26.8.07
By Adrian Ash "...The call for more money to fix the financial markets comes just as global inflation is beginning to cause real mischief..."
http://www.safehaven.com/article-8289.htm
Wednesday, August 29, 2007
Get ready for oil supplies to dwindle, experts warn
26.8.07
Aleklett believes the peak could arrive as soon as 2008 -- and that the struggle to adjust to the new energy reality could take 20 years, posing enormous challenges for developed nations.
http://www.canada.com/vancouversun/story.html?id=58fc9401-92d8-47b8-b1f2-bb320676825b
Aleklett believes the peak could arrive as soon as 2008 -- and that the struggle to adjust to the new energy reality could take 20 years, posing enormous challenges for developed nations.
http://www.canada.com/vancouversun/story.html?id=58fc9401-92d8-47b8-b1f2-bb320676825b
25 QUOTES ON THE CREDIT CRISIS
28.8.07
The financial market globally is up to its elbows in one of the strangest and most complicated credit crises in history. Events have come in rapid succession with mind-numbing effect. No sooner does the dust settle in one part of the market than it is kicked up in another. Through it all, the reactions on the part of the participants have been the stuff of a good financial thriller. We thought it would be interesting to catalog some of that reaction for you on one web page. So here they are - from the witty and profound to the scary and downright silly - our Top 25 Quotes on the Credit Crisis of '07
http://www.financialsense.com/editorials/kosares/2007/0828.html
The financial market globally is up to its elbows in one of the strangest and most complicated credit crises in history. Events have come in rapid succession with mind-numbing effect. No sooner does the dust settle in one part of the market than it is kicked up in another. Through it all, the reactions on the part of the participants have been the stuff of a good financial thriller. We thought it would be interesting to catalog some of that reaction for you on one web page. So here they are - from the witty and profound to the scary and downright silly - our Top 25 Quotes on the Credit Crisis of '07
http://www.financialsense.com/editorials/kosares/2007/0828.html
Do freight rates tell the true story?
26.8.07
"Twice already this year it has proved a reliable indicator of fundamental trends for commodities when markets wobbled," it says. "Once the dust settles, the likelihood is for some very strong rebounds in commodity prices."
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/25/ccfreight125.xml
"Twice already this year it has proved a reliable indicator of fundamental trends for commodities when markets wobbled," it says. "Once the dust settles, the likelihood is for some very strong rebounds in commodity prices."
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/25/ccfreight125.xml
BHP Billiton sales to India outpacing gains in China
BHP Billiton, the world's biggest mining company, says that growth in sales to India is outpacing gains in China as the southern Asian nation requires more coal and nickel to meet rising demand
http://www.iht.com/articles/2007/08/26/business/sxbhp.php
http://www.iht.com/articles/2007/08/26/business/sxbhp.php
Global copper deficit widens in H1 2007
22.8.07
The global copper deficit widened in the first half of this year, largely on strong Chinese demand and in spite of higher production, said the World Bureau of Metals Statistics
http://www.forbes.com/markets/feeds/afx/2007/08/22/afx4043454.html
The global copper deficit widened in the first half of this year, largely on strong Chinese demand and in spite of higher production, said the World Bureau of Metals Statistics
http://www.forbes.com/markets/feeds/afx/2007/08/22/afx4043454.html
Sunday, August 26, 2007
Top 25 Derivative Bank Nightmares
http://www.rense.com/general77/topfe.htm
Check the derivative book of the 25 banks with the highest derivative book
Check the derivative book of the 25 banks with the highest derivative book
Shrinking supply of Venezuelan oil to the US
23.8.07
Sagging supply of byproducts has been the main reason for the decline of oil shipments to the United States. Still, Venezuela continues being among the top five in the ranking of major oil suppliers
http://english.eluniversal.com/2007/08/22/en_eco_art_shrinking-supply-of_22A940517.shtml
Sagging supply of byproducts has been the main reason for the decline of oil shipments to the United States. Still, Venezuela continues being among the top five in the ranking of major oil suppliers
http://english.eluniversal.com/2007/08/22/en_eco_art_shrinking-supply-of_22A940517.shtml
Fed bends rules to help two big banks
24.8.07
If the Federal Reserve is waiving a fundamental principle in banking regulation, the credit crunch must still be sapping the strength of America's biggest banks.
