- Dear Friends,
- According to news reports, the G7 on one weekend of mutual
understanding will restructure the entire world monetary system and make
the present consequences of more than one quadrillion one thousand one
hundred forty-four billion dollars of notional value rotten garbage go
- A few of the characteristics of the problem will
be solved in two days of deliberation of the G7, but they mistakenly think
they are still the Sun of the World around which all other countries orbit
quietly and obediently. That alone has to give you some insight into the
- Behind the curtain of silence the subprime loan problem,
better described as a global meltdown of credit and default derivatives,
continues. The reason for this condition is an attempt to value that for
which there is no value. It is spreading globally as a product of the limitless
manufacturing PRIMARILY (above 75%) by USA financial entities.
- Keep in mind that over the counter derivatives created
between 1999 and 2007 generally have the following characteristics:
- 1. Without regulation.
- 2. Without listing on public exchanges.
- 3. Without standards.
- 4. Therefore not in the least bit transparent.
- 5. Therefore without an open market of the bid/ask type.
- 6. Dealt in by private treaty negotiations.
- 7. Without a clearinghouse.
- 8. Unfunded without financial guarantee of any kind.
- 9. Functioning as contracts of specific performance.
- 10. Financial character or ability to perform is totally
dependent on the balance sheet of the loser in the arrangement.
- 11. Evaluated by computer assumptions made by geek, non-market
experienced mathematicians who assume religiously that all markets return
to their normal relationships regardless of disruptions.
- 12. Now in the credit and default category alone considered
by accepted authorities as totaling more than USD$20 trillion in notional
- 13. Notional value becomes real value when the agreement
is forced to find a real market for ending the obligation which is how
one says sell it.
- The US dollar has improved based on the well crafted
Urban Myth that Euroland has more problems than the USA. That like all
great lies of history becomes true by experts saying it loud and often.
This method of the transition of nonsense into manufactured truth is known
as Spin. It was one of the most important imports from Germany in 1945.
Some think this method of spin exceeded the imports of Dr Braun.
- The first plan crafted for the dollar recovery was experts
assuring everyone that Euroland, as the source of this problem, clearly
would have to have more problems than the USA, with a finger clearly pointing
- Next many interventions took place with fanfare galore.
I love the picture of the Congressional personality high-fiving on the
passage of the bailout bill.
- Since then the Secretary of the US treasury has announced
investments in bankrupt banks four times, each time as a new intervention
cure of problem.
- The best of all might be the collapse of FASB [Financial
Accounting Standards Board] this weekend as the overseers of fair accounting
making values where there is none.
- THE ABILITY TO GIVE VALUES TO VALUELESS INSTRUMENTS,
CLEARLY KNOWN TO THE BANKS TO BE WORTHLESS, IS NOT GOING TO MAKE INTER-BANK