Well, Bill Poole said that barring a calamity, there was no need to cut rates. That was before the Peru earthquake, but it seems not to have qualified.
The funds will have to keep selling and I think individuals are running on funds now. This is what happens when a few very stupid, very arrogant Street insiders don't realize that when you make a market, you have to back it.
The bottom line is that a very few fools on the Street caused this. We weren't going to avoid the decline in value for these bogus securities, but it was the refusal of the companies who were major players and beneficiaries of the business to make a market (even at reduced prices) that caused this.
Before this crash there were 11,700 hedge funds registered, 2/3 of them offshore. The aggregate moneys total more than 900 billion (what is turning out to be a false asset value). There were almost 7,000 "trading advisors. No matter how you slice it, there were more than "just a few" guys leveraging zero while claiming zero was actually (fill in the blank). Zero was zero because nobody knew what was in the bond mix: how much AAA and how much ZZZ. What caused "this" was the fact that everyone seemed to realize at about the same time that their hedge fund was hedging zero; they tried to bail and found they had to give thirty to forty five day notice to do so AND there was no assurance at all that there would be any money to redeem.
3 comments:
Well, Bill Poole said that barring a calamity, there was no need to cut rates. That was before the Peru earthquake, but it seems not to have qualified.
The funds will have to keep selling and I think individuals are running on funds now. This is what happens when a few very stupid, very arrogant Street insiders don't realize that when you make a market, you have to back it.
The bottom line is that a very few fools on the Street caused this. We weren't going to avoid the decline in value for these bogus securities, but it was the refusal of the companies who were major players and beneficiaries of the business to make a market (even at reduced prices) that caused this.
Snow blowing Kudlow is getting iffy. He's not 100%. Now I know things are gonna get ugly.
Guns? Check.
Ammo? Check.
Food? Check.
Ya, we're ok here. Batten down the hatches. This is gonna get real fun.
Before this crash there were 11,700 hedge funds registered, 2/3 of them offshore. The aggregate moneys total more than 900 billion (what is turning out to be a false asset value). There were almost 7,000 "trading advisors. No matter how you slice it, there were more than "just a few" guys leveraging zero while claiming zero was actually (fill in the blank). Zero was zero because nobody knew what was in the bond mix: how much AAA and how much ZZZ. What caused "this" was the fact that everyone seemed to realize at about the same time that their hedge fund was hedging zero; they tried to bail and found they had to give thirty to forty five day notice to do so AND there was no assurance at all that there would be any money to redeem.
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