muses of the moment

August 31, 2012

A little humor

Filed under: Credit Derivatives — totallygroovygirlfriday @ 6:09 pm

groovygirl found this 2002 Fed paper humorous. Click here.

It is 52-pages, so if you are in a hurry, read the intro and the conclusion (page 32-33-34). This Fed paper examines if a financial crisis, like the collapse of Russia in 1998, would have a major systemic impact via the interest rate swap market in particular. Guess what the paper concludes?

groovygirl wonders if they did a paper for the collapse of Europe?

Side musing: groovygirl skimmed through the math on this one, it is not her best subject. The take-away: it is the spreads that kill you, not the real interest rates. That is why LIBOR was manipulated (up and down), to keep the spread from causing a default on the swap. (gg suspects that they still manipulate it, they have to, it’s the only option.)

Nothing has changed!!! There are more interest rate swaps now than in 2007-8 (or 1998). It is the largest portion of the global derivatives market. And it is the spread that blows the thing up, not the rate, so the Fed can not control the collapse. Even if they wanted to.

They can only bail out the damage from the aftermath. An interest rate swap is a bet. If you are betting that interest rates will go up in the next five years, who is taking the counter bet? Why would they do that? Those are the questions to ask yourself. Those are the questions government regulators should be asking themselves. Click here.

IMPORTANT: Latest Blog Post from Martin Armstrong dated August 29, 2012

Click here for Martin Armstrong’s latest blog post entitled Will We Collapse By August 2013? dated August 29, 2012.

Very important update from Martin. He is warning that the timing of the economic confidence model signalling a collapse/major crisis may be accelerating. He is also suggesting that a “two-part” crash could occur such as the one in the US in 1987 followed by Japan in 1989.

groovygirl is very concerned with this development. This is the first time that Martin has mentioned the August 2013 turning point as anything but a further progression toward the 2015 collapse.

Remember the Economic Confidence Model is a confidence model, not necessarily a specific market model.

From Martin’s blog post:

Former Clients familiar with the Economic Confidence Model have asked is this a rapidly advancing cycle as was the cast in 1989? The Answer to that question appears to be YES! There, we had the 1987 Crash on the half cycle followed by the collapse of Japan in 1989, and then the rise and fall of South East Asia as the US S&P 5oo bottomed precisely with the low of that wave in 1994. The accuracy was astonishing from the 1987 Crash right to the day, the peak in Japan 1989.95, and then the precise day of the low in 1994. This wave appears to be working in a very similar manner. This means August 7th, 2013 we must be very careful about next year. We will be looking at the global markets at the upcoming conferences(San Diego-Bangkok-Berlin) around the world. So yes! This is a very serious development. We may not last until 2015.75 and that could be the complete economic meltdown.

Martin also released a blog post on ObamaCare. Click here.

PFG drama

Filed under: MF Global bankruptcy, Odds 'n ends — totallygroovygirlfriday @ 11:48 am

Unwinding the big chaos is big business….click here. Apparently, crime pays, even after you get caught.

Time to Talk or Fish?

Filed under: Odds 'n ends — totallygroovygirlfriday @ 1:51 am

This is a long post, but an interesting, thought-provoking post. GG found this from a link through Solari site.

Click here for post Time to Talk or Fish?.

They are having a Transformations Gathering in October. Their suggestions for discussion topics are interesting too. Click here.

August 30, 2012

Getting Stocks in Your Name

Filed under: 401K and IRAs, MF Global bankruptcy, Odds 'n ends, Stock Market — totallygroovygirlfriday @ 11:47 am

If you have not been a regular visitor at Jim Sinclair’s website, you may be missing important dialogue about getting stocks directly in your name. Click here.

Companies are discouraging this with illegal fees for the process. It should be free because US companies are not charged for this transfer/process. I am sure you can imagine why they are discouraging this.

gg didn’t know….

Filed under: Housing Market, Odds 'n ends — totallygroovygirlfriday @ 1:49 am

….that prison cells are part of the housing starts stats. Click here.

Guess you put that under government housing? Does that mean that prisoners that work for prisons at below-wage are government employees? Do they count in the employment stats. too?

August 29, 2012

Just rumors….

Filed under: Bailout Nation, European Debt Implosion, The Banking Crisis — totallygroovygirlfriday @ 3:27 pm

This is just a RUMOR, so take it just as that. Click here.

Side musing: any bank that has exposure to Europe is vulnerable. There is a reason the European Financial Leaders are skipping Jackson Hole.

Bill Moyers

Filed under: Odds 'n ends — totallygroovygirlfriday @ 10:52 am

Bill Moyers had an interesting show last week on Nuns on a Bus, the Catholic nuns that traveled by bus  to protest against Paul Ryan’s proposed budget. Although, groovygirl disagrees with alot of ideas in this segment, she thought the discussion about the poor in America was excellent.

Click here for full video or portions of the hour-long show.

I think one thing we can agree on is that the War on Poverty is not won. And during this economic crisis, it will only get worse. Regardless of what government does or doesn’t do about meeting the needs of the poor (that is politics), everyone has an obligation as a human being to aid in the struggle at the level he/she is able.

Poor and middle class people give a higher percentage of their income to charity than rich people. Although rich people give a higher dollar amount. But it is the percentage that reveals the heart, not the dollar amount. I believe the reason for this phenomenon is that poor and middle class either have been poor at one time or see the poor struggling on a day-to-day basis.

And who says you have to give dollars…give food, time, energy, compassion, a listening ear….

Groovygirl hates reality TV. However, she would be willing to rescind her contempt, if……there were a show where politicians and appointed government officials had to disguise themselves and live on the street/shelter as homeless Americans. (Like the Undercover Boss show.) Groovygirl bets that if that were to happen, homeless shelter and food programs would not be cut. (Oh, and make sure they have to take care of a couple of kids under 10, too.)

gg personally thinks this should be a requirement for public office. Just my two cents.

The Retiree

Filed under: 401K and IRAs, Economic Crisis — totallygroovygirlfriday @ 1:43 am

Here is another good article on the demise of the US pension plan, this one from Automatic Earth. Retirement planning as we understand it is gone, but there will not be an announcement or education program to alert you to this demise.

The collapse of the pension plan was inevitable, despite the current financial crisis. Pension plans (private and public) are designed with two main imaginary assumptions: every generation is larger than the previous generation (like the baby boomers) and investments make at least 3-4% over the real inflation rate every year. And that is why pension plans, social security, and 401ks are at the least, overly optimistic, and at the worst, a ponzi scheme. This system doesn’t even take into consideration the devalue of the USollar or the rise in taxes.

groovygirl is very concerned about those people over 45 that are now or will be dependent on these systems for their survival. Even if they understand the collapse of the retirement systems, they have very little time to do anything about it. However, every step to save money outside these systems is better than no action at all.

August 28, 2012

European Crisis Update-from The Slog

Filed under: European Debt Implosion, Global Debt, The Federal Reserve, The Financial Crisis — totallygroovygirlfriday @ 5:50 pm

The Slog has news from Europe. And it is not good. Click here.

A Swiss-based bank credit specialist I’ve known for some time now insists that it is bank viability, not bonds, that’s kept the EU’s central bankers chained to their Frankfurt desks.

“I think too many observers are underplaying the [Spanish] banking liquidity thing,” he said last night, “Draghi knows what to do and how to do it, but I think only in the last few days has he grasped the size and the inevitability. We’re talking very, very big here: this is going to dwarf anything done for Greece, and it is going to make the bank 200% responsible for stopping the collapse”.

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