.

'The 2050 maturity set a new SGD benchmark, being the longest dated SGD bond yet issued,' said Aaron Russell-Davison, head of Asian debt syndicate, Standard Chartered Bank

DBS was the global coordinator for the issue. Joint lead managers and bookrunners were DBS and Stanchart.

'It's an accomplishment by Temasek in many fronts,' said Mr Lee. 'They're opening up new markets for themselves and others and only very strong credits can do that . . . (and) tapped 40-year money at a 30-year rate.'

In December, Temasek sold $300 million of 30-year bonds at a coupon rate of 4.2 per cent when interest rates were a lot higher.

Since then, interest rates have fallen and a top quality issuer such as Temasek becomes very attractive.

The 40-year bonds were sold in less than two hours with 88 per cent demand from Singapore and 12 per cent from Hong Kong.

In the end, 97 per cent of the bonds went to Singapore-based investors and only 3 per cent to Hong Kong. 'Allocation was different because we would like to place more of the bonds to long term investors,' said Mr Lee.

Insurance companies were allocated the lion's share of 89 per cent, followed by funds with 9 per cent and banks with 2 per cent. There were 53 accounts in all.

This is Temasek's eleventh bond issue under its US$10 billion guaranteed global medium term note programme.

With Monday's ??pounds;700 million (S$1.47 billion) of bonds sold to UK investors, the total Temasek bonds amount to S$10.4 billion, or just over 70 per cent of the US$10 billion programme.

For long term investors, such as insurance companies, hungry for high quality bonds, there may be more to come from Temasek.

'We remain flexible depending on our objectives,' said Temasek spokesman Tan Yong Meng when asked if there would be another bond programme when the current one ends.

Said Mr Russell-Davison: 'The fact that Temasek could access a new, extended maturity in SGD just days after completing their inaugural GBP deal demonstrates the depth of investor demand for their credit. Very few issuers could tap such diverse investor interest so effectively.'

DBS's Mr Lee expects more corporates to issue longer date bonds in Temasek's wake. 'This year, we have seen a historically high level of bond issuance,' he said.

Data from Bloomberg shows that in the first half of 2010, total SGD bond issuance came to S$10.5 billion, more than double that in the same six months of 2009.

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<>

Temasek makes history with its 40-year bond

Siow Li Sen

Fri, Jul 23, 2010
The Business Times

(SINGAPORE) Temasek Holdings has pulled off another trailblazing fund raising exercise, bringing more depth to the local debt market. Yesterday, it sold $1 billion of bonds with a 40-year tenor, double the length of the longest dated Singapore government bond.

Demand, especially from insurance companies, was strong and came in at $1.7 billion, said Clifford Lee, DBS managing director and head of fixed income, global financial markets.

The latest Temasek Bond which matures in August 2050 will pay 4.2 per cent interest. Investors will be paid every six months, at a coupon rate of 4.2 per cent per annum.

'The 2050 maturity set a new SGD benchmark, being the longest dated SGD bond yet issued,' said Aaron Russell-Davison, head of Asian debt syndicate, Standard Chartered Bank

DBS was the global coordinator for the issue. Joint lead managers and bookrunners were DBS and Stanchart.

'It's an accomplishment by Temasek in many fronts,' said Mr Lee. 'They're opening up new markets for themselves and others and only very strong credits can do that . . . (and) tapped 40-year money at a 30-year rate.'

In December, Temasek sold $300 million of 30-year bonds at a coupon rate of 4.2 per cent when interest rates were a lot higher.

Since then, interest rates have fallen and a top quality issuer such as Temasek becomes very attractive.

The 40-year bonds were sold in less than two hours with 88 per cent demand from Singapore and 12 per cent from Hong Kong.

In the end, 97 per cent of the bonds went to Singapore-based investors and only 3 per cent to Hong Kong. 'Allocation was different because we would like to place more of the bonds to long term investors,' said Mr Lee.

Insurance companies were allocated the lion's share of 89 per cent, followed by funds with 9 per cent and banks with 2 per cent. There were 53 accounts in all.

This is Temasek's eleventh bond issue under its US$10 billion guaranteed global medium term note programme.

With Monday's ??pounds;700 million (S$1.47 billion) of bonds sold to UK investors, the total Temasek bonds amount to S$10.4 billion, or just over 70 per cent of the US$10 billion programme.

For long term investors, such as insurance companies, hungry for high quality bonds, there may be more to come from Temasek.

'We remain flexible depending on our objectives,' said Temasek spokesman Tan Yong Meng when asked if there would be another bond programme when the current one ends.

Said Mr Russell-Davison: 'The fact that Temasek could access a new, extended maturity in SGD just days after completing their inaugural GBP deal demonstrates the depth of investor demand for their credit. Very few issuers could tap such diverse investor interest so effectively.'

DBS's Mr Lee expects more corporates to issue longer date bonds in Temasek's wake. 'This year, we have seen a historically high level of bond issuance,' he said.

Data from Bloomberg shows that in the first half of 2010, total SGD bond issuance came to S$10.5 billion, more than double that in the same six months of 2009.

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capital has no more land ?

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SGX is CLUELESS ? ? ? ?

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nO fUtUre ? ? ? ?

ALL gOOd cOunters are dOwn ? ? ? ?

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correction time ?