Mind,
JPM ONLY holds about 27 trillion derivatives (about 87% of the GDP of the whole world) (God bless America. The Fed dare to allow them to do so! No wonder someone call the Fed and JPM the biggest legal criminals of US). Since 1998, all US banks other than JPM playing the derivatives game supported an average of 4 times their total assets in notional derivatives value. The JPM Derivatives Monster, on the other hand, had an average of 41.9x its total assets leveraged in notional derivatives terms.
I think that Greenspan and his gang will do whatever they need to avoid this pig getting slaughtered. Rumor has it that the Fed has already pumped 30 billion to save JPM. Without it, who knows what would have happened? And I believe that the US finacial system is in much more dangerous zone than the Japanese counterparts faced in the last decade. This baby can definitely implode.
And now take a look at the story of FNM. This has all the writings of a disaster. No wonder the bond rallies like there is no tomorrow. But the problem is, the more FNM buys bond, the lower the yield it goes, and the more refin activities going on. This is why FNM will pay dearly in the near future when the Fed allows it to leverage to a ridiculous level.
http://hsgfx:reciprocal@www.hussman.com/hussman/members/updates/latest.htm
And finally, The great Boston area is about to lay off 15 -30 k people, or more(from Fidelity, to Lucent, to EMC, to even big pharmas) in the next 12 months. The general consensus among hiring managers and job hunters are that it's going to get much worse as compared to the last 2 years before it gets significantly better. Cannot imagine what it will do to the housing market because most of these people are high-paid white collars.
good luck,
larry |
