On Thu, 13 Mar 2008 10:04:20 -0600, F. George McDuffee
wrote:
snip
This is greatly amplified by what appears to be the case that the
increasingly complex macro economic structures/organizations are
not determinant but rather are random, much like the weather. To
be sure trends can be seen, such as it gets hot in the summer and
cold in the winter.
http://www.amazon.com/gp/reader/0465...pt#reader-link
What is not at all clear to me is why the belief persists that it
is somehow a "sin" against the "gods of the market," (and likely
to bring down their wrath) to introduce and enforce prophylactic
economic/financial measures such as "loan reserve requirements,"
FASB accounting standards, and the provisions of Sarbanes-Oxley,
but it is now generally religiously acceptable to introduce and
enforce public health measures such as the pure food and drug
laws, and compulsory immunizations. Indeed, anesthesia during
childbirth is now acceptable to most people.
snip
==============
A follow-up to my follow-up.
The "masters of the universe," have just done it again, by
assuming they could predict/control random events.
In spite of the best economics advice and political clout that
money could by, Carlyle Capital Corporation, the hedge fund
subsidiary of the Carlyle Group, is in default/bankruptcy,
despite owning 16.6 [others articles indicate 21.7] billion $US
of AAA rated GSE [US government sponsored enterprise] bonds.
http://www.cjr.org/the_audit/opening..._hedgefu_1.php
The hedge fund Carlyle Capital all but collapsed last night,
stunning investors with the speed of its fall from being one of
the biggest-name investment vehicles spawned by the late credit
bubble to its latest victim.
Bloomberg reports the public company said late Wednesday it has
defaulted on $16.6 billion in debt after its banks withdrew their
money from the fund. Carlyle’s pleas to its lenders failed to
prevent them from issuing margin calls (requirements to put up
more collateral for investment loans) because of the plunging
value of Carlyle’s investments, which spiraled uncontrollably
until it wiped out all of the company’s cash.
snip
As if to prove Bundy right, three more hedge funds shut down or
blocked investors from withdrawing their money in the last
twenty-four hours or so, the FT reports. Drake Management, which
has $12 billion in assets, said it would allow investors to vote
on liquidating three of its hedge funds after more than half
tried to withdraw their money. A $900 million Amsterdam hedge
fund called Global Opportunities Capital shut down investor
withdrawals for a year, and Blue River Asset Management of
Colorado also shut down.
===========
http://news.yahoo.com/s/ap/20080313/...uNZ3_W2yBh IF
The Japanese CDS [credit debt swap] derivative market is going
bananas.
http://www.reuters.com/article/bonds...29439820080313
http://www.ft.com/cms/s/0/bcd05360-f...0779fd2ac.html
snip
In a normal world or in a world where the derivative is closely
tied to the underlying cash security, if the price of the
derivative became utterly divorced, market operators would step
in to trade away the difference, Mr Fisher adds.
But volumes in the credit derivatives market exploded precisely
because most of the bonds hardly trade at all. At Goldman Sachs,
for example, for every three dollars of trading in bonds, the
firm trades $97 in credit default swaps.
snip
===========
The dollar worth less than 100 yen, oil over 110$US/bbl and gold
over 1,000$/ounce
http://news.yahoo.com/s/ap/20080313/...Ce1bhmI1iyBhIF
And these are the people that want to dictate how the US economy
operates.....
Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).