Asian banks lead gains ahead of U.S. Treasury plan

Marketwatch ^ | 10:56 p.m. EDT March 22, 2009 | V. Phani Kumar, MarketWatch

[Ernest_at_the_Beach]

HONG KONG (MarketWatch) -- Asian banking and financial shares were mostly higher Monday as investors awaited the release of a U.S. plan to stabilize the financial system, although hopes were laced with concerns that market intervention by Washington could spark inflation.

The advance extended the market's strong performance last week, and as investors await U.S. Treasury Secretary Timothy Geithner's briefing to unveil details of the new plan, scheduled for 8:45 a.m. Eastern time. See details of coming Geithner briefing.

A Wall Street Journal report late Sunday cited U.S. Treasury Secretary Timothy Geithner as saying that the only way to resolve the financial crisis was to work with the private sector to remove troubled assets clogging banks' balance sheets.

Francis Lun, a general manager at Fulbright Securities in Hong Kong, said that while Geithner's plan might influence Wall Street in a big way, Asian markets were still worried about the impact of the Federal Reserve's separate plan to buy longer-dated U.S. Treasurys.

"Markets will be more concerned that [Fed Chairman Ben] Bernanke is introducing another $300 billion to buy longer-term debt, thereby increasing money supply and increasing the risk of inflation," Lun said.

Most Asian currencies rebounded strongly against the U.S. dollar last week after Bernanke detailed plans to buy the longer-dated U.S. debt, with the greenback's weakness also spurring sharp gains in crude-oil and gold prices.

[NormsRevenge]

Stock futures up 1 percent on reports of bad assets plan Reuters - Sun Mar 22, 8:57 PM ET
http://news.yahoo.com/s/nm/20090323/bs_nm/us_markets_stocks;_ylt=ArzFS9pR1szBtw_XXaRcRr6yBhIF
HONG KONG (Reuters) - U.S. stock futures rose 1 percent on Monday after detailed reports about the White House plan to rid banks of $1 trillion of “toxic” assets made investors more tolerant of risk.

[Ernest_at_the_Beach]

Posted a Wall Street article earlier:

Geithner Banks on Private Cash

[Ernest_at_the_Beach]

OK,...thanks...also from Marketwatch:

Geithner to hold briefing Monday on toxic assets plan

***********************EXCERPT************************

The Treasury Department's program involves setting up a new investment fund to buy mortgage-related securities and other assets weighing down bank balance sheets. The new Public Private Investment Program would combine taxpayer money with private funds, aiming to buy loans and free up banks to renew lending.

The Wall Street Journal earlier reported that the Treasury could announce the new three-part plan as early as Monday.

[Ernest_at_the_Beach]

I hope the market doesn’t tank....

[blam]

Asian markets are up, see here.

[Tempest]

No not yet, people will be lulled into a false sense of calm before that happens.

[ken21]

>The gains in Japanese shares came despite a downbeat business sentiment survey released by the Japanese government Monday, which posted a headline result of negative 51.3 in the first quarter of this year, well below the negative 35.7 seen in the previous quarter.

[Ernest_at_the_Beach]

Guess I better get to bed so i can get up and see the smooth talking Mr. Geithner WOW the Markets ....worldwide...and then they can do their thing....

[Orange1998]

http://www.nakedcapitalism.com/2009/03/investor-on-private-public-partnership.html?showComment=1237677240000

Neville said...
Does anybody remember that the last people who brought in 3% equity partners to take control of an off-balance sheet hedge fund in a no-loss deal designed solely to absorb toxic assets at inflated prices, were sent to jail by the government for misleading the public? Their names were Andrew Fastow, Jeffrey Skilling and a raft of other managers, at Enron.

The goal of their off balance sheet partnerships was to conceal where and when the real losses had occurred and thus who was responsible for them, until some later date when they could either be transferred back onto the public (Enron’s shareholders) in a way they would not notice, or at least after the Enron managers had a chance to unload their shares.

Now we have a virtually identical scheme, but this time it’s being promoted jointly by the banks and the US Treasury. Once again the effort is to construct a vehicle into which toxic assets can be transferred at inflated prices, positioning the public to take the losses while disguising them in the short term, and giving the managers of our biggest banks a chance to both profit now and then sell out ahead of the public.

Perhaps Lay, Skilling and Fastow should be hailed as innovators in the field of public finance.

[Southack]

Ernest, you’ve been around long enough to be told the great posting secret...if you copy/paste the article from the web into an Outlook Express email, then cut the source out of the email and paste it onto your Free Republic post, the links embedded in the article will work instead of going to “Page Not Found.”

[AlexW]

I have given up on trying to understand the stock market.
I can only guess that it is traders around the world doing the old pump and dump that’s going on.
I would like to see other opinions.