My friend Yoshi Fujioka has produced a new macro view - he is always worth reading:
In the aftermath of the 1929 crash, conscience pushed some Wall Street professionals out of their office windows and the society then saw it as a part of the sorry story, but, in 2008…
Ed Seykota said, “Part of the function of economic downturns is to restore compassion, community and humility - and to support people in migrating to more profitable enterprise. It looks like we might have a way to go.”
Coordinated Governments’ Actions are Helping the Coordinated Attacks by the Big Banks
When the big prime brokers raised the margin to 35% from 15%, the market lost $1 trillion liquidity and was crashed. The big US banks not only get free money (290bp free positive carry vs. 10y UST) but they are now also in control of this market on the downside by manipulating the margin calls and lending amount. Who can say the 35% is the top? Insider trading is no longer illegal.
They may well let the market bounce to 1000 S&P, and then do it again sometime between over the year-end and Q1 2009 pushing the index down to 650 next time. The banks think their existence will always be justified at whatever the cost and they see investors’ and tax payers’ money an easy prey via Paulson and by squeezing the hedge fund industry because central banks are not in control of money, the big private banks are by margin calls, foreclosure and loan amount.
It makes me so mad that Japan, the country I had given up all my hope 29 years ago, again is stupidly contributing $100 billion to the US Treasury controlled IMF, which would only help to promote the US agenda, while the same department killed any chance of creating Asian Monetary Fund. Yes, China is a planned economy and not efficient distributor of resources, but the democratic US government is making more mistakes (the same mistake) more often and it is still expecting different result. So Asia still is my choice of lesser evil.
If this kind of insane transfer and extortion of wealth to the unfit continues when we will have real food, water and natural resource fights in a few years, yes we will have wars if not the second civil war.
But I still hope the people will soon wake up and do the right thing before too late. The US was my second home for 11 years and I know with my own eyes and ears that they are good and capable of doing the right thing.
“That the people have an indubitable, unalienable, and indefeasible right to reform or change their government whenever it be found adverse or inadequate to the purpose of its institution." James Madison
10 Tuesday AM Reads - My two-for-Tuesday morning train reads: • Japan’s Back, Baby (Institutional Investor) • The Crash of ’87, From the Wall Street Players Who Lived It (Bloo...
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