Posted on 03/01/2006 10:27:06 AM PST by ex-Texan
The spigot might be turned off, but there is still plenty of gurgling at this end of the pipeline. Still get an offer a day of enough credit to put one into lifetime slavery.
Thanks for the tip. Do you always refer to UAE publications for your business news?
Incidently, conspiracy theories notwithstanding, the Japanese don't suddenly decide to "turn off the tap on ultra cheap credit." Their own credit markets offer a lower rate of return than ours, because they are suffering from deflation. That's why they buy our bonds. Which, in turn, drives the interest rate the US TReasury must offer lower. This is covered in the first week of any HS AP Economics course.
This is actually from the UK Telegraph, but in any case, the UAE is our good friend and strategic ally. What's your problem?
([T]he Swedes)???????... HuH?
This author leaves out the major player, next to Uncle Sugar, his homeland!?
Maybe humans can indeed control the weather. Might be easier than trying to control this market, tho'...
ping for later
No, the article was picked up by the Telegraph in association with Emirates UK. Don't believe me? Click on the link. And, to be honest with you, I have no problem with the UAE or the ports deal. I just don't see the need to be referring to them for evaluations of the world economy. But that's neither here nor there. This is a poorly written piece. Credit markets do not suddenly reverse themselves.
[oh, sorry, that was Dallas in 1982 - it was sheer terror back then - people screeming in the streets]
I think the answer is to keep renting. That's the best way to build wealth over the long run. Owning property is a mistake, because the market never goes back up. In fact, some people who bought years ago are in bad straits, their $300,000 equity may go down to $280,000. They should never have bought a house. Idiots.
If you do not understand those facts, please let me explain. It is highly likely that your mortgage was sold by the lender within six months after you signed the papers. Lenders resell mortgages. They are packaged into graded bonds (based on credit review of the borrowers) and sold to buyers on Wall Street. Most of these mortgage bonds have been purchased by wealthy foreigners, hedge funds, rich Arab sheiks, governments, including the UAE.
What this all means is that if you are paying a mortgage today you may be paying wealthy foreigners. How much American credit does the UAE hold? Nobody really knows.
But one thing is certain: Be very careful about making your payments. There are mortgage scams out there. Lenders may be set up to foreclose properties rapidly. Your friendly mortgage company might even be owned by wealthy oil traders from the UAE.
The Bankruptcy Act was amended by Congress last year. People can no longer walk away from their homes when things turn bad. People will pay and pay for years after their homes have been seized. Are you getting the picture yet?
Guys, forget about the UAE connection. It is a distraction for you. Assuming that this column comes from a reputible news course, it is stilly using faulty logic, and an incomplete understanding of global credit markets.
Great Post!...
Get ready with your nomex suit because the "EVER" Bulls will be here to spout thier typicl government statistics and debunk this and maybe you...
Cheers...
Gold to the moon if this unwinds...
With the collapse of the housing market, bird flu and the communist take over of San Fransico, I am damn near ready to reach for another beer which is disheartning, 'cos I don't drink.
If you are going to post yield curves, you might want to identify them. Also, one month is not a useful historical sample for the pruposes of this discussion.
No big deal. Companies are trolling for foreclosures.
I don't drink either, but I might join you, because an asteroid just missed us this summer, hackers are busy creating the latest computer virus, the planet will run out of oil any second now, and TomKat is splitting up.
BTW, I am wearing scuba gear as a type this. NYC will soon be under water due to Global Warming.
This story is suddenly all over various media outlets (search Google news for "carry trade"), and I promise you some well-placed fund managers had their positions carefully set up to benefit from a day or two of market chatter about this.
For the record, Lyndon LaRouche agrees with you that this is about to cause the collapse of the global financial system.
http://www.larouchepub.com/pr_lar/2006/lar_pac/060226carry_trade.html
Real live FX traders, however, are treating it as just another normal trend shift.
http://www.dailyfx.com/story/dailyfx_financial_markets_headlines/dailyfx_financial_markets_headlines/6946_carry_trade_liquidation.html
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