Perspectives on the global economic meltdown- (Nov 28 2010)

ramana · Post by **ramana** » 27 Oct 2011 01:43

Theo, If Spain goes down so goes the e-CON-omy. They take down queenie and rest will follow. PRC might be doing that.

svinayak · Post by **svinayak** » 27 Oct 2011 01:46

ramana wrote:Theo, If Spain goes down so goes the e-CON-omy. They take down queenie and rest will follow. PRC might be doing that.

It is risky for PRC too.
PRC will be hit hard at the peak of its population growth and another 20 years of employed youth.

svinayak · Post by **svinayak** » 27 Oct 2011 01:51

Theo_Fidel wrote:
The link to big chart has China on it. Basically US owes $1.5 Trillion to China. Even NYTimes gave up on trying to find what EU owes China. The cash flows sloshing through the system are now in $ Trillions. No one is really sure what is going to happen.
---------------------------------------------------------------------

This sloshing of cash in the international market is a new phenomenon resulting from cold war alliance.

With asset price artificially going up in 1997-2007, the money loaned to many global corp is floating around without any means to suck them up. This is the most destabilizing part of the global economy and it needs to be tamed.

shaardula · Post by **shaardula** » 27 Oct 2011 07:26

Theo_Fidel · Post by **Theo_Fidel** » 27 Oct 2011 07:32

Ramana, does that arrow not indicate that it is Spain that is Blighty's creditor. Not the other way. So Blighty going down would collapse Spains banks. It does shock me how much Blighty is tied up with Spain. We have even heard of how Italy might take down France but there is not a peep about Spain. Is there a back stop there that we don't know about?

There is a terrific amount of money and debt in the system. It is hard to know what will happen next.

As we are now a $2 Trillion economy saving $700-$800 Billion every year a tremendous amount of this cash is going to be sloshing through our system as well. Prime danger of Inflation IMHO. RBI raising rates is going to destabilize government finances as the interest payout is going to rise tremendously with all these rate hikes. Prime the pump for more inflation down the road.

skumar · Post by **skumar** » 27 Oct 2011 08:37

Arjun wrote:Savers choose to outsource management of their savings primarily because they have (a) either no time to spend on such management or (b) even if they had the time they might not have the ability to generate beyond 15% pa on a consistent basis; and most often the reason is a combination of both (a) and (b).

It is now fairly well established that a low cost fund generally performs better than most of these "money managers".

Arjun wrote: Why would the manager do it when he can get rich by managing his own money? The answer is simple. If he starts with say $1 Mil of his own money, after n years he has turned it into 1.35^n Mil. On the other hand if he takes in additional X Mil from other savers to manage, and 2/ 20 contract gives him an additional 10% of the saver's money, his net wealth after n years is 1.35^n + X*1.1^n.

Goes to show how money managers think this is a great way to get other people's money

.
[nitpick]Actually if a money manager invests $1 M of his own money and $X M of his clients money as per the 2/20 contract, it would be 1.35^n + X*.09*(1 - 0.26^n)/0.74, if he gets a consistent 35% return and doesn't steal.[/nitpick]

But seriously, how many HNI PMS / hedge funds have generated 35% returns consistently over 3 years or more?

Singha · Post by **Singha** » 27 Oct 2011 09:27

I think just as UK marketed itself as a comfortable and friendly base for third world , arab and russian wealthy to use as a playground and financial clearing house for deals, residency etc, Spain marketed itself to the UK as a place for frequent holidays, second home condos, retirement and so on. seems lot of construction took place along spanish coast to support the UK people's desire for a warmer wintering cove.

on a visit to far east, I spotted some glossy realty mags advertising all sorts of high end looking homes and condos in australia places like perth and adelaide. not sure what drives that swell or who buys in there...the total pop of australia probably does not justify so much high end construction for internal consumption. maybe wealthy brits and east asians like to buy in australia ?

Neshant · Post by **Neshant** » 27 Oct 2011 09:43

That will require banks to take on 50 percent losses on their Greek bond holdings — a hard-fought deal that negotiators will now have to sell to individual bondholders.

