Lonestar1

Why Was the PPIP Extended Today?

AS FASB has revised MTM accounting rule, the seller side (banks) has no incentive to sell those toxic assets any more. Perhaps hedge funds know this, and thus do not want to participate. But the funniest thing is that big banks are very interested in setting up PPIP funds. I guess the end result is these guys can swap toxic assets at much higher prices ?

Bulls Hold The Line - For Now

Good article. Although my own bias is for the market to set a new deep low sometime in the summer months, the near term technical picture + a (false?) hope for 2H recovery should push the SPX above 944 we saw in the new year.

No certainty, always probability.

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.