Bobby......
1)...Rubin supporting the Yen....political rather than monetary
2)...Greenspan not raising interest rates 1/4% in May, when he could have dampened the stock market
3)...Lack of communication from the banks about losses...I believe that that is one of the reasons for the mergers....because a lot of sins can be buried in the extraordinary charges that are written off in the mergers...BA did this with SeaFirst Bank in Seattle...years ago
4)Derivatives are not just played from our banks side...I believe that the Russian Banks have been in the derivatives market....
5) '4' also applies to the Japanese Banks
I think that the governments are frozen...in that they (the US Gov.)
took a position years ago to open the Japanese Market, and Kantor worked on it for years....we could not penetrate their market...so we have moved under Rubin to open them up with the pressure on their currency....and I do believe that that is the Political and Monetary Policy of the US.....
Derivatives are basically a 1980's creation....they have and are being used everywhere....they are reported to be in the Banking system...in Mutual Funds....In Corporations....examples (my memory???) JP Morgan....$600,000,000.00 loss in Korea, when they refused to pay up...Proctor and Gamble....sued over derivatives that were put in their portfolio, they okayed them but did not understand them....they sued and won....Orange County California....derivates....Joseph Jett...he is barred from the Securities forever...When the case came up, the evidence exposed that the derivatives market is very active and not understood by managers or the top executives of his Brokerage...
Which has the SEC trying to figure out how to bring banks, insurance companies and corporations to put into their annual reports and their literature for prospective investors their derivative positions....
I believe that this is still in committee, as I have not heard that this has been accomplished....
I don't believe that I stated or implied that the Japanese wouldn't survive....just that their banks are in crisis...but they do not have the luxury of a high interest rate that can be used as Greenspan did, taking the Prime rate to 3 and holding it there until the banks came back healthy......and in the US, a bankrupcy and or failure is not the end of ones world....it is in Japan, and culturally I believe they do not know personally how to survive....
Bobby...you do not want to get me started on healthcare....
All of this is my conclusion...from reading and reading...and watching the markets....and remembering the 40's as a kid and the 50's
in High School....and the Markets....of the 60's and 70's and putting all my money in the market between June 12 and July 16, 1982 when the market was at 765....I did well for the next few years...
Bobby a lot of this is a very strong feeling based on history and my history........Too much random, and non specific....but thats what you get for now....Karen <G>
Bobby when I speak of derivatives, I am not speaking of the calls and puts, leaps and straddles, I am refering to the exotic ones that they have been playing with...keh [sorry for the misspells...] |
