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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (7496)	5/20/2008 7:24:08 AM
From: saveslivesbyday	Read Replies (3) \| Respond to of 71475

RE: the bomb (really the OTC derivatives Ponzi scheme) I think Bernanke and the Fed actually realize this, and are scared sh!tless that such a catastrophe could indeed happen on their watch. Their actions to prevent this (using their reserve to back the banks and IB's) was a panic reaction - damage control so to speak, not a well-planned action with expected consequences. If this is so - that the Fed comprehends the severity of the derivatives bomb - their best approach would be to diffuse it slowly and carefully, rather than pump it up for a bigger explosion. How to do this? I'm sure BB reads his email daily hoping someone comes up with a good suggestion. It would seem to me that tightening regulations, oversight, anything that would tame the monster without poking or prodding it too hard, would be the answer. The 2 problem are - if it's widely publicized that there is a bomb about to go off, "investors" will be scared, and g-d forbid the stock market goes down, even temporarily. Second, are there enough people on WS (and around the world) who care enough about the larger good to resist fighting the attempts to harness this?

To: Real Man who wrote (7496)	5/20/2008 1:59:11 PM
From: Tommaso	Read Replies (2) \| Respond to of 71475

" the failure of 1 firm would have caused a collapse of entire US financial system through domino effect." Well, that's what everyone but me and Jim Rogers says. Since Bear wasn't allowed to implode, I find it hard to know what would have happened if it had.

To: Real Man who wrote (7496)	5/20/2008 2:14:43 PM
From: ggersh	Respond to of 71475

This should help......guess retail investors also have a BB put... No End To Fixed-Income Boo-Boos? In answer to that oft-asked question, ‘Are there any more monster banks in bed with hedge funds that are still kerfuffling?’ we can now, unfortunately, say yes. Enter Citigroup's soon-to-be infamous Falcon Strategies fund, which has lost more than 75% of its value, triggering a fresh sound and fury that’s already resulting in lawsuits, torrents of investor ire (both retail and from the likes of Wachovia and Fifth Third Bancorp), a wave of broker resignations and no shortage of nettlesome questions as to why a bank would choose to back life-insurance policies with bets of a highly speculative nature. Shocking – or, at this point, just par for the course? Morning Call: May 20 The downward spiral of a Citigroup Inc. hedge fund has caused steep losses for at least three large U.S. banks that hoped it would rev up returns on a controversial type of employee life insurance. Besides triggering a lawsuit against an insurer and brokerage firm that arranged the hedge-fund investment for Fifth Third Bancorp, the losses may pressure Citigroup to give the banks some of their money back, as it has agreed to do for individual investors. Such a bailout would be costly, because the clobbered banks sank more than $1.6 billion into the hedge fund, according to the lawsuit and people familiar with the matter. The problems stem from Citigroup's Falcon Strategies hedge fund, a fixed-income vehicle whose value has plunged more than 75%. Many of the fund's investors were retail clients at the New York financial giant's Smith Barney unit, including some who were told Falcon was a haven. The collapse is another headache for Citigroup's new management, led by Chief Executive Vikram Pandit, as it tries to rebound from crippling losses that stemmed partly from inadequate risk controls. Falcon's descent has caused a handful of high-level brokers to quit in frustration. Citigroup is spending $250 million to allow retail investors to exit from their positions without absorbing the fund's full losses. Falcon also attracted major banks that invested in the hedge fund as part of their bank-owned life insurance programs. Wachovia Corp., the fifth-largest U.S. bank by stock-market value, was the most heavily exposed, with more than $1 billion invested, people familiar with the situation say. The stake represented at least 7% of the Charlotte, N.C., bank's $14.9 billion in BOLI-related assets as of March 31.