Lonestar1

Which Black Swan Will Pop the Treasury Bubble?

Dumping of Treasuries by Foreign central banks is not a pure economic event. One should look for clues in strategic arm twisting among the world's largest geopolitical power brokers.

On the same basis, doesn't it make everybody wonder why Tokyo-Mitsubish (?) executed its $9 billion investment in Morgan Stanley for a 20% stake while they can withdraw without any penalty? More ironic is that the same Japanese bank raised capital for its own capital adequacy..

Bernanke Speaks Out on the Great Recession

It's hard to believe he continues to focus on a broken financial architecture which is impossible to repair. This top down approach is too late now. Instead he should circumvent the existing financial system and focus on how to help the real economy. The commercial paper program is in the right direction. But buying toxic assets or bailing out banks is throwing good money on bad.

Blaming on subprime shows that he still doesn't see the problem: a disproportionately large % of GDP is generated by the financial sector which will collapse even without subprime. It can be triggered by anything.

Wall Street's finacial games have risen to a laughable level prior to Aug 2007 when they "perfectly" hedged their risk positions and thus leveraged up to the neck. Also, since monetizing human activities on the earth at the present time was limited in size for them, they turned their focus on "future". Those 30-year or even 50-year swaps may not be enough. If without subprime, they porbably will do 100-year or 1000-year swaps to find some arbitrage opportunities.....In the end, it is only a game. They have no economic substance.