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Politics : Formerly About Advanced Micro Devices

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To: bentway who wrote (362964)	12/16/2007 12:53:39 PM
From: tejek	Read Replies (1) of 1577464

A fresh portrait of this stressed system appeared last week in the latest quarterly report by the Bank of International Settlements. The report noted that net issuance of certain mortgage-backed securities fell to $3 billion in September, compared with $30 billion or more a month in 2005 and 2006. Borrowing in general declined sharply, with the net issuance of bonds and notes in the third quarter less than half that of the previous quarter. Part of the problem is too much money is going into Treasuries where the yields have improved considerably over the past few months. that means there is much less liquidity. What does this market feel like for players at ground zero? I asked the head of one of the leading hedge funds how he had traded his portfolio Wednesday, the day the joint rescue package was announced. He answered that he had stayed out of the market because he wasn't sure what to do. Trades that looked sensible at 10 a.m. would have turned out to be mistakes by noon. I understand exactly how he feels. That's why I went to 60% cash last week. I only trade....not hold.....momo stocks until they get overbought, then take my profits. "If someone would take me out of all my positions, long and short, I'd do it," he said. This is the financial market equivalent of saying you want to start over. Six months into the credit crunch, that's the way many exhausted players are feeling. The markets will have to sink a good deal more, alas, before the vultures arrive to carry off the debris and the process of rebuilding can start. I disagree......the markets don't have to sink more although that may well happen. What is needed is some clarity. There is none....plus there is the feeling that the Fed has become Disney's headquarters for mickey mouse cartoons. It doesn't help that the UK and ECB are raising rates in order to fight inflation while we are lowering them to prevent deflation. Meanwhile the BOJ has been downright abrasive.....subprime is your problem, America, so you fix it.

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