Thursday, December 18, 2008

Fed Loans Guided by Raters Grading Subprime Debt AAA



Fed basing its lending on credit ratings provided by S&P, Moody's, Fitch--the same idiots that said all the toxic subprime stuff was AAA. Amd the same idiots that will ultimately downgrade U.S. sovereign debt.

This is the blind leading the blind. Totally absurd!! God help us!!!

Read full story here.

3 comments:

knapp said...

Wow! I thought this week's $US selling was a bit overdone, now I'm not so sure.

Mike Norman said...

Yes, with policy this bad it's hard to get bullish on the dollar, at least for now. It will get more interesting in April, however. That is the date when the Fed said it will cease conducting these swaps. If foreign institutions (particularly Europeans) are still on the hook for dollar liquidity at that time, it could be very rapid endgame for the euro. Expect four months of tough trading until then.

majestyx said...

It wouldn't be a surprise if the Fed would change it's mind come April. It's not like they have ever held fast to any kind of deadlines.

But amazing how a few days can change the outlook on the currencies. Right now it looks like the dollar is strengthening due to the Russia/Ukraine natural gas standoff. Add to that the problems in the Euro-zone countries like Italy, Spain and more recently Greece, there is a distinct possibility of trouble with the Euro as a currency in the future.

See, Mike, I'm not here to only disagree with you, as I've been doing in most of my previous comments.