Fed says Singapore is in deep trouble

[imperialarms]

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<p class="heading1"><arttitle>Fed opens swap lines with Brazil, SKorea, Singapore, Mexico</arttitle>
<br /><span class="headingnext">30 Oct, 2008, 0331 hrs IST, <artag>AGENCIES</artag></span>
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<div class="Normal"><span> WASHINGTON: The US Federal Reserve Wednesday announced temporary "swap" lines of credit with central banks in Brazil, Mexico, South Korea and Sin
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</table>gapore to help those countries ease a credit squeeze. </span>
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<br /><span> The US central bank said it would be providing of up to 30 billion dollars in liquidity to each of the banks, Banco Central do Brasil, Banco de Mexico, the Bank of Korea, and the Monetary Authority of Singapore. </span>
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<br /><span> The actions come "in response to the heightened stress associated with the global financial turmoil, which has broadened to emerging market economies," the Fed said. </span>
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<br /><span> "These facilities, like those already established with other central banks, are designed to help improve liquidity conditions in global financial markets and to mitigate the spread of difficulties in obtaining US dollar funding in fundamentally sound and well managed economies." </span>
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<br /><span> On Tuesday, the Fed extended a temporary 15-billion-dollar currency line to New Zealand's central bank to help it boost lending and unblock the global credit squeeze. </span>
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<br /><span> The FOMC has previously authorized such arrangements with the European Central Bank, the Bank of England, the Bank of Japan and the central banks of Australia, Canada, Denmark, Norway, Sweden and Switzerland. </span>
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[DOM the Clown]

 

[DOM the Clown]

 

[DOM the Clown]

PLEASE......................

 

[madmansg]

I writing letter to the FED that sg govt is not credit worthy as they still have not pay me my NS salary backlog of 2 years even after so long and many attempts by my lawyer.

 

[DOM the Clown]

Oops!!! My apology...................but hell, imperialarm is still misleading

Fed Opens Swaps With South Korea, Brazil, Mexico (Update1)

By Steve Matthews and William Sim

Oct. 30 (Bloomberg) -- The Federal Reserve agreed to provide $30 billion each to the central banks of Brazil, Mexico, South Korea and Singapore, expanding its effort to unfreeze money markets to emerging nations for the first time.

The Fed set up ``liquidity swap facilities with the central banks of these four large systemically important economies'' effective until April 30, the central bank said yesterday in a statement. The arrangements aim ``to mitigate the spread of difficulties in obtaining U.S. dollar funding.''

South Korea's benchmark stock index had its biggest gain since at least 1980, the won surged and the cost of protecting Asia-Pacific bonds from default tumbled on optimism the measures will prevent the global credit crisis from upending financial markets. The Fed and China cut interest rates yesterday, followed by Hong Kong and Taiwan today.

``The swap lines will help unclog the liquidity pipeline and that action is boosting markets even more than'' the Fed's rate cut, said Venkatraman Anantha-Nageswaran, head of research at Bank Julius Baer & Co. in Singapore. ``It's a step in the right direction and prevents things from getting worse.''

South Korea's Kospi Index surged 10.5 percent to 1072.81 at 12:33 p.m. in Seoul. The won jumped 10 percent against the dollar. Singapore's Straits Times Index climbed 3.6 percent.

The cost of protecting Asia-Pacific bonds from default tumbled, with the Markit iTraxx Asia credit-default swap index of 50 borrowers falling the most since its was created in September 2007.

IMF Credit Lines

The Fed announcement coincided with a decision by the International Monetary Fund to almost double borrowing limits for emerging market countries while waiving demands for economic austerity measures.

The Fed and IMF actions ``show international resolve to support strong performing emerging-market economies adversely impacted by the current financial market turbulence,'' U.S. Treasury Secretary Henry Paulson said in a statement.

Emerging-market investors have created ``massive demand for dollars and a reduction of liquidity in other currencies'' by going back to investing in the U.S. currency, said David Spegel, head of emerging-market strategy at ING Financial Bank NV in New York.

The Fed swap lines ``are designed to help restore liquidity so that a vicious negative spiral doesn't occur,'' he said.

The yield premium on emerging-market dollar bonds over U.S. Treasuries narrowed yesterday by 61 basis points, or 0.61 percentage point, to 7.21 percentage points, according to JPMorgan Chase & Co.'s EMBI+ index. The spread has jumped 5.72 percentage points from a record low of 1.49 percentage points in June 2007, and reached its widest since 2002 earlier this month.

Emerging Markets

``The Fed is there to support large emerging markets that have done their homework over the past several years like South Korea, Brazil, Singapore and Mexico,'' said Alonso Cervera, a Latin America economist with Credit Suisse Group in New York. ``These are large, relevant emerging countries that have followed responsible fiscal and monetary policies for the past several years and now are going through tough times.''

The Fed also created this week a $15 billion swap line with its New Zealand counterpart and removed limits this month on four existing swap lines, including one with the European Central Bank. The Fed set up a $10 billion arrangement with Australia's central bank last month and then tripled it to $30 billion.

`Hoped-For Result'

``The hoped-for result is that we don't see the global financial crisis worsen still more,'' said Lyle Gramley, a former Federal Reserve governor who is now senior economic adviser at Stanford Group Co. ``The Fed is making dollars available to the central banks of these countries who are trying to meet the needs of their banking systems.''

