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Scooter chat from other site. 5/15/12

idplzr

By idplzr,
in Chat Logs

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idplzr Newbie

idplzr

Posted
Posted

[therealbubbie] ok enough of the kiss up lets get this thing started !

[priscilla927] Scooter-EG You're not allowed to use any words over three syllables....

[scooter-EG] luckyintx luckyintx Good evening lucky

[oogie] priscilla927

[built to last] therealbubbie

[scooter-EG] priscilla927

[scooter-EG] ok

[scooter-EG] I'll keep my words short

[priscilla927] Alright, kids....the countdown has begun....oogie ~ you ready?

[scooter-EG]

[scooter-EG]

[scooter-EG] Hold on

[oogie] priscilla927 I am ready

[mercedes99] Scooter-EG you must behave here or me BL will POW

[scooter-EG] there's a paragraph that I wanted everyone to read

[oogie] Scooter-EG you tell me when you are ready!

[scooter-EG]

[scooter-EG] thanks oogie

[priscilla927] All right...everyone sit on hands, please...chat has begun...

[scooter-EG] is gizmo here

[priscilla927] Scooter-EG No

[scooter-EG] Shoot

[scooter-EG] Nevertheless

[scooter-EG] he had some outstanding questions last week

[scooter-EG] and one of the peices of information I promised

[oogie] Scooter-EG yes he did

[scooter-EG] I have

[scooter-EG] So

[oogie] maybe he will be in

[scooter-EG] perhaps

[scooter-EG] but

[scooter-EG] I do want everyone to read this first

[scooter-EG] Let me get this one part of this document

[scooter-EG] 3. Rafidain Bank used to borrow on behalf of the Government. The Exchange rate at the time was US$1=ID 0.33 but is now US$1=ID1180, which led to a large exchange valuation loss. Since Rafidain Bank borrowed on behalf of, and is owned by, the Government, these losses and the offsetting liabilities should be removed from the balance sheet. The calculation is complicated by a number of other issues, see below. It should be noted that preliminary data provided by Rafidain Bank differ slightly from that reported by the CBI.

[scooter-EG] 4. The team was not able to obtain any official estimate of the magnitude involved and the number given should be viewed as an illustrative approximation. They are based on an internal Rafidain Bank calculation for 2009, which was provided to the team. That calculation showed a reduction in total assets of Rafidai Bank from ID 288 trillion to ID 29 trillion.

[scooter-EG] Now this comes from the recent World Bank Financial review of Iraq

[scooter-EG] Page 14

[DDF] Scooter-EG Scooter-EG Scooter-EG Scooter-EG Hello

[scooter-EG] Middle East and North African Region

[scooter-EG] Republic of iraq

[scooter-EG] Financial sector review

[scooter-EG] A Study led by sahar nasr

[scooter-EG] You can google that if you like

[scooter-EG] It's a great summary

[scooter-EG] oh shooooooot

[scooter-EG] sorrry ddf

[scooter-EG] how are you

[scooter-EG] didn't see ya there

[scooter-EG] MY BAD

[scooter-EG]

[scooter-EG] One other item

[scooter-EG] http://i1217.photobucket ••• SETS.png

[scooter-EG] That's only one part of my analysis of that report

[scooter-EG] The reason I bring this tonight

[scooter-EG] is for two reasons

[scooter-EG] one

[scooter-EG] I promised my friend GIZMO

[scooter-EG] and two

[scooter-EG] I promised BL this information from my morning conversation with her

[scooter-EG] She is such a nice lady

[scooter-EG] She's great !

