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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (18370)	9/3/2004 4:51:27 PM
From: ild	Read Replies (1) \| Respond to of 110194

Date: Fri Sep 03 2004 15:56 trotsky (economic statistics) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved debating these stats is basically a waste of time. only very few are left that can be considered reliable ( e.g. the trade data are pretty accurate ) . if not for hedonic indexing, we'd all be aware that the state of the much-heralded recovery is far more precarious than the PTB make out. almost the entire gain in capital investment is due to the supposed 'real' number of computer related spending - i.e. money that no-one spent nor received ( as evidenced by the continuing revenues and earnings debacles in hi tech ) . the same methodolgy that distorts GDP also distorts inflation and productivity data. most remarkably, even if one took the data at face value, the recovery is the weakest post WW2 recovery on record. 'real' ( which is a funny Orwellian government way of saying 'imagined' ) GDP growth of $580 billion approx. since the official end of the recession contrasts with $6 trillion in new debt incurred over the same span ( not imagined, but very real ) . so the weakest post WW2 recovery has coincided with the biggest ever debt expansion. no, the glass is NOT half full. Date: Fri Sep 03 2004 13:26 trotsky (Chicken man@credit default swaps) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved absolutely. this is the greatest growth area in the derivatives world, and the sellers of such credit insurance probably thought Argentina was a safe bet. don't know the actual volumes involved, but i remember there was some talk at the time of the default of credit insurers getting hit. but the real fat tail massacres in that arena are imo yet to come. i can think of several venerable, large companies drowning in debt and unpayable pension obligations which could become victims of the 'soft patch' turning into an even softer patch. iow, i don't think Enron, or Argentina for that matter, will remain the largest defaulters of the decade. other candidates are waiting in the wings. Date: Fri Sep 03 2004 13:04 trotsky (Chicken Man) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved true, Argentina's government is broke, and appears quite intent on stiffing its foreign creditors ( it's currently offering 25 cents on the dollar, which is unheard of in sovereign debt default work-outs. in the secondary markets they're trading Argentine debt at 29 cents per dollar of face however ) . the latter have no avenue to enforce their claims - they can only threaten to withhold additional credit, which seems not to overly impress the Kirchner government. the Argentine CB is quite free to increase its reserves, and do with them as it sees fit.