Friday, October 10, 2008

Looking Fear in the Face.

Some months ago a friend recommended Minyanville for honest and fearless analysis of the markets and America's precarious financial condition. Todd Harrison, pundit-in-chief of Miyanville, has offered the following observation on the resolution of the Credit Default Swap Crisis - one that is never uttered on CNBC, CNN, or other places: "...there's not enough money to go around".

Somebodies are going to get screwed in the resolution of this mess, for very, very big sums of money. They will be left holding the bag. A member of the Harrison Think Tank speculates that the hedge funds - those with no real skin in the mortgage game but merely bought and sold lottery tickets on chance of mortage defaults will be the designated somebodies and could be done by Presidential fiat. Our sympathy for such gamblers evaporated with the recent 2000 point loss on the Dow, as the hedgers raised cash from the only source of liquidity - our 401(K)s.

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