contraxism

What Obama Needs to Know about Tim Geithner, the AIG Fiasco and Citigroup

Why are CDSs are not rolled into an exchange yet? Would this not be a prudent methodology to legitimize the interest and save the taxpayer from bailing out speculators as we speak?


On Nov 26 12:50 PM BerkeleyBob wrote:

> Complex issues here, some of the comments are informative, some not.
> Two central points emerge: 1) The damage to US reputation in the
> world financial market is incalculable and grave; 2) AIG appears
> to have been at the fulcrum of making book on leveraged CDO's and
> credit default swaps which were purchased by entities having no
> insurable or legitimate hedge interest in the underlying assets.
> It was not insurance, not regulated, and required apparently no reserve.
> Pure profit for AIG until the Ponzi scheme unraveled. Hank Greenberg
> is as unrepentant as Dennis Kowzlowski or any of the Enron gang.

What Obama Needs to Know about Tim Geithner, the AIG Fiasco and Citigroup

Hypothetically, I borrow $1K to buy $1M in fire insurance on my house that would actually cost $100K to replace. My house burns down and the insurer can't make good because too many houses burned down in such a short period of time with such exorbitant coverage . Should the government fund the insurer with taxpayers money to make good hoping that not many more houses will burn down?

What Obama Needs to Know about Tim Geithner, the AIG Fiasco and Citigroup

Why fund a leveraged wager of CDSs with taxpayers money?


On Nov 26 10:04 AM Steve Pluvia wrote:

> You, lost me early in this overly-long soap-box stint.
>
> Are you *seriously* suggesting the U.S. let AIG blow-up?
>
> So let me see if I get your point...
>
> Let AIG fail; All foreign held debt insured by AIG blows up...
>
> -- US treasury and corporate debt immediately has zero credibility;
>
> -- US corporations and have zero borrowing power for short term trade
> and expansion.
> -- Trade grinds to a halt as foreign partners no longer honor purchase
> orders from US corporations.
> -- Run on all banks;
> -- The dollar gets crushed; and,
> -- The US have very little ability to jump start the US economy with
> spending
>
> Oy freakin vey. Your idea is ridiculous. Clearly you don't understand
> the implications of what you propose.
>

The End of the Economy As We Know It?

On Nov 11 12:49 PM mdmrjsds wrote:

“Let everyone make as much money as they can during their life”

I say that one mans wealth shall be no greater than 10 times that of the average man.

My God! I have reached my limit, what shall I do now?

Every man, woman and child is not without food, shelter, health care and education.

The End of the Economy As We Know It?

Until a society is willing to except a limitation on individual wealth, the boom bust cycle will continue to repeat itself. Trust cannot be achieved in a society that worships its wealthy class.

News Flash: Major Market Turns Aren't Announced In Advance

The market is turning bullish one sector at a time.

The 9 sector SPDR’s consists of 4 bull market sectors and 5 bear market sectors.

Materials, Energy, Utilities and Consumer Staples are the 4 sectors which have held a gradual upward sloping support line from Aug 2007 lows on the 1 year chart.

Financials, Industrials and Consumer Discretionary are the 3 sectors which have set new 52 week lows on their downward sloping support line in July 2008. The Technology sector downtrend bottomed in Jan 2008 and the Health Care sector bottomed in March 2008.

The Jan 2008 correction was easier to identify an interim bottom as all 9 sectors corrected simultaneously with a 37 reading on the VIX. The Mar 2008 correction was reminiscent of Jan 2008, but to a lesser degree with a VIX reading of 35. The July 2008 correction is more confusing because it was a staggered one due to the fact that Technology and Health Care have joined the Bull camp, adding 2 more sectors. Therefore the Bear market has matured with 6 Bull market sectors versus 3 Bear market sectors.

If you are looking for leadership, it is happening in stages. The next sector to join the Bull camp will be the Industrials as the July 2008 lows were in line with Jan 2008, marking a double bottom support line on the chart. Financials and Consumer Discretionary sectors are getting much closer to the worst of their losses and will gradually be pulled along by the leading sectors and emerging market strength. Don't look to Financials for leadership, look to the leading markets for leadership.