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

To: ggersh who wrote (9921)	9/8/2008 9:38:50 PM
From: Terry Whitman	Read Replies (2) \| Respond to of 33421

I sensed that the LTCM bailout in 1998 was a bad thing for free markets, and this move to take over the mortgage industry is probably even worse. I don't feel near the anger that I did then. I don't know if that comes from aging, or a dulling of the senses from all of the bailouts and takeovers that have occurred since then. Funny thing though, the moves by Easy Al in 1998 took us higher for over a year. If we could count on that again, it would be easy money, I guess. Have to wonder, though. The longer an alcoholic drinks, the more he needs to drink. This fat assed market is gonna need a heap of liquor to catch a buzz now.. and that buzz just may not last as long as it did 10 years ago.

To: ggersh who wrote (9921)	9/9/2008 10:43:35 PM
From: John Pitera	Respond to of 33421

Ggersh, yes and as many of you may recall the fairly spirited discussion that John Bogle got going in the spring, when he stated that at 800 Billion dollars the US Federal Reserve had committed it's entire balance sheet and could not take onto it's books even on a repo basis any more distressed assets, or even triple AAA rated Government debt. Nonsense, says I. I've got one question for the people who believe that and lament about the USD being the perpetual clownbuck. At this point, do these global markets especially the global currency markets seem to have any concerns about The FED monetizing more assets that are lacking a bid. Of course, all other things being equal that should be pushing the value of the USD down, but low and behold..... capital markets are running to and bidding up the USD in this time of widespread global disequilibrium. If the FED needs to take 2 trillion dollars of distressed and impaired assets onto their books to get them out of the hands of the huddled and befrazzed current holders, who or what is going to stop them?...... who's going to complain. The presumed end game of a big run on the FED's US Dollar is a nonstarter, because as we look around we see all these other so called clownish currencies with Central Banks that have little more huff and puff than our dog(big bad wolf/CB) which the US has in this hunt. (And it appears our dog Can still hunt. The biggest area in which even the really big, well paid, well respected Global Macro guys don't have a black box mathematical advantage in this environment is that just about no one has spent enough time theorizing and running the numbers on exactly how much heft and Financial Gravitas the FED and the Key Central Banks have and can exert in "times of extraordiary" financial disequilibrium. Where exactly is everyone going to run to find liquidity and security? As I have mentioned on numerous occasions, brain surgery is best left to the brain surgeons; film making best left to the film makers and Central Banking is best left to the Central Bankers. .... one further point I have been making recently, their is a slightly darker undertone of GeoPolitical- Military Capability risk/exposure in these global markets. The rally in the USD since Russia's forray into Georgia on August 7th-8th seems to be keeping Teddy Roosevelt's maxim fresh....and relavent from his perch atop Mt. Rushmore ( It's nice to have a big stick). maybe that's why he's on Mt. Rushmore... John