Asbytec

Currency Swaps, U.S. Dollar, And a Tilted Playing Field

I remember the dollar rally and the Fed announcing currency swaps. Are you saying currency swaps actually help the dollar by themselves, or was it the insider play? That's quite a play on the dollar. Man. It seems to me currency swap would debase the dollar, as I feared back then, but as contradicted by the graph above.

If the Fed has unwound the program, I take that to mean they have recalled their dollar loans and remitted the euros, then wouldn't that support the dollar as they disappear form circulation? Need some thinking on this...interesting article.

The Coming Consequences of Banking Fraud

Warm Paw, I'd argue the housing crisis was the trigger, not necessarily the root cause or the problem, setting our over extended financial system into a tail spin. Being over extended, making too much money than can be supported by our economy or consumer debt, is the problem.

Too much synthetic liquidity floating around the globe fueling unsustainable growth, especially in China. Now that the liquidity bubble has burst, we are in real trouble. The central banks simply cannot reinflate to keep up with the deflation.

I am not really a conspiracy theorist, but there does seem to be some collusion between the powerful people in the world to save the banking system. It is a source of great wealth for the oligarchs, as long as folks are employed and pay off their debt. Now that the worker can't pay off debt because of high interest rates or unemployment, the money well dries up fast, doesn't it? That's because the wealth effect is nothing like real wealth. With real wealth, the consumer doesn't need to borrow from those who really are wealthy.

Right on, Jason...I am proud of our constitution and declaration of independence. The Federal reserve act is unconstitutional, in my view. So is a fiat dollar.

Fannie Mae: Trading Derivatives...and Losing

Good for them...

Preview from Europe: Market Futures Bounce

Yea, stunning rally based on Obama's take on what's beginning to show signs of improvement: financial markets, housing, and the list goes on. But, wait till the short sellers take theirs. I dunno, still digesting this whole thing. The fundamentals are still out of whack, but good news coming out of Washington.

I am pleased Obama is ensuring the rest of he G20 will follow suit. This means the dollar might not tank as badly as it should.

The Difference Between TARP and TALF

Can I still get in on a CDS that guarantees me a return if Paulson turns out to be a nice guy? I'd like to bet against it.

If I understand correctly, it sounds like he's trying to short circuit the CDS failures so banks won't have to pay on bets against consumer default? What about paying out on bets they will not default? Is he ensuring someone will still have to pay? This is getting confusing.

My understanding is the banks are weighed down heavily by debt they already owe. The banking system should never engage in insurance functions and gambling. I hope the act of congress approving such activity is repealed and burned.

Man, this is a mess. Maybe another great depression is just what we need to reboot our economy.