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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (30662)	3/9/2008 8:34:35 PM
From: carranza2	Read Replies (3) \| Respond to of 220435

Had a grok session with The Force today. I think we're OK. The tranformonetization of loaned TAF cash into gilt-edge Treasuries is likely just another useless maneuver meaning nothing. A switch from the left hand to the right. It was no drain, just a meaningless metamorphosis because the banks are not lending, and so it makes no difference if the accounts hold cash or Treasuries or tulips. The banks still owe the Fed the money, whether you call it TAF cash or T-bills or banana peels. And the loans are still collateralized partially with crap. Balance sheet and real world effect: mostly nil, I think. We should be OK. I'm setting stops, not just as tight ones as I thought I needed, just in case, because the "why did BurnUndKaput do this?" still escapes me as it appears a zero sum game in which nothing much seems to change. And of course I could be wayo-ff in my thinking, missing forest for trees. More smoke and mirrors. TAF or Treasuries, what difference does it make? It's not being loaned and it must be repaid.

To: TobagoJack who wrote (30662)	3/9/2008 8:47:08 PM
From: Riskmgmt	Read Replies (2) \| Respond to of 220435

Ah, logical you say, sounds more like Alice in Wonderland. >>the hedge funds, long of good stuff and short of crap, is or soon should be in process to reduce size of book, meaning buying back crap and selling off goodies, in a hurry, and in concentrated wallops, within short elapsed time, and so we may enter twilight zone where everything we hold dear goes down and all that we despise rises to the heavens, in a hurry it would be a logical explanation based on imagination<< Ok now I admit I've had 2 glasses of wine with dinner but let me see, "long on good stuff" "short of crap". So let us say gold and commodities are good stuff so they will be selling them which will tilt supply and demand so that these "goodies will be cheaper. Ok got that and that makes sense. The "crap" I'd guess as MBS or one of the acronyms, SIV's,CDO's etc., paper junk. I can follow why they would sell off goodies (to raise cash) but what would motivate them to buy crap?