Van Rompuy also said the eurozone and International Monetary Fund — which have both been propping the country up with loans since May of 2010 — will give the country another euro 100 billion ($140 billion). That's slightly less than amount agreed in July, presumably because the banks will now pick up more of the slack.

I got a question :

Why is the IMF giving out "loans" to Greece if its about to default ?

The money does not even go to Greece but goes towards German & French banks which lent money foolishly to Greece. This is nothing more than croneyism coming from the French woman Christine Lagarde who recently was installed as head of the IMF. She is busy offloading the losses of banks in her home country onto the world - the developing world !

It truly is a half-assed organization.

Neshant · Post by **Neshant** » 27 Oct 2011 09:53

in other news, Goldman Sachs ripped off Libya's state funds during the war.

banking goons strike again.

Theo_Fidel · Post by **Theo_Fidel** » 27 Oct 2011 10:30

Singha,

You probably have that spot on. So the Spanish banks have financed a whole bunch of British investment in Sunny Spain that is probably under water right now and the British, being the 'nice' gentle types they are, are probably walking away from all that property. In effect even though the British who owe this money it is the Spanish that are on the hook for it.

What a stupid cluster fu#k this thing is turning into...

Arjun · Post by **Arjun** » 27 Oct 2011 10:34

skumar wrote:But seriously, how many HNI PMS / hedge funds have generated 35% returns consistently over 3 years or more?

Check out Renaissance Technology's Medallion Fund & its average returns for over 2 decades since 1989.

vishvak · Post by **vishvak** » 27 Oct 2011 11:37

(edit)
Eurozone crisis: banks agree 50% cut on Greece's debt

The French president and German chancellor both insisted that the €440bn bailout fund, the European Financial Stability Facility (EFSF), could find its firepower increased by four to five times. Since the fund has about €250bn left this could amount to €1tn – or US$1.4tn in Sarkozy's words.
...
A 15-page communique issued in the early hours of Thursday morning called on the IMF to help finance the second Greek bailout programme,

So if IMF does help finance the bailout programme, why not cut debt of India too?

ranjbe · Post by **ranjbe** » 28 Oct 2011 05:56

The consequences of the current meltdown in Europe and to a lesser degree in USA, will be "death by a thousand cuts" spread over many years, chipping away at the standard of living and all the benefits enjoyed until now under the welfare states in Europe. The weak and vulnerable, particularly the elderly and poor are prime targets. One example in UK:
Misery for millions as elderly care funds cut
http://www.telegraph.co.uk/health/elder ... s-cut.html

Neshant · Post by **Neshant** » 28 Oct 2011 06:11

vishvak wrote:So if IMF does help finance the bailout programme, why not cut debt of India too?

We end up in this bizzare situation where the poor countries of the world are funding the indebted rich countries via the IMF to keep on spending (i.e. handing over money to banks in developed countries), going in debt and finally defaulting.

Robin Hood stole from the rich to give the poor. The IMF is a reverse Robin Hood scheme.

ldev · Post by **ldev** » 28 Oct 2011 06:45

Merkel Called Bankers’ Bluff, Getting Europe a Financial Plan

She is one tough lady. Reminds me of Mrs. G.

In the end, it was Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France against the European banking establishment — and the bankers blinked.
It was approaching 2 a.m. Thursday, not long before the Asian markets would open, and the two leaders were desperately trying to nail down the last component of a complex deal to save the euro: forcing the banks to pay a greater share of Greece’s effective default.

For hours, negotiators had been trying to persuade the banks to accede to a “voluntary” 50 percent loss in the face value of their Greek bond holdings. The banks, which had already agreed to a 21 percent write-down, had dug in their heels.

They knew how badly the European leaders needed a deal, and how much financial experts feared a disorderly, involuntary default. That could set off a “credit event,” throwing world financial markets into turmoil, much as the collapse of Lehman Brothers did in the fall of 2008.

But Mrs. Merkel called the bankers’ bluff, said officials present at the discussions. Accept the 50 percent write-down, she told the bankers, or bear the consequences of default. In effect, she was willing to risk a credit event, and to place the blame for any fallout on them.

