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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: SliderOnTheBlack who wrote (13725)	12/1/2008 7:49:27 PM
From: 200ma	Respond to of 50062

excellent post!

To: SliderOnTheBlack who wrote (13725)	12/1/2008 11:36:41 PM
From: pitbull_1_us	Read Replies (2) \| Respond to of 50062

Thanks Slider..However my interest is in the currency reaction if the european banks implode..Do you see any further longterm dollar strength in the offhand chance that the world powers cannot contain a massive emerging economy debt default.(ie crushed euro = dollar strength) My concern involves my rather large physical precious metal holdings in that I may want to begin to scale out if they are drug much further down because of a withdrawn strengthening of the dollar.I'm not really concerned with silver above 8 or gold above 600 but if they are going below that for a 10 year period I need to begin selling if I want to get out without a loss.Thanks in advance.

To: SliderOnTheBlack who wrote (13725)	12/1/2008 11:57:37 PM
From: bmillermn	Respond to of 50062

long EEV isn't a bad trade either. Going for ride number 4 here.

To: SliderOnTheBlack who wrote (13725)	12/2/2008 7:34:32 AM
From: bearjones	Respond to of 50062

Now with all that said, please comment on investment strategies since there is no obvious reason to be optimistic about the economy.

To: SliderOnTheBlack who wrote (13725)	12/2/2008 10:06:28 AM
From: Collier	3 Recommendations Respond to of 50062

Slider, I found this analysis interesting and would like to get your take on it. gregor.us Outcomes for Deflationists and Inflationists December 2, 2008 Although Gregor.us is ostensibly an energy blog I sometimes feel the need to tackle macro issues. Over the past few weeks I’ve been trying to focus my thoughts on our current moment, where we find that deflationary pressures are rampant but reflationary policies globally are of a historic magnitude. What follows is my attempt to take the two outcomes through, to their most obvious conclusions. Deflationists If you believe deflation will take hold, and no amount of monetary policy or fiscal policy globally can prevent it, then prepare for the collapse of the US financial system for the following reason: there will not be enough economic activity to support the asset base of the key banks and financial institutions. Operations of the kind that took place last week with Citigroup would occur on a weekly basis. In such an environment, even the good debtors will lose their jobs, run down savings, or walk away from their homes. The FED will respond with more printing of money to give to the banks, but this frankly becomes nationalisation and then the government will mediate the aggregate private debt by forgiving most of it: all the mortgages, credit cards and commercial loans. It will become painfully clear that no future economic activity will take place unless 90% of the previous debt is forgiven. Bottom line: in deflation there will be no condition present that will allow Americans to increase their savings, pay down debts, and repair balance sheets. In deflation, the repair model simply will not happen. It will be a collapse. And the government will also default on its debt. Infllationists If you believe inflation takes hold and/or deflation never takes hold, then there is a chance that enough growth can take place while the debt is reduced by inflation that would allow Americans to keep working and devote capital to pay down debts with weaker dollars. But, even with inflation, there is only a chance that this happens. But, it’s a decent chance. Bottom line: it’s crucial that the USD weaken substantially so that purchasing power is reduced to inhibit consumption of foreign goods, while at the same time earnings inflate via wage growth and proceeds are used to reduce debt. The sign that reflation is taking hold would be a weakening of the USD, a rise in the stock market, and a good uptick in demand for money which would initially take place on a landscape of very low interest rates. The Surprise Thus, we arrive at the conundrum that I don’t think the deflationists have figure out yet. They are at present busily cheering on the rally in Treasuries, as yields plummet, only happy to have their thesis (apparently) confirmed. What they have not figured out yet, and I am unclear why, is that deflation will detonate the private banking system, which will in turn detonate the US ability to rollover its own debt. The government will own the banks, but, will not have enough tax revenues to service its debt. Treasury auctions will fail, because supply will either be too large, or, the FED will be monetizing the auctions. There will simply not be enough buyers of US debt under those conditions. The surprise is therefore counter-intuitive: US Treasury bonds will default eventually if deflation takes hold, but, if inflation takes hold US Treasury bonds will simply go into a bad bear market–they’ll be paid off but with cheaper dollars. For the United States, a nation of debtors not savers, no truer words were ever spoken: inflate or die.

