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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (101162)	2/11/2009 11:07:30 PM
From: RJA_	Read Replies (1) \| Respond to of 110194

>>But more importantly, when the US came out with TIPS bonds, I think it drastically undercut the value of gold as an inflation hedge. When you can buy a bond that is indexed to inflation, is fully liquid, and backed by the full faith and credit of the elected government (who hope to be re-elected), I not sure what purpose gold serves except as a speculative investment. US Government inflation figures are shall we say, inaccurate. Therefore TIPS pay amounts very much understated. See Shadowstats.com

To: Hawkmoon who wrote (101162)	2/12/2009 2:02:04 AM
From: Hawkmoon	Respond to of 110194

If you're not following Barry Ritholtz's tirade against the Rating Agencies, this is a must read: ritholtz.com The collusion between the IBs and the RA's are going to be the focus of years of litigation by the insurers who backed their issuances. The monolines, who assigned their insurance premiums and risk analysis based upon the models presented by the RAs were denied the ability to properly charge according to the ACTUAL risks involved. And many have discovered that a large percentage of originated loans were fraudulent (liar loans), which may also ultimately limit the insurers liability. The monolines own the voting rights to the CDOs and won't surrender them for potential sale/transfer by the banks to the Treasury/Fed without a proper commutation of their liability. In sum, the insurers were victimized by the RAs and the IBs and they aren't going to give up the only leverage they possess.. Thus, I'm just not sure how the Fed/Treasury is going to accomplish all of this without an outright purchase of those toxic assets into a bad bank, or backstopping the monolines who were left holding the bag by the RAs and IBs. Barry Ritholtz is definitely on to something when he criticizes the Credit Rating Agencies. It's one of the least reported upon issues of this financial crisis. Hawk