VikramS · Post by **VikramS** » 28 Oct 2011 08:21

Arjun:

Rentec is not a traditional investment vehicle; they are the grand-daddy of High Frequency Trading doing fast quick trades across asset classes and geographies at a time when very few people paid attention. As far back as 1997 one of Rentec's fund Nova often did high single digits of Nasdaq's total volume, going as high as 13-14% on some days. Nova was folded into Medallion.

The Medallion fund is closed to new investors and most of the money in the fund is of the owner and company employees. The funds open to the public (RIEF etc.) heavily under-perform Medallion letting some people to believe that Medallion actually trades against them. The spread in performance has been as large as 30-40%, positive returns for Medallion negative for RIEF that it has been the subject of SEC investigations.

Read more here

http://online.wsj.com/article_email/SB1 ... TUzWj.html

ramana · Post by **ramana** » 28 Oct 2011 09:26

Could BO have done that in 2009 or was it not same thing?

skumar · Post by **skumar** » 28 Oct 2011 09:36

Arjun wrote:
skumar wrote:But seriously, how many HNI PMS / hedge funds have generated 35% returns consistently over 3 years or more?
Check out Renaissance Technology's Medallion Fund & its average returns for over 2 decades since 1989.

So, the answer is one? That too a crooked fund which might be stealing money from its scheme open to the public to enrich its internal funds?

And also from wikipedia - Renaissance's charges a management fee of 5% and a profit participation of 36%, both of which are higher than the industry standard of 2% and 20%, respectively

Satya_anveshi · Post by **Satya_anveshi** » 28 Oct 2011 10:41

ramana wrote:Its an interesting thing that you have spotted that the Euro crisis is a way for EU to manage US. I didnt think of it like that but chart which shows the net flows is very interesting to understand the moves.

It seems Obama wrote an OpEd for Financial Times (not WSJ?

). Unable to access FT due to subscription issue. Not sure if anyone can workaround and post it without breaking copyrights.

Obama Calls For Firewall To Prevent Europe Crisis Contagion -FT

Arjun · Post by **Arjun** » 28 Oct 2011 11:02

skumar wrote:So, the answer is one? That too a crooked fund which might be stealing money from its scheme open to the public to enrich its internal funds?

Never fail to be amused by the mindset displayed by Neshant, you and other assorted commies !! If a firm is successful in financial services, it has to be crooked ! That's impressive logic.

You probably failed to notice that your question asked about average performance for 3 years. There are literally tons of funds that have shown 35%+ annual returns over 3 years. I was pointing to one that has done this over 20+ years.

And also from wikipedia - Renaissance's charges a management fee of 5% and a profit participation of 36%, both of which are higher than the industry standard of 2% and 20%, respectively

Please also look into why investors are willing to pay that much to Jim Simon. The answers can also be obtained easily enough by googling. Also compare returns AFTER subtracting these fees.

Arjun · Post by **Arjun** » 28 Oct 2011 11:26

VikramS wrote:Rentec is not a traditional investment vehicle; they are the grand-daddy of High Frequency Trading doing fast quick trades across asset classes and geographies at a time when very few people paid attention.

Vikram, All my references have been only to alternative investment vehicles and I have more than passing familiarity with high-frequency trading.

The Medallion fund is closed to new investors and most of the money in the fund is of the owner and company employees. The funds open to the public (RIEF etc.) heavily under-perform Medallion letting some people to believe that Medallion actually trades against them. The spread in performance has been as large as 30-40%, positive returns for Medallion negative for RIEF that it has been the subject of SEC investigations.

Frankly its always much better to restrict your investors to folks you know well, especially if you have the ability to pick and choose your investors. So I don't question Medallion's close-end nature.

They must have started the public fund in response to repeated enquiries from other HNIs. The only way to make that work is to have separate funds, one comprised of investors you are comfortable with and an external one - both managed by completely separate teams. These two funds had different strategies, different management as well as risk / return parameters, and hence the difference in performance. They might have been subject to SEC investigation - but what was the outcome ?

