snorkels4 Posted September 10, 2007 Report Share Posted September 10, 2007 he institutions holding ABCP are getting back about 50 cents on the dollar right now, and are being forced to roll over the rest, from what I hear. The crash in the ABCP market depicted in the chart above and the one I posted earlier do not begin to reflect the full extent of the crash. This is liquidity destruction on a scale unprecedented in modern history. * abcp=?? Link to comment Share on other sites More sharing options...
cwd Posted September 10, 2007 Report Share Posted September 10, 2007 Who has 90% of the spec home construction loan market around here? Vineyard Bank. Who has less than 1% of the spec home construction loan market? My bank, way too conservative. I guess we'll be still standing after the carnage hits. 606296[/snapback] Thas is what is important, to be standing when the game is over. Link to comment Share on other sites More sharing options...
cwd Posted September 10, 2007 Report Share Posted September 10, 2007 The interesting thing is that the Fed gave the impression that it was supplying additional liquidity, and that seemed to work for the time being. Probably just a lucky coincidence as the market was pretty much sold out at that point anyway. Or maybe good timing. But the point is that without additional liquidity, and a LOT of it, another wave of selling as bad or worse than the first one is just around the corner. The Fed knows, or should know that. But they are choosing to play the game armed only with smoke and mirrors. I guess they are saving the real firehoses for the real conflagration. Who knows. 606309[/snapback] Maybe the FED is worried about the Dollar and GOLD. Link to comment Share on other sites More sharing options...
The End Posted September 10, 2007 Report Share Posted September 10, 2007 Thinking ST I do not believe for one minute that 1370 will be retested completely. Link to comment Share on other sites More sharing options...
linrom Posted September 10, 2007 Report Share Posted September 10, 2007 This bull market, asset backed commercial paper, is having a little pullback. In all fairness this isnt a price chart but a chart of total paper volume. Still, I've seen worse charts, I think. 606336[/snapback] Nice chart. Destroy the debt = deflation. "Debt kills": it's like "speed" of an earlier era. Richard Russell, who's been pretty wrong in recent years, is expecting a dollar rally as debt burns. Something about debt being a natural short on dollars, or something. As I tried to propose Friday, I'm pondering deflationary debt destruction and dollar destruction. More than pondering, I'm positioned for it. 606345[/snapback] ALL debt destruction: money is debt. Bullish for the dollar and bearish for interest rates. This is the old standing view held by Pretcher. Link to comment Share on other sites More sharing options...
Jimi Posted September 10, 2007 Report Share Posted September 10, 2007 ABCP = Asset Backed Commercial Paper Link to comment Share on other sites More sharing options...
LeeWhee Posted September 10, 2007 Report Share Posted September 10, 2007 One of my favorite dickweeds over at Pimpco (the one who used to talk to his rabbit) has just posted a long, whiny essay which concludes:Thus, the Fed needs to ease and will ease, substantially I firmly believe, not to bail out Wall Street but to make certain that weaker growth on Main Street does not morph into recession, which would carry serious debt-deflation consequences. ... Here?s saying a prayer that 100 basis points of Fed funds cuts, by the end of 2007, will not be too late for the sky. PIMPCO Pathetic, or what? Hey, dickweed, in case you're wondering what happened to your rabbit . . . 606354[/snapback] McCulley makes the case that Cheat Street speculation, if allowed to deflate, would spill over into the "real economy" and risk a systemic debt deflation. So even though he admits the "Fed put" is a moral hazard of the first order, they need to cut anyway and keep the game going. What he fails to mention is that decades of Fed moral hazard has helped create this monster. There would be no risk of debt-deflation if the Fed hadn't given their imprimatur to wave after wave of credit-fueled asset inflation. The time will come when this game simply can't continue, no matter what the Fed does or doesn't do. Is this that time? Or will the game go into extra innings? Link to comment Share on other sites More sharing options...
Brisbane Bear Posted September 10, 2007 Report Share Posted September 10, 2007 I think the only way they can keep the game going is to let a lot of air out of the various bubbles before they cut agressively. Most assets are only down marginally,compared with how far they have risen in recent years. A short,very sharp drop would probably do the trick.Enough to cause some real pain and snap people out of their complacency.But not too much that the whole economy gets thrown out with the bathwater. A real good shake out of all the speculators would allow the bull market to continue on for quite a few years. It is a risky strategy,you want to panic some of the herd,shake out the dodgy speculators,but don't do too much damage. It is easier said than done. Link to comment Share on other sites More sharing options...
crazy_ate Posted September 10, 2007 Report Share Posted September 10, 2007 The time will come when this game simply can't continue, no matter what the Fed does or doesn't do. 606377[/snapback] That time is now!!!! But first, give me time to buy back the rest of the CALLS I wrote (as the market continue to dump) and then dump my dongs after the wingohockingmoyamensinging 1,000+ point moonshot once the Fred does anal ease #1. Link to comment Share on other sites More sharing options...
Private Skidmark Posted September 10, 2007 Report Share Posted September 10, 2007 I'm flat broke. Busted. Had this irresistible compulsion to spend all my money on physical gold. Traded these funny paper things for it. Link to comment Share on other sites More sharing options...
shorty Posted September 10, 2007 Report Share Posted September 10, 2007 Will the next 12 months be any different? nope....it's all good, all the time there is no risk Guaranteed and Insured. the economy is strong consumers are flush with excess spendable cash and low debt inflation is totally contained, with costs actually falling for food, clothing, shelter, gasoline, college, insurance and taxes good high-paying jobs are plentiful and easy to come by the housing market is booming, making everyone wealthy the so-called "subprime crisis" is much ado about nothing, affecting only a miniscule isolated irrelevant segment of the market, which will be bailed out anyway at no cost to anyone stocks are deeply undervalued and will easily soar to new all-time highs worldwide we've achieved a true lasting peace in the middle east, with endless love and gentle goodwill amongst all peoples it's gonna be a great year 606288[/snapback] Hey Shorty, have you been listening to Hans Hans Hans Brinker Again? 606368[/snapback] "I did not have any relations with that man, Mr. Scchhhtinker!" Link to comment Share on other sites More sharing options...
cwd Posted September 10, 2007 Report Share Posted September 10, 2007 Fund Name (Symbol) Effective Yield (%) Current 7-Day Yield (%) Availability OER1 SWSXX Schwab Cash Reserves? 4.95 4.84 Households with $500,000 or more in assets 0.68% SWMXX Schwab Money Market Fund? 4.94 4.83 Fund closed to new accounts 0.73% SWGXX Schwab Government Money Fund? 4.66 4.56 Fund closed to new accounts 0.75% SWUXX Schwab U.S. Treasury Money Fund? 3.43 3.38 Fund closed to new accounts 0.61% This is what Schwab is paying on money markets apparently if you are already in. Link to comment Share on other sites More sharing options...
cwd Posted September 10, 2007 Report Share Posted September 10, 2007 The time will come when this game simply can't continue, no matter what the Fed does or doesn't do. 606377[/snapback] That time is now!!!! But first, give me time to buy back the rest of the CALLS I wrote (as the market continue to dump) and then dump my dongs after the wingohockingmoyamensinging 1,000+ point moonshot once the Fred does anal ease #1. 606379[/snapback] I think Doc maybe right we says after the rate the DOW will drop 1k points. Link to comment Share on other sites More sharing options...
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