http://money.cnn.com/2007/08/24/magazines/fortune/eavis_citigroup.fortune/index.htm?postversion=2007082417
If the Federal Reserve is waiving a fundamental principle in banking regulation, the credit crunch must still be sapping the strength of America's biggest banks.
http://money.cnn.com/2007/08/24/magazines/fortune/eavis_citigroup.fortune/index.htm?postversion=2007082417
THE LIQUIDITY CRISIS OF 2007
24.8.07
Is the current stock market correction a healthy correction, or thestart of a bear market? http://www.financialsense.com/fsu/editorials/sutton/2007/0824.html
Is the current stock market correction a healthy correction, or thestart of a bear market? http://www.financialsense.com/fsu/editorials/sutton/2007/0824.html
Thursday, August 23, 2007
Subprime Infects $300 Billion of Money Market Funds
20.8.07
Unbeknownst to most investors, some of the largest money market funds today are putting part of their cash into one of the riskiest debt investments in the world: collateralized debt obligations backed by subprime mortgage loans.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aEUtlgwzL_qc&refer=home
Unbeknownst to most investors, some of the largest money market funds today are putting part of their cash into one of the riskiest debt investments in the world: collateralized debt obligations backed by subprime mortgage loans.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aEUtlgwzL_qc&refer=home
Top Swiss banker attacks US lending standards as 'unbelievable'
21.8.07
Jean-Pierre Roth, president of the Swiss National Bank, said market turmoil was far from over as tremors from the sub-prime debacle continued to rock the world.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/20/bcnswiss20.xml
Jean-Pierre Roth, president of the Swiss National Bank, said market turmoil was far from over as tremors from the sub-prime debacle continued to rock the world.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/20/bcnswiss20.xml
Sunday, August 19, 2007
Who says there is almost NO inflation
15.8.07
Prices for key foods are rising sharply
The Labor Department's most recent inflation data showed that U.S. food prices rose by 4.2 percent for the 12 months ending in July, but a deeper look at the numbers reveals that the price of milk, eggs and other essentials in the American diet are actually rising by double digits
http://www.mcclatchydc.com/227/story/18902.html
Prices for key foods are rising sharply
The Labor Department's most recent inflation data showed that U.S. food prices rose by 4.2 percent for the 12 months ending in July, but a deeper look at the numbers reveals that the price of milk, eggs and other essentials in the American diet are actually rising by double digits
http://www.mcclatchydc.com/227/story/18902.html
The Archdruid Report
15.8.07
Excellent recommended to read
Scrabbling Around For Plan B
The carnage began with mortgage companies, not so long ago the darlings of the financial press. Eighty-odd of them have imploded in the last few months as they discovered that if you loan money to people who can’t pay it back – who’d have thought? – they can’t pay it back. Next it was the turn of hedge funds that speculated in mortgage debt, with two Bear Sterns funds leading the rush to insolvency
http://thearchdruidreport.blogspot.com/
Excellent recommended to read
Scrabbling Around For Plan B
The carnage began with mortgage companies, not so long ago the darlings of the financial press. Eighty-odd of them have imploded in the last few months as they discovered that if you loan money to people who can’t pay it back – who’d have thought? – they can’t pay it back. Next it was the turn of hedge funds that speculated in mortgage debt, with two Bear Sterns funds leading the rush to insolvency
http://thearchdruidreport.blogspot.com/
Arctic sea ice is melting at its fastest rate since records began
15.8.07
The sea ice of the Arctic will melt further and faster than at any time since records began nearly 30 years ago, according to the latest data collected by a satellite survey of the polar region.
http://news.independent.co.uk/sci_tech/article2864214.ece
The sea ice of the Arctic will melt further and faster than at any time since records began nearly 30 years ago, according to the latest data collected by a satellite survey of the polar region.
http://news.independent.co.uk/sci_tech/article2864214.ece
Saturday, August 18, 2007
Middle East
15.8.07
Labeling of I's Revolutionary Guards: Another step toward military confrontation
http://www.globalresearch.ca/index.php?context=va&aid=6561
Labeling of I's Revolutionary Guards: Another step toward military confrontation
http://www.globalresearch.ca/index.php?context=va&aid=6561
A Bull Market in Fools
16.8.07
The one thing needful at the top of each bubble, the rabble also takes on the role of greatest sucker, too. Piling in as the smart money runs for the exits, the common or garden investor pays top price. He or she is then left holding the "asset" as its price collapses...and by that time, the Lear jets have long since cleared the tarmac...taking the money with them.