To: SliderOnTheBlack who wrote (13725)	12/17/2008 9:07:55 AM
From: SliderOnTheBlack	3 Recommendations Read Replies (1) \| Respond to of 50062

More on the "Evil Empire of Goldman Sachs"... Well, well, well... Whodathunkit?!? The punditry is now raising the question of whether Paulson extorted Congress with threats of Martial Law, primarily to rescue and bail out Goldman... ************************************************************ portfolio.com Dec 16 2008 4:21PM EST Did Geithner Bail Out Goldman Sachs? Add the NYT editorial board to the Goldman Sachs conspiracy theorists. It asks some good questions about Lehman revisionism, but then ends up with this: The revised version of the story sidesteps questions about whether the bailout of A.I.G. -- arranged by Mr. Geithner -- was influenced by the specific needs of some of the insurer's counterparties, like Goldman Sachs. The Times's Gretchen Morgenson reported that Lloyd Blankfein, the chief executive of Goldman, was the only Wall Street executive at a meeting at the New York Federal Reserve on Sept. 15 to discuss the A.I.G. bailout. A Goldman spokesman said Mr. Blankfein was not there to represent his firm's interests, but rather that Goldman "engaged" the issue because of the implications to the entire system. (Yeah Right) Adding to the opacity, the Fed recently decided to keep confidential one of two reports that it made to Congress on the A.I.G. bailout. If the Fed had not insisted on confidentiality, that report would have been made public. Mr. Geithner should be asked at his confirmation hearing to explain which firms were threatened by an A.I.G. collapse, in what amounts and how those entanglements justify an ongoing bailout. Mr. Geithner must also explain how such entanglements came to be the norm on his watch. His answers will help shed light on whether he is sufficiently distant from Wall Street to reform a system that has proved catastrophically unstable. The bit about the confidential report is a classic bit of misdirection: while it's understandable that the press is upset that the report is confidential (I'd like to see it too), there is zero chance that it contains some kind of smoking gun saying that the AIG bailout was really a Goldman Sachs bailout. The reason for the confidentiality is much more mundane: the report contains commercially-sensitive details of AIG's positions, which would be picked over by the rest of Wall Street were they to be made public. I do think that Geithner should be asked about the firms threatened by an AIG collapse, however, and I do think that he should reply in detail. Yes, Goldman Sachs was a big AIG counterparty, but it has stated repeatedly -- and credibly -- that its AIG exposure was hedged. But Goldman is a trading shop, with risk managers who hedge anything they can measure on a real-time basis. The real damage of an AIG collapse would not have been at trading shops but rather larger, slower, commercial banks which had large CDO portfolios and less-assiduous risk-management systems. The lion's share of AIG's losses have come from the credit default swaps that it wrote on banks' CDOs. If those swaps were to become worthless -- or even just worth less -- then any counterparties who hadn't hedged their AIG exposure would have to have taken enormous further write-downs on CDO holdings they thought they'd hedged. My gut feeling is that if AIG had failed, there's a good chance that Citigroup would have become insolvent overnight. And since Citi is far too big to fail, it was much easier for the Fed to bail out AIG than it would have been for the Fed to bail out Citi and some unknown number of other banks who had also hedged their CDO positions with AIG. Of course, none of this would have been good for Goldman Sachs -- the insolvency and/or bailout of one or more major banks would have had collateral damage on Goldman just like it did on the rest of the financial system and the economy as a whole. And there's a good chance that Goldman's AIG hedges would turn out to have been with counterparties who were themselves exposed to AIG, and therefore not worth as much as Goldman had thought. But there's no real evidence supporting the NYT's implication that Tim Geithner bailed out AIG because he wanted to do a special favor for Lloyd Blankfein. I do hope that he can put this meme to rest at his confirmation hearings, if not before. ********************************************************* Message 25219310 "Paulson's threat to congress about martial law and a armageddon scenario in the banking system, was to save Goldman Sachs. Paulson "broke the glass" to save Goldman -- period. Why do you think he wanted "immunity" as part of the bailout package? Let's NEVER forget that Hank Paulson was the chief architect in increasing the leverage that could be used by Wall Street Investment Banks. Paulson's lobbying allowed investment banks to increase their leverage from 15:1 in 2000, to over 50:1 by 2004, which they then pyramided atop Greenspan's explosion in money supply, and irrationally exhuberant rate cuts. And today, the U.S. Treasury is now a branch office of Goldman Sachs. The inmates really are running the prison people. And the insiders are cutting themselves deals left and right, as Rome burns. They're picking the winners and losers, and getting pay back on companies like Bear Stearns, who turned it's back on the other Wall Street investment banks during the LTCM bailout. And Greenspan is now a paid consultant to the likes of John Paulson, who made billions by shorting mortgages and who is now buying up "select" distressed mortgages, as well as being a paid consultant to PIMCO, who is also now a corporate insider to the bailout process. Never has Wall Street been in a position to deal itself such a lucrative hand." ********************************************************** Did Geithner bail out Goldman Sach's? Duh... And one final thought regarding Goldman... You want the truth... Here's the truth: Gold vs. Goldman SOTB