S&P500 / VIX Ratio & USD LIBOR

There's a big tug of war today between bulls and bears - it'll be interesing to see who comes on top today/this week. The ratio is still high at about 68 but what is unusual is that both the S&P & VIX are up, with the VIX well off its lows from Friday into the 17s today. The $ fall at the US opening bell has given a relief rally for now but things can change very quickly.

Hi Ashraf,

do you have an estimated target price for S&P500? Do you think we will break below Feb's low? Just trying to get your feel on the severity of the sell-off.

Callum

Asad,

I'm glad I'm not the only one swimming against the tide. What is interesting is that Bob Prechter was on CNBC on Friday calling a double top in the market - he talks a lot of sense and I respect his views - he's called the market down for a while now but with so much interference from the govts around the world he can't be blamed for getting his timing wrong - i.e. the markets are overshooting.

Looking back over the last 5 years on the DJIA the RSI is near its highs now. With India raising rates and China to follow soon we could be in for a rough few weeks as commodities sell off. My guess is for a shallow sell off before April followed by another high in April/May and then the resumption of the bear market thereafter.

G

Basel III i ahead and underpins the importance of liquidity forcing banks to change their strategy dramatically

have a lok at the related isssues of Basel iii

Making global liquidity more robust

20. The crisis vividly demonstrated that adequate liquidity is a prerequisite for financial stability.

The drying up of liquidity at the level of financial institutions, countries and ultimately the global system caused the seizing up of credit provision and of financial flows.

Cross-border flows are often the most vulnerable during financial crisis, and emerging markets can face damaging volatility in foreign exchange and liquidity flows.

21. Just as strong capital is a necessary condition for banking system soundness, so too is a strong liquidity base.

Many banks that had adequate capital levels still experienced difficulties during the crisis because they did not manage their liquidity in a prudent manner.

The lesson is that banks resilience to system-wide liquidity shocks affecting both market and funding liquidity must be significantly increased and their management of this risk strengthened.

22. To this end, we are substantially raising the bar for global liquidity risk regulation:

The Basel Committee will issue by the end of 2009 a new minimum global liquidity standard.

This new regulatory framework introduces a liquidity coverage ratio that can be applied in a cross-border setting.

It establishes a harmonised framework to ensure that global banks have sufficient high-quality liquid assets to withstand a stressed funding scenario specified by supervisors.

The Basel Committee will also formulate a structural ratio to address liquidity mismatches and promote a strong funding profile over longer-term horizons.

This new standard complements the supervisory guidance for banks liquidity risk management practices, the implementation of which is being assessed in supervisory reviews.

Ashraf, paradigma liquidity

What do you think about an overview of the responsible parameters, which determine availability repectively withdrawal of liquidity for stocks per se or comprehensive

Would it not be useful to have a calender with the important days or data to describe the development of the paradigma liquidity

I only want to remember, that the lack of liquidity was the most important catalysator for deepening the financial crisis