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

To: Dr. Voodoo who wrote (37334)	7/17/2008 10:07:14 PM
From: TobagoJack	Respond to of 217744

<<I don't know how TJ keeps up>> ... yes you do, as we are getting paid by the likes of zimblazinwick to keep up, and so leisure is work, and work is leisure, a win-win outcome that encourages further engagement which in turn-around-corners dictates always keeping up. as you noted, thankfully, <<The great thing about the game is, that it never ends. teotwawki is a long time in comming>> and yes, as with you, my skf will undoubtedly be called away. for me, at 130 and 140, blessedly, and may the short covering ramp, further enhanced by bear market hope climbing, bring skf into our embrace once again. heck, we may even get to short fre to 6, before blazinshortzimwick breaks even ;0) working at secret hide away today, and above and over my pc screen, i see an antique pier, a bunch of little sailing boats and wind surf boards in the foreocean, as well as a gigantic maersk liner in the distant sea. i think about blazinshortwick a lot, and am wondering what he is now doing :0) just in in-tray Now can someone explain to me the politicians and markets view of world Because mine is that the credit or banking crisis is primarily driven by following factors: - banks have far too many illiguid assets , and assets of questionable valuation on their books (or off their books , but liable for, as case may be). - banks have limited equity capital as compared to potential exposure of the above assets being redefined, revalued - banks are struggling to fund their balance sheet as the mechanisms deployed over last years have come to grinding halt and as interbank group looses faith in each other (or needs funds to cover own shortfalls) - banks now being faced with rising cost of funds , short and long term. Against existing long term commitments. Ie carry trade broken , so no easy return for bank to lend long and borrow short - banks now facing depositors asking if money is safe. So we could have traditional bank run - banks are facing a massive loss of business (revenue) from not being able to write new business because of above. - banks are facing massive losses as adjust balance sheet assets to market - banks raising equity but on dilutive terms , and in some cases the buyers are not following thru (Ie china) The credit crisis and subsequent wipe out of banks equity was because of reality , not just a bunch of short sellers doing naked shorts in ny. The naked shorts were just accelerating this process. Ie driving the equity to be worthless , which it likely is. What is next , govts legislating that the citizens must deposit money at banks, or that the banks must lend to each other (a rule akin to the school yard, where someone has to have little timmy on their team , even though he was a liability). This legislation will protect existing equity , but does nothing to help stop the banking or credit or liguidity crisis. Am I confused. All I know is that my company has several billion of loans from banks at libor + 50-75 bps , for 10-15 year terms. And that the banks that lent us the money are being forced to pay much higher to borrow short or meduim term (5 year) money in interbank market, and now to depositors. My math is simple. We borrow at l + 75 bps. Banks borrow at l + 100 bps for 92 percent of loan and equity for balance 8 percent of loan (fortunately our loans a lower capital weighting under basle 2 - about 2-4 percent). But anyways , I just don't see the banks turning a profit, and those upfront fees - well they were used to bonus the bankers last year. . The deleveraging cycle is upon us , as banks pull back on lending to reinforce their own balance sheets and as they raise the cost of funds to match their own . Optimisim is gone , so suddenly a banker will allow a borrower to lever a maximum 4 I 5x cash flow instead of 7x or 8x. Equity will want a return that justifies its risk on this delevered basis. I don't see this turning any time soon. But maybe I am wrong.