8/7/2019 Morning News Notes: 2011-03-18

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Friday, March 18, 2011 my comments are in italics

UN Security Council voted Thurs night to pass a resolution authorizing military action againstLibya, inc. airstrikes against Libyan tanks and heavy artillery as well as the establishment of a no-fly zone. NYT the resolution passed wit h ten votes in favor, zero against and five abstentionsRussia, China,

Germany, Brazil & India. Here is the resolution.France says airstrikes could start w ithin several hours (said this at 3amET). It may start with a

mixture of Cruise missiles and air strikes, Bloomberg

The objective of the resolution is to push the governments forces back from Benghazi andhopefully sow confusion in the Libyan army to the extent that defections begin to pick up. Some thinkthe army would crumble following major strikes against Gadaffi. WSJ This is merely the most positivepossible outcome. Regardless of how easy it may be to turn the tide back against Qaddafi, this is asignificant escalation with any large number of possible outcomes. With abstentions from Germany and Turkey being against this move, it is very unlike that NATO forces will be used. Arab League forces areminimal and those that do exist are busy quelling unrest in Bahrain and guarding Saudi Arabias oil fields.

G7 finance ministers met at 7am Tokyo time Fri morning and decided to jointly intervene in FXmarkets In response to recent movements in the ex change rate of the yen associated with the tragicevents in Japan, and at the request of the Japanese authorities, the authorities of the United States, theUnited Kingdom, Canada, and the European Central Bank will join with Japan, on 18 March 2011, inconcerted intervention in exchange markets. As we have long stated, excess volatility and disorderlymovements in exchange rates have adverse implications for economic and financial stability. We willmonitor exchange markets closely and will cooperate as ap propriate European Central Bank is thisthe equivalent of a global QE3? The Yen is a funding currency, thus, its suppression keeps alive the carry

trade. Taken alone, this is bullish for risky assets.

Nuclear crisis appears to have stabilized officials in Japan early Fri appeared to have stabilizedthe crisis. FT

China banks the PBOC raised bank reserve requirement ratios (RRRs) by 50bp, the third suchmove of 11. The RRRs were raised 6x last year. China's official reserve requirement ratio for mostbanks will be 20.0% after the latest hike takes effect, based on the PBOC's public announcements.Reuters

Bahrain continues its aggressive crackdown on opposition, unveiling more arrests and attacks oncertain villages. Many Shia government officials have resigned in protest. FT

Bloomberg says that some banks found the tests to be more stringent than they anticipated,forcing some institutions to scale back proposals for capital returns. Examiners told some lenders toreduce or delay plans for giving shareholders capital. The Fed may apply a lower valuation to certain

consumer loans and the FDIC apparently pushed for the TLGP debt to be refinanced. Bloomberg

http://nyti.ms/fIRHXQhttp://nyti.ms/fIRHXQhttp://nyti.ms/fIRHXQhttp://i.cdn.turner.com/cnn/2011/images/03/17/draft.resolution.on.libya.pdf?hpt=C1http://i.cdn.turner.com/cnn/2011/images/03/17/draft.resolution.on.libya.pdf?hpt=C1http://on.wsj.com/ejh7Oehttp://on.wsj.com/ejh7Oehttp://on.wsj.com/ejh7Oehttp://www.ecb.int/press/pr/date/2011/html/pr110318.en.htmlhttp://www.ecb.int/press/pr/date/2011/html/pr110318.en.htmlhttp://www.ecb.int/press/pr/date/2011/html/pr110318.en.htmlhttp://on.ft.com/fCBDEwhttp://on.ft.com/fCBDEwhttp://on.ft.com/fCBDEwhttp://on.ft.com/h65Nvohttp://on.ft.com/h65Nvohttp://on.ft.com/h65Nvohttp://www.bloomberg.com/http://www.bloomberg.com/http://www.bloomberg.com/http://www.bloomberg.com/http://on.ft.com/h65Nvohttp://on.ft.com/fCBDEwhttp://www.ecb.int/press/pr/date/2011/html/pr110318.en.htmlhttp://on.wsj.com/ejh7Oehttp://i.cdn.turner.com/cnn/2011/images/03/17/draft.resolution.on.libya.pdf?hpt=C1http://nyti.ms/fIRHXQ