Foreign investors veto Fed rescue

Asian, Mid East and European investors stood aside at last week’s auction of 10-year US Treasury notes. “It was a disaster,” said Ray Attrill from 4castweb. “We may be close to the point where the uglier consequences of benign neglect towards the currency are revealed.”

The share of foreign buyers (“indirect bidders”) plummeted to 5.8pc, from an average 25pc over the last eight weeks. On the Richter Scale of unfolding dramas, this matches the death of Bear Stearns.

Rightly or wrongly, a view has taken hold that Washington is cynically debasing the coinage, hoping to export its day of reckoning through beggar-thy-neighbour policies.

It is not my view. I believe the forces of debt deflation now engulfing America – and soon half the world – are so powerful that nobody will be worrying about inflation a year hence.

JPMorgan Buys Bear Stearns for $2 a Share After Clients Flee

Fed Takes New Steps to Ease Crisis

The Federal Reserve announced a series of new steps Sunday to help provide relief to a spreading credit crisis that threatens to plunge the economy into recession.The central bank approved a cut to its lending rate to financial institutions to 3.25 percent from 3.50 percent, effective immediately, and created another lending facility for big investment banks to secure short-term loans.The new lending facility will be available to financial institutions on Monday

At this point it seems a foregone conclusion that the Fed has decided to risk sacrificing the dollar in order to try to save the bankers but that may be futile. In the end both may be destroyed.

My main fear (although it is a fear) is NOT the mortgages…because at least there is a tangible asset behing the mortgage….a piece of property….but the freaking derivitives is all speculative and leveraged to what 10:1…100:1…..1000:1…..

I remember some years ago when wealthy Orange County (CA) went bankrupt (Ch 9 – I think)…and 60 Minutes had some economic PHD’s on who could not clearly explain why…or what a derivative is….or how it is valued….

I’ll bet half the fucks buying and selling that shit can’t even explain what they are buying or selling….or how to Value a derivative properly.

If thats the case the Fed will have to do $1 just to stop the hemorraging……but that will bring rates to what 2% or something….

At 2% rates, they won’t have much room for FUTURE rate cuts…… So its a point of diminishing returns…..

The USGOV has already committed to rate cutting which eases the problem in the short run but creates bigger (and deeper) problems in the long run….Maybe the Bush administration is just hoping to keep the wheels on the vehicle until Jan…then let the whole thing collapse….on Obama’s or Hillary’s watch….

Note that we have a Currency Crisis….and McCain promises 100 years of more war…..and both Dem’s are pushing national Healthcare (and with a Dem House/Senate – THEY WILL GET IT)…..

Also….think of the Healthcare costs for the WOUNDED vets (which will be incurred 20 – 30 – 40 – 50 more years!)….

Also….think of how Bush expanded Medicare Prescription coverage – without even MEANS testing….

You aint seen Nothing Yet…..

Btw, for what it’s worth and speaking of econo-heads, Gary North thinks the drop in the CPI for February means that were heading for a deflationary recession, not an inflationary one. The direction it goes will be important for gold. . . . maybe.

http://www.marketwatch.com/news/story/fed-acts-sunday-prevent-global/story.aspx?guid=%7B43265631%2D1656%2D4697%2D8377%2D55F05D859B76%7D&dist=hplatest

Its 11:30PM EST…….In overnight trading gold is up $24 oz (to $1026 USD) so far…..I’ll be in scum suck NYC til 5PM tomorrow so I can’t really follow the intraday market activity (vis a vis gold / Bear Sterns, et al)……

I’ve been bullish on gold long term, but predicted a pull back at 960 oz to 910 or so before the move over $1K, so I fucked myself out of a nice piece of $$$$ in my trading account by selling and hoping to come back in a little cheaper….Luckily I’ve kept it buy and hold in my wife’s IRA so I didn’t totaly fuck myself………..

I believe the Fed is supposedl to meet Tuesday, which basically means it won’t do shit tomorrow….because if it did something dramatic the DAY BEFORE a Fed meeting it would mean panic…..

Ergo, the Fed MUST cut on TUESDAY……but……if it cuts 1/4 point Tuesday….there will be a SELLOFF…..but if it cuts 1/2 point Tuesday there should be a nice rally…for a day…maybe two or three…but it will give back all those gains over the next 2 or 3 or 4 weeks…..and the reality is the more you cut rates…the less room you have for cutting rates in the future……

Scott: The mortgages are a real problem….but not the biggest problem…..Its the derivatives…the Derivatives….Please do a show on the DERIVATIVES!

So WAR is a motivational speaker! Another Matt Foley in a van down by the river? http://youtube.com/watch?v=lFPp5WfE-Yg

Who’s stupid enough to give WAR 15 grand to hear him speak?

I don’t think the average LP’er agrees with the statist and warmongers who are hijacking the party. At least that’s what it seems to me at the local level where I am although I’m not involved with the local party much but I do get their newsletter.

True, party politics may be not where it’s at. But what is being fought over is the very name and label of “libertarian” in the mind of the public. One major battle front for that is, of course, in the LP. Because if the Neil Boortzians get to redefine the word via the LP, we lose. That means that whenever the person on the street hears “libertarian,” they will think “A Republican, only an Even Bigger Misanthrope Jerk.” Bad.

But such a strategy is only being on the defensive. We need to find a way to be on the offensive, to not only parry and dodge but lunge… How? I don’t know.

But really in all fairness, for me to have a properly formed opinion, I need to have a little chat with the luminous form of Obi-Wan-Rothbard, the patriarch of all that was good and true in the whole movement.

Good night.

Aye, may the wee-minded bastards choke on their own confections.