Singha · Post by **Singha** » 28 Oct 2011 11:48

> Frankly its always much better to restrict your investors to folks you know well

why ? money is money and if invested will generate some -ve or +ve return regardless of if it came from a relative or total stranger. I can understand closed-end after a certain time limit, but not why it should be restricted to friends and family only.

shyam · Post by **shyam** » 28 Oct 2011 11:50

Here Is How The 50% Greek Haircut Is Actually Just 28%
Just the math, something Europe is unable to do:

- Greece has €350 billion in total debt including about €70 billion in Troika "post-petition" loans; these are untouched.

- Of the €280 billion, roughly €75 billion is held by the ECB: this, like the Troika loans, will be untouched.

- This leaves just ~€200 billion in actual debt to undergo a haircut.

- Apply a 50% haircut to this debt (ignoring the fact that of this about €35 billion is held by Greek pension funds, and once the realization that Greek pensions have been cut in half dawns upon the population, the result will be the biggest riots ever seen in Athens yet).

- Total debt to be cut: just about €100 billion.

- Hence, of the total €350 billion, just €100 billion is eliminated, most of it used to backstop and service Greek pension and retirement obligations

- €250, or the residual, of €350, the original, means 72%, or a 28% haircut.

- Greek GDP was €230 billion on December 31, 2010 and declining fast.

- And that is how a 50% haircut is "cut" almost in half

Arjun · Post by **Arjun** » 28 Oct 2011 12:05

Singha wrote:why ? money is money and if invested will generate some -ve or +ve return regardless of if it came from a relative or total stranger. I can understand closed-end after a certain time limit, but not why it should be restricted to friends and family only.

Well, one of the investors could turn out to be a guy like Neshant, convinced that the fund manager is a crook out to get his money. He would start hollering at the first sign of any dip in profits.

Like any firm and its management is ultimately answerable to their shareholders, a hedge fund's manager is answerable to the LPs. If you have a choice in picking your boss - you would rather work with one that has faith in you and your abilities. Secrecy regarding strategies is another reason.

Friends and families may not always be the easiest to deal with - but in the Rentec case, there is also the confidence from prior year returns that these investors have already experienced.

skumar · Post by **skumar** » 28 Oct 2011 16:01

Arjun wrote: Never fail to be amused by the mindset displayed by Neshant, you and other assorted commies !! If a firm is successful in financial services, it has to be crooked ! That's impressive logic.

Comment was with reference to the link posted earlier by VikramS. Perhaps you fail to recognize logic or perhaps your logic is like your arithmetic?

How easy it is for a firm managing two funds to transfer money from one to the other using very legitimate trades esp when the firm in question itself does not deny this? http://www.zerohedge.com/article/rentec ... ion-fodder

Arjun wrote: You probably failed to notice that your question asked about average performance for 3 years. There are literally tons of funds that have shown 35%+ annual returns over 3 years. I was pointing to one that has done this over 20+ years.

Probably you failed to notice that my question was about consistent returns or probably you could not understand the difference between consistent returns and average returns? 35-40-35 is consistent, 50-50-10 is not.

http://dealbook.nytimes.com/2011/07/07/ ... cent-gain/
So where did you get public information on Medallion's 35% (even average) returns for over 20 years? Lots of posts throwing numbers around but do you have verifiable information? Does Medallion need to publish this info?

Back to the question - "how many HNI PMS / hedge funds have generated 35% returns consistently over 3 years or more?"

Arjun · Post by **Arjun** » 28 Oct 2011 16:45

skumar wrote:Comment was with reference to the link posted earlier by VikramS. Perhaps you fail to recognize logic or perhaps your logic is like your arithmetic?

I have replied to Vikram. As for arithmetic, does your arithmetic prove anything different that what I had sought to use my arithmetic for?

How easy it is for a firm managing two funds to transfer money from one to the other using very legitimate trades esp when the firm in question itself does not deny this? http://www.zerohedge.com/article/rentec ... ion-fodder

Have you ever looked in detail at any prospectus for a firm or fund? What's been quoted in your link is a very standard disclaimer that does not say anything one way or the other. If Medallion was truly trading a significant portion of the Nasdaq's volume at one point, then it's very obvious that some of its trades could have been opposite to the ones taken by RIEF.

