That's exactly what the funds do with bad bets , roll them into tier two and wait for them to start performing again . Tier one has the performers running somewhat to script , anything else is put on the backburners of tier two .
Managing large amounts of money may seem like someones perfect job , but it's no party nowdays . Everything has it's limitations . If we look back at banks performances , the beacon that was , is now dimming .
I for one am still waiting for AMPs double digit growth promises to come about , been a few swipes at that glowing line , can't see it eventuating in a tight credit climate , especially now that banks have hit their peak profitablity and are more likely to start declining . Just another round of misquotes to the ASX and the public .........
here's an interesting piece from Bloombergs Paris desk :
http://www.bloomberg.com/apps/news?pid=20601039&sid=aB2QLMpsHn_c&refer=home
Fed Heavy Lifting, SocGen Fallout, China Trade Tension: Timshel
Commentary by Michael R. Sesit
Feb. 16 (Bloomberg) -- Like the proverbial horse who refuses to drink when dragged to water, banks are resisting lending while the U.S. Federal Reserve lowers official interest rates. That underscores the biggest question in global financial markets: Can the Fed and other central banks rescue the world economy?
The Fed has lowered rates by 2.25 percentage points to 3 percent since last September. Elsewhere, the Canadian and U.K. central banks have cut rates; markets are betting that the European Central Bank will eventually have to lower borrowing costs and that the Bank of Japan will at least back off from raising them.
Nonetheless, lowly rated companies and investment-grade ones are having to pay more to borrow than before the Fed knocked 125 basis points off its federal-funds rate in January. Likewise, rates on so-called jumbo mortgages -- those above $417,000 -- have risen in the past month.
In the Fed's January Senior Loan Officer Opinion Survey covering the previous three months, a poll of 56 domestic banks and 23 foreign institutions showed they had ``tightened their lending standards and terms for a broad range of loan types.''
The comparable ECB survey, released in late January, painted a similar picture. The message from Europe may be even more worrisome because euro-area companies depend more on bank lending than their U.S. counterparts, which satisfy most of their funding needs in the capital markets.
Loan Policies
The tougher loan policies reflect the fallout from the subprime crisis as banks take more assets onto their balance sheets, eroding their capital ratios. Lenders are also wary of the worsening economic outlook and the prospect of increased delinquencies and defaults.
``The longer the banks wait to join the Fed by easing credit standards, the more the Fed will have to ease in order to stimulate growth,'' says Bob Prince, Westport, Connecticut-based co-chief investment officer at Bridgewater Associates Inc.
Regardless, this doesn't imply monetary policy is impotent, optimists contend. Central-bank rate cuts still keep the cost of capital lower than otherwise, cushion the fall in asset prices, reduce default and foreclosure rates on adjustable-rate mortgages and encourage more bank lending by widening the margin between banks' interest costs and lending rates, Deutsche Bank AG economists Peter Hooper, Thomas Mayer and Torsten Slok said in a recent report.
Money Supply, Cost
Pessimists contend that central banks couldn't control the supply and cost of money as liquidity flooded global economies and markets in the 1990s and early part of this decade. So there's no reason to expect them to have any more influence when world liquidity is shrinking. Derivatives and securitized debt account for 93 percent of the world's liquidity, while bank loans represent 6 percent and central banks make up a mere 1 percent, according to London-based consulting firm Independent Strategy.
Although the combination of monetary and fiscal easing ``can still prevent a cataclysmic recession, it may not be able to save industrial countries from a rather protracted period of sluggish growth,'' Deutsche Bank said.
* * *
Do French companies believe in meritocracies where the most deserving get the biggest rewards and best opportunities? According to reports from headhunters, Jerome Kerviel's trading scandal at Societe Generale SA has wrecked the chances of back- office clerks being promoted to traders.
Compliance and Control
Kerviel initially worked in the bank's compliance and control operations, and French prosecutors and SocGen executives allege he drew on his knowledge of clearing and settlement systems to mask fictitious transactions backed by falsified documents. But not promoting clerks because of their know-how makes as much sense as refusing to hire government officials or ex-paratroopers, respectively the former vocations of Societe Generale Chief Executive Officer Daniel Bouton and Jean-Pierre Mustier, head of SocGen's corporate and investment bank.
By contrast, U.K. banks were famous for hiring rough characters from London's poorer East End neighborhoods to work as traders. They didn't have Harvard MBAs or advanced degrees in mathematics. They did have street smarts. When asked what skills made for a good trader, the head of foreign-exchange trading at a big New York bank once replied, ``the ability to scalp tickets outside of Madison Square Garden.''
No wonder lower-class English longbowmen crushed the flower of French nobility at the battles of Crecy, Poitiers and Agincourt in 1346, 1356 and 1415.
* * *
The last thing the ailing world economy needs right now is a trade war. Yet recent revelations that China last year overtook Canada as the biggest exporter to the U.S. is sure to raise protectionist sentiment in the American heartland, not to mention Washington. After all, it is an election year, and the Democrats, who have a good chance of capturing the White House and keeping control of both legislative branches, have never been gung-ho advocates of free trade.
U.S. imports from China last year totaled $321.5 billion, while those from Canada were $313.1 billion. And with the Chinese buying a mere $65.2 billion of American goods, the U.S. bilateral trade deficit widened to a record $256.3 billion.
It might be time for China to consider taking more effective steps to reduce its burgeoning trade surplus with the U.S. These might include letting the yuan appreciate more quickly, cutting or eliminating export subsidies, stepping up imports from America and taxing exports. The tools are all there. All China has to do is use them.
Best not to wait until some grand-standing congressman or senator calls for a boycott of the Olympics.