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March 18, 2009



thanks for the linkbacks, and nice article too, helped me wrap my head around this a little better.


Foo, I was not drawn in to what you were saying. I was content to pass the detail by, trusting that sometime between the comments and the end of the thread that someone would give a cogent summary that made sense to me and was enough for me to know.

Then TM chimed in with his soapbox cracking and I thought, good for Foo, he persisted to make a point he believed in. And I thought, good for TM, to recognize it charitably.

Then you snarked, and it came across to me like a cold wet mackerel to the face. You probably didn't mean it that way, and it wasn't directed at me, but it sure harshed my mellow.

Yeah. Selfish of me to feel my mellow was harshed, but I did.

So I suppose you didn't need to say it, and I didn't need to smack the mackerel back at you. I'm content to drop it.

Rick Ballard

Mr Uk,

If I were picking subjects, this wouldn't be one. You're absolutely correct. I haven't much to say about the theoretical ex post facto tax lynching precisely because it is a tale told by idiots.

I would note that the desperate need for traders who understand the transactions involved is dropping rather rapidly and that cheaper and just as knowledgeable replacements are probably available at very reasonable cost. I find the "hedge funds will snap them up" argument peculiarly risible, given the rate at which hedge funds are folding.

The entire ABS market is shrinking and the Fed promise to gobble them up is going to cause it to shrink even more quickly.

BTW - I find President Telobama's choice of uniform very suitable and fitting.


Mr Ballard,Similarscapegoating ishappening here>/a>

As far as regulation in the financial area, as in many others, generally it works pretty well when it isn't needed and is an abysmal failure when it is.
Well this is a bit off topic, but I've been maintaining lately that exchanges are an example of private regulation. Yes, exchanges are all regulated, by the SEC, CFTC, etc., but it is a public-private partnership what those regulations are.

An exchange is a cooperative organization, where its members submit to regulations (margins, reporting, transparency) in order to get others to submit to the regulations, and to reduce the credit risk of dealing with each other. And wherever the an instrument trades on an exchange, the OTC market disappears -- who would trade with a counterparty who might default, when you can trade with the exchange which has a much lower default risk?

In other words, there is a free market in regulation, in which participants freely submit to the regulations, and, in fact, pay handsomely for the privilege of being regulated.

Rick Ballard

Mr Uk,

There really aren't that many songs in the dirty fascist socialist songbook.

I've been trying to fit this Treasury report, which mentions that primary dealers are forecasting a $1.6 trillion deficit this year with this FOMC report which seems to indicate that the Fed will purchase up to $1.75 trillion worth of debt this year (including $300 billion of "longer-term Treasury securities").

I sure wish I could guess which shell the pea is under but I can only lean a little towards the one labeled "Inflation". I'll bet the Chinese wish they had accounts with US domiciled dealers. They're going to miss out on the Fed purchase of Treasuries. That could get expensive after that $300 billion is gone.


cf, there is a hefty third market.

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