http://www.whiskeyandgunpowder.com/Archives/2007/20070817.html
The one thing needful at the top of each bubble, the rabble also takes on the role of greatest sucker, too. Piling in as the smart money runs for the exits, the common or garden investor pays top price. He or she is then left holding the "asset" as its price collapses...and by that time, the Lear jets have long since cleared the tarmac...taking the money with them.
http://www.whiskeyandgunpowder.com/Archives/2007/20070817.html
Meltdown 'inside' Wall Street's brain
14.8.07
Seven rules for bull-and-bear predators in a 'brutal, manipulative world'
http://www.marketwatch.com/news/story/seven-rules-keeping-wall-streets/story.aspx?guid=%7BFD6E8E92%2D1066%2D48E1%2DBD24%2D49D6B2362AB9%7D
Seven rules for bull-and-bear predators in a 'brutal, manipulative world'
http://www.marketwatch.com/news/story/seven-rules-keeping-wall-streets/story.aspx?guid=%7BFD6E8E92%2D1066%2D48E1%2DBD24%2D49D6B2362AB9%7D
Wednesday, August 15, 2007
Hedge funds prepare for mass redemptions
15.8.07
From FT Europe
For anyone worried hedge funds could spark another market crisis, Wednesday is a red letter day: the final chance for investors to put in demands for their money back by the end of September at many funds using standard redemption terms needing 45 days’ notice
http://www.ft.com/cms/s/3dc39278-4a99-11dc-95b5-0000779fd2ac,dwp_uuid=d355f29c-d238-11db-a7c0-000b5df10621.html
Well we can expect some more Hedge funds to stop redemption towards the end of 3rd quarter
From FT Europe
For anyone worried hedge funds could spark another market crisis, Wednesday is a red letter day: the final chance for investors to put in demands for their money back by the end of September at many funds using standard redemption terms needing 45 days’ notice
http://www.ft.com/cms/s/3dc39278-4a99-11dc-95b5-0000779fd2ac,dwp_uuid=d355f29c-d238-11db-a7c0-000b5df10621.html
Well we can expect some more Hedge funds to stop redemption towards the end of 3rd quarter
from Lemetropolecafe.com
Kudos to James Turk who was way ahead of the pack two days ago in a Chris Powell dispatch…
"Suddenly investors are learning about counterparty risk, GoldMoney founder James Turk writes in his latest commentary for that gold-brokerage service."
Turk, editor of the Freemarket Gold & Money Report and consultant to GATA, speculates that the next phase of the panic over sub-prime mortgages may involve the discovery that they have infected ordinary money-market funds.
***
Voila…
10:55 Sentinel Management Group halts redemptions - CNBCCNBC reports that Sentinel of Illinois has asked the CFTC to permit the firm to halt redemptions for clients that have overnight accounts. CNBC says that it is unclear how big Sentinel is. * * * * *
1:24 Follow-up: Bloomberg reports that Sentinel Management managed $1.6B as of last monthCNBC reported earlier that Sentinel had asked CFTC permission to halt redemptions. Bloomberg reports that an assistant at Sentinel said that the CFTC had not yet approved the request. * * * * *
This is astounding…
From Barry Ritholz "The Big Picture"Money Markets Halting RedemptionsTuesday,
August 14, 2007 10:13 AM
via the always astute Doug Kass, we must point you to this simply unbelievable document . . . That's right, some Money Markets -- safe as cash, totally liquid -- are halting redemptions. Note: there is a big difference between Money Market Funds, and "enhanced" Money Market Mutual Funds -- namely, whether or not they are FDIC guaranteed to $100k.Once again, we see what the reach for yield has wrought . . .
