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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: robert b furman who wrote (8584)	12/12/2007 8:23:08 PM
From: Augustus Gloop	Read Replies (2) \| Respond to of 33421

One thing I'm looking forward to is being able to buy some quality financials with good divi's when this cyst is lanced. It might take some time but there are going to be some great buys IMO - BAC will buy Countrywide in full as we near a vomit bottom

To: robert b furman who wrote (8584)	12/12/2007 9:18:32 PM
From: ahhaha	Read Replies (1) \| Respond to of 33421

"This" is a fed member bank not paying a penalty rate for a deficiency of reserves that are required to be part of the federal reserve system. Nothing to do with the referent,"It is a free pass to not keep required reserves in the fed's system ie create inflation", assuming anyone can untangle these sentences with negatives. A fed discount penalty elimination allows unlimited leveraging- No such animal. That is, no discount penalty so there is no elimination of it. Going to the Window isn't a penalty. You really should get away from these sentences predicated in the negative. which unduly imperils those conservative banks that are responsible for their mortgages and the respective defaults. What is the subject here? Are you saying, "penalty elimination unduly imperils banks"? I know it contradicts what you think, but what you think, "discount penalty", is false, so your sentence is incoherent. Not to mention inflationary money creation universally. This is non sequitur. You were making comments about reserve bank machinery and that has nothing to do with inflation. So this bidding for funds, that provides liquidity on collateralized debt obligations, Are you saying the collateral is being offered? If you are one of the highflyers that embraced these new debt instruments,and collected a lot of fees,and now are at the end of the day holding that which they peddled,and to a greater degree out in the future it will all come back to them at expiration or roll over time. But you just said it won't : "So this bidding for funds, that provides liquidity on collateralized debt obligations". So they've got a time bomb on their hand - sell at depressed values that assure no hurt to the buyer (in the buyers estimation) or put it up as collateral - pay an auctioned rate,and let the crap they peddled pay out. Are you saying the collateral is being bid? If you didn't fraudulently junk the paper - it'll work out.They should know they bought it ,packaged it and peddled it - with our reputations guarantee! I thought you were talking about reserve bank's role in implementing an assuage of an awkward acceleration in mortgage cost. Doesn't it make more sense to help people pay rather than run them out? If you bogued the paper - it'll come home and it will be devastating - as well it should be. IMO In a free market these circumstances don't arise. This is contrary to what is taught at universities, so consequently the populace is brainwashed into believing a protection scheme is better than the vicissitudes of a free market. The problem is, protection schemes bring about the very outcome they're designed to prevent or alleviate. Your war is against the ignorance of the people as instilled by the universities, not against how people can use lawful means to obtain their ends. The fed is primarily composed of conservative local bankers that know their customers - have PLENTY of money to loan and aren't worried. FED is composed of a microcosm of quasi academics who have varying degrees of experience with business and finance. The outrage is coming from brokers,mortgage loan originators,and global money banks, that pumped this fee based product, to all corners of the world at a higher than treasurey market rate when deflationary forces affered no high yields and people took them for a higher yield. If you're looking for a culprit, you should look no farther than AG's FED. They ran a negative real ff rate for 3 years. That rate is the core determinant of all public monies world wide, and it sets the tone for the rate on private money. Without accommodation in public money rates there is no possible abuse of private money because private is derived and therefore goes at a premium to public. When at a premium private money can't be used for a "sure thing" like RE because it would be uneconomic to try. So FED policy enabled the RE inflation which devolved to the situation that now exists. The proof of this truth is seen in, say, today's comments by AG where he's trying to do damage control to avoid having his legacy targeted for blame. The fed really isn't hip to opening the discount flood gates discount flood gates? If you don't know how FED works, then you have no business criticizing them. Like most, including the academics, you have no idea as to the true fault behind FED implementation of policy. The policy isn't at fault, but the way they implement policy, literally the technique, is at fault. I'll give you a clue: FED fixes the price of money. Please tell me how a correct determination of price can ever come in a fixed price market. Indeed, "fixed price market" is oxymoron. I'm finished here. Bye bye.