fannie mae's mortgage portfolios are littered with bad accounting for hedging. If we have a significant interest event with all of these new mortgage products i think this will be ground zero for a financial crisis.
Is Geithner's speech related to the "NewBank" creation to backstop JPM Chase & Bank of NY two of the Big Fourteen with substantial unconfirmed derivatives backlogs? Unregulated financial instruments and sortof regulated investment pools outflanking the regulated financial system present many reasons to worry.
One by one, the eurozone, the Swedes, the Swiss and now even the Japanese, are turning off the tap of ultra-cheap credit that has flushed the global system for the past year, keeping the ageing asset boom alive.
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The "carry trade" - as it is known - is a near limitless cash machine for banks and hedge funds. They can borrow at near zero interest rates in Japan, or 1pc in Switzerland, to re-lend anywhere in the world that offers higher yields, whether Argentine notes or US mortgage securities. ...
Thanks for the info jm and note how important derivatives are to this game. It seems the reality is that we have an unregulated free market global financial system arbitraging national regulated financial systems. Hopefully the new laissez faire doesn't end as badly as the 1920's experiment.
So very true. Perfect example is what happened w/ Google's CFO today. Progam stock selling went into effect just b/c of this one stock's news.
fannie mae's mortgage portfolios are littered with bad accounting for hedging. If we have a significant interest event with all of these new mortgage products i think this will be ground zero for a financial crisis.
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What do you think are the chances of a grand systemic meltdown?
Most writing on gold bug sites are eye opening, but your voice here sounds more reasonable.
Is Geithner's speech related to the "NewBank" creation to backstop JPM Chase & Bank of NY two of the Big Fourteen with substantial unconfirmed derivatives backlogs? Unregulated financial instruments and sortof regulated investment pools outflanking the regulated financial system present many reasons to worry.
Global credit ocean dries up
One by one, the eurozone, the Swedes, the Swiss and now even the Japanese, are turning off the tap of ultra-cheap credit that has flushed the global system for the past year, keeping the ageing asset boom alive.
\t
The "carry trade" - as it is known - is a near limitless cash machine for banks and hedge funds. They can borrow at near zero interest rates in Japan, or 1pc in Switzerland, to re-lend anywhere in the world that offers higher yields, whether Argentine notes or US mortgage securities. ...
Thanks for the info jm and note how important derivatives are to this game. It seems the reality is that we have an unregulated free market global financial system arbitraging national regulated financial systems. Hopefully the new laissez faire doesn't end as badly as the 1920's experiment.