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tisonlyi · 12-04-2008, 08:55 AM

This is only just beginning (lots more mortgages start resetting and revaluing(i forget the proper term, but there were many mortgages with portions of the principle suspended for a period of time) next year, plus commercial real estate is starting to show its distress, plus, plus, plus).

What are my odds on a bet of "All of the above"?

Until the US Gov runs out of capacity to borrow from foreigners and the currency becomes.. well... less than respectable, which it will in time (watch out for the popping of the bond bubble soon/soonish and the commensurate collapse in the dollar), they won't allow any major financial institution to fail. The reason being the Credit Default Swaps that are out there, running into many 10/100's of trillions, depending on who you listen to, that would be affected or triggered... and the problems with counter-party risk. Lehman almost brought Armageddon... and it was, if memory serves, the smallest of the 'big' investment banks.

Also, should another large bank be allowed to fail, the money markets will break the buck again and then the credit markets will shut down completely. Again (they're still shut down for any but the highest credit-rated corporations on commercial paper, for example). Trying to unfreeze that loss of confidence in what now laughably passes for 'the system' well... good luck with that.

The UK is in even worse condition. The pound is dead first, then comes the dollar.

Financial meltdown of the Anglo-Saxon model...
-----Added 4/12/2008 at 11 : 58 : 29-----
Yakk: You're right. At current prices, if the US gov allowed them, many of the Sovereign Wealth Funds could walk in and buy pretty much all of corporate America overnight.

Why they're not even seemingly interested in doing that is interesting.

12-04-2008, 08:55 AM	#27 (permalink)
tisonlyi Nothing	This is only just beginning (lots more mortgages start resetting and revaluing(i forget the proper term, but there were many mortgages with portions of the principle suspended for a period of time) next year, plus commercial real estate is starting to show its distress, plus, plus, plus). What are my odds on a bet of "All of the above"? Until the US Gov runs out of capacity to borrow from foreigners and the currency becomes.. well... less than respectable, which it will in time (watch out for the popping of the bond bubble soon/soonish and the commensurate collapse in the dollar), they won't allow any major financial institution to fail. The reason being the Credit Default Swaps that are out there, running into many 10/100's of trillions, depending on who you listen to, that would be affected or triggered... and the problems with counter-party risk. Lehman almost brought Armageddon... and it was, if memory serves, the smallest of the 'big' investment banks. Also, should another large bank be allowed to fail, the money markets will break the buck again and then the credit markets will shut down completely. Again (they're still shut down for any but the highest credit-rated corporations on commercial paper, for example). Trying to unfreeze that loss of confidence in what now laughably passes for 'the system' well... good luck with that. The UK is in even worse condition. The pound is dead first, then comes the dollar. Financial meltdown of the Anglo-Saxon model... -----Added 4/12/2008 at 11 : 58 : 29----- Yakk: You're right. At current prices, if the US gov allowed them, many of the Sovereign Wealth Funds could walk in and buy pretty much all of corporate America overnight. Why they're not even seemingly interested in doing that is interesting. __________________ "I do not agree that the dog in a manger has the final right to the manger even though he may have lain there for a very long time. I do not admit that right. I do not admit for instance, that a great wrong has been done to the Red Indians of America or the black people of Australia. I do not admit that a wrong has been done to these people by the fact that a stronger race, a higher-grade race, a more worldly wise race to put it that way, has come in and taken their place." - Winston Churchill, 1937 --{ORLY?}-- Last edited by tisonlyi; 12-04-2008 at 08:58 AM.. Reason: Automerged Doublepost