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After 40+ years of trading I've learned the validity of an old wall
street adage. "When someone goes out of their way to deny that
something is true -- It is true."
Gary Fritz wrote:
The WSJ Sunday supplement today had some talking head (do they have
those in newsprint? :-) claiming there was almost no chance of money funds
"breaking the buck." Wonder what he gets paid to blow sunshine.
As to amount it is almost the same, but billions with a B, even for
individual companies. For Citi alone 50 BILLION.
Jaezuss. I'm not sure if/how even Citi could absorb a hit like that and
survive.
Some probably won't, but others will be able to work off the problems
they have over time, and in the meantime they'll carry the junk on their
balance sheets at overly optimistic prices so everything looks OK.
Go back and look at what most of the banks did with their fixed income
portfolios when Volker drove interest rates skyward, and the real value
of their older holdings dropped like a stone.
I spent the month of October bouncing all over Asia doing some work for Citi.
I suspect it wouldn't have happened if they were setting it up now...
He did leave the conclusion that there will be more great investment
opportunities out there than there have been for generations. Sounds
like the old Chinese proverb -- "May you live in interesting times."
Interesting indeed. Too damn interesting. Though I would like to hear his
projections on what & when those "great opportunities" will be...
Think contrary to what they say, to see what they'll actually want.
Most often the pronouncements from the ivory towers are designed to make
it easier for them to accomplish what they want to do themselves. A
good current example is the conversation I had with Goldman. They are
most likely filled up with shorts and they want me, and others, to help
them drive the prices down.
Richard
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