[scooter-EG] Now

[scooter-EG] The main reason I bring this information is that you can see

[scooter-EG] that the Rafidain Bank

[scooter-EG] based on these numbers

[scooter-EG] as well as the Rasheed bank

[scooter-EG] need to "Devalue" itself first

[scooter-EG] before the IMF and World Community can re-capitalize those two government banks

[scooter-EG] it's this reason

[scooter-EG] that I feel the RV/RD/hybrid solution

[scooter-EG] is so reliant upon this occurring

[scooter-EG] Please remember

[scooter-EG] those two Banks

[scooter-EG] do 85% of all the transactions in Iraq

[scooter-EG] maybe a little less

[scooter-EG] but the bulk of the transactions occur there

[scooter-EG] So the first thing I'm looking

[scooter-EG] for is activities with these two banks

[scooter-EG] once they have the proper asset values listed ont he balance sheets

[scooter-EG] then and only then will we see movement

[scooter-EG] now

[scooter-EG] This may have occurred earlier in the year

[scooter-EG] but highly unlikely

[scooter-EG] The reason I say this is simple

[scooter-EG] this was supposed have gone down three years

[scooter-EG] ago

[scooter-EG] and it was supposed to occur on June 30th every single time

[scooter-EG] so -- doesn't make sense that if the two government banks go through some balance sheet changes

[scooter-EG] in combination with introduction of lower denoms

[scooter-EG] a shift could occur

[scooter-EG] I've always held that to be the case

[scooter-EG] but one never knows

[scooter-EG] ok

[scooter-EG] enough bantering from me

[scooter-EG] where's the questions

[scooter-EG] oogie

[scooter-EG]

[oogie] Scooter-EG ty very nice bantering

[scooter-EG]

[scooter-EG] ty

[oogie] Scooter-EG ok hold on

[scooter-EG] Do I have to

[scooter-EG] ok

[scooter-EG] I'll be good

[scooter-EG] I don't want Bubbie angry with me

[oogie] first question :}: 1) how much wood can a woodchuck chuck if a woodchuck could chuck wood?

[therealbubbie] Scooter-EG

[scooter-EG] holy cow - there's a large group here tonight

[oogie]

[scooter-EG] NONE

[oogie] 2nd question: 2) [bondLady] ask scooter if he knows how to get a mustard stain out of a cashmere sweater?

[scooter-EG] the beavers would use the wood for a damn

[scooter-EG]

[scooter-EG] oooooo

[scooter-EG] Cashmere

[scooter-EG] tough call

[scooter-EG] just get a new sweater

[scooter-EG] plus

[scooter-EG] I don't wear sweaters in AZ

[oogie] ok final answer?

[scooter-EG] final answer

[scooter-EG] The only one I know

[oogie] 3rd question....we are getting to the real ones scooter-eg lightingcslt]What is the best method to quit smoking?????

[scooter-EG] hmmmmmm

[scooter-EG] You really don't want my answer on that one

[scooter-EG] there's another items

[scooter-EG] that I wanted to follow up on

[oogie] Scooter-EG bear with me I am copying the chat too!

[scooter-EG] ok

[oogie] 5) [bondLady] ask him what is his perseption on the tarriff taxes and if he feels like they would have to set a new rate and if not why and if so why

[scooter-EG] while you're doing that I'm going to continue my banter

[scooter-EG] From that same document

[oogie] Scooter-EG oh okay I'll hold that last one there

[scooter-EG] While work should commence on a broad range of issues, some key decisions need to be taken immediately, while others may be implemented over the medium term. Key issues to be addressed up front are the role of state banks and the creation of a level playing field for all banks.

[scooter-EG] This will need to be followed by the early adoption of the proposed permanent Securities Law and steps to turn the insurance Diwan into an effective supervisor. Supporting ongoing efforts will be needed to address financial sector infrastructure, including supervision, credit registry, collateral framework, judicial systems, and accounting and auditing frameworks.

[scooter-EG] A crucial step, also to signal seriousness of intent, is to clean up the balance sheet of Rafidain Bank and Rasheed Bank, which has been under discussion since 2006. Since more time may be required to clarify some of the disputed items on the balance sheet, the best approach will be to transfer disputed assets and liabilities of the two banks to a newly created asset/liability management company to permit the slimmed down Rafidain Bank and Rasheed Bank to focus on moving forward with their operational restructuring.

[scooter-EG] The latter process is well formulated in the 2006 memorandum of understanding between the Ministry of Finance and the Central Bank of Iraq and should be carried out over the next two years. Once the balance sheet is cleaned up, the capital of the two banks should gradually be brought up to the level prevailing for private banks by June 2013.