August 13, 2007Dear Client:As you undoubtedly know, the credit markets, along with most other markets, have experienced a liquidity crisis in the past several weeks. Investor fear has overtaken reason and has induced a period in which most securities have simply ceased to trade. We have all read the stories about one hedge fund or another suffering losses related to subprime exposure and closing down or being rescued. This fear, while warranted in some cases, has spilled over into the rest of the credit market and liquidity has dried up all over the street. In addition, investment banks and securities firms are stuck with LBO deals they have already entered into but cannot find buyers for the bonds so must inventory them themselves.This liquidity crisis has caused bids to disappear from the market and makes it virtually impossible to properly price securities or to trade them. High grade securities are trading like junk bonds as panicked investors dump names like General Electric at Tyco-like prices.We have carefully monitored this situation for the past several weeks and have met regularly todiscuss the potential impact it may have on our clients. We had previously thought that the marketwould return to some semblance of order and that our clients would not join in the panic.Unfortunately, this has not been the case. We are concerned that we cannot meet any significant redemption requests without selling securities at deep discounts to their fair value and therefore causing unnecessary losses to our clients. We contacted the CFTC today and asked for their permission to halt redemptions until we can honor them in an orderly fashion.
Sentinel has always sought to protect your interests and since our inception in 1980, we have never experienced a situation quite like this one. We will continue to monitor the markets and we will raise cash as opportunities present themselves.We understand that this will obviously cause inconveniences on your part however, at present,we do not see an alternative and we don't believe it is in anyone's best interest if a run on Sentinel tookplace and we were in a forced liquidation mode.We value your trust in us these past 28 years and this has been a very difficult decision for usand we understand the implications of this decision both on you and on Sentinel. We feel, however,that this is the best way to assure you the best possible value on your investment.We will remain in contact with you and update you as things progress.
Sincerely,Sentinel Management Group, Inc.
CFTC says it can't halt Sentinel's redemptions WASHINGTON,
Aug 14 (Reuters) - The U.S. Commodity Futures Trading Commission has no authority to grant Sentinel Management Group's request to halt client redemptions, an agency official said on Tuesday. "The CFTC has no authority in this area," the CFTC official, who asked not to be identified, told Reuters. "This isn't something we do. "We have no role in whether or not the company does this and whether the client accepts it," the official said…
-END-
Why the CFTC I asked Jesse? Then I learned Sentinel was an FCM (Futures Commission Merchant) and not a money market fund, although are providing a similar service.
Jesse responded with…Here is the CFTC connection for Sentinel. I'm sure you've seen the CFTC response saying 'no jurisdiction.'But this is probably why they asked the CFTC and not the SEC. Sentinel 125 PortfolioInvestment Objective:The 125 Portfolio is intended to provide Sentinel's FCM clients with a short-term investment alternative that combines safety of principal, liquidity and competitive yields compliant with the CFTC's Rule 1.25. An investment in the 125 Portfolio provides an indirect, undivided pro-rata interest in the underlying securities.
Allowable Investments:
» Obligations of the U.S. Treasury and GNMA
» Short term commercial paper rated A1/P1
» Medium and long term debt rated AA or higher » Bank time deposits
» Repurchase agreements collateralized by the above Investment Strategy:
Sentinel's 125 Portfolio has been created and designed to adhere to the guidelines of the CFTC's Rule 1.25 governing allowable securities for the investment of customer (segregated) funds by FCMs. Sentinel structures this portfolio to include only those securities that meet the high rating standards of the rule. Sentinel uses the provision of the rule dealing with maximum average maturity, as a way to deliver yields that exceed those of competing money market funds whose maturity guidelines are subject to more constraining regulation. In order to accommodate the liquidity needs of FCM clients, this portfolio will, typically, hold forty to fifty percent of its assets in the form of overnight repurchase agreements (repos). Special market conditions may dictate higher or lower percentages as prudent departures from the norm.
Comment from my side
How determines the Fair Value?
Let's go back to the statement in Sentinels letter
"We are concerned that we cannot meet any significant redemption requests without selling securities at deep discounts to their fair value and therefore causing unnecessary losses to our clients."
To that please read the remark from Mish (http://globaleconomicanalysis.blogspot.com/)
"doesn't the market determine "fair value"? Apparently Sentinel thinks it knows what fair value is but the market doesn't. Recall that Bear Stearns thought the same thing. Bear Stearns locked out clients who wanted to redeem all the way back in January. Those investors would have gotten something back. Perhaps as much as 70 cents on the dollar. Bear Stearns locked those clients in and the Hedge Fund went to zero: totally worthless
"Suddenly investors are learning about counterparty risk, GoldMoney founder James Turk writes in his latest commentary for that gold-brokerage service."
