Posted on 10/01/2008 10:38:51 PM PDT by bruinbirdman
Ambrose Evans-Pritchard says it is ironic that European banks have turned out to be deeper in debt than their US counterparts.
It took a weekend to shatter the complacency of German finance minister Peer Steinbrück. Last Thursday he told us that the financial crisis was an "American problem", the fruit of Anglo-Saxon greed and inept regulation that would cost the United States its "superpower status".
By Monday, Mr Steinbrück was having to orchestrate Germany's biggest bank bail-out, putting together a 35 billion loan package to save Hypo Real Estate. By then Europe was "staring into the abyss," he admitted. Belgium faced worse. It had to nationalise Fortis (with Dutch help), a 300-year-old bastion of Flemish finance, followed a day later by a bail-out for Dexia (with French help).
Within hours they were all trumped by Dublin. The Irish government issued a blanket guarantee of the deposits and debts of its six largest lenders in the most radical bank bail-out since the Scandinavian rescues in the early 1990s.
Then France upped the ante with a 300 billion pan-European lifeboat for the banks. The drama has exposed Europe's dark secret for all to see. EU banks took on even more debt leverage than their US counterparts, despite the tirades against ''le capitalisme sauvage'' of the Anglo-Saxons.
We now know that it was French finance minister Christine Lagarde who begged Mr Paulson to save the US insurer AIG last week. AIG had written $300 billion in credit protection for European banks, admitting that it was for "regulatory capital relief rather than risk mitigation". In other words, it was underpinning a disguised extension of credit leverage. Its collapse would have set off a lending crunch across Europe as banking capital sank below water level.
It turns out that European regulators have allowed even greater
(Excerpt) Read more at telegraph.co.uk ...
I'll tell you this right now: buying the CME Eurodollar December 9712-strike or 9725-strike call options right now, and selling an equal number of the November 9712- or 9725-strike call options is almost certainly profitable over 30-45 days, and MIGHT be enormously profitable.
This is called a 'calendar spread' or 'time spread'. The margin required, for each spread you put on, is $40.00. Each tick in Eurodollar contract is $25.00. You risk less than 4 ticks (plus commissions) per spread and stand to make between 3 and 20 ticks per spread by 1 November, with further chances of enhancing your profit after that.
Won't speak for you, but that's a plenty good enough opportunity for me.
FReegards!
Ich habe keine (or is it 'kein'?) Deutsch. Sehr schade. Eine kleine Nachtmusik, bitte!
;^)
The politico I should like to insert into your ‘3 Stooges’ scenario is my old ‘’friend’’ Gerhard Shoe-Odor, now a lobbyist for a Russian-German energy firm.
I didn’t mean you were gloating. There are plenty of people in various posts who seem thrilled that European institutions are even more dysfunctional than American institutions. They have the perverse idea that America “wins” if other countries are sinking to the bottom faster. That is why I said that smart people shouldn’t gloat. I guess I should have said that smart people are not gloating.
Can you suggest any good newsletters or whatnot where they give generally sound advice? There is so much disinformation out there.
I can, however, recommend a website to you that tracks currencies in real time, and has a number of very experienced traders on it (caution: their jargon can be VERY dense, so one must try to get used to it). That site is Jay Meisner's excellent Global-View site.
Very short 2-item signup, completely free unless you want to subscribe to various forex trading advisories (I don't). The commentary is VERY good, if occasionally a bit difficult to sort through. Oh, and G-V does **not** send out any obnoxious e-mail solicitations (definite plus!).
FReegards!
Written by a woman named Barbara Rockefeller, LONG-time currency analyst, spent 20 years or so with Citigroup.
Don't recall what she charges, but it's reasonable for non-commercial (meaning non-bank) subscribers. Her politics are pretty lefty, but she knows her field, bet your life!
Thanks! I know you ultimately have to be your own guru, so to speak. And it can be work to find out what is really going on. I know enough to not let emotions drive financial decisions and I have a pretty good fad detector, but there are a lot of things I should study more than I have recently.
Check out this thread you posted in April, bruinbirdman. Look at my reply #2 and your #3.
SAJ, this is why I'm not a trader. No balls. Especially as regards shorting. :-) So I'm afraid I'll have to stick with investing.
Over time and through experience the Good Lord has made it abundantly clear that His plan for me involves working, not "trading". If you know what I mean, and I think you do. If you can make a living at it, more power to you!
FRegards
Thirty years ago he and, I forget, wrote a book called, “Blood In the Streets”. About the world wide financial collapse and the wars and revolutions it would bring.
Goldbugs. You know, I’ve never been income taxed, sale taxed, property taxed, fined, permitted, observed, regulated, lawed against by a goldbug, but I have by the fiat money people.
I willing to give the goldbuggers a chance to do to me what the paper guys have. Could it be worse?
YouTube James Grant. He of Grant’s Interest Rate Observer. I try to read everthing he publically puts out. A bit of a bear, but a great financial historian, funny too.
In fact, the Forbes recommendation was to "repatriate dollars" invested in foreign instruments which, since the beginning of the year, were trading at historic highs. Forbes said that at least 20% of foreign equities' valuation increase to U.S. investors was due to undervalued greenback.
Joe sixpack shorted the EU by taking his foreign profits. Many did just that. One result was that U.S. equities peaked at the end of May (a month after the post).
yitbos
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