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

To: bart13 who wrote (84973)	8/13/2007 10:10:26 PM
From: John Metcalf	Read Replies (1) \| Respond to of 110194

Bart, is ECB injecting more cash in order to defend an interest rate that is lower than ours in the US? Our Fed has said that they were defending the current Fed funds rate, which had opened above-target at 6% last week.

To: bart13 who wrote (84973)	8/13/2007 10:15:10 PM
From: regli	Read Replies (4) \| Respond to of 110194

"A large point that has been missed so far in any media I've seen is that the European Central Bank did temporary injections of over $210 billion the last three days and the Fed only did about $64 billion over the same 3 day period." This might very well be true based on what we can observe to this point. However, I don't think that the present gyrations are actually that important in the bigger picture. The key take-away, from my perspective, is that there is growing awareness that Wall Street and the rating agencies did fool quite intentionally foreign investors. This means that the primary groups who have financed the U.S. deficits (trade and budget) and therefore were the key sources of financing of the credit bubble will now retrench and seriously reevaluate U.S. investments. China stopping the purchases of agencies in May was likely just a start. I expect that the major fallout from current events will be the start of the end of Bretton Woods II as a result of foreign distrust in U.S. packaged securities. This is likely a much more serious consequence than the current liquidity issues bandied about in the press.