Turk, editor of the Freemarket Gold & Money Report and consultant to GATA, speculates that the next phase of the panic over sub-prime mortgages may involve the discovery that they have infected ordinary money-market funds.
***
Voila…
10:55 Sentinel Management Group halts redemptions - CNBCCNBC reports that Sentinel of Illinois has asked the CFTC to permit the firm to halt redemptions for clients that have overnight accounts. CNBC says that it is unclear how big Sentinel is. * * * * *
1:24 Follow-up: Bloomberg reports that Sentinel Management managed $1.6B as of last monthCNBC reported earlier that Sentinel had asked CFTC permission to halt redemptions. Bloomberg reports that an assistant at Sentinel said that the CFTC had not yet approved the request. * * * * *
This is astounding…
From Barry Ritholz "The Big Picture"Money Markets Halting RedemptionsTuesday,
August 14, 2007 10:13 AM
via the always astute Doug Kass, we must point you to this simply unbelievable document . . . That's right, some Money Markets -- safe as cash, totally liquid -- are halting redemptions. Note: there is a big difference between Money Market Funds, and "enhanced" Money Market Mutual Funds -- namely, whether or not they are FDIC guaranteed to $100k.Once again, we see what the reach for yield has wrought . . .
August 13, 2007Dear Client:As you undoubtedly know, the credit markets, along with most other markets, have experienced a liquidity crisis in the past several weeks. Investor fear has overtaken reason and has induced a period in which most securities have simply ceased to trade. We have all read the stories about one hedge fund or another suffering losses related to subprime exposure and closing down or being rescued. This fear, while warranted in some cases, has spilled over into the rest of the credit market and liquidity has dried up all over the street. In addition, investment banks and securities firms are stuck with LBO deals they have already entered into but cannot find buyers for the bonds so must inventory them themselves.This liquidity crisis has caused bids to disappear from the market and makes it virtually impossible to properly price securities or to trade them. High grade securities are trading like junk bonds as panicked investors dump names like General Electric at Tyco-like prices.We have carefully monitored this situation for the past several weeks and have met regularly todiscuss the potential impact it may have on our clients. We had previously thought that the marketwould return to some semblance of order and that our clients would not join in the panic.Unfortunately, this has not been the case. We are concerned that we cannot meet any significant redemption requests without selling securities at deep discounts to their fair value and therefore causing unnecessary losses to our clients. We contacted the CFTC today and asked for their permission to halt redemptions until we can honor them in an orderly fashion.
Sentinel has always sought to protect your interests and since our inception in 1980, we have never experienced a situation quite like this one. We will continue to monitor the markets and we will raise cash as opportunities present themselves.We understand that this will obviously cause inconveniences on your part however, at present,we do not see an alternative and we don't believe it is in anyone's best interest if a run on Sentinel tookplace and we were in a forced liquidation mode.We value your trust in us these past 28 years and this has been a very difficult decision for usand we understand the implications of this decision both on you and on Sentinel. We feel, however,that this is the best way to assure you the best possible value on your investment.We will remain in contact with you and update you as things progress.
Sincerely,Sentinel Management Group, Inc.
CFTC says it can't halt Sentinel's redemptions WASHINGTON,
Aug 14 (Reuters) - The U.S. Commodity Futures Trading Commission has no authority to grant Sentinel Management Group's request to halt client redemptions, an agency official said on Tuesday. "The CFTC has no authority in this area," the CFTC official, who asked not to be identified, told Reuters. "This isn't something we do. "We have no role in whether or not the company does this and whether the client accepts it," the official said…
-END-
Why the CFTC I asked Jesse? Then I learned Sentinel was an FCM (Futures Commission Merchant) and not a money market fund, although are providing a similar service.
Jesse responded with…Here is the CFTC connection for Sentinel. I'm sure you've seen the CFTC response saying 'no jurisdiction.'But this is probably why they asked the CFTC and not the SEC. Sentinel 125 PortfolioInvestment Objective:The 125 Portfolio is intended to provide Sentinel's FCM clients with a short-term investment alternative that combines safety of principal, liquidity and competitive yields compliant with the CFTC's Rule 1.25. An investment in the 125 Portfolio provides an indirect, undivided pro-rata interest in the underlying securities.
