Well-well.... Bernie Schaeffer could as well be right - the
Fed is not waiting for subprime mortgage disaster - they
are printing again. That's definitely NOT unexpected. -g-
Can they create something out of nothing forever? Well,
John Law tried that in the past, and that paper got devalued. So will
the dollar. The choice of the BK endgame is in the hands
of the Fed, and is really between letting the dollar
fall hard or allowing a deep depression. Unfortunately, I
believe due to short-term policies pursued, the ultimate
endgame will involve BOTH - the dollar will fall hard,
and so will the assets in real terms. Inflation will skyrocket.
That's Argentina/Brazil crisis scenario. The blame should
be put on the Fed, whose bailout policies (save the Wall Street
buddies no matter what) have induced unprecedented level
of speculation in credit market OTC derivatives, which
are tied directly to interest rates set by the Fed.
On the other hand, much lower dollar
will definitely move US manufacturing back from China,
that's a positive -ng-
The dollar broke the uptrend, and headed down to test
that 80 level again. It will probably bounce, as I'm sure
the Fed will float the "inflation fighter" speech as soon
as it gets there. Doesn't matter the M3 that is gone in 2006 is
growing at 12%... Inflation fighters they are. -g-
It's not gonna work forever, BKs have not been outlawed just
yet. -g- But, full speed ahead for now. We'll see these markets
recover soon, as the printing press is working again.
Then again, the credit market is huge, and the subprime
disaster is spreading. The BBB traunches are trading as low as
67; with a face of 100. Can these 1bln. coupon passes support
the 300 Trillion financial pyramid forever? I think not.
The credit market is a lot bigger than the Fed.
Or, to put it another way,
the unfolding disaster in the credit market will require
a lot more effort from the Fed's printing press. On the
other hand, if the Fed starts producing all the cash required
by the credit market disaster, it
will likely spook the dollar (bag) holders. That will be the
point when we arrive to the endgame/BK
Operation Date: 02/26/2007
Operation Type: Outright Coupon Purchase
Release Time: 10:30 AM
Close Time: 11:00 AM
Settlement Date: 02/27/2007
Maturity/Call Date Range: 11/30/2007 - 06/30/2008
Total Par Amt Accepted (mlns) : $1,878
Total Par Amt Submitted (mlns) : $10,809
|
