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

To: Mike Johnston who wrote (67920)	8/10/2006 10:55:58 AM
From: russwinter	Respond to of 110194

A good day to repost my prior Godfather protection racket post: xanga.com What happens is that some regional tension gets revved up, such as the North Korean missile test, and the US "protection" chip is called into play. At about the same time, or shortly thereafter, overpriced Old Maid Card trash, like this week's 20 year TIP, gets auctioned by the US Treasury, the GSEs, or some key Pig Man. That trash gets mysteriously scarfed up, and when you look around to see if some private party may have participated, you will instead see an unusually high participation from FCBs, or someone like the Korean pension fund, or some foreign quasi-government institution. Next if tension flares up in the Middle East, protection gets paid by Saudi Arabia, or the UAE, or Kuwait, to show the Godfather good faith. Wash, rinse, repeat. 3.75 billion extra repo blast, but no coupon pass. However Japan did that last night to the tune of 0.90 trillion yen, and watch the aforementioned FCB boyz write out a check for about six billion to cover the 30 year auction.