Wednesday, November 07, 2007


"Bill Gross, the chief investment officer of Pacific Investment Management, said US mortgage delinquencies and defaults would rise in 2008. 'There are $1 trillion worth of sub-primes, Alt-As [self-certified] and basically garbage loans,' he said, adding that he expects some $250bn in defaults. 'We've only begun to see the pain from rising mortgage payments,' he added. Brian Gendreau, an investment strategist at ING, commented: 'Financials are 20 per cent of the S&P 500 and if that sector doesn't do well all bets are off. People just don't know what’s on the balance sheets.'"

Of course they don't mention the other 99% of the iceberg, as those at the top get their money out. Sub-prime is the buzz word at the moment, but next comes the $20-40 trillion in credit default OTC derivatives (now beginning to hit the fan) - nobody knows how much, really - and teetering above them, high over the global economy, maybe another 300 trillion in further derivatives... (the annual world production is valued at ca. 65 trillion once-upon-a-time dollars.)

And to think those garbage derivative AAA raters and marketers to the public are not (yet) being prosecuted for the biggest fraud in history! And who will pay? The public, as always.

Advice from Jim Sinclair, as of November 6: "How Can You Be so Complacent?"

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