Probably you failed to notice that my question was about consistent returns or probably you could not understand the difference between consistent returns and average returns? 35-40-35 is consistent, 50-50-10 is not.

Hedge funds have a lock-up period unlike mutual funds, which makes the distinction somewhat moot. More importantly there are many hedge funds which on an annual basis declare their 1 year and 3-year average returns which are audited figures. The data for year-by-year returns for some of the smaller non-public funds might not be as easily available.

http://dealbook.nytimes.com/2011/07/07/ ... cent-gain/

Maybe you didn't notice that the article is about RIEF and not about Medallion.

Back to the question - "how many HNI PMS / hedge funds have generated 35% returns consistently over 3 years or more?"

If you really want to follow the business, please read the specialist alternative investment sites / magazines. There's tons of details every year (and every quarter) regarding the best performing hedge-funds and what their performance benchmarks are. Barron's also comes out with a Top 100 annual list by performance. Believe me, a 3-year average return exceeding 35% has a number of examples every year - the names of the high performers would typically not be the large, familiar ones though.

More importantly, please understand that the 35% was used as a proxy for the highest levels of returns in the industry averaged over a 3 - 5 year period. The core argument regarding savers benefiting from professional management is independent of this figure, as long as the gap between what the saver can generate on his own and what managers can return is non-zero. Now if you feel that you have the capability as an independant saver to match proffessional returns, go ahead - but where the commie mentality comes in is in trying to impose on others what industries are 'acceptable' and what are not.

Theo_Fidel · Post by **Theo_Fidel** » 28 Oct 2011 18:43

skumar wrote:... both of which are higher than the industry standard of 2% and 20%, respectively[/i]

Both Warren Buffet and Vanguard CEO have written numerous scathing articles on the loot and scoot going on with the "2 and 20" crowd. They called them mindless scamsters who exploit the greed of people to enrich themselves. These are not 'investors' in any sense of the word.

Renaissance is only loosely a investment company. In reality it is a trading company that depends on trading for all/most of its profits. Mai-Bap log like us should NOT under any circumstance touch these groups with a barge pole.

With trading profits are infinite but risks are infinite too, as LTCM discovered the hard way. With investment both are limited.

Singha,

If you don't understand how a investment/savings vehicle and its managers is creating its returns do not invest with them. There are no black boxes. In India esp. getting your cash back has to be the highest priority and the entire focus of your approach. Returns are most definitely the second priority. In too many cases this is not easily guaranteed in India.

ramana · Post by **ramana** » 28 Oct 2011 21:26

Guys it would be better if one sticks to just the facts and comment on them. No one is going to change the others views. So calling names and getting angry will lead to flames and banning. Is it worth it?

Singha · Post by **Singha** » 28 Oct 2011 21:48

if we look at it, bernie madoff too have good ROI for quite a while, albeit with fabricated numbers.
http://en.wikipedia.org/wiki/Madoff_inv ... d_strategy

Rather than offer high returns to all comers, Madoff offered modest but steady returns to an exclusive clientele. The investment method was marketed as "too complicated for outsiders to understand". He was secretive about the firm’s business, and kept his financial statements closely guarded.[44] The New York Post reported that Madoff "worked the so-called 'Jewish circuit' of well-heeled Jews he met at country clubs on Long Island and in Palm Beach".[45] The New York Times reported that Madoff courted many prominent Jewish executives and organizations; according to the Associated Press, they "trusted [Madoff] because he is Jewish".[42] One of the most prominent promoters was J. Ezra Merkin, whose fund Ascot Partners steered $1.8 billion towards Madoff's firm.[46] A scheme that targets members of a particular religious or ethnic community is a type of affinity fraud, and a Newsweek article identified Madoff's scheme as "an affinity Ponzi".[47]

Madoff was a "master marketer",[48] and his fund was considered exclusive, giving the appearance of a "velvet rope".[46][48] He generally refused to meet directly with investors, which gave him an "Oz" aura and increased the allure of the investment.[36] Some Madoff investors were wary of removing their money from his fund, in case they could not get back in later.[13]

