Quote:
Originally Posted by teomaxxx
Credit markets are seizing up, since noone belives in AAA rating bullshit anymore...thats what you get, when you try to play bullshit game like goverment regulators, banks, rating agencies continue so...
They better kick the rating agencies for a downgrades of monoline insurers or it will backfire much stronger...
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and another good one, since credit markets are seizing up really fast, on friday there was a blowout of 2bn fond in UK, on monday there was blowout of TMA, yesterday there was blowout of Carlyle Capital Corp.
"Bernanke's dilemma is starting to get some play in the mainstream press, with CNBC noting that while The Fed has been "slashing rates" and flooding the market with "liquidity" the market hasn't recovered (and in fact has cratered) and the credit markets are in worse shape than in August, with the malaise now spreading into virtually every corner including supposedly-"safe" instruments such as Auction Rate municipals. And Bloomberg said the following today:
"March 6 (Bloomberg) -- Credit trading models used by Wall Street have gone haywire, raising company borrowing costs even as Federal Reserve Chairman Ben S. Bernanke cuts interest rates."
Well duh. As I've said repeatedly you cannot fix a junkie's problem by offering him heroin! Bernanke needs to decide whether he is going to address the willful regulatory ignorance emanating from The Fed and other banking system regulators or whether he prefers to have the credit markets seize up piece by piece, margin call by margin call, until we finally force into the open the institutions that are insolvent - the hard way.
Down the latter road lies a rerun of the 1930s or a Japan-like situation, with both being brought about by precisely the same sort of regulatory refusal to force market participants to face reality.
The bad news is that I fear that Bernanke has very little time left to get off his kiester as the market is choosing for him. He's wasted the last six months running the old Greenspam playbook but unfortunately this is not LTCM where you literally have one institution that got in trouble - this is much more serious as the we quite literally have all areas of the credit markets seizing up because trust has been destroyed.
What's worse, Bernanke and his Fed have destroyed confidence in our currency by willfully refusing to address the root cause of the problem and that is being reflected in the DX.
The irony of this is that the longer Bernanke fiddles with his bullcrap "rate cut" nonsense trying to shove more heroin at the junkie, the worse the dollar craters and the more inflationary pressure this puts back into the economy through higher import costs, with the most important of those being the energy complex! The Dollar broke 73 today - south!
Bluntly: Bernanke cannot control this situation with more "liquidity" or "rate cuts", and the more he jawbones the more the dollar reacts by sinking further into the quicksand, taking back - with interest - what he is attempting to "give."
from:
http://market-ticker.denninger.net/2...tion-mess.html
Regulators are running out of time....