[scooter-EG] Once the reform of Rafidain Bank and Rasheed Bank is well under way, the authorities should consider more generally the role of state banks in the economy, including that of ITB and the four smaller sectoral banks, with a view to eventual liberalization.

[scooter-EG] Now don't freak out because you see June 2013

[scooter-EG] There is a reason for this

[scooter-EG] First

[scooter-EG] when the world bank developed the DPL

[scooter-EG] Development Plan for Iraq

[scooter-EG] they had the banking sector reform broken out into two (2) phases

[scooter-EG] and the structural changes to the monetary system is considered in the first phase of the plan

[scooter-EG] Phase two takes them to the next steps with further infrastructure, transactional systems (smart cards), and deeper tools for the bonds, stocks, etc....

[scooter-EG] Here's some more

[scooter-EG] As noted above, private banks operate on an uneven playing field. An immediate priority should be to announce the removal of all impediments for private banks

[scooter-EG] in doing business with the government and state owned enterprises. Given some concerns over the strength of private banks, some elements, such as the size of letters of credits, could be phased in over a period of two years (but preannounced) to permit enhancement of the effectiveness of banking supervision to take hold as well as some consolidation of the banking system following the increase in minimum capital levels.

[scooter-EG] It is clear that this potential expansion of private banks’ business opportunities entails keen vigilance on the part of the banking supervision department of the CBI to ensure the safety and soundness of the private banks.

[scooter-EG] Now

[scooter-EG] that's a mouthful right there

[scooter-EG] Now

[scooter-EG] that's a mouthful right there

[scooter-EG] but lets take a look at what they are saying versus our last chat

[scooter-EG] if you remember from the last two weeks of chats

[scooter-EG] we talkedf about the "Re-Booting" of those government banks

[scooter-EG] and two

[scooter-EG] the bond markets fueling the future governments liquidity

[scooter-EG] so let's talk about that for a second

[scooter-EG] Who is the primary bond market in Iraq

[scooter-EG] well

[scooter-EG] it's those SOE's that the World Bank is talking about above

[scooter-EG] the large pension funds

[scooter-EG] the utility companies

[scooter-EG] the Insurance companies

[scooter-EG] These have been state owned enterprises for decades

[scooter-EG] now -- the question will be which ones out of the 108 SOE's will become privatized and why?

[scooter-EG] the seecond item is the statement regarding the CBI

[scooter-EG] the CBI will require the safety and soundness of the private banks

[scooter-EG] Now -- why did i bring that up?

[scooter-EG] Here's why -- give me thirty seconds

[scooter-EG] http://cbi.iq/documents/ ••• s.EN.pdf

[scooter-EG] sorry

[scooter-EG] I had to find the data

[scooter-EG] now that document

[scooter-EG] it defines some special rules of engagement for the private banks

[scooter-EG] and part of those special rules include having proper captial levels

[scooter-EG] in order to bank and loan money to SME's

[scooter-EG] small to medium sized businesses

[scooter-EG] So ok

[scooter-EG] why is that important to this whole modification

[scooter-EG] well -- remember what we said two weeks ago about Consumption being a critical component of any changes

[scooter-EG] Iraq needs to form capitol in that country and do it fast

[scooter-EG] they intend to build over one million houses

[scooter-EG] and build the agriculture businesses up

[scooter-EG] they have infrastructure to continue to build

[scooter-EG] etc.... etc....

[scooter-EG] ok -- so how's there existing banks going to do this?

[scooter-EG] well what they put in the ordinance documents pretty much states that Iraqi banks will need to meet certain capitol reserves to play in this endevour

[scooter-EG] and they will need to increase their capitol

[scooter-EG] and the only way they do this is if they go out to the BIG money plays like Suisse Bank, Barclays, BofA, Chase, etc...

