magic 15 , 000 level on nikkei - - - - - - - - - - - - - - - - - - - - - - forwarded by leann walton / na / enron on 10 / 26 / 2000 10 : 47
am - - - - - - - - - - - - - - - - - - - - - - - - - - -
from : darren delage @ enron on 10 / 16 / 2000 02 : 53 pm ze 9
to : maureen raymond / hou / ect @ ect
cc :
subject : magic 15 , 000 level on nikkei
maureen ,
hope all is well . thank you for your coverage last week . i certainly
appreciate the value - added that you provide in your research . i had a quick
question for you regarding any anticipated japan central bank intervention at
the 15 , 000 level in the nikkei .
if i am understanding the mechanism correctly , bis reserve requirements fall
below certain threshold and banks can no longer lend money and meet bis
lending criteria due to improper reserve base . and this roughly happens at
15 , 000 level ?
reason i ask is goldman sachs put out an article suggesting that
break - evenpoint for bank holding of stocks is roughly 12 , 000 - 12 , 500 a
different index level than the one you have mentioned .
i can appreciate the difference between reserve liquidity and actual
break - even on equity positions , but just wanted to clarify this point with
you , as we are trying to gain a complete understanding of how a trigger would
effect japanese capital markets . and so , as i currently understand it , there
are ( 2 ) trigger levels to watch :
15 , 000 where banks fail bis criteria and hence cannot extend new loans with
bis stamp of approval . clearly ctl bank would have incentive in restoring
this or else financial system would be thrown into turmoil .
12500 where banks begin to take an actual loss on equity holdings
is this right ?
thanks maureen , take care ,
darren
magic 15 , 000 level on nikkei
- - - - - - - - - - - - - - - - - - - - - - forwarded by leann walton / na / enron on 10 / 26 / 2000 10 : 47
am - - - - - - - - - - - - - - - - - - - - - - - - - - -
from : darren delage @ enron on 10 / 16 / 2000 02 : 53 pm ze 9
to : maureen raymond / hou / ect @ ect
cc :
subject : magic 15 , 000 level on nikkei
maureen ,
hope all is well . thank you for your coverage last week . i certainly
appreciate the value - added that you provide in your research . i had a quick
question for you regarding any anticipated japan central bank intervention at
the 15 , 000 level in the nikkei .
if i am understanding the mechanism correctly , bis reserve requirements fall
below certain threshold and banks can no longer lend money and meet bis
lending criteria due to improper reserve base . and this roughly happens at
15 , 000 level ?
reason i ask is goldman sachs put out an article suggesting that
break - evenpoint for bank holding of stocks is roughly 12 , 000 - 12 , 500 a
different index level than the one you have mentioned .
i can appreciate the difference between reserve liquidity and actual
break - even on equity positions , but just wanted to clarify this point with
you , as we are trying to gain a complete understanding of how a trigger would
effect japanese capital markets . and so , as i currently understand it , there
are ( 2 ) trigger levels to watch :
15 , 000 where banks fail bis criteria and hence cannot extend new loans with
bis stamp of approval . clearly ctl bank would have incentive in restoring
this or else financial system would be thrown into turmoil .
12500 where banks begin to take an actual loss on equity holdings
is this right ?
thanks maureen , take care ,
darren