"structured-notes": here's another disaster for you

and not a small amount either: $114 billion, another one of those "b" things. we're just getting going on this one as news starts leaking out that some are worth pennies. here's the bloomberg story ...

http://www.washingto...ml?hpid=topnews


p.s. i see futures down over twenty handles. any thoughts on what the next bailout plan will be? right.

Edited by humble1, 29 September 2008 - 03:46 AM.

and not a small amount either: $114 billion, another one of those "b" things. we're just getting going on this one as news starts leaking out that some are worth pennies. here's the bloomberg story ...

http://www.washingto...ml?hpid=topnews


p.s. i see futures down over twenty handles. any thoughts on what the next bailout plan will be? right.

Yeah that alphabet soup never ends.

The next bailout plan ... market will clear for pennies on the dollar. Once deleveraging is done and people actually LIQUIDATE, we're off to a fresh start.

Edited by ogm, 29 September 2008 - 05:21 AM.

i agree and i look forward to that time. but we are still in act I, scene X (I,II,III?) and the finale is many moons away. bank runs will accelerate in the coming weeks and months. my question to you and to myself and others: is there ANYTHING which can stop that?

nothing can stop it, the only thing is to remediate the effects it has on the real economy, smoothe the fall and curtail total disruption and chaos - and retain whatever confidence might be left with the (foreign) treasury bond buyers that are keeping us on life support. We will have to produce our way out of this, or it could be WW3 as DC suggests. There are so many reasons this bailout fails, not least of which is the string of future failures like CDS, CDO, structured notes and other OTC derivatives that cannot be paid by the institutions that wrote them are not accounted for and it is setting a bad precedent. Add in the banks that will fail because they have these in their portfolios - and the ensuing bailout of FDIC, the retirement plans that will be cut in half or obliterated, unemployment rates in the double digits, tax receipts way off, especially income and property taxes to states and localities going to single digits of what they have been...there will be many trillions needed for the real economy. This bailout of the reckless investment bankers and stockholder et al is another misallocation of capital that we will pay for, for decades.

US sollar index is up 1.7% today, though. Means there is still some confidence left. Even if this is the flight to safety, they are flying for safety into the US assets. These are the most liquid markets in the world. And I love that the dollar is up. Bull market is cash. Its now worth more then yesterday.

Edited by ogm, 29 September 2008 - 06:23 AM.

US sollar index is up 1.7% today, though. Means there is still some confidence left. Even if this is the flight to safety, they are flying for safety into the US assets.

These are the most liquid markets in the world.

And I love that the dollar is up. Bull market is cash. Its now worth more then yesterday.

Were not rates cut in Asia last night? That's likely primary reason for $USD pop.

HB: excellent points: the derivatives disasters have not really even started. to unwind that Gordian Knot will take an alexander-the-great style whack. but then all you have is loose dangling strings. eventually, a clearing house and regulation of derivatives will be required. but, oh the pain!, before that gets traction. and, by the way, regulation and clearing facilities were clearly needed safety measures whicch ALAN GREENSPAN WORKED AGAINST! that man needs to be tried for fiduciary fraud and put in jail.

ogm: i think you completely miss the point about the stronger dollar. it simply means that worldwide runs on banks are ramping up. it is because the USA has so much paper out there that frightened large entities go to the dollar. it also could have a deflation message: REALLY BAD NEWS THERE!

Edited by humble1, 29 September 2008 - 06:42 AM.

ogm:

i think you completely miss the point about the stronger dollar. it simply means that worldwide runs on banks are ramping up. it is because the USA has so much paper out there that frightened large entities go to the dollar.

it also could have a deflation message: REALLY BAD NEWS THERE!

No, I don't miss it, Its a safety run, as I said. Good for those who have US dollars. And deflation means that those with cash have more buying power. Bull market in cash.

HB:

excellent points: the derivatives disasters have not really even started. to unwind that Gordian Knot will take an alexander-the-great style whack. but then all you have is loose dangling strings.

eventually, a clearing house and regulation of derivatives will be required. but, oh the pain!, before that gets traction. and, by the way, regulation and clearing facilities were clearly needed safety measures whicch ALAN GREENSPAN WORKED AGAINST!

that man needs to be tried for fiduciary fraud and put in jail.

Not only did GreenScam work against safety measures, so did the DemoCraps and especially Obama, Clinton, others. All along it was a disaster in the making and all the greedy politicos turned a blind eye.

A few years back, many were singing GreenScam's praises... "Oh, he's been just great"... "Best Fed chairman ever", and more such rot. Then the Queen KNIGHTED him (sort of) ... SHOULD HAVE INDICTED HIM!

There is LOTS AND LOTS of blame to go around here... all from greed and lack of oversight and regulations. And now, the politicos want those who were not involved in the fiasco/catastrophe to pay the bill.