Madoff's annual returns were "unusually consistent",[49] around 10%, and were a key factor in perpetuating the fraud.[50] Ponzi schemes typically pay returns of 20% or higher, and collapse quickly. One Madoff fund, which described its "strategy" as focusing on shares in the Standard & Poor's 100-stock index, reported a 10.5% annual return during the previous 17 years. Even at the end of November 2008, amid a general market collapse, the same fund reported that it was up 5.6%, while the same year-to-date total return on the S&P 500-stock index had been negative 38%.[1

RamaY · Post by **RamaY** » 28 Oct 2011 23:01

Acharya wrote:
Theo_Fidel wrote:
- US manufacturers are squeezing American into working longer for less and less pay, adjusted for inflation. It is only natural that they are now close to competitive with Pandaland.
It is very simple. They have to put tariff and put pressure on the PRC currency
This act of not taking care of US interest is costing jobs for Americans and this is out of free will.

Recent NPR program had a CA state bridge project given to a PRC company. US state officials are staying in PRC with money given to them to monitor the construction. This kind of project infrastructure was unheard before.

The other day I was listening to John Bachelor's radio show and they were talking about China's bank NPLs and low-returns on their infra projects, especially Railways.

The point is that all these low ROI investments are putting pressure on Chinese internal economy and the raising inflation is CPC's indirect tax on its people for stability and growth etc.,

So as the inflation increases its currency value goes down. So how much additional pressure China can take on its currency from external environment?

Neshant · Post by **Neshant** » 29 Oct 2011 05:00

Both Warren Buffet and Vanguard CEO have written numerous scathing articles on the loot and scoot going on

Warren Buffet was hollering for a taxpayer funded bailout of his own underwater investments back in 2008. So how does he end up writing scathing articles without mentioning himself as one of the free loaders.

The whole banking & bull&hitting 'industry' has got to go. The only solution is a return to honest money.

Singha · Post by **Singha** » 29 Oct 2011 06:16

buffet is a consumate insider who gets sweet deals for himself vs normal people trying to do the same thing.

Neshant · Post by **Neshant** » 29 Oct 2011 10:14

Arjun wrote:but where the commie mentality comes in is in trying to impose on others what industries are 'acceptable' and what are not.

Thievery is unacceptable. That is universal among all societies.

The existance of the useless middleman industry is on account of a counterfeiting racket robbing producers of society and offloading gambling losses onto their backs.

At the back of their minds, I bet even those that ply their trade in this industry know the underlying basis of their livelyhood is theft from productive society. What's equally bad is that they end up as promoters of the fraud against their better judgement as their livelyhoods becomes dependant on perpetuation of the fraud.

Its a beastly system that withdraws the mind from pursuit of honest enterprise and makes slaves of us all.

There was once a time when the people could be baffled with fancy jargon, fast talking investment advisors & wealth managers, BS claims and nonsensical theories. But these days, people are waking up to the fact that all this is little more than a smoke screen for theft.

It is the cause of the present economic problems. Sadly, it will be the cause of the destruction of wealth of millions of hardworking producers of society.

The useless middleman industry has got to go.

The mechanism for getting rid of it is by ending its monopoly over the issuance of intrinsically worthless paper money forced onto productive society by government which has been co-opted & corrupted by these parasites. It might be tough on the useless middleman industry, 90% of it will evaporate overnight but it must be done if we are to help bring these people over to the productive economy and end this system of robbing productive society.

Prem · Post by **Prem** » 29 Oct 2011 10:33

http://www.hyscience.com/archives/2011/ ... orte_1.php
Chicago Reporter Notes Anti-Semitic Tendencies of OWS (The 'Ugly Underbelly' of the Occupy Wall Street Movement. In a report filed on October 19, Goudie described the origins of the Occupy movement-from Adbusters in Canada, to anarchist Lisa Fithian in Texas, to the numerous hard-core radicals who have flocked to demonstrations and courted arrest.
And in this report (also via Joel Pollak), which aired on October 26, Goudie explored the antisemitism on display at Occupy Wall Street and numerous Occupy demonstrations, including a protest in Chicago where an Occupy activist called for the destruction of the State of Israel.

