Wag The Dog
Mistatement of the Millenium... Alan Greenspan May 8, 2003:
"the use of a growing array of derivatives and the related application of more sophisticated methods
for measuring and managing risk are key factors underpinning the enhanced resilience of our largest financial intermediaries."
What do peak oil, Adam Smiths invisible hand of the free market and the price of a barrel of oil and have in common?
As we have proved empirically in these pages, the latter is a contrivance of controlled market manipulation,
The former two are urban myths used by paid liars and market shills, or whores of academia and intelligensia,
to support the unsupportable and unjustified commodities prices to an unsuspecting and naive public.
Much like suppossed real estate "values", another royal scam perpetrated by the house of finance to enslave the public in debt,
these connivances of greed and avarice are all getting their skirts blown up to reveal severely stained knickers.
More evidence backing our contentions has come to light in the form of an admission by the markets
that they may be the victims of their own devices. A clear lesson to be careful what you wish for, because you may get it.
Hattip To Bloomberg.
The credit-default swap market has become a lesson in being careful what you wish for
now that Wall Street has taken $245 billion of losses partly tied to such exotica.
What was intended as a way for lenders to protect against defaults spawned a market covering $45 trillion of bonds and loans
where no one knows how much is traded and speculators who bet on deteriorating credit quality end up forcing that reality.
Some credit-default indexes have morphed into what Wachovia Corp. analysts led by Glenn Schultz call
``Frankenstein's monster'' because they now often drive prices in the so-called cash bond market, rather than the other way around.
Fearing a repeat of losses, banks are refusing to support new indexes that would allow investors
to wager on everything from auto loans to European mortgages and Alt A loans.
Jacques Aigrain, CEO of Swiss Re:
"The indices are just trading on their own account with no relationship whatsoever to an underlying cash market that's ceased to exist.
`ABX, CMBX, any kind of X you like, are totally uncorrelated to any kind of underlying market"
Andrew Dennis, head of the asset-backed debt syndication group for UBS:
"The last thing the securitization market needs is another no-cash-upfront instrument that people can use to knock the markets about with."
Glenn Schultz, head of asset backed bond research at Wachovia: "The dealers got caught in a vicious cycle. They did a great job of selling the indexes.
At the end of the day, they had to mark their own books to the prices on the indexes. They fell victim to their own sales job."
Dottie Cunningham, CEO of Commercial Mortgage Securities Association:
"In a volatile market, this mark-to-market process becomes a self-fulfilling prophecy,
driving prices down based on index trading activity rather than asset fundamentals."
"the use of a growing array of derivatives and the related application of more sophisticated methods
for measuring and managing risk are key factors underpinning the enhanced resilience of our largest financial intermediaries."
What do peak oil, Adam Smiths invisible hand of the free market and the price of a barrel of oil and have in common?
As we have proved empirically in these pages, the latter is a contrivance of controlled market manipulation,
The former two are urban myths used by paid liars and market shills, or whores of academia and intelligensia,
to support the unsupportable and unjustified commodities prices to an unsuspecting and naive public.
Much like suppossed real estate "values", another royal scam perpetrated by the house of finance to enslave the public in debt,
these connivances of greed and avarice are all getting their skirts blown up to reveal severely stained knickers.
More evidence backing our contentions has come to light in the form of an admission by the markets
that they may be the victims of their own devices. A clear lesson to be careful what you wish for, because you may get it.
Hattip To Bloomberg.
The credit-default swap market has become a lesson in being careful what you wish for
now that Wall Street has taken $245 billion of losses partly tied to such exotica.
What was intended as a way for lenders to protect against defaults spawned a market covering $45 trillion of bonds and loans
where no one knows how much is traded and speculators who bet on deteriorating credit quality end up forcing that reality.
Some credit-default indexes have morphed into what Wachovia Corp. analysts led by Glenn Schultz call
``Frankenstein's monster'' because they now often drive prices in the so-called cash bond market, rather than the other way around.
Fearing a repeat of losses, banks are refusing to support new indexes that would allow investors
to wager on everything from auto loans to European mortgages and Alt A loans.
Jacques Aigrain, CEO of Swiss Re:
"The indices are just trading on their own account with no relationship whatsoever to an underlying cash market that's ceased to exist.
`ABX, CMBX, any kind of X you like, are totally uncorrelated to any kind of underlying market"
Andrew Dennis, head of the asset-backed debt syndication group for UBS:
"The last thing the securitization market needs is another no-cash-upfront instrument that people can use to knock the markets about with."
Glenn Schultz, head of asset backed bond research at Wachovia: "The dealers got caught in a vicious cycle. They did a great job of selling the indexes.
At the end of the day, they had to mark their own books to the prices on the indexes. They fell victim to their own sales job."
Dottie Cunningham, CEO of Commercial Mortgage Securities Association:
"In a volatile market, this mark-to-market process becomes a self-fulfilling prophecy,
driving prices down based on index trading activity rather than asset fundamentals."
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