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Libor (London Interbank Market) is spiking again, signaling deep stress in the interbank market as rumors of a BIG financial institution going under prompt banks to hoard cash from each other
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This Link is located in the Public Channel Housing Bubble and Bear Links.
Posted by ian 1 year 254 days ago (traderview.com). Views: 50
Tags: housing bubble |
| Related Tags: credit crisis gold wall street economics peter schiff inflation banks |
Credit and credit default spreads widen relentlessly as margin calls and deleveraging forces more and more poorly-prepared and under-capitalized investors to dump HIGH QUALITY issues like hot potatoes. They are dropping them into very illiquid, over the counter markets causing the spiral in the subprime markets to widen relentlessly into higher quality issues. Thornburg mortgage is on the edge of bankruptcy and their book of mortgages is in very fine shape as mortgage securities are downgraded by the mark to the market realities caused by bank risk managers’ margin calls.
Ambac raised 1.5 billion dollars from a group of banks from which they have bought insurance. Originally the bailout was to be $15 billion; can you say COLD FEET and throwing good money after bad? CNBC's Charlie Gasparino has totally destroyed any shred of credibility he may have had after reporting this story over and over as the boy who cried wolf: Every report he made sparked a rally based on HIS false information that subsequently failed with the reality of its inaccuracy. Most people would be jailed for these types of false reports. When you see his face you should switch to Bloomberg.
In conclusion: You could feel the air get sucked out of the markets last week. A true “throw the baby out with the bathwater” moment appears to be directly ahead. The $200 billion dollar injection by the Federal Reserve signals the coming tsunami of money creation that is at hand. Libor (London Interbank Market) is spiking again, signaling deep stress in the interbank market as rumors of a BIG financial institution going under prompt banks to hoard cash from each other.
Two year notes fell to about 1.5% yield, Fed funds signals an imminent move 75 basis points lower to 2.25% -- 1.5% should materialize before we see Memorial Day. Interest rates are negative and are going to remain so for a long time. A bag of dirt will rise in price in this environment. Commodities hit new highs as did the spread on 10-year tips (inflation protected securities) signaling the anchors on inflation expectations being snapped away. The implosion in many debt markets also reflects the pricing-in of the “loss of purchasing power, present and future” of the paper in which the fixed income instruments are priced. It’s only the beginning.
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ian said |
| 1 year 251 days ago |
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ian said |
| 1 year 254 days ago |
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