[scooter-EG] because they will be able to leverage up to 300% of their assets on all the loans

[scooter-EG] that's enormouse leverage for these loans

[scooter-EG] Imagine BofA

[scooter-EG] they do approx. 1 trillion a year

[scooter-EG] I wonder what their assets are

[scooter-EG] alot

[scooter-EG] a whole bunch

[scooter-EG] so what you'll see in the coming months

[scooter-EG] in my opinion is a much stronger influx of those larger banks partnering with the banks in Iraq

[scooter-EG] what will occur will be a tornado of loans and business excchange

[scooter-EG] when this occurs -- the dominos follow -- and the middle class begins (embryonicly) to form

[scooter-EG] they need a strong Stochastic Cloud of Transactions to occur in order to bring life to the economy again.

[scooter-EG] WOW -- now that's a rant

[scooter-EG] ok -- i'm done

[oogie] well done!

[scooter-EG] [scooter-EG] I missed BL's question

[scooter-EG] no way

[scooter-EG] where

[Mr Rockett] NEVER. but I'll let you continue.

[oogie] ok here is the next question: 5) [bondLady] ask him what is his perseption on the tarriff taxes and if he feels like they would have to set a new rate and if not why and if so why

[scooter-EG]

[scooter-EG] no fair

[scooter-EG] that's three questions

[scooter-EG]

[scooter-EG] ok

[oogie] 1 at a time

[scooter-EG] the tariff taxes --- hmmmmmm --- let's think this one through

[scooter-EG] Will Iraq's tariffs taxes go up or down when this occurs

[scooter-EG] and

[scooter-EG] why are they modifying the tax code in the first place

[scooter-EG] so the answer to that is this

[scooter-EG] the taxes may increase or decrease plus or minus 10% - 20%

[scooter-EG] not a big swing there

[scooter-EG] however

[scooter-EG] a big however[scooter-EG] what they gain by modifying their existing tariff rules is this

[scooter-EG] they will then be in compliance with WTO rules of engagement

[scooter-EG] now3

[scooter-EG] now

[scooter-EG] what they will probably do to increase their revenues to the government

[scooter-EG] is drop the tariff's significantly

[scooter-EG] and watch what happens

[scooter-EG] the reduction in tariffs will spur intense business and the tax base will broaden significantly

[scooter-EG] I'm not exactly certain if they can pull that one off

[scooter-EG] but that's what I would do

[scooter-EG] here's why

[scooter-EG] if they want that Stochastic Cloud of money exhange to occur

[scooter-EG] they need to put the stimulant for that cloud in the hands of the consumers

[scooter-EG] when the consumers see phenomenal deals, they will start purchasing and the money and loans that spin from that could go on for 22 - 25 more cylces

[scooter-EG] just my two cents

[scooter-EG] in my opinion, I don't see that having a primary impact on the rate

[scooter-EG] it will have what I call

[scooter-EG] a "PULL" type of reaction to the economy

[scooter-EG] and rate

[scooter-EG] whereby the transaction will fuel the economy

[scooter-EG] and nine months later we would realize the impact on the economy and rate of exchange

[scooter-EG] next

[oogie] ty

[oogie] ok hold on

[scooter-EG] No problem

[oogie] [shredd] Scooter - let's talk tariffs. I understand tariffs will increase between 5-30% depending on the good being imported. That said, in my mind, the only way the iraqi people will not get stuck with the aggregate average of the consumer cost increase is if [shredd] the dinar would be stronger than the USD by the same amount. Anything less will only keep the USD in the iraqi's hands. What are your thoughts?

[oogie] more tarrifs

[scooter-EG] hmmmmmm

[scooter-EG] shredd -- I think that's an interesting question

[scooter-EG] but

[scooter-EG] let's take a look at that for a moment

[scooter-EG] first

[scooter-EG] in a free open market

[scooter-EG] the consumer will purchase products that provide them value

[scooter-EG] if the value doesn't come from the products made and produced in country

[scooter-EG] then demand will goto imports

[scooter-EG] now

[scooter-EG] the the mfg'ers of those goods will modify their pricing based on those factors and the tariffs

[scooter-EG] now with that said

[scooter-EG] lets take a look at your statement regarding the dinar would need to be stronger than the us dollar to offset

[scooter-EG] In my opinion

[scooter-EG] The reason the dinar will increase in strength is demand for the IQD

[scooter-EG] and in my opinion -- I believe the dinar will have large demand at the time when those tariffs rules are engaged

[scooter-EG] sorry

[scooter-EG] I had to think what i wanted to say there

[scooter-EG] now

[scooter-EG] with that said

[scooter-EG] you are correct

[scooter-EG] the Iraqis,. In my opinion.

