Comments on: The Rising Disconnect between FOMC Policy and LIBOR http://alephblog.com/2007/11/26/the-rising-disconnect-between-fomc-policy-and-libor/ Helping Institutions and Ordinary People Invest Better by Focusing on Risk Control Thu, 18 Mar 2010 20:53:26 -0400 http://wordpress.org/?v=2.8.4 hourly 1 By: Josh Stern http://alephblog.com/2007/11/26/the-rising-disconnect-between-fomc-policy-and-libor/comment-page-1/#comment-14530 Josh Stern Mon, 26 Nov 2007 22:34:10 +0000 http://alephblog.com/2007/11/26/the-rising-disconnect-between-fomc-policy-and-libor/#comment-14530 It seems like the combination the weak RMBS/CDO market, mark to market requirements for publicly traded equities, and capitalization requirements for banks is creating a bad positive feedback loop. RMBS goes down, then there are mark to market losses, then capitalization requirements and risk mgmt. force the selling of more RMBS, so RMBS goes down (then shorts pile on)...Not sure where all this ends, but the govt. regs are certainly not helping to create an efficient market for investors in the way they were intended. It seems like the combination the weak RMBS/CDO market, mark to market requirements for publicly traded equities, and capitalization requirements for banks is creating a bad positive feedback loop. RMBS goes down, then there are mark to market losses, then capitalization requirements and risk mgmt. force the selling of more RMBS, so RMBS goes down (then shorts pile on)…Not sure where all this ends, but the govt. regs are certainly not helping to create an efficient market for investors in the way they were intended.

]]> By: Steve Milos http://alephblog.com/2007/11/26/the-rising-disconnect-between-fomc-policy-and-libor/comment-page-1/#comment-14524 Steve Milos Mon, 26 Nov 2007 22:06:04 +0000 http://alephblog.com/2007/11/26/the-rising-disconnect-between-fomc-policy-and-libor/#comment-14524 David, Given the whack I took today, after that welcome respite on Friday, can I please have all 150 bps of Fed easing all at once, preferably ASAP? LOL Steve David,

Given the whack I took today, after that welcome respite on Friday, can I please have all 150 bps of Fed easing all at once, preferably ASAP? LOL

Steve

]]> By: larster http://alephblog.com/2007/11/26/the-rising-disconnect-between-fomc-policy-and-libor/comment-page-1/#comment-14469 larster Mon, 26 Nov 2007 19:08:46 +0000 http://alephblog.com/2007/11/26/the-rising-disconnect-between-fomc-policy-and-libor/#comment-14469 Nina Easton had a story on CNN Money re an interview with Cheney. In the interview cheney opined that "We do not want to interfere with the basic, fundamental working of the markets". Well, the markets are not working; they are stuck. So, perhaps it is time to scrap the ideology and find some resolution that includes dear old Uncle Sam. How can the markets become unstuck with the administration openly stating that they will stay on the sidelines and watch the crash. First Iraq and now the US. Nina Easton had a story on CNN Money re an interview with Cheney. In the interview cheney opined that “We do not want to interfere with the basic, fundamental working of the markets”. Well, the markets are not working; they are stuck. So, perhaps it is time to scrap the ideology and find some resolution that includes dear old Uncle Sam. How can the markets become unstuck with the administration openly stating that they will stay on the sidelines and watch the crash.

First Iraq and now the US.

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