Nouriel Roubini is even more grim than usual (and that's saying something):
Hundreds of hedge funds will fail and policy makers may need to shut financial markets for a week or more as the crisis forces investors to dump assets, New York University Professor Nouriel Roubini said.``We've reached a situation of sheer panic,'' Roubini, who predicted the financial crisis in 2006, told a conference of hedge-fund managers in London today. ``There will be massive dumping of assets'' and ``hundreds of hedge funds are going to go bust,'' he said.
Group of Seven policy makers have stopped short of market suspensions to stem the crisis after the U.S. pledged on Oct. 14 to invest about $125 billion in nine banks and the Federal Reserve led a global coordinated move to cut interest rates on Oct. 8. Emmanuel Roman, co-chief executive officer at GLG Partners Inc., said today that as many as 30 percent of hedge funds will close.
``Systemic risk has become bigger and bigger,'' Roubini said at the Hedge 2008 conference. ``We're seeing the beginning of a run on a big chunk of the hedge funds,'' and ``don't be surprised if policy makers need to close down markets for a week or two in coming days,'' he said.
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and...
more deleveraging...
so says Peter Schiff at europac dot net:
it seems that lots of troubled funds are needing to sell off their gold...
and that shows up now in declining gold prices...
but...
when most of this deleveraging ends...
gold prices will soar...
and the dollar will drop in value...
leading to very high inflation...
but...
hey, have a nice day...
abundance faith hope love joy peace to all...
Forgive Reagan and God...
and yet more...
what about commodities, you may ask...
when the majority of the deleveraging ends...
commodities should gain in value...
while stocks fall as earnings drop in the coming Greater Depression 2.0...
so...
as the major deleveraging comes to an end...
then...
stocks down...
dollar down...
inflation up...
commodities up...
which means oil will soar...
here's hoping this doesn't happen before Spring...
after the heating oil season...
abundance faith hope love joy peace to all...
Forgive Reagan and Greenspan...
"Hedge" funds?
More like "leveraged-out-the-ass" funds.
godisaheretic,
The Community Reinvestment Act (CRA) has been blamed for the current financial crisis, but the CRA does not apply to institutions making the vast majority (80%) of troubled loans underlying the crisis. The Federal Reserve Bank earlier this year said the CRA has actually increased the volume of responsible lending to low-and moderate-income households.
http://tinyurl.com/3sjcfj
thanks, Jim, that's a somewhat good article...
though...
keep in mind that it's partly spin...
you refer to the 80% figure...
which means at least 20% of troubled loans fully apply to CRA...
and the article clearly states that up to 30% more of the troubled loans at least partly apply to CRA...
also you refer to CRA as increasing "the volume of responsible lending" to low-income households...
yes, no doubt that is true...
what is also true but goes unsaid is that CRA (based on those above percentages) is also responsible for increasing the volume of irresponsible lending...
see how the article is spun to state the positive and leave the negative unsaid?
the article also says that banks found CRA to be good business...
sure, they did...
because they could dump those risky loans onto Fanny and Freddy...
look, I'm not saying any one program or one group or one person or one anything is responsible for this financial mess...
but it seems that CRA was the leading edge pointing the way forward for banks to give out ever more risky loans and then quickly dump them onto Fanny and Freddy...
so yes, CRA can be fairly said to be only a small part of the current problem...
but CRA was a leader for all those others who made the problem so much bigger...
so credit should be given where credit is due...
to Carter and Clinton...
and, of course, Reagan and GW Bush and Greenspan...
and others...
abundance faith hope love joy peace to all...
Forgive Reagan...
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