Allowable Investments:
» Obligations of the U.S. Treasury and GNMA
» Short term commercial paper rated A1/P1
» Medium and long term debt rated AA or higher » Bank time deposits
» Repurchase agreements collateralized by the above Investment Strategy:
Sentinel's 125 Portfolio has been created and designed to adhere to the guidelines of the CFTC's Rule 1.25 governing allowable securities for the investment of customer (segregated) funds by FCMs. Sentinel structures this portfolio to include only those securities that meet the high rating standards of the rule. Sentinel uses the provision of the rule dealing with maximum average maturity, as a way to deliver yields that exceed those of competing money market funds whose maturity guidelines are subject to more constraining regulation. In order to accommodate the liquidity needs of FCM clients, this portfolio will, typically, hold forty to fifty percent of its assets in the form of overnight repurchase agreements (repos). Special market conditions may dictate higher or lower percentages as prudent departures from the norm.
Comment from my side
How determines the Fair Value?
Let's go back to the statement in Sentinels letter
"We are concerned that we cannot meet any significant redemption requests without selling securities at deep discounts to their fair value and therefore causing unnecessary losses to our clients."
To that please read the remark from Mish (http://globaleconomicanalysis.blogspot.com/)
"doesn't the market determine "fair value"? Apparently Sentinel thinks it knows what fair value is but the market doesn't. Recall that Bear Stearns thought the same thing. Bear Stearns locked out clients who wanted to redeem all the way back in January. Those investors would have gotten something back. Perhaps as much as 70 cents on the dollar. Bear Stearns locked those clients in and the Hedge Fund went to zero: totally worthless
Saturday, August 11, 2007
Worse than LTCM: Not Just a Liquidity Crisis; Rather a Credit Crisis and Crunch
Nouriel Roubini Aug 09, 2007
We also have insolvent hedge funds and other funds exposed to subprime and other mortgages. A few – at Bear Stearns, in Australia, in Germany, in France – have already gone bankrupt or are near bankrupt. You can be sure that with at least of $100 billion of subprime alone losses – and most losses are still hidden given the reckless practice of mark-to-model rather than mark-to-market - many more will go belly up. In the meanwhile the CDO, CLO and LBO market have completed closed down - a “constipated owl” where “absolutely nothing moves” the way Bill Gross of Pimco put it. This is for now a liquidity crisis in these credit markets; but credit events will occur given that the underlying problem was not of of liquidity but rather one of insolvency: if you take a bunch of to-be-defaulted subprime and near prime mortgages and you repackage them into RMBS and then these RMBS are repackaged into various tranches of CDOs, the rating agencies may be using magic voodoo to turn those junk BBB- mortgages into AAA tranches of CDOs; but this is only voodoo as the underlying assets are going to be defaulted on
http://www.rgemonitor.com/blog/roubini
We also have insolvent hedge funds and other funds exposed to subprime and other mortgages. A few – at Bear Stearns, in Australia, in Germany, in France – have already gone bankrupt or are near bankrupt. You can be sure that with at least of $100 billion of subprime alone losses – and most losses are still hidden given the reckless practice of mark-to-model rather than mark-to-market - many more will go belly up. In the meanwhile the CDO, CLO and LBO market have completed closed down - a “constipated owl” where “absolutely nothing moves” the way Bill Gross of Pimco put it. This is for now a liquidity crisis in these credit markets; but credit events will occur given that the underlying problem was not of of liquidity but rather one of insolvency: if you take a bunch of to-be-defaulted subprime and near prime mortgages and you repackage them into RMBS and then these RMBS are repackaged into various tranches of CDOs, the rating agencies may be using magic voodoo to turn those junk BBB- mortgages into AAA tranches of CDOs; but this is only voodoo as the underlying assets are going to be defaulted on
http://www.rgemonitor.com/blog/roubini
The $300 Trillion Time Bomb
Portfolio.com May 2007 Issue
Interesting read. The amounts in derivatives are in fact much higher than the 300 trillion
If Warren Buffett can't figure out derivatives, can anybody?
