James Lewis

Oil Jumps, Stocks Slide, Dollar Succumbs

Erm...

Why are we talking about US data, when yesterday it became apparent that the Citi Group are going to write down another 8.9 billion USD. In effect this is an advert that they are insolvent.

The only think stopping them from bankcruptcy is by raising funds from the Middle East and Asia.

And of course the FED printing money day in day out.

This begs the question if Cit Group are insolvent what counter-party risk has the rest of the worlds companies have.

Also we are now seeing write-downs in all sort of other exciting areas. Its a good job all the rating agencies are not independent or the flawed financial system would have gone down.

What a system:-

Credit Default Swaps written by insolvent banks with AAA credit ratings.

You all know what happens next....


Disclaimer - Very Very Very Very Long Gold.