jbde

Is Dubai's Default a Black Swan Event?

apppro said: "That entire area was a waste of Arab oil dollars"

No - OUR DOLLARS.

The flow of wealth taken from the average person has been used unwisely. Not FOR the average person, but for the elite.

What we need is reality - $40 oil - no war premiums, no rapid up and down trading - good ol' boring oil prices without speculators.

When 7 FED members [and counting], plus Tim say there is no asset bubble - THERE IS AS ASSET BUBBLE. How big it is will be measured as to how low prices get as everyone scrambles for the door and the overhead abundance of sellers depresses prices for years.

Yes years. Deflation is here and the 're-inflation' trade of low interest rates is not working. Sure you may 'recover' price as risk is chased, but just try to sell a lot of something - like foreclosed and now deteriorating homes. Looks good on paper - but not in the real world.

Bank of America, Citigroup, JP Morgan and Wells Fargo Stocking Up on Liquidity

The large banks are preparing for the day of reckoning [wrecking]. They are hording liquidity because they know what is about to happen. They are hiding the losses and when they are forced to mark to market [by liquidating housing and commercial assets], the losses will pour.

Confidence in the banks will wane to zero and we will see bank runs. Expect the government to test its new 'not too big to fail' rules by breaking up Citi. BofA can avoid this by spinning MER off.

We are in a period of deflation that will start to spiral downward. There are no more piggybanks for consumers; and when you have to by oil or gas to heat your house, you will sell anything you can for whatever you can get.

Instead of giving 'stimulus' money to municipalities, the money should have been spent on creating jobs to old fashion way - work programs! Bridges, roads, grid, solar, nukes, wind. How many urban planners do you need writing reports? Get rid of the waste. The bloated positions added over the boom years need to go - instead they keep them and axe the teachers.

Five Reasons the Market Could Crash This Fall

The obvious problems with the banks have already happened. Now for the shockers - OREO's [other real estate owned] cannot be held forever as the upkeep [cutting the grass] and taxes [real estate] begin to take their toll. The banks 'hope' prices will recover, but the opposite is happening - prices are still falling and the assets are wasting [no warm bodies and propery climate control can deteriorate a house in a year as vermin and bugs take up residency]. And anyone who believes the commercial RE is not going to be a problem because everyone knows about it, is not living in the real world. Try to rollover a loan with a property needing repairs, half the tennants and the restdemanding lower rents - good luck.

BANKS SHOULD NOT BE PERMITTED TO TRADE - GS will eventually get it's hat handed to it - calls for probes are mounting - the money they 'make' is stealing from society. Hiding behind 'providing liquidty' is total BS and disrupts markets.

The High Cost of Carry Trades and Their Impacts on the Markets

Where does the 'cost' to borrow a stock come from?
Broker fee?

I thought the only true cost was the liability to pay dividends to the new 'owner' who buys the shorter's sell.

The loaner gives up voting rights as they go to the new 'owner' of the borrowed stock sold by the shorter. That's no cost.

The Hedge Fund of America, LP

The plan will buy assets in clearly defined tranches by permitting the holders to offer selling prices [reverse auction]. This means the first sale, where say $50B will be bought, will attract those who most need to raise cash - WB for example. The first $50B of the best prices are taken in for cash. The next tranches will probably yield a higher price for the sellers as the more toxic stuff will go first, but those who missed the boat the first round may again push prices down since there will still be some desparate sellers.

Such wholesale sales are great for the buyer, and this buyer has deep pockets. You will almost immediately see hedge funds wanting to get in on the action as the prices move up in successive auctions. Watch some stuff be sold immedaitely after purchase in some cases as the smart money will realize that the next sale will be at higher prices.

Thus the $700B credit line revolves and more than $700B in stuff can be moved from the banking system to other hands - hands other than the government as well.

The tax payers will win and win big as only the government can lend borrow at graet long term rates and hold for long term. The FED is the lender of last result, but the government is the buyer of last result.