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

To: NOW who wrote (26597)	1/27/2010 8:15:25 PM
From: Real Man	1 Recommendation Read Replies (1) \| Respond to of 71463

Yes, that sounds obscene. However, it might not be a crime. Not every kind of financial robbery is a crime. Finance is robbery by nature. One thing they do is manipulate the markets to their advantage derivative-wise, so their clients lose. That is a crime. The Fed provides liquidity, surprisingly, mostly on expiration week. See Jesse's site.

To: NOW who wrote (26597)	1/27/2010 8:31:11 PM
From: Real Man	Respond to of 71463

My personal hunch is that so-called derivative bubble is not something as dangerous as painted by WB, myself, and a few others. It's the core debt bubble itself that presents the danger. However, by their very nature they amplify the core debt bubble (by offloading risk onto the system) and will convert a downturn into a severe systemic crash. The truth lies in between the feared notional values and the banking system's tiny calculated VAR.

To: NOW who wrote (26597)	1/27/2010 10:27:59 PM
From: Real Man	Respond to of 71463

IMHO things were done the right way to minimize the overall pain, although ad hoc, dealing with one blowup at a time, and allowing some major moral hazard and looting. The correct next step would be to limit leverage and overregulate, which seems coming. In my view, now that the financial strain has subsided, it's a good time to implement Volcker's burn 'em strategy and try to eliminate too big to fail. It might work. Debt crises are strange beasts, and Japan was able to run huge govt indebtedness without consequences. That's an optimistic view -g- Of course, we still have quite a bit of debt overhang, but they might be able to engineer slow growth of employment going forward, reducing that debt as a fraction of GDP through monetization over time. This year and next will be crucial. It will either work or we blow. It might work, which will surprise the bears.