I can not post to much info, but IMO this is not a credit crunch, but what we are now facing is a liquidity crisis at this point, with all the write downs on the street, plus other internal issues at all the major banks and wirehouse there just seems to be a big liquidity problem right now. You must understand a major part of US $$$ liquidity is overseas due the real bad current account deficit (trade imbalance) that has been going ion for some time. The Fed is lowered rates, but they need to add cash to the system. Look up were the money supply is M2, remember when Financials have write downs what is taking place is with drawing 4-5 times that amount of the money supply. When you stary seeing AAA rate high quality 7 day paper fail a AMS Auction, there is a problem. There have only been 3-4 failed auctions over the last 25 years all due to Credit issues, but this week they were all failing, there is a liquidity issue at hand right now, The street must fix the hole in the wall to keep it from spilling over to other parts of the economy.
Can not post to much info...
You some kinda insider? Work on the street?
I don’t even have a bank account, so what little I have is totally liquid. Never trusted the paper pushers.
Many thanks for the information. You obviously know a lot more than I do about the bond markets. Thanks
Isn’t part of the problem that more foreign money used to be there to buy up these munis & bonds? Aren’t Europeans and others pissed off at being burned by US CMOs they bought that were highly rated? So staying away?
So how do you fix a liquidity crisis, besides let it run its course? Are cuts to the Feds rate going to have any useful effect?
I'm still showing M2 is increasing as of January. Still scary about the AAA paper failing.