Good lord. These people never stop, do they?
Under Clinton you would hear so so economic data, such as job numbers that were worst then anything under Bush, and the writers would be orgasmic about how great the improvement was over what had been expected and how it all had to do with Clinton.
Now compare that to the coverage under both Reagan and Bush 2. You have truly great economic data released and all the “news” media does is feverishly spin and go into hysterics about how the good news really isn’t good news and disaster is just around the corner.
What difference does it make? Global warming and Chinese merchandise are going to kill us all anyway.
A Letter To Chairman Bernanke Author: Jim Sinclair
Blockquote>Dear Chairman Bernanke,
This is a problem based on the revelation that over the counter derivatives on credit and defaults are:
Without regulation.
Without listing on public exchanges. Without standards.
Therefore not in the least bit transparent.
Therefore without an open market of the bid/ask type.
Dealt in by private treaty negotiations. Without a clearinghouse.
Unfunded without financial guarantee of any kind. Functioning as contracts of specific performance.
Financial character or ability to perform is totally dependent on the balance sheet of the loser in the arrangement.
Evaluated by computer assumptions made by geek, non market experienced mathematicians who assume religiously that all markets return to their normal relationships regardless of disruptions.
Now in the credit and default category alone considered by accepted authorities as totaling more than USD$20 trillion in notional value.
Notional value becomes real value when the agreement is forced to find a real market for ending the obligation which is how one says sell it.
Interest rate adjustment will not replace the necessary act of providing liquidity in proportion to the problem. When the Fed was initiated, its prime legal directive was to provide liquidity in periods of disruptive credit problems.
Adjustments of interest rates can only hope to hide the problem for a time, causing a global extension of liquidity at unprecedented levels. Good luck, but your academic approach is unlikely to do much and will only lose precious time.
Sincerely, Jim Sinclair
Sinclair, is smart, honest and able to see problems before most. The URL for this can be found: HERE.
At least glancing at his efforts and several of his colleagues will help you understand what usually only the professional traders understand.
I’ll be very interested to see the August numbers.
I’ve been watching the flow of junk faxes to my office. They seem to be correlated to the general flow of the economy.
In August the junk faxes all but stopped.
It will be interesting to see if there is any validity to my theory.
bump