SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Sun Tzu who wrote (93422)4/10/2008 4:30:24 PM
From: Sun Tzu   of 110194
 
Several years ago I heard about a banana republic that in an effort to improve roads, painted 5 lanes on a 4-lane highway. With this, the ministry of transportation triumphantly declared a 25% increase in highway capacity under difficult budgetary conditions. A year of plenty accidents and several fatalities convinced the ministry to undo the change and paint back 4 lanes onto the highway. They recorded this as a 20% reduction of highway capacity and (get this!) a net gain of 5% over the two years (+25% - 20%)!!

It seems that these days similarities between the US and banana republics is never ending...

The weird stuff at the Fed, the weird stuff at the Treasury, and the weird Bear Stearns fiasco becomes a little more suspicious, if that was even possible, after reading, "Wall Street's Latest Illusion" in Barron's. Andrew Bary explains, "Some Wall Street titans have been able to book gains from the declining value of their own debt."...Mr Bary explains, "When a company's credit weakens and the yield on its debt rises relative to risk-free Treasuries, the debt becomes worth less to the holder. The financial company, which is the debt issuer, then takes a gain, because theoretically it could buy back its debt below face value."
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News