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US dollar index at 71.676; US$1 = ¥99.01, €0.6375, all decade or record lows.
The Wall Street Journal describes it as the US receiving a margin call; essentially the last few days saw a run on Bear Stearns. That, and their position was considerably weaker in reality than Alan Schwartz had allowed on Monday, when he called liquidity concerns "totally ridiculous." I personally cop to "considerably weaker in reality than...allowed" being an unduly polite way of saying they were lying through their teeth. Their awfully, awfully short conference call today blames everything on "untrue rumours," which I have to admit I find kind of funny; The Exile, an extremely cranky newspaper of American emigrants living in Russia, notes the direct comparisons to the Russian collapse in the 90s, which was blamed, over and over again, on "rumours." Dr. Roubini at RGE Monitor notes that this is Stage 9 of his 12-step path to a really bad outcome. Also, the Telegraph has this to say:
Lost in the noise is that mortgages continue to deteriourate, particularly alt-A and prime. Yes, prime. Almost half of defaults are now alt-A and prime loans - at least, officially. Also, more funds are halting redemptions.
Have some bullet points:
ETA: Stranger link courtesy![[livejournal.com profile]](https://www.dreamwidth.org/img/external/lj-userinfo.gif)
cow ^_^
ETA2: I keep forgetting to pull this link sent me byhubbit: Americans are staving off bankruptcy by cashing out 401(k) funds. DO NOT DO THIS. EVER. 401(k) are about the only thing you can't lose in bankruptcy. Sadly, Americans either don't know this or are doing it anyway. DON'T.
The Wall Street Journal describes it as the US receiving a margin call; essentially the last few days saw a run on Bear Stearns. That, and their position was considerably weaker in reality than Alan Schwartz had allowed on Monday, when he called liquidity concerns "totally ridiculous." I personally cop to "considerably weaker in reality than...allowed" being an unduly polite way of saying they were lying through their teeth. Their awfully, awfully short conference call today blames everything on "untrue rumours," which I have to admit I find kind of funny; The Exile, an extremely cranky newspaper of American emigrants living in Russia, notes the direct comparisons to the Russian collapse in the 90s, which was blamed, over and over again, on "rumours." Dr. Roubini at RGE Monitor notes that this is Stage 9 of his 12-step path to a really bad outcome. Also, the Telegraph has this to say:
The 'monoline' bond insurers - MBIA, Ambac, and others - that guarantee most of the $2,600bn market for US municipal bonds have seen their shares collapse by 90pc since the Autumn.The Financial Times reports that the International Monetary Fund is telling states to prepare for the worst:
They are still battling to raise enough to capital to save their 'AAA' ratings. Should they fail, the insured bonds will be downgraded in lockstep. Pension funds would be forced to liquidate huge holdings. As New York Governor Eliot Spitzer said before his own liquidation, such an outcome is too dreadful to contemplate.
You have to go back to the banking crisis of the Great Depression to find a moment when the financial system as a whole seemed so close to the precipice.
He urged policymakers to “think the unthinkable” and prepare now for what they would do if the worst case scenarios materialised and “low probability but high impact events” threatened to jeopardise global financial stability.Meanwhile, the CPI came out flat, clearing the way for a possible new large rate cut on Tuesday. Except nobody believes that energy costs fell 0.5% in February; just for example, Fil Zucchi at Minyanville says the CPI report "defies credibility," and some are going so far as to call the report "cooked." (That link also has some good Bear Stearns ranting.)
He warned of the risk that a “global financial decelerator” could take hold, in which rising defaults and margin calls from lenders triggered forced asset sales, driving down the value of collateral and forcing further forced sales.
The IMF deputy managing director’s comments make it clear that the fund is open in principle to the possibility of taxpayer-funded intervention in the market for mortgage securities as well as intervention to save individual banks from bankruptcy.
Lost in the noise is that mortgages continue to deteriourate, particularly alt-A and prime. Yes, prime. Almost half of defaults are now alt-A and prime loans - at least, officially. Also, more funds are halting redemptions.
Have some bullet points:
- Here's a sourceless rumour: there's serious talk of major central-bank coordinated action again, probably Sunday night, partly to Do Something about the collapsing US dollar.
- I'd love to know why the Fed Funds Rate Data stopped updating a couple of days ago. It's probably nothing, but the timing is poor.
- Washington Mutual got downgraded to one step above junk today by Moody's - the same agency that gives AAA ratings to bankrupt CDO-based funds. If they're calling WaMu Baa3, one starts to assume that WaMu is only not bankrupt because nobody's asked them to check lately.
ETA: Stranger link courtesy
cow ^_^ETA2: I keep forgetting to pull this link sent me by
hubbit: Americans are staving off bankruptcy by cashing out 401(k) funds. DO NOT DO THIS. EVER. 401(k) are about the only thing you can't lose in bankruptcy. Sadly, Americans either don't know this or are doing it anyway. DON'T.
