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April 2009

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42

Taking a Sledge Hammer to the Machine

April 07, 2009 – Comments (20)

Picture in your mind the world's most complex machine, built by 100,000 engineers over decades.  Now imagine the machine is breaking down.  But the engineers are all gone.  Nothing a few dozen politicians can't diagnose and solve!   Just give them a screwdriver and some hammers and nails.  I'm sure they'll find the glitch in the machine -- they're experts!  [more]

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What happens if the Fed loses control of interest rates?

April 03, 2009 – Comments (25)

The Fed is buying treasuries and mortgage bonds to try to keep rates low.  It is desperate to do so.  So if you're an institution or a central bank holding either one of these, you essentially KNOW they are overvalued because of the guaranteed buying by the money printing Fed.  Therefore, why wouldn't you sell ALL your treasury holdings and buy high quality corporate bonds, for instance?  If the Fed lost control of interest rates, we'd be in serious trouble.   [more]

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If I Were China... HIT THE BID!

April 02, 2009 – Comments (9)

This is really a no-brainer for China.  Central banks are buying their own debt -- they have no choice if they want to keep interest rates at zero.  HIT THE BID, China!  Sell all your dollars and buy the world's natural resources with the proceeds.  This is your chance to own a greater share of stuff the has real value!

This is so obvious that I'll be shocked if I find out they aren't doing it.

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40

Three Cheers for Mark to Imagination!!

April 02, 2009 – Comments (16)

Let's officially endorse Enron-style accounting.  Transparency sucks.

If the market says something is worth 20 cents on the dollar, then it probably is.  If billion dollar hedge funds could buy something for 20 cents that is worth 40 cents, isn't it friggin obvious that they would do it?

The dollar is going to be toilet paper.

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