Thursday, October 04, 2007

Tipping Point for US$?

There is an interesting video discussion with the investment expert, Dr Martin D Weiss at "The Great Dollar Panic of 2007-2008" (Click to watch)

Some excerpts from the transcript:

    "this credit crisis is many times larger.... Back in 1998, Greenspan was dealing with a small tumor in our financial system that could quickly be isolated and contained. Today, his successor, Fed Chairman Ben Bernanke, is dealing with a cancer that has already spread throughout the financial system...

    ...Back in 1998, Greenspan was dealing with a crisis that was isolated and easily contained. Now, in 2007, Bernanke is dealing with a crisis that is already spreading out of control to 20,000 cities and towns across America.

    In 1998, the epicenter of the crisis was small Asian markets. This time, the epicenter is right here in the United States, with financial markets that are at least a hundred times larger.

    In 1998, Greenspan was dealing with just one major hedge fund in trouble. He was able to sit down with the big banks. They were able to hash out a bailout. They were able to nip the crisis in the bud.

    Now, Bernanke is trying to cope with at least a thousand hedge funds in this sector. If even just one-tenth of them are entangled in this mess — and there's every indication they are — that alone is 100 times more than 1998. Plus, this time, we already have 140 mortgage companies in trouble, bankrupt or mortally wounded.

    Greenspan's 1998 crisis was a ripple. Bernanke's 2007 crisis is a tidal wave....

    ...It's already striking
    . Bernanke is facing a tidal wave of foreclosures in the $824 billion subprime mortgage market... the $722 billion Alt-A mortgage market... the $517 billion jumbo mortgage market... and, ultimately, in the entire $13.5 trillion mortgage market.... Not only the $13.5 trillion mortgage market, but also the $2.2 trillion U.S commercial paper market... the $2.4 trillion consumer credit market... the $10.1 trillion corporate bond market … and, biggest of all, the $144.8 trillion in derivatives held by U.S. banks alone.

So apparently, this may be, for all you know, the history in making... the concluding part of a trend that was quite apparent in the long-cycle over last many decades:

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