( watch the Video,passion flying all over)

Neshant · Post by **Neshant** » 29 Oct 2011 11:39

The emergence of the SDR was first predicted by Jim Rickards. Its the next stage in transition from one worthless paper monetary system (on a national level) to another worthless paper money system (on the international level). In the end, it will all be worthless and anyone stupid enough to get entangled in such a system will see much of their wealth evaporate.

China is desparate to offload its mountain of dollars onto suckers around the world via this SDR. The US also wants China to offload its dollars so the dollar can inflate (and destroy its own citizen's living standards for the benefit of banking goons). Once this SDR is in place, China will also make its currency convertible. That will wreck living standards of western countries by raising costs of goods & materials - which is what western banking goons seem to want.

As an aside, isn't it ridiculous that the useless middleman industry spends all its time figuring out ways to destroy the savings & earnings of productive people in society? These con artists truly offer no value to society.

Anyway the problem for US & China is how to force other countries to accept SDRs? Its an attempt by US to find a way out for China by passing on the loss off USD devaluation to suckers down the line (other countries).

India better be wary. YET another worthless paper money racket is about to unfold.

------------------

BEIJING - China expects the International Monetary Fund (IMF) to issue more detailed regulations on the IMF's special drawing rights (SDR) issue, a central bank official said on Friday.

Zhang Tao, director of the International Department of the People's Bank of China, made the remarks during a press briefing regarding President Hu Jintao's attendance at the G20 summit from November 3 to 4.

The IMF has specific regulations on whether China gains the SDR with the exchange of making it's currency, the yuan or renminbi, convertible, Zhang said, adding that China expects more detailed regulations on the issue to be made by the IMF.

The SDR was drafted by the IMF, not China, Zhang said. "So the IMF has its own process, and arrangements about whether and when to implement any reforms on the SDR should be made by the IMF."

As a member of the IMF, China respects the SDR arrangement, Zhang said. If the IMF believes that the SDR needs reformed in order to beef up the diversification and stability of the international monetary system, China will support the reform, Zhang added. (dropping hints are we....

)

Meanwhile, Zhang said China hopes the IMF's current standard be respected during the SDR reform.

"Definitely, China has an open attitude about the further improvement of the reform standard," he said.

Neshant · Post by **Neshant** » 29 Oct 2011 11:59

Jim Rickards (1 hour) presentation

http://outerdnn.outer.jhuapl.edu/rethin ... Video.aspx

This guy is ahead of the curve. He's got in depth knowledge of what's coming. I've been tracking his predictions and much of what he's said previously has panned out. I've come to believe he has some connections that are deeper than he lets in on.

Neshant · Post by **Neshant** » 29 Oct 2011 12:10

Methinks nobody will trust Credit Default Swaps anymore.

CDS were supposed to protect against the downside. Like insurance. Except now the people writing the rules claim the insurance is not valid on Greece's default.

Greece defaulted on its debt. Yet creditors are being stopped from exercising their CDS that they purchased in the event of a Greek default. But the powers that be claim Greece has not defaulted. Its creditors have "volunteered" to take a 50% haircut therefore it is not a default. So the CDS on Greece's default are not valid.

But how is not paying 50% of your debt not a default? Nobody volunteers to lose money.

The goal post is being shifted so be careful. The day may come when regulators will not honour your purchase of stocks, ETFs, IRAs, 401Ks, bank deposits, CDs, locker contents... etc. You will be deemed to have "volunteered" your wealth to the state for emergency funding purposes.

shyam · Post by **shyam** » 29 Oct 2011 12:39

This is a European magic wand. But Fitch has already declared that this is a credit default event.

I read somewhere that they might let it be a credit default for a small section of bonds (worth approx ~$3.5B) to protect the CDS. Without CDS, all bond sales will go up in the smoke. Also, J P Morgan makes a lot of money by selling CDS, so they won't let that huge market go away.

Pratyush · Post by **Pratyush** » 29 Oct 2011 15:38

Europe's debt crisis strategy suffers setback

RoyG · Post by **RoyG** » 29 Oct 2011 19:35