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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: robert b furman who wrote (65189)	8/4/2003 8:40:58 AM
From: Gersh Avery	Read Replies (1) \| Respond to of 94695

remenber Argentina? or Russia? You think it'll be OK if Europe implodes? BTW .. I agree .. good place for the end of the downhill run <g>

To: robert b furman who wrote (65189)	8/4/2003 10:53:23 AM
From: Real Man	Respond to of 94695

I'm sure they cleaned up, and were warned by the Fed. But that's not the point. The risk was transferred to Fannie and Freddie. So - everyone thinks, to the Fed. Thus, everyone thinks, it will be OK. Will it be OK? I don't think so. The point is, if just SOMEONE blows up, the whole thing will go down in flames. Sure, it won't be the banks. But only at first. That's what I'm thinking anyway. Derivatives are zero sum game. Someone loses, someone wins. However, if the loser can't pay, the system goes down in flames. We've seen that with Enron. That was just a very minor accident compared to what's going on now. The spreads are already higher than after LTCM blew up.

To: robert b furman who wrote (65189)	8/4/2003 11:11:15 AM
From: Real Man	Read Replies (1) \| Respond to of 94695

The way I understand banking system works - they make loans 10 times the actual amount of cash, to leverage on interest rates. So, if someone can't pay a loan, bad things happen, as 10 times the amount is lost. I'm sure you read it somewhere many times, as I did. The Fed may print to put the amount back into the system, but with the current size of the bond market, they will have to print a lot more than the size of the US economy. In that case, US dollar will go into the toilet, gold up. Either that, or a case of bad deflation, or both (Argentina)