The Bank of Korea cut interest rates by a record amount on Oct. 27 and the government pledged to guarantee local banks' debts to help lenders struggling to access foreign funds. Stocks and the won tumbled last week, prompting concern the country may face a currency crisis a decade after the IMF organized a $57 billion bailout to help repay overseas debt.

The swap line with the Fed ``will expand our foreign- exchange reserves and help stabilize the currency market,'' Bank of Korea Governor Lee Seong Tae told reporters in Seoul today. ``We'll also try to cooperate with other central banks to stabilize global and local financial markets.''

To contact the reporter on this story: Craig Torres in Washington at [email protected]; William Sim in Seoul at [email protected]

Last Updated: October 29, 2008 23:36 EDT

 

[ChaoPappyPoodle]

Wahahahahahaa!!!!

KNNPCB! PAP kenna treat like beggar!!!

Please send the first post to everyone you know to tell them how wonderufl the PAP is doing to Singaopre.

HAHAHAHAHA!!!!

KNNPCB to LHL! May your mother die a painful death and you kenna dildo by your own mother and wife because you are so a pink lady! Wahahahaha!

PAP boleh!

 

[Powerman]

Bad move. The money would probably go into the old fart's pocket.

 

[High till Dry]

we're in deep shit

 

[cass888]

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The US central bank said it would be providing of up to 30 billion dollars in liquidity to each of the banks, Banco Central do Brasil, Banco de Mexico, the Bank of Korea, and the Monetary Authority of Singapore.

Read between the lines, these four countries probably hold lots of US Treasury bonds which could cause havoc if sold for liquidity.

 

[The_Latest_H]

Read between the lines, these four countries probably hold lots of US Treasury bonds which could cause havoc if sold for liquidity.

And that's probably the only thing that holds the local economy together: a million of shaky Treasury bonds in the US.

 

[theblackhole]

what the hell is going on here? can any kind soul pls explain in layman's terms, what is this all about? pls enlighten this ignorant peasant what is actually happening minus all those high flying terms. thank you.

are we in deep deep deep shit now?

 

[scroobal]

what the hell is going on here? can any kind soul pls explain in layman's terms, what is this all about? pls enlighten this ignorant peasant what is actually happening minus all those high flying terms. thank you.

are we in deep deep deep shit now?

The feds on Monday began Commercial Paper Funding Facility in the states. However, many companies also issue commercial paper in USD in these countries which has now dried up. This arrangement is to cater for that and to ensure that the US dollar does not dive again.

As usual , the americans are using al qaeda in iraq spin to make sure that the rednecks are happy back in the bayou and vote caribou shooting tina fey lookalike.

 

[mscitw]

bah haha, after pouring billions to rescue failed western investment banks, Peasantpore has to accept 'aid' from yanks!

woe woe woe peasantpore, where art thy $150 billion reserves?

 

[cleareyes]

i dun see any line that say singapore in deep shit

is that just ur assumption?

 

[theblackhole]

thanks scroobal...looks like singapore is in some sort of problems right?

why everybody so quiet?

 

[scroobal]

thanks scroobal...looks like singapore is in some sort of problems right?

why everybody so quiet?

The whole world is unless their economy is not engaged globally. It certainly is a lifetime event as a major model of funding disappeared overnight.

The trouble with Singapore is its lack of transparency. No one will know for sure how much we lost. The press will not probe. Mind you even before this blew, Temasek received a cash injection of 100 million. Now Temasek will no longer will be part of the formula for briging in profits to the govt coffers as mentioned in parliament.

We took this path of concealment first when civil service payscale which is published the world around and similary in singapore suddenly became state secret. Then figures on citizenship became state secret.

Tells me that they have taken singaporeans for granted, unable to articulate and substantiate their position and concealment is the eventuality.

They are also becoming dishonest. Failing to disclose that average lifespan of a singaporean is 80 but chose 85 as age for proposed redemption. The crucial detail only emerged when questioned by an nmp.

Not good signs at all.

 

[cass888]

bah haha, after pouring billions to rescue failed western investment banks, Peasantpore has to accept 'aid' from yanks!

woe woe woe peasantpore, where art thy $150 billion reserves?

The reserves include US T bills and bonds (probably a large proportion of it) which have probably risen in value because the interest rates are now so low and demand is high. So if Fed doesn't grant the swap, Singapore might start use the US T bills to meet is USD obligations. If all four countries are forced to do it, the T-bills and bonds price will drop meaning the interest rates will go up, somethingthe US doesn't want. That is why US has to give the swap (you think it is because of the kindness of their hearts?) to the four countries.

Anyone know if China has also got the facility? They probably have twice the amount of T-bills/bonds that the four countries have combined.

 

[typh00n]

What!? Singapore needs to borrow? :*:

 

[eatshitndie]

misleading title. it's the fed that is fucked up. they have so much useless usd sitting idle that they are pushing the potential liquidity to performing countries such as brazil and sg. basically, they are offering cheap freshly minted treasury notes to these countries to offset potential flood of usd pouring back into the u.s. economy as it picks up steam before the 2012 election. americans and u.s. businesses have been holding back on spending and expansions for the last 3 years, and once the tipping point is breached, there will be a sudden surge of usd flooding the market. it's the performing countries that are doing uncle sam a favor, not the other way around.