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原帖由 Rubber 於 2008-9-20 10:45 發表


They said it was a liquidity problem, not investment problem...

I believe the first person who said this is Hank Greenberg, former AIG chairman.
Correct me if I may, but I think Greenberg was saying AIG has a liquidity problem, not a "solvency" problem.

What Greenberg means is that AIG only need a transitional short term loan to pass through the current crisis. He think the long term fundamentals of AIG has no problem and AIG will not go insolvent.

But of course, like all you guys said, this is an excuse.
The basic issue is AIG's over-exposure in the Credit default SWAPs (CDS) business. ( Heard AIG has half a trillion US dollar exposure.) When there is a credit crunch, all the investments in these CDS go down the drain. And thus AIG is now in deep trouble.

I don't think any one in the Hong Kong Goverment really understand what is really going on. Maybe a couple of those phDs in the monetary authority can understand what it is.
The issue is just too complex for a bureaucrat to grasp.

Perhaps even George Bush can't understand this too..... so..... just forget it......
our beloved CE tsang will never understand this.......... We are doomed.

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原帖由 Rainybreeze 於 2008-9-22 20:00 發表
The governments, all able governments across the world, will be and have to be very selectively in handling the situation.  

They have to act on FM and FM cos, the US government is their products'  ...

You know what, I was quite surprised to find out there are a number of PROs here in this forum.
Typically this is a forum for "victoria park uncles".  But I am wrong. And am I glad I am?!

HK is truly blessed with so many " crouching tigers and hidden dragons. "

About rainybreeze's and rubber's idea, I totally agree.  Regulation is not the answer to our current crisis. Like rainybreeze said, CDS is a product. And when there is a product, there is a market for it.

I don't think it is a right step to totally ban CDS too. Doing so will only further tighten the Bank's willingness to loan out money and thus will further deteriorate the current credit crunch crisis.

But given the high leverage of these derivatives( derivative to underlying asset ratio is way too high) , some sort of a leverage rule must be made for the product to prevent any domino effect to happen again in the future.

My suggestion is to stop trading CDS over the counter, create a formal trading platform where these derivatives can be properly priced according to market supply and demand. Doing so, when and if there is a rise in the default rate in the mortgage market,  the price of these CDS will rise following the trend. And with a higher cost in insuring against default loans, banks will be more careful in their loan approval process.  Problems solved.

If I were the advisor to the CE, I will propose to the CE to jump into this great financial opportunity and create a CDS trading market in Hong Kong. If we can do this, we shall be the real financial hub of the world and no other city shall come close to us ever......

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原帖由 Rubber 於 2008-9-23 16:04 發表


I am just an engineer and not a financial PRO.
However, in the forseeable future, US needs to print a lot of $ ( some said 1 trillion ) to cover this crisis.
Your suggestion is great, to create ...

Bravo my friend. Bravo!
You concern are absolutely valid. You are right. With the US$700billion financial rescue plan , plus the amount spent on Fannie Mae , Freddie Mac , AIG........  The US governemnt really has an enormous pressure to her pocket. But let's not forget the US budget deficit has already accumulated to a staggering 9.6 trillion dollars. Putting another trillion on the bill is "just" 10% more.  Yes, it is a serious concern. But it won't be the straw that breaks the camel's back.(Hopefully.... )

With this in mind, my opinion is that there is no eminent danger for the US-HK$ peg system.
Yes, you are right. The US $ will continue to weaken, and so will HK$.
But this should be within our acceptable limits. (Hopefully .... )

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原帖由 public59 於 2008-9-25 12:09 發表


Currently, a lot of people in US are agruing if "fair value accounting" is leading to the financial/credit crisis. FASB are now forced to speed up its response time in dealing with credit crisis-r ...

It's not entirely the new accounting system, it's also the responsibility of the credit rating agency.
In the past, the credit rating agency has been blamed for giving too much slack to some corporations.
And so to do things in the safe side, they suddenly tighten all ratings.....and this immediately blow AIG away.

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原帖由 Rainybreeze 於 2008-9-24 16:15 發表
PROs?  I can't speak on Rubber's behalf, but for Rainybreeze?  Please, as I was saying, don't blow it out of proportion.

For the CDS, the US rumor goes that they are going to put the tradings onto  ...

Globalization - a fancy word it is. Indeed.... a fancy word it is.

In communist china, it's the word they use to represent "advancement to market economy".
In the capitalist's eyes, this is the equivalence of "lower production cost" and cheap labor.
In western liberals' eyes, this is the representation of pure corporate evil squeezing the poor.

Whether China will continue it's open policy I do not know, but in this fincncial tsunami, I am quite sure more regulations will be called for. And this will happen in all major financial centers around the world.

The golden era of a free economy with little or no intervention as we know may be coming to the end.