John Pitera's Market Laboratory Message Board

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Strategies & Market Trends : John Pitera's Market Laboratory

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To: Cactus Jack who wrote (10145)	10/2/2008 10:31:47 PM
From: John Pitera	1 Recommendation Read Replies (1) of 33421

No $700 Billion is not going to be enough..... I think you can argue that the FED has already come up with over 800 Billion this year. We had interesting discussions on this thread when John Bogle stated that the FED was halfway through their 800 Billion Balance sheet in dealing with the crisis back in March. Don't know what he was smoking...... as I have highlighted in articles the past few days, the FED is accepting Equities from some firms as collateral this week. The FED is empowered to monetize and accept almost any type of asset that it deems appropriate in times of extreme economic distress. I am very impressed with how the AIG intervention has been structured as reported on the SEC cited. It appears that the US treasury AND NOT THE FED, which is ostensibly privately owned, has had a trust created which the Treasury is a 79.9% beneficiary of a special preferred share of stock that will give them interest payments of 11.5% and 8.5% over the next 2 years. The Treasury will also get returns on the 16 different business divisions that may and or will be sold. Including the Aircraft leasing division. Two this is absolutely a GLOBAL PROBLEM. At the end of the day their will be more Credit Default Swaps fallout among the Banks of Europe, the Hedge Funds of Grand Cayman, The British Virgin Islands, Global capital waystations in Singapore, Brussels, German. The US is completely emmeshed in this conundrum; however it's a global credit deleveraging. Final bill..... 5 to 10 Trillion Dollars. How do we get there .....stay tuned. John

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