We have a bond market blowoff, I think - bonds and stocks go up together on weakening dollar and higher commodity prices
Now, on leverage. Imagine you had a 5,000$ account, borrowed $95,000 from other people, and bought puts and calls on margin in the amount of $200,000, with a notional value of $4,000,000, and played with that on your account, pocketing the profits. Nuts? That's exactly what JPM is doing, in the credit market:
$60 billion market value,
$700 billion deposits,
$1.5 Trillion market value of derivatives,
$30 Trillion notional value
Now you know how ugly it will be when interest rates turn?
Well, blame our dear Green spam for that. I think he has opened the $ flood gates now like he did in 1999, but I think now it won't help. When they get it, they will run to the exit.
The good thing is that all the crooks will come to light, be prosecuted, and US will be able to move on and grow. |
