Posted on 02/16/2008 2:59:00 PM PST by Toddsterpatriot
No. But your ignorance about swaps and derivatives is a big joke.
Just like you told us last year, when you touts were saying real estate was rock solid, right?
Did you bump your head? I never said any investment, even real estate, was rock solid.
"I cannot help but raise a dissenting voice to statements that we are living in a fool's paradise, and that prosperity in this country must necessarily diminish and recede in the near future."
~~E. H. H. Simmons, President, New York Stock Exchange, January 12, 1928
"Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months."
~~Irving Fisher PhD, leading U.S. economist , New York Times, October 17, 1929
"If recession should threaten serious consequences for business (as is not indicated at present) there is little doubt that the Federal Reserve System would take steps to ease the money market and so check the movement."
~~Harvard Economic Society, October 19, 1929
"This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years."
~~R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929
Correcting the errors of idiot doomers is not the same as claiming the RE market would do or not do anything.
But we've got your number, TP.
As we've seen, numbers are not your strong point.
Wow, I’m glad you found this. I always assumed that interest rate swaps were the largest piece of this $500 trillion number that gets thrown around on here all the time. Doubting the wisdom of certain financial instruments is perfectly reasonable, and in many cases is proper. However, to assume that $500 trillion is “at risk” is ignorant and nothing short of hysterical fear-mongering.
Even credit default aren’t that scary. If a lender sells a CDS to another party, they have simply transferred the risk of loss on the underlying loan. So the maximum amount that can be lost is still just the balance of the loan. The CDS has just shifted that loss to another party (who has been paid a market rate to bear that risk). Not so scary now, is it?
Absolutely.
However, to assume that $500 trillion is “at risk” is ignorant and nothing short of hysterical fear-mongering.
Sounds like something a government shill would say. LOL!
Not so scary now, is it?
Stop it. You're confusing us with your logic.
I know you know this. This is for the benefit of the fear mongerers who undoubtedly are not here right now because they are scouring gold-bug sites for apocalyptic predictions of doom and despair.
“Even if I went broker” should read “even if I went broke.”
It’s like taking out a mortage worth a hundred times the home value hoping the price goes up.
I've watched a portion of it: all of the opening statements up to and including Spitzer's, along with some comments made by committee members Capuano and Bachus.
For those who haven't watched it (the video reads over 7 hours in length)...I think it's important to do so as it is time well spent, imho.
I heard how Bachus attempted to blame the problems on NY regulators (instead of the federal government) and the firing back by Spitzer, who said to Bachus, "You are involved in a finger-pointing exercise. I'm more than willing to do that also, and can point to many instances when the Bush administration failed to do their duty to regulate these scandals."
I particularly enjoyed hearing, after Bachus went on about dividends and how NY regulators should have done something, Spitzer say, "Should the NY gov suspend the dividend of a publicly traded company?" It seemed that Bachus attempted to make it appear as though Spitzer was aware of fraud occurring while he was then attorney general investigating potential fraud. According to Spitzer, he said their investigation found no fraud but business practices that, though within legalities, seemed risky. (But that he could not file criminal charges for that which seemed high risk as it was not outside the law.)
Some of the more choice comments I heard, for those who have not yet seen the video, are as follows:
Spitzer:
"this is falling apart piece by piece"
"bond insurance problem could be financial tsunami"
"States will have to step in and break apart the munis from the rest if things don't get done privately."
"I need to talk with urgency to get movement, but I don't want to spook the markets. I don't think Congress could move quickly enough. We want resolution in 3 to 5 business days."
"We had to act in NY because the federal agencies didn't do their job."
Capuano: "I was a mayor, and when we were issuing munis the credit agencies were involved in 'legal extortion.'"
That's about where I left off for today.
>>Credit-default swaps are “the dominant instrument,” accounting for 88 percent of credit derivatives, the BIS said.<<
I actually find this to be the most amazing part - this instrument barely existed 10 years ago and now the dollar amount is many times the U.S. economy.
Gold, platinum, rhodium, wheat, corn, soybeans. Keep your money there. All at all-time highs this week.
From 1971
http://www.polyconomics.com/searchbase/gp3.htm
There is also no record that President Nixon’s economists advised him that by completely closing the gold window on August 15, 1971, he would invite the worst global inflation in recorded history. Rep. Henry Reuss [D-WI], chairman of the Joint Economic Committee, helped force this decision by announcing ten days earlier that it had to be done, an action that set off a wild selloff of dollars and dollar bonds in Europe. Reuss predicted that when the dollar no longer propped up the price of gold, it would fall to no more than $7 an ounce.
Until you've got an actual tread/post#, the only place this shows up is where you posted it.
Sounds like they're using 'drive-by media' math.
It's like those guys that were saying the Americans are broke because we owe $45trillion --the fact that the money is owed to other Americans doesn't matter.
Say I own $1,000 worth of GM. Imagine you really really really want a volatility hedge so you pay for options to buy and to sell those shares, and then for good measure you get a contract on the dividends while borrowing my shares for a short sale. You've got less than a $100 in fees at risk, but the Tribune is reporting $4,000 worth of derivatives (on my $1,000 worth of GM).
So much for this "$516 trillion".
What question is that, Toad? You didn't direct any question to ME....you PINGED me to this thread. I do notice, however, that you stated nothing concerning my LENGTHY post.
Out of $516 trillion? Maybe Nic can explain how that can be?
Think about it before you attempt to answer.
There is more to this problem than just the derivatives, though that has also caused/created more problems.
Just as there are problems because of the sub-prime market, the now-current difficulty/inability to obtain credit, the fraudulent ratings given by AMBAC and MBIA....the resulting lack of trust, rightly so, in ANY ratings given by AMBAC and MBIA, as it can legitimately be said that their ratings are BOUGHT and paid for, etc., etc., etc.
Asking questions to others about their thoughts or concerns regarding derivatives does not equate to a THREAD ABOUT DERIVATIVES. If you are so "brilliant" concerning derivatives, toad, POST SOMETHING of substance concerning YOUR OWN explanations as to how you insist that derivatives is not causing/creating part of the entire problem which we see in the market.
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