Quick-comment this am:
Subject: This is getting worse than 1992 ERM crisis - distrust at new highs
This is getting worse than the 1992 ERM crisis - distrust at new highs... I expect EXTREME US Dollar yield in money market to be main issue into turn of the month..- yes even bigger than HBOS, Barclays and BoA getting nationalised!
The maximum pain in any financial system is the lack of funding - the banks no longer trust each other at all. Everyone is refusing to lend outside overnight - but EVERYONE is willing to give Fx forwards EURUSD ..taking in US Dollar deposits @ 5% and higher (in 3.25%).... this morning market is paying into 1 mos!!!!! (I cant say this enough - this is WORST part of this cycle)......
EURUSD Basis swaps... new high -- Chart 1
EURUSD Basis swaps... new high -- Chart 1
(Click on chart for bigger picture)
...having lowered my S&P to 770... I am MAXIMUM negative on stocks - keep 75% cash!
AIG bail-out 85 bln. ==> Price: 850 over LIBOR - nice one... so they will run out money SLOWLY instead of this week--- Idiots...
US biggest hedge fund now .. 900 bln. of toxic waste - chronology: Save Inv. bank, Save Mortgage Inst., Save insurance, next? Leasing? Soon Fed will accept used cars as colleteral.... US hedge fund will bear the name: Leveraged Ponzi Inc -
if this market not realising this is BIGGEST CRISIS since 1987 it never will.. Asia paying 25% of o/n US this morning...? Remember IEP o/n in 25.000% ?
Good luck Ladies and the few Gents ...
Med Venlig Hilsen Yours Sincerely Steen Jakobsen, Chief Investment Officer, Saxo Fund Management Saxo Bank A/S -London
40 Bank Street, 26th Floor Canary WharfLondon E14 5DA
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1 comment:
"US biggest hedge fund now .. 900 bln. of toxic waste - chronology: Save Inv. bank, Save Mortgage Inst., Save insurance, next? Leasing?"
Nope, distressed football teams instead! After all, a franchise going bankrupt might have huge social costs as well :)
Always a pleasure to read your posts.
AT
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