This is the truth, nothing but the truth, and the whole truth, with a waterboard as my witness!

Tuesday, October 28, 2008

getting closer to telling you I told you so The above link and last night even Mad Money man acknowledged that the dollar was a silver lining; albeit late for his viewers. Crammer on mad money said what I said a month ago.

We are getting estimates in the TRILLIONS of dollar destruction,, The latest data from the Bank for International Settlements shows that Western European banks hold almost all the exposure to the emerging market bubble, now busting with spectacular effect.

They account for three-quarters of the total $4.7 trillion £2.96 trillion) in cross-border bank loans to Eastern Europe, Latin America and emerging Asia extended during the global credit boom – a sum that vastly exceeds the scale of both the US sub-prime and Alt-A debacles.

So let me propose another narrative, The US fed and Treasury spent 700 billion to offset the 3 trillion in losses, (hardly inflationary hmmmmm???) and then there are those surprised to see a strong dollar?

So let me propose another narrative, the US fed and Treasury instead of sweeping dirt under the rug discloses and gives sunshine to US markets as the rest of the world has the majority of the bad debt positions, in other words the US owns up to it's problems, addresses them proactively, does the RIGHT THING and people are surprised to see a strong dollar?

The US Fed, FDIC, Treasury all did the right things given the circumstance where a former fed chief "never saw the possibility of housing going down." "Never saw the possibility of housing going down." "Never saw the possibility of housing going down." ... hmmmmm bad call there Alan. But I have to give 100% ctedit to the response to the problem by the FEDS on this crisis. I mean lets give them credit where it is due. I supported the bailout/rescue as they did, and it was the right call, and hardly inflationary.

Meanwhile, unable to call the gold bubble a gold bubble, read this. Funny when you read this narrative by Mike there is no mention of a bubble in gold. And keep in mind that his advice was go long gold, mine??? Go long dollar.

I would gloat but my lot is to explain accounting to people who think they understand it, fancy themselves as understanding it, but have never actually been responsible for a consolidated balance sheet. (real job)

But my point is to say, that if the FEDS had not acted when they did, we would be in a far worse situation.

Because the FED did act fast I think we have a 50/50 chance of a 12 month recession and possibly longer if the other central bankers don't act couragesouly.

Candidly, I typically quit when working with dumb and unsupportive people. I want to express appreciation to Paulson and Big Ben for being the Gamesman.

I never suck up, never pander, but you have to give credit for taking ideas to the public where the vast majority cannot see the implications and connections, come up with a plan, and then get personally attacked for doing precisely the correct thing. The Jungle fighter in me often leaves me with the attitude, hell let em wallow in their studpidity, but even at great personal stress, these people perservered and did the right thing.

I at least "I'm appreciative" recognize the good call.

I expect a worse case at 7300 and would not be surprised if that number is higher as the low, in fact.. wondering if Buffet made the better call?

But understand, that no matter how bad things look, something you are reminded of when you travel abroad, that if the US seems screwed up, rest assured the rest of the globe is worse.

These FED chiefs will be only recognized in hind-sght and history for getting this precise moment in history right.

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