Gen Re got into derivatives dealing in 1990 and became tied to global financial markets in ways it found difficult to predict. When Buffett bought the company in 1998, he quickly decided he wanted out. At Buffett’s behest, Brandon embarked on a task that lost Berkshire and Gen Re a cool $409 million before taxes. The experience led Buffett to write in his 2002 letter to Berkshire Hathaway shareholders what has become the most memorable line about the instruments: “Derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”
http://www.portfolio.com/news-markets/national-news/portfolio/2007/03/29/The-300-Trillion-Time-Bomb#page1
Interesting read. The amounts in derivatives are in fact much higher than the 300 trillion
If Warren Buffett can't figure out derivatives, can anybody?
Gen Re got into derivatives dealing in 1990 and became tied to global financial markets in ways it found difficult to predict. When Buffett bought the company in 1998, he quickly decided he wanted out. At Buffett’s behest, Brandon embarked on a task that lost Berkshire and Gen Re a cool $409 million before taxes. The experience led Buffett to write in his 2002 letter to Berkshire Hathaway shareholders what has become the most memorable line about the instruments: “Derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”
http://www.portfolio.com/news-markets/national-news/portfolio/2007/03/29/The-300-Trillion-Time-Bomb#page1
The "Plunge Protection Team" working Overtime
10.8.07
By Gary Dorsch
"Imagination is more important than knowledge", the brilliant Albert Einstein used to say. Imagine for just a moment, that the Dow Jones Industrials has become a key instrument of national economic policy, and that by "actively managing" its direction, the government could impact the wealth of tens of millions of US households, and by extension, influence consumer confidence and spending
http://www.321gold.com/editorials/sirchartsalot/dorsch081007.html
By Gary Dorsch
"Imagination is more important than knowledge", the brilliant Albert Einstein used to say. Imagine for just a moment, that the Dow Jones Industrials has become a key instrument of national economic policy, and that by "actively managing" its direction, the government could impact the wealth of tens of millions of US households, and by extension, influence consumer confidence and spending
http://www.321gold.com/editorials/sirchartsalot/dorsch081007.html
Bernanke Panics & Gold Responds
11.8.07
In Globally Contained Liquidity Crunch I pointed out that the Fed was providing temporary loans (as repos) not capital to the markets. While true I missed something. What I missed involves the collateral the Fed is willing to take for those short term loans
http://globaleconomicanalysis.blogspot.com/
In Globally Contained Liquidity Crunch I pointed out that the Fed was providing temporary loans (as repos) not capital to the markets. While true I missed something. What I missed involves the collateral the Fed is willing to take for those short term loans
http://globaleconomicanalysis.blogspot.com/
WHAT WE KNOW
11.8.07
by Roger Conrad
How do you solve a liquidity crisis? The simple answer is to inject more liquidity into the financial system. The hard part is not pouring in too much and thereby setting off a speculative boom in the markets that leads to a greater meltdown later on
http://www.financialsense.com/editorials/RConrad/2007/0811.html
by Roger Conrad
How do you solve a liquidity crisis? The simple answer is to inject more liquidity into the financial system. The hard part is not pouring in too much and thereby setting off a speculative boom in the markets that leads to a greater meltdown later on
http://www.financialsense.com/editorials/RConrad/2007/0811.html
A BRIEF COMMENTARY ON FINANCIAL CRISES
10.8.07
by J. R. Nyquist
A financial crash is more than an economic glitch. It leads into dangerous political territory. It can trigger revolutions. Financial distress in the 1780s led to the French Revolution. Financial distress brought the Nazis and Japanese militarists to power before World War II. A financial earthquake may cause a political earthquake. A political earthquake, in turn, can set off a revolution, civil war, or even a world war. This is what history teaches
http://www.financialsense.com/stormwatch/geo/pastanalysis/2007/0810.html
by J. R. Nyquist
A financial crash is more than an economic glitch. It leads into dangerous political territory. It can trigger revolutions. Financial distress in the 1780s led to the French Revolution. Financial distress brought the Nazis and Japanese militarists to power before World War II. A financial earthquake may cause a political earthquake. A political earthquake, in turn, can set off a revolution, civil war, or even a world war. This is what history teaches
http://www.financialsense.com/stormwatch/geo/pastanalysis/2007/0810.html
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