THIS is NOT doom and gloom
okay
it is a responsible perspective that i'm sure many could agree poses a serious threat
www.marketoracle.co.uk...
touches on the high risk of deregulation in the markets and how derivitaves trading is such a illusion built on high risk loans re-packaged as assets
we been set up and set ourselves up for a fall . hedge funds are a similiar story
also talks about how the PPT works to pick up stock market by manipulating the shorts and rally's seemingly come out of the blue
That buying comes out of the blue at a time when short interest is high. The unexpected rally strikes blood, and fear overcomes those who were
betting the market would drop. These shorts need to cover, need to buy the very stocks they had agreed to sell (without owning them) at today's
prices in anticipation they could buy them in the future at much lower prices and pocket the difference. Seeing those stocks rally above their
committed selling price, the shorts are forced to buy — and buy they do.
this according to Robert McHugh, Ph.D and consitent with former Fed chairman Robert Heller
because the ppt was designed to intervene and prevent market distasters like in 1987 it's good intentions many supect have been over-ridden and
replaced by greed. (which should be very surprising:@@
it seems what may have been invented based on the economies best intrests and avoiding sudden unnecessary spook caused crashed has morphed into a tool
used by the elite and big cooperation to continually post-pone healthy "corrections" as well and the group has the money and power to over influence
the short position and make them cover there butt's but even this group and changes in fed policy will be unable to stop the derivitaves and hedge
funds from collapsing when the credit cycle goes bust very soon as the housing sector is contributing to the liquidity crisis also.
It's the corporate warlords and banking moguls who have benefited the most from dismantling the regulatory system. The PPT creates an additional
“taxpayer-supported” safety net for dubious debt-instruments which are finally beginning to unravel. There's no reason why the market should be
manipulated simply to protect private investment. It is a fundamental contradiction to the workings of a free market.
This may explain why the Federal Reserve mysteriously decided to stop publishing its M-3 report. Since the Fed is the “main resource” for
buying averages in the futures market “the money is injected into markets via the New York Fed's Repo desk, which easily showed up in the M-3….
Without the useful resource of M-3”, Robert McHugh, Ph.D.says, “we need to find other tools to monitor when the PPT is likely to intervene, and
kill shorts”.
the level of insanity
“$8.3 trillion of real money is controlling $313 trillion in derivatives!”
If there's a fire-sale in hedge funds or derivatives, there's nothing the Plunge Protection Team or the Federal Reserve will be able to do to
stop a meltdown. The market will crash leaving nothing behind
now what would cause a fire sale in hedge funs or derivatives
well how about consumer spending going backwards and mortgage defaults increasing and creditors going bankrupt and this trend will only increase
"The failure of a highly leveraged fund holding large, concentrated positions could involve the forced liquidation of those positions, possibly
at fire-sale prices, thereby imposing heavy losses on counterparties," Bernanke said.
In the worst scenarios, these counterparty losses could lead to further defaults or threaten systemically important institutions," he added.
lets see how the hedge funds are doing this summer, now that for the last 4 months the housing sector forecast losses have continually if not
purposefully been under forecasted (can't blame them for being optomistic and trying to be self -fullfillng) . but this housing groundswell can not
be brushed off though wishful thinking and perception adjustment (spin doctors)
the question is how bad the shaky motgages which continue to default this year thanks to the subprime loans and the trillion dollars in ARM ready to
reset (increase) this year and there influence on the hedge funds
as well as the amount of capital inflows going elsewhere (invested overseas) instead of in the states thanks to the weakness in the dollar and slowed
consumer spending on top of and directly related to the housing debacle.
the hedge funds are telling the banks look we can't allow all these poor people who can't pay there mortgages to stay in the houses. and the banks
know that if they do not do something to bridge the gap then the real estate loss will be BIG TIME and many banks and HEdge funds will go kaput.
But the big banks really don't want to take the hit either. Keep an Eye on this, there greed could be there and our downfall
[edit on 7-6-2007 by cpdaman]