[scooter-EG] would want the IQD approximately 25% - 35% stronger than the USD

[scooter-EG] that would be an ideal situation

[scooter-EG] however

[scooter-EG] their economy right now

[scooter-EG] and their existing monetary statistics don't support those numbers

[scooter-EG] but

[scooter-EG] I truly believe this when i say this

[scooter-EG] We don't have all the facts on this bad boy

[scooter-EG] And we certainly don't have all the missing datapoints

[scooter-EG] WE DON'T KNOW WHAT "proxy countries" are involved

[scooter-EG] We don't have a full inventory of those missing assets

[scooter-EG] We don't know how much $$$$ will be able to fall into the reserves

[scooter-EG] but we do know this

[scooter-EG] that an economy of only 30 million people

[scooter-EG] and most of that demographic is the younger age

[scooter-EG] the working age

[scooter-EG] that economy with the right stimulants

[scooter-EG] will have a tremendous opportunity to increase the value and increase it fast !

[scooter-EG] very fast

[scooter-EG] in fact

[scooter-EG] when you take a look at standard modes of growth based on Fibronacci rules

[scooter-EG] that rate -- if and when they freely float --- which will be several years

[scooter-EG] could see monsterous swings in strength

[scooter-EG] just in 6 - 12 month time frames

[scooter-EG] but please know this

[scooter-EG] nobody knows what's going to happen

[scooter-EG] and I mean nobody

[scooter-EG] no guru

[scooter-EG] no economist

[scooter-EG] no person except a handful really have a grasp

[scooter-EG] just my opinion

[scooter-EG] that was a great question

[shredd] thanks Scooter

[scooter-EG] No

[scooter-EG] thank you

[oogie] ty scooter-eg here is the next question: 7) [bondLady] when the un put iraq under chapter 7 santions, and sanctioned everything from sports to currency to international status, when the un takes iraq out of chapter 7 would that automatically reinstate the back into every thing as it was before sanctions international status, iqd exchange rate back to last know entry from cbi in saddams time and sports?

[priscilla927] Point well taken....thank you for your perspective....

[scooter-EG] Not neccessarily

[scooter-EG] remember -- the security council and UN

[scooter-EG] they can pretty much implement this anyway they want

[scooter-EG] there's no set rules of engagement

[scooter-EG] some countries have gone down that path

[scooter-EG] but anything goes when it comes to money and reinstatement

[scooter-EG] just my opinion

[scooter-EG] but this can be realized in the many changes they've made over the last 6 years

[scooter-EG] priscilla927 thank you

[scooter-EG] much appreciated

[scooter-EG] now

[scooter-EG] reinstatement of the old rate

[scooter-EG] there's something that needs to be understood there

[scooter-EG] the only thing that is required in that situation

[scooter-EG] is that the debt to commercial companies and other states

[scooter-EG] needs to be paid back at that same rate

[scooter-EG] so what does that mean /

[scooter-EG] simple

[scooter-EG] you take the value of the debt and put into USD

[scooter-EG] or EURO

[scooter-EG] and they pay it back in whatever rate that exist

[scooter-EG] We've seen several items regarding this one

[scooter-EG] Egypt

[scooter-EG] Jordan

[scooter-EG] the UK

[scooter-EG] Syria

[scooter-EG] iraq has had to pay back those debts at the prevailing rate

[scooter-EG] so whatever that rate was back then in USD

[scooter-EG] move it today and calculate it out with the interest on top of that

[scooter-EG] Just my two sense

[scooter-EG] ok

[scooter-EG] one more question

[oogie] next question: [bondLady] what is your thoughts per the the WTO and iraqs fulll membership into the wto, does he believe they will go ahead and do what needs to be done to be able to be a full member or will they screw it off like everything else and just go down to moes tavern an slugg it out with each other

[priscilla927] You get extra points if you know the Moes Tavern reference.....

