[FoRK] more on ownership

Justin Mason jm at jmason.org
Tue Nov 23 12:45:56 PST 2004


-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1


reportedly http://www.everbank.com/main.asp?affid=eb are quite good -- a
lot of recommendations.  They offer foreign-currency CDs.   I've been
meaning to sort something out there but haven't quite gotten around to it
yet ;)

- --j.

Sateesh Narahari writes:
> scary...
> 
> so, how does one go about buying european/asian T-bills ?.
> 
> On Tue, 23 Nov 2004 11:48:51 -0800, Justin Mason <jm at jmason.org> wrote:
> > -----BEGIN PGP SIGNED MESSAGE-----
> > Hash: SHA1
> > 
> > vaguely related -- Morgan Stanley's chief economist predicts economic
> > 'armageddon' in the US, and either increased interest rates, or inflation.
> > 
> > http://business.bostonherald.com/businessNews/view.bg?articleid=55356
> > 
> > Economic `Armageddon' predicted
> > By Brett Arends/ On State Street
> > Tuesday, November 23, 2004
> > 
> > Stephen Roach, the chief economist at investment banking giant Morgan
> > Stanley, has a public reputation for being bearish.
> > 
> > But you should hear what he's saying in private.
> > 
> > Roach met select groups of fund managers downtown last week,
> > including a group at Fidelity.
> > 
> > His prediction: America has no better than a 10 percent chance of
> > avoiding economic ``armageddon.''
> > 
> > Press were not allowed into the meetings. But the Herald has
> > obtained a copy of Roach's presentation. A stunned source who was
> > at one meeting said, ``it struck me how extreme he was - much more,
> > it seemed to me, than in public.''
> > 
> > Roach sees a 30 percent chance of a slump soon and a 60 percent
> > chance that ``we'll muddle through for a while and delay the
> > eventual armageddon.''
> > 
> > The chance we'll get through OK: one in 10. Maybe.
> > 
> > In a nutshell, Roach's argument is that America's record trade
> > deficit means the dollar will keep falling. To keep foreigners
> > buying T-bills and prevent a resulting rise in inflation, Federal
> > Reserve Chairman Alan Greenspan will be forced to raise interest
> > rates further and faster than he wants.
> > 
> > The result: U.S. consumers, who are in debt up to their eyeballs,
> > will get pounded.
> > 
> > Less a case of ``Armageddon,'' maybe, than of a ``Perfect Storm.''
> > 
> > Roach marshalled alarming facts to support his argument.
> > 
> > To finance its current account deficit with the rest of the world, he
> > said, America has to import $2.6 billion in cash. Every working day.
> > 
> > That is an amazing 80 percent of the entire world's net savings.
> > 
> > Sustainable? Hardly.
> > 
> > Meanwhile, he notes that household debt is at record levels.
> > 
> > Twenty years ago the total debt of U.S. households was equal to
> > half the size of the economy.
> > 
> > Today the figure is 85 percent.
> > 
> > Nearly half of new mortgage borrowing is at flexible interest rates,
> > leaving borrowers much more vulnerable to rate hikes.
> > 
> > Americans are already spending a record share of disposable income
> > paying their interest bills. And interest rates haven't even risen
> > much yet.
> > 
> > You don't have to ask a Wall Street economist to know this, of
> > course. Watch people wielding their credit cards this Christmas.
> > 
> > Roach's analysis isn't entirely new. But recent events give it
> > extra force.
> > 
> > The dollar is hitting fresh lows against currencies from the yen
> > to the euro.
> > 
> > Its parachute failed to open over the weekend, when a meeting of
> > the world's top finance ministers produced no promise of concerted
> > intervention.
> > 
> > It has farther to fall, especially against Asian currencies,
> > analysts agree.
> > 
> > The Fed chairman was drawn to warn on the dollar, and interest rates,
> > on Friday.
> > 
> > Roach could not be reached for comment yesterday. A source who
> > heard the presentation concluded that a ``spectacular wave of
> > bankruptcies'' is possible.
> > 
> > Smart people downtown agree with much of the analysis. It is
> > undeniable that America is living in a ``debt bubble'' of record
> > proportions.
> > 
> > But they argue there may be an alternative scenario to
> > Roach's. Greenspan might instead deliberately allow the dollar to
> > slump and inflation to rise, whittling away at the value of today's
> > consumer debts in real terms.
> > 
> > Inflation of 7 percent a year halves ``real'' values in a decade.
> > 
> > It may be the only way out of the trap.
> > 
> > Higher interest rates, or higher inflation: Either way, the biggest
> > losers will be long-term lenders at fixed interest rates.
> > 
> > You wouldn't want to hold 30-year Treasuries, which today yield
> > just 4.83 percent.
> > -----BEGIN PGP SIGNATURE-----
> > Version: GnuPG v1.2.4 (GNU/Linux)
> > Comment: Exmh CVS
> > 
> > iD8DBQFBo5QiMJF5cimLx9ARAnXkAJ0aBHp6/meHCOlOaDcPaeLsg9htnACcC8HC
> > S33XGWOmrJibwPE+Pn55kf0=
> > =AJ4R
> > -----END PGP SIGNATURE-----
> > 
> > _______________________________________________
> > FoRK mailing list
> > http://xent.com/mailman/listinfo/fork
> >
-----BEGIN PGP SIGNATURE-----
Version: GnuPG v1.2.4 (GNU/Linux)
Comment: Exmh CVS

iD8DBQFBo6GEMJF5cimLx9ARAj2UAJ9bTX+Dv3byLjeUwTYUTzSyua14sACgkYm1
6/Y6wPDlkucJLuMEGEVT8Ds=
=jAx0
-----END PGP SIGNATURE-----



More information about the FoRK mailing list