Global Recession, Part Deux
The world is for sale. We will continue to see the financial institutions “de-lever” as egregious liquidity needs continue to force the sale of any assets that don’t have a government stamp of approval on them.
“Quality” assets are at fire sale prices. Get yours (but not just yet).
Up to this point, we’ve seen piecemeal approaches by the government and regulators in dealing with this problematic mess. The asshats are finally getting it together and trying to deliver a “global package” to address these most trying and terrifying of times. The obnoxious Irishman’s “GLORC” is part of that.
Looky here: this is not just a banking crisis anymore. This is not just a U.S. crisis anymore. This crisis is for leveraged players and cash players worldwide, as we have seen with commerical paper and money markets. So, place your bets.
The contagion is growing. Hence the markets will continue to sell off assets until a more comprehensive solution begins to emerge. That’s all it can do right now without massive, coordinated intervention.
What’s the Fix being proposed by our globalists?
First of all, they are working furiously to effect a restoration of banking payments and settlements in the overnight swap markets. Counter-party trust is the issue here.
Secondly, massive capital injections by governments are in the works to fix the brokenness of the current financial system. Simply playing balance sheet games and selling distressed assets to use for funding vehicles, isn’t going to solve the problem of bank insolvency.  We are talking about TRILLIONS of dollars that are needed to fix the problems just here in the U.S.
The United Central Bankers of the World (UCBW)Â are going to have to reflate economies on a global scale that is unprecedented.
Don’t throw away your gold just yet.
Thirdly, TARP will simply BEGIN to deal with troubled assets on the books here in the U.S. It’s a small fix. However, I don’t agree with the form and substance of that bailout provision. It doesn’t really effectively recapitalize the banking system. It only gets rid of the toxic waste material clogging the system. I would have much preferred to see “The Warren Buffett Way” of capital infusion viz a vis purchasing preferred stock and warrants from these banking institutions of economic death. But, no matter. I’m just a peon.
Finally, although not desired by many true capitalists, more coordinated regulation is on the table to address matters on a global scale. Welcome to the new age of socialism. For you conspiracy theorists out there, this global crisis sets the table for the “New World Order”, elegantly and effectively. Never ask when you can take, I guess.
Keeping watching and observing, that you might be able to escape the trouble that’s still coming. This is far from over, my friends.
My leprechuan has more gold than you.
October 7th, 2008 at 2:26 pmThe sooner we realize the monies are just paper, the sooner we can put foil hats on, participate in trade, and join each other in building massive underground tunnels, hiding from the secret society, and stop being “useful idiots” to the Illuminaughties.
Then we can make plans to go all “fight club” on the fed.
October 7th, 2008 at 3:22 pmFPR, refer to the first rule of fightclub.
October 7th, 2008 at 3:24 pmAnd remember, you’re not a pretty snowflake.
Here, have some pee soup while i got put subliminal flashes of my exposed self in children’s movies.
Are you better off now than you were a year ago?
October 7th, 2008 at 4:02 pmCME is setting up a clearing house for the CDS market. this is going to be the tonic that unlocks the credit markets. Transparency is what is holding the markets back. Without it fear is ruling the day.
slowly things are beginning to shape up and I can begin to see the fixes being put in place. Getting more confident that a new credit market will be put into place.
October 7th, 2008 at 4:25 pmGood. That is another finger in the dike. More needed.
October 7th, 2008 at 4:44 pma finger eh? I think that the sheer size multi trillion dollars and the counter party risk that would be alleviated by the introduction of a middle man clearing house is more than a superficial fix.
but alas the depression hyperbole and end of the world talk only comes around only so often and the siren song of the cassandras is so hard to resist….. smile….
look out across the valley and there is another horizon approaching
October 7th, 2008 at 10:09 pmNIKKEI TSX DOW all below 10 k…..the opening tomorrow should be intense.
full moon coming up this week to boot you can almost feel the participants going insane. I have usually rational money mangers that are just dumping stuff all day long with the feeling that the market is dead. They are burned out and they don’t know what to do…..sad but true.
October 7th, 2008 at 10:16 pmwe are in a tricky spot between deflation and inflation…right now defaltion has the upper hand but I can see that infaltion will be back sooner than the majority thinks.
PS the CME and Citadel plan to have the CDS clearing house setup and running within 30 days…. do your own homework on this but I really see this as a key long lasting structural IMPROVEMENT to the credit markets.
October 7th, 2008 at 10:30 pmanjing–I’m being facetious…sure CME plan to clear CDS is more than just a finger in the dike. We do need to have more of these types of “fixes”.
“full moon coming up this week to boot you can almost feel the participants going insane”…
moon = lunacy.
we go down until the wolves stop howling.
October 8th, 2008 at 12:12 am