Until these Dens of thieves and crooks have their their assets stripped,put on a Devil’s Island nothing, and handed basic Soc. Sec. level when return, nothing will change. Would tell them they’re lucky they’re not getting shot at sunrise too.

smart independent

8.5 Trillion and counting….is a minor hiccup. I dread to think what a serious problem is. Though no doubt if that kind of thinking, is what is running the system, we will soon find out.

AIG/Goldman and CDS’, yet again.

No wonder Paulson negotiated immunity, first, after all he has no conflict of interest here at all. Imagine what would have happened to his trust funds of Goldman stock , if IAG had gone down…..he might have to work for a liveing instead of stealing….

I don’t know why you’re making fun of AIG, we all have a 79% non-voting position in it…..I expect those profits to start rolling in any day now as soon as we get past these minor hiccups. Best part is that we won’t incur any legal fees in defense of the cash infusions.

I think that there are a significant number of folks in the world that would disagree about the systemic risk that kicking America in the arse would cause. I think that the countries whose national debt goes “underwater” because of our systemic failings don’t have much to lose by worrying about what might happen if things don’t change.

Time will tell….I think within 6-9 months at most we will have a period of world wide introspection…..I have no money to bet on my scenarios, sorry.

If they didn’t, we’d all have to take the pain now, at a particularly inopportune moment, and everyone’s shown ample willingness to delay and worsen the inevitable to date. Bretton Woods 2, as this has been called particularly by Setser, has been remarkably resilient despite it having an obviously awful outcome.

My take says that soon after Obama takes office there will be another “Brenton Woods” meeting and the American dollar will no loner be the Reserve Currency

This would be the ideal outcome for the long run, and I’d like to see it. I wouldn’t bet on it, though, because of the immense systemic risk it poses.

Zugzwang…

My take says that soon after Obama takes office there will be another “Brenton Woods” meeting and the American dollar will no loner be the Reserve Currency.

Your thoughts?

We don’t know who they’d offer the CD’s to, Anonymous, but it’s very clear there’s no shortage of people eager to lend money to the Federal Government right now.

A lot of this buying is forced and mechanical. Countries that operate with a pegged currency, for example, have basically no choice. They can either let their currency appreciate, or stop exporting much to us. Neither is likely an acceptable choice for domestic reasons there. CIC is petrified. Full Treasury money market funds have no choice but to buy as well, as their own assets soar as retail gets scared.

There’s just such serious market dislocation that we have desperate borrowers and desperate lenders who are unable to come to terms with each other at prevailing interest rates. It’s really ugly.

The Fed can in effect forcibly make a market by absorbing the risk on its own balance sheet, but their balance sheet looks awful already. Issuing CD’s would make it slightly less awful in most scenarios, which is why I’m in favor of this move, if they’re going to make all their other moves. Which I’d not have done, but we’re pretty far down that road already.

I’m feeling more neoclassical by the day, dude.