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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives
SPY 679.68+0.7%Nov 26 4:00 PM EST
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To: Wayners who wrote (40737)11/23/2012 8:24:46 PM
From: Hawkmoon2 Recommendations  Read Replies (1) of 219403
 
On one hand, I think Geitner's comments were very ill-advised. What he said indicates that no attempts at fiscal restraint and deficit reduction should be made.

But what, IMO, he's really thinking is that we need more high-grade collateral to prop up the derivatives bets from the shadow banking system.. And compared to everything else, with the exception of physical gold and silver, US sovereign debt is the gold standard.

I find myself paying more and more attention to what Grahmn Summers is saying on the issue, especially with regard to Precious Metals.. (and I'm not known as a gold bug)..

http://www.zerohedge.com/contributed/2012-11-21/real-reason-fed-wont-tough-treasuries-again-and-tapped-out


The Fed is supposedly buying up MBS debt in order to put a floor under that market as the value of housing backed securities has diminished in credibility as collateral.. So, what's left is Sovereign debt, backed up by the full faith and credit of heavily strapped tax payers.

Can't have additional Trillions in collateral made available if we have a debt ceiling..

But I really don't think debt should be used as collateral.. Especially when the borrowed money is being wasted by the politicians and party hacks who lobby for more public spending that does not create an ROI for the taxpayers.

Hawk
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