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

To: Real Man who wrote (22210)	8/21/2009 6:44:45 AM
From: gregor_us	1 Recommendation Read Replies (1) \| Respond to of 71479

Would it be your sense then that FED operations to gather reserves started before their 06 OCT 2008? federalreserve.gov IIRC, Fannie and Freddie are subjected to an announced govt-takeover plan Sunday 7 September. Lehman is gone 8 days later, on 15 September. Personally I remain interested also in that particular relationship--the timeline between the FNM/FRE announcement and the ensuing cascade a week later. G

To: Real Man who wrote (22210)	8/21/2009 7:36:10 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 71479

This is funny that you mention Lehman. It appears that the approach was a three-some: One thing was clearly tightening money supply; thus ending the rampant spec in Oil and raw materials. I often thought this was the nuke option as there was no end in sight in running commodity prices (with wheat at 10, corn at 6 to 8, Oil over 100) and this became a self-sustaining feedback process. That clearly propped the dollar as the dollar financing for all those trades had to be pulled, as other carry trades also imploded. I think it is safe to say that a dangerous asset inflation had to be stopped whatever that costed, with the side effect to stabilise the dollar. (And I say stabilise, because the dollar has not gained much ground while commodities were cut in half). Second was the series of other than subprime mortgage related failures which (after the 2007 and early 2008 failures) I think is still the real underlying issue and it was in the market for some months already; this was made prominent through stalling of easy money; not only FRE FNM failed but also WM and for all practical purposes Golden West (WB) in that time. Third was some sort of collateral damage: AIG got underwater on its contracts and it would have failed easily on that, had the AIG counterparties enforced their rights in September; like they did in Lehman. And Lehman failed because it was a player too much in investment banking; Lehman could have failed in 1998 as well but back then the other players, notably Goldman have been much smaller than now.