What does this mean?

[Mega]

http://www.bloomberg.com/apps/news?p...IYM&refer=home
Mike

[blazespinnaker]

Re: What does this mean?

It means the Central Banks are just replacing the Shadow Banking System, so net-net, things don't really change.

I, for one, welcome our new banking overlords.

[Supercilious]

Re: What does this mean?

Here is an answer:

http://blogs.cfr.org/setser/2008/10/...-to-financing/

[ASH]

Re: What does this mean?

I, for one, welcome our new banking overlords.

I think the comparison to Fannie Mae/Freddie Mac made by Brad Setser in the piece that $#* posted is exactly right.

Bigger picture: I think this may mean "here comes the POOM."

[blazespinnaker]

Re: What does this mean?

Maybe, but I doubt it.

I think people were right about financial instruments of mass destruction. But I think they used that concept and extrapolated a lot from it that doesn't make any sense, at least not to me.

Meanwhile, I'm glad I loaded up Friday, but I might sell a bit after the tidy one day 10% returns.

[ASH]

Re: What does this mean?

Maybe, but I doubt it.

I think people were right about financial instruments of mass destruction. But I think they used that concept and extrapolated a lot from it that doesn't make any sense, at least not to me.

Meanwhile, I'm glad I loaded up Friday, but I might sell a bit after the tidy one day 10% returns.

It sounds like we're thinking on slightly different time scales, so I should probably clarify: "Here comes the POOM" means that I think the direct backing of loans by the various governments is the agency by which POOM will be unleashed, but not that I expect POOM immediately.

I also believe in financial WMD, if by that you mean derivatives and the dangers they pose in terms of unpayable obligations. If they do go off, then yeah -- there'd be plenty more KA before the POOM. Perhaps I'm too early. I was thinking that government intervention might finally be of sufficient scale to prevent those particular WMD from going off.

As for your Friday trade -- nicely done! You are obviously a good deal more canny than I about short-term market motion. I never attempt short-term trades because, while I often have an opinion about what the market might do day-to-day, I have been keeping score, and I'm more often wrong than right.

[walenk]

Setser/corporate welfare

I also thought the Setser piece was excellent.
The phrase 'corporate welfare' has a shrill connotation, but it's appropriate here. They are creating the most egregious kind of welfare dependency. It brings to mind the film The Alien and the difficulty of ejecting it into space.:cool:

[blazespinnaker]

Re: What does this mean?

It sounds like we're thinking on slightly different time scales, so I should probably clarify: "Here comes the POOM" means that I think the direct backing of loans by the various governments is the agency by which POOM will be unleashed, but not that I expect POOM immediately.

I also believe in financial WMD, if by that you mean derivatives and the dangers they pose in terms of unpayable obligations. If they do go off, then yeah -- there'd be plenty more KA before the POOM. Perhaps I'm too early. I was thinking that government intervention might finally be of sufficient scale to prevent those particular WMD from going off.

As for your Friday trade -- nicely done! You are obviously a good deal more canny than I about short-term market motion. I never attempt short-term trades because, while I often have an opinion about what the market might do day-to-day, I have been keeping score, and I'm more often wrong than right.

Oh, I am probably a much worse short term trader than you are

Today was frankly, surreal. We live in surreal times. Very surreal.