[scooter-EG] MOES looks good

[scooter-EG] hmmmmm

[scooter-EG] here's the thing with this question

[oogie] bondlady has a way with words

[scooter-EG]

[scooter-EG] Yes she does!

[scooter-EG] Too funny

[scooter-EG] ok

[scooter-EG] where to start with this one

[scooter-EG] the reason I'm hessitant is this

[scooter-EG] there's been an internal Iraqi group that's been resisting the move into the WTO

[scooter-EG] and i never could understand why this was

[scooter-EG] until just recently

[scooter-EG] If you remember those 108 SOE's

[scooter-EG] many of those companies would never survive in the open market

[scooter-EG] and as a result, those companies and those employees would be out of work

[scooter-EG] great more unemployment in Iraq

[scooter-EG] however,

[scooter-EG] if you recall

[scooter-EG] those 108 SOE's will be required in order to fund the liquidity of the government through the purchase of bonds

[scooter-EG] Now

[scooter-EG] with that said

[scooter-EG] if they move methodically with those SOE's to privatize them

[scooter-EG] yet still maintain the fidelity of the agreement witht he WTO

[scooter-EG] then they could have the best of both worlds

[scooter-EG] I think that's the biggest reason

[scooter-EG] we haven't seen Iraq's assencion into the WTO

[scooter-EG] the structural changes to tariffs and stamps

[scooter-EG] that part is easy

[scooter-EG] but the get the right balance between the SOE's, WTO, and the government of Iraq

[scooter-EG] that's the tricky part

[scooter-EG] just my opinion

[scooter-EG] Moe's tavern still looks good

[scooter-EG] ok

[oogie]

[scooter-EG] unfortunately -- I really need to jettison

[oogie] ty Scooter-EG

[player46] Scooter-EG .. TYVM.. appreciate your time.

[scooter-EG] but I wanted to say thank you to my good friend

[scooter-EG] OOGIE and Bubbie

[oogie] we really apreciate the chat

[vested]

[Crash] Scooter-EG ty

[scooter-EG] and player46

[luckyintx] tyvm scooter that was amazing!

[d6j8] thank you

[scooter-EG] vested

[scooter-EG]

[priscilla927] Scooter-EG Great job...thank you.

[scooter-EG] You are welcome

[player46]

[scooter-EG] I hope this helped

[scooter-EG] and was worthwhile

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KamelKeeper Newbie

KamelKeeper

Posted
Posted

Thank you for bringing this over.

Many focus on what is in front of us: the news of Maliki, ministers, Iran, on and on... But there are bigger issues, like the banks, that need to be resolved before movement can happen. It takes someone like Scooter to remind us of that.

Thanks again. I am always glad to see a Scooter chat.

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BrokeNoMore Newbie

BrokeNoMore

Posted
Posted

They lost me at the mustard stain on the cashmere sweater.

Don't people have better things to do than foul up a chat that thousands of people are going to spend time reading?

I mean really.

I think I'm irritable this morning. :D I'll go take a happy pill now, and come back and try it again! :lol:

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FXStockpiling Newbie

FXStockpiling

Posted
Posted

The Exchange rate at the time was US$1=ID 0.33 but is now US$1=ID1180, which led to a large exchange valuation loss. Since Rafidain Bank borrowed on behalf of, and is owned by, the Government, these losses and the offsetting liabilities should be removed from the balance sheet. The calculation is complicated by a number of other issues, see below. It should be noted that preliminary data provided by Rafidain Bank differ slightly from that reported by the CBI.

[scooter-EG] 4. The team was not able to obtain any official estimate of the magnitude involved and the number given should be viewed as an illustrative approximation. They are based on an internal Rafidain Bank calculation for 2009, which was provided to the team. That calculation showed a reduction in total assets of Rafidai Bank from ID 288 trillion to ID 29 trillion.

Read more:

I should point out that if $1 = .33 then the IQD was worth $3

The first thing to do is to divide 288 trillion by 3 = 96 trillion IQD then divide that by the 1180 rate = 81 billion and some change is the correct number here...

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