Humpty Dumpty Dollar
via Prieur du Plessis Is Bernanke facing a death spiral?
Monday, November 05, 2007 | 02:30 PM | Permalink
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And Bernanke takes it up the rear once again from the Fed Governors....(just look at the pic in the post)
Posted by: matus | Nov 5, 2007 2:52:11 PM
Don't worry, we've got Terri's law, it'll never die! Just as long as we can keep the intravenous credit running full blast and the external stimulus running the dollar will keep on charging along.
Posted by: Don | Nov 5, 2007 3:31:24 PM
"Credit Risk Derivatives" Transmute Into "Default Credit Derivatives" With An Unexpected Degree Of Acceleration
Author: Jim Sinclair
Clearly the next step to follow a meltdown in the credit risk derivative group’s pounding of the commercial paper market would be a meltdown in the credit default derivative wherein trillions of dollars are involved yet the dealership in this structured product is an incredibly small number.
Those people, according to a Wall Street Journal article a year ago, are Merrill, Citicorp, Lehman, Goldman and Bear. These products, when purchased ostensive, protect the buyer from credit rating reduction and defaults be they in the market place (slashing of value) or the bond issuing entity itself.
The world class oxymoron is the credit default derivative that the financial integrity, as defined as the special performance contract actually performing, depends on the balance sheet capability of the loser on the arrangement. I would suggest to you that the outstanding commitments on the credit default derivatives exceeds the total cash and near cash assets of all the dealers involved. There is another outstanding question which is how many credit default derivatives have been written by the few participants on each other?
Friends, this is all coming down much faster than anyone could have anticipated. It is still too complex for most of the public and professionals to understand. That is the only reason that there isn't a panic attitude roaring through markets.
Posted by: Stuart | Nov 5, 2007 3:36:18 PM
With regard to Stuart's final point above, there just seems to be such a disconnect where one money manager says that this thing is just about over at the same time some derivatives guy says some shiznit is about to hit the fan. I realize this is what makes a market, but some streeters are going to get spanked if it blows up like some are suggesting it will.
Where's Schumacher today...he must have loved this action in the last 60 minutes...always the last 60 minutes.
Posted by: Global Savings Mutt | Nov 5, 2007 3:55:56 PM
3pm 7th cavalry fails this time (first?)
bears limbering up to surround the market (for now?)
rgds pcm
Posted by: peter from oz | Nov 5, 2007 4:06:56 PM
I daytrade/scalp E-mini's for a living and I made my daily goal very early today... but couldn't resist all the action later and took some more out. But, I got to tell you, that was some wierd price action that last 2 hours... I know the run-up they like to do lately, but this time we had a nice sell off after it. But the volume was very high thru-out. This is getting great!! I am glad I am in cash in my longer term accounts. I really thought we would get that last push up to Dow 14,700ish, and I would miss it, looks iffy now. Good Luck all. Never let a small controllable loss turn into a large panic stop.
Posted by: Brian B. | Nov 5, 2007 4:08:32 PM
Greenspan pushed him.
Posted by: MAS (Seattle) | Nov 5, 2007 4:22:48 PM
Well, now that we have Brazilian supermodels opine on the value of the US dollar I don't know what to think... a big rally ahead?
Small Investor Chronicles™
Posted by: Alex Khenkin | Nov 5, 2007 4:23:08 PM
You GOTTA love the fact that cartoons from JSMineset are posted to Big Picture. Confirmation that the advice I got from Jim Sinclair almost 5 years ago has been spot on?
Posted by: MikeR | Nov 5, 2007 4:38:37 PM
Great cartoon!!
Posted by: Pat Gorup | Nov 5, 2007 5:35:07 PM
Barry-
President Ronald Reagan once said that a dollar should be worth a dollar and only weak men and governments devaluate their currency. Ronald Reagan would have nothing but contempt for what they are doing to the dollar and what WallStreet and Banks are doing today.
I have given-up on WallStreet and Banks, I don't care, they won.
"Do not repent these things, for they are heavier Than all thy woes can stir. Therefore betake thee To nothing but despair." William Shakespeare
Posted by: David | Nov 5, 2007 7:49:42 PM
I believe has I have written several times, that this market is on the brink of falling. Now I can handle if I am wrong, cause I really dont care about my ego. The thing that would really suck is that Dennis Kneale would be correct. He is an bobblehead blow hard that doesnt trade or put real money on the table, and just keeps blabbering that everything is just fine.
Posted by: Brian B. | Nov 5, 2007 8:02:53 PM
About the "death spiral"
Has the shift from a manufacturing economy to a services (especially financial) economy made the economy more able to stay out of recessions longer but more fragile when if one did happen?
In the 50s or late 60s, did we not have recessions in which the GNP actually contracted by a few percentage points? What would that do to housing prices/mortgages/derivatives?
Posted by: jessica rooney | Nov 5, 2007 8:21:52 PM
Brian- Dennis Kneale is probably right, it doesn't matter, I don't care, he can have it all.
"In the corrupted currents of this world
Offense's gilded hand may shove by justice,
And oft 'tis seen the wicked prize itself
Buys out the law. But 'tis not so above."
Shakespeare
Posted by: David | Nov 5, 2007 9:39:02 PM
Speaking of the dollar's woes...
http://www.chaskaherald.com/node/3010
Is Jay-Z signaling a recession?
Posted by: Jeremiah | Nov 6, 2007 2:26:41 AM
You can't really appreciate Shakespeare until you've read it in the original Klingon.
Posted by: Chancellor Gorkon | Nov 6, 2007 2:29:17 AM
Brian,
I am right with you on Dennis Kneale. Nothing makes me lunge to change the channel faster than seeing that doofus pop up on the screen.
Thankfully, I get some Bloombabble here.
Posted by: Global Savings Mutt | Nov 6, 2007 7:47:54 AM
Global-
I tend to turn it off when that happens. It's really embarrassing to see these bankers and brokers cling to hope and hold strategy (which is exactly what they are doing with all that crap on the books). Apparently that is a NOT ok for us retail people to think that way but it's just fine to , almost everyday, gap the market up, fade it to lower than the previous day's close and then have it sit and churn only to lather rinse repeat the next day.
It's not fundamentally driven so it's rather easy to see it coming. It's harder to act upon as MANY things have to be disregarded (like an $8 BILLION loss, sorry WRITEDOWN) you know little things like that.....
I miss some opps. but I sleep at night....some of these hopeless perma bulls are not I guarantee it...
Ciao
MS
Posted by: michael schumacher | Nov 6, 2007 10:13:39 AM
