-Caveat Lector- from: http://www.aci.net/kalliste/ Click Here: <A HREF="http://www.aci.net/kalliste/">The Home Page of J. Orlin Grabbe</A> ----- Fin-de-Siecle Fed Sells Y2K Liquidity Options Just in case you run out of money--have we got a deal for you. The New York Federal Reserve has sold almost $370bn in "liquidity options" to leading banks in an effort to quell panic about the millennium bug. Bankers said the popularity of the options, which offer buyers insurance against the possibility that markets could dry up because of Y2K problems, had already eased fears about the bug. The New York Fed, which conducts open market operations on behalf of the US Federal Reserve in Washington, said it is planning further auctions of liquidity options in the next few weeks. The Fed's unprecedented venture into options sales has turned it into one of the biggest derivatives dealers in the world - an unaccustomed role for the guardian of US monetary stability. The liquidity options are especially popular with marketmakers, because they assure their funding even if financial markets should suddenly dry up over the end of the year. "The markets were expecting liquidity to get progressively worse as the millennium approached, but liquidity has improved in the past two weeks," said Avinash Persaud, head of global research at State Street Bank. "Part of this can be attributed to the success of the Fed's liquidity options." The options, which are legitimate for five days and encompass three five-day periods starting December 23, December 30 and January 6, give the holder the right to access cash from the Fed at a "strike" price of 150 basis points over the Fed funds rate. This means the options would be exercised if liquidity dried up to such an extent that it was only available from the normal inter-bank market at a higher spread than 150 basis points over the Fed funds rate. Bankers say that the popularity of the options combined with the Fed's decision to expand the pool of collateral available to the market to borrow money from its discount window had significantly eased fears of a liquidity crunch over the millennium. "We believe the markets have understood our message that we want the transition to the new millennium to be as smooth as possible," said an official at the Fed in New York. Concerns have also been eased by the belief in bond markets that there is little possibility that the Federal Reserve and the European central banks will raise interest rates in the near future. The Fed and other central banks have printed additional supplies of banknotes in case of a rush by individuals to hold cash over the new year. The Financial Times, November 23, 1999 Oil Market Iraq Embargo Drives Oil Price to 9-Year High More New World Disorder. World oil prices leapt to a nine-year high yesterday after Iraq began implementing a weekend threat to halt 2.2m barrels a day of exports under the United Nations oil-for-food programme. The Iraqi move appeared to be intended to exploit divisions in the UN security council over the international community's sanctions regime imposed on Iraq after its 1990 invasion of Kuwait. It came as security council members negotiated ways to relax mandatory sanctions on Iraq in exchange for Baghdad agreeing to a new arms control regime. The US and Britain have argued that any easing of sanctions should only go ahead after Baghdad has demonstrated that it will co-operate with UN arms inspectors. France, Russia and China have advocated a more relaxed approach. In London, oil prices opened at $25.90 a barrel, the highest level since the 1991 Gulf War, after Amir Mohammed Rasheed, Iraq's oil minister, confirmed that Baghdad would not agree to a proposed two-week extension of the current phase of a programme under which Iraq is allowed to export oil to fund food and medicine imports. In late trading the January futures contract for Brent oil, an international price benchmark, was quoted at $25.58 a barrel, 51 cents up on Friday's close. The Iraqi decision highlighted Baghdad's ability to disrupt world oil markets in spite of the tight sanctions regime. Diplomats pointed out that until Baghdad made its surprise announcement on Saturday, Iraq had been working normally with UN staff on details of a new, seventh, six-month phase of the oil-for-food programme, due to start shortly. Under the programme Iraq is allowed to sell $5.2bn worth of oil every six months. Kofi Annan, the UN secretary-general, yesterday expressed optimism that a way would be found to defuse the latest crisis over sanctions. The security council is trying to agree on a new sanctions package that would allow for foreign investment in Iraq's oil industry, while ensuring that the arms embargo stayed. Madeleine Albright, the US secretary of state, said Iraq had once again "shown its true colours . . . by turning down the possibility of having more food and medicine for its people by selling more oil". A prolonged suspension of Iraqi oil exports could have a big impact on world oil prices, which have more than doubled this year as a result of production cuts by leading exporters and a decline in surplus inventories in the main consuming countries. It could also exacerbate global inflation levels. The Financial Times, November 23, 1999 US Politics Was John McCain Brainwashed? Clinton didn't release his records. Why release yours? SENATOR John McCain, the leading challenger to the runaway campaign of George W Bush for the Republican presidential nomination, will release his medical records this week to show that he is not "nuts". Mr McCain, who spent five and a half years in a North Vietnamese prison camp after his US navy fighter was shot down in 1968, is responding to what his aides say is a whispering campaign to suggest he is mentally unfit for the White House. Although trailing badly in national polls, the Arizona senator is neck-and-neck with Mr Bush in the crucial state of New Hampshire, which is first to hold a primary election. Asked about the rumours surrounding his psychological health, Mr McCain said: "First of all, you have to be half nuts to run for President. So I accept the charge." His campaign manager, Senator Chuck Nagel of Nebraska, said: "Some of my Senate colleagues want to drive a stake through John McCain's heart. Their und erlying message is that John is nuts and shouldn't be around any kind of button that could lead to nuclear war." Mr McCain said that to set the record straight, he would publish a 350-page report on his medical history. Mr McCain was severely beaten during his captivity and is still unable to raise his arms high enough to comb his hair. But he denied that anything had happened to make him unsuitable for the role of President. He said: "The fact is that I'm a far better man for having had the experience that I had. I learned the meaning of friendship and comradeship and love and compassion and learned many of my own failings." If there is a covert attempt to portray Mr McCain as unstable it may backfire, because his opinion poll ratings have always risen substantially whenever he has had any opportunity to demonstrate his war record. The London Telegraph, November 23, 1999 ------------------------------------------------------------------------ ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. Roads End DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance—not soapboxing! These are sordid matters and 'conspiracy theory', with its many half-truths, misdirections and outright frauds is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRL gives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credeence to Holocaust denial and nazi's need not apply. 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