Comments on: Quelle Surprise! Traders Say Dollar May Be "Crushed" By Bailout Plan

By: phil_hubb

phil_hubb — Mon, 22 Sep 2008 15:36:00 +0000

Congress is about to give the Treasury Department permission to purchase 700 billion worth of illiquid derivatives, right?

But who's actually going to give Paulson the money?

Permission to buy is one thing, actually getting the financing is another.

Lately, the CB's are sounding like the tough love parents at the crisis intervention.
I'm not sure they're going to bail junior out of jail this time, especially with yields this low.
jmo

By: Anonymous

Anonymous — Mon, 22 Sep 2008 12:25:00 +0000

There is a good post on bailoutville about the longer term ramifications on the dollar.

By: RK

RK — Mon, 22 Sep 2008 09:05:00 +0000

The best piece written to date on this topic is Satyajit Das 2 part article in Eurointelligece. If you haven’t
read it yet, do so.

By: gsm_73

gsm_73 — Mon, 22 Sep 2008 06:45:00 +0000

Will someone explain how did the proposed rescue plan come with the figure of USD700 bn?

Is there rational to it?

regards:

gsmani@gmail.com

By: don

don — Mon, 22 Sep 2008 04:56:00 +0000

As banks receive the gift of TARP, they are likely to hoard the new cash (rather than lend to few borrowers), and in turn then buy treasuries, thus limiting the down slide of the dollar.

By: Independent Accountant

Independent Accountant — Mon, 22 Sep 2008 04:51:00 +0000

YS:
I am “bullish” on the market. Why? What we commonly call a bull market is really a “bear” market in the dollar. As the dollar goes down, the dollar price of stocks should rise. This will be the biggest surprise for many people. A “bull” market in stocks accompanying a “bear” market in bonds.

By: Anonymous

Anonymous — Mon, 22 Sep 2008 03:55:00 +0000

The best trade on the planet in the last year has been put options or shorting.

Buying gold and oil has been pretty good too. Many people buying gold as a flight to safety, which Mr. Dubuque here ignores.

Treasuries are only in a bull market because of risk-avoidance. The bailouts are inflationary and this will hurt the dollar. The US Gov't runs giant deficits every year and this will hurt the dollar.

The recent dollar rally was a great time to get out.

By: Anonymous

Anonymous — Mon, 22 Sep 2008 02:32:00 +0000

One of the consequences of the money market run last week created an opportunity for the fed to lower rates.

Last week, the day before the rate decision treasury yields were up over 6%, the fed had to intervene and sell into the market to keep the rates at the targeted level of 2%. There was no decision for the fed to make, drop rates and try and hold the yield even lower? They had no choice at the moment.

The run on money markets created a whole new market for the treasury paper. How much more? If the fed cut rates, even today, could they count on the expected exit from the stock market to keep yields down? Seemed to do a good job last week, maybe even more effective than the collective world banks throwing money into the fire prior to it.

By: Matthew Dubuque

Matthew Dubuque — Mon, 22 Sep 2008 02:17:00 +0000

Matthew Dubuque

The dollar is obviously going lower in the intermediate term.

The issue is whether it is an orderly repricing.

The raging bull market in Treasuries and the CONTINUING flight to safety is inconsistent with a run on the dollar.

Keep your eyes on the Treasuries.

So far, the best trade on the planet over the last year has been to buy Treasuries HEAVILY on margin.

The Treasury market gives NO sign whatsoever that that trend is changing.

By FAR the biggest risk we face over the near term 6 months is a DEFLATIONARY burst. This is verified by the continued and protracted PANIC buying of Treasuries.

Matthew Dubuque

By: Dean

Dean — Mon, 22 Sep 2008 01:39:00 +0000

Aucune surprise du tout. C’est une certitude