Saved by Zero; Carry Trade Unwind; CDO Overexposure; Tears In The Sands
ZIR (Zero Interest Rate) world...
ECB cut 50 bps to 3.25% & BOE cut 150bps to 3%. Free money can solve any problem, right? Saved by zero?
I think not, ask Greenspan or Japan... carry on my wayward rising Sun...
June 07, the peak of the carry trade... the yen was 127 per $
Once the market realizes that we're in a global recession, there's further deleveraging to come...
as the Yen carry trade unwinds and drives Japan into a depression. Canon projects its 1st profit loss in years; Sony net -72%.
The Bank of Japan cannot stop Yen appreciation, as traders liquidate their leveraged assets purchased with yen previously borrowed at 1%...
dollar up 13% this year except vs the yen...$ down 14%; euro down 30%...
you can count on the Yen going from 97 to 90 and perhaps 80 per dollar in the near term.
Which would match the 79 high in 1995... ah yes, the price of all assets may reset to 1995.
CDO over exposure reported earlier this week... New York-based DTCC's data, released on its Web site Nov. 4,
showed a total $33.6 trillion of transactions on governments, companies and asset-backed securities worldwide.
Andrea Cicione at BNP Paribas: the report includes only a small fraction of contracts linked to mortgage securities.
The data are likely to underestimate the amount of net CDS exposure by 40%, making the actual exposure closer to $45 trillion; 3.5 yrs worth of US GDP.
When casinos cry or tears in the Sands... Sands Casino with $8.8 billion in long-term debt...
& dwindling cash flow jeopardizing $16 billion worth of developments in Asia.
Billionaire owner Sheldon Adelson:
"Las Vegas Sands is seeking funding to stave off defaults on loans or face substantial doubt about its ability to survive as a going concern".
ECB cut 50 bps to 3.25% & BOE cut 150bps to 3%. Free money can solve any problem, right? Saved by zero?
I think not, ask Greenspan or Japan... carry on my wayward rising Sun...
June 07, the peak of the carry trade... the yen was 127 per $
Once the market realizes that we're in a global recession, there's further deleveraging to come...
as the Yen carry trade unwinds and drives Japan into a depression. Canon projects its 1st profit loss in years; Sony net -72%.
The Bank of Japan cannot stop Yen appreciation, as traders liquidate their leveraged assets purchased with yen previously borrowed at 1%...
dollar up 13% this year except vs the yen...$ down 14%; euro down 30%...
you can count on the Yen going from 97 to 90 and perhaps 80 per dollar in the near term.
Which would match the 79 high in 1995... ah yes, the price of all assets may reset to 1995.
CDO over exposure reported earlier this week... New York-based DTCC's data, released on its Web site Nov. 4,
showed a total $33.6 trillion of transactions on governments, companies and asset-backed securities worldwide.
Andrea Cicione at BNP Paribas: the report includes only a small fraction of contracts linked to mortgage securities.
The data are likely to underestimate the amount of net CDS exposure by 40%, making the actual exposure closer to $45 trillion; 3.5 yrs worth of US GDP.
When casinos cry or tears in the Sands... Sands Casino with $8.8 billion in long-term debt...
& dwindling cash flow jeopardizing $16 billion worth of developments in Asia.
Billionaire owner Sheldon Adelson:
"Las Vegas Sands is seeking funding to stave off defaults on loans or face substantial doubt about its ability to survive as a going concern".
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