Here Comes The Leverage.

Great piece in in The Financial Times.

www.ft.com/cms/s/0/064f0ff2-bf2c-11de-a696-00144feab49a.html

I will stand by my statement that this entire rally is completely bogus.

Its all been about liquidity and global fund flows backed by borrowed dollars via the USD carry trade.

Why else would every single risk asset class being bought hand over fist?

www.economist.com/businessfinance/displaystory.cfm?story_id=14700710

Its all going to end badly. When is the $23 Trillion question.

tradersutra.blogspot.com/2009/09/labor-day-not-good-times.html

I say summer of 2010. We will have a perfect storm of excess housing inventory and an overflow of foreclosures that will drastically sink the housing market. By then the bankrupt FHA will be guaranteeing 1/3 of all mortgages in the country.

My guess is the roughly hundreds of billions of ARM mortgages that are set to reset by end of year will eventually be a derivative death nil for the banks, this coupled with massive repatriation of trillions of SIV/OBS crap back on to Bank balance sheets will be the nail in the coffin.

tradersutra.blogspot.com/2009/07/next-wave-of-failures.html

tradersutra.blogspot.com/2009/08/return-of-king.html

Now one is speaking about the shadow banking system.

tradersutra.blogspot.com/2009/07/shadow-banking-for-dummies.html

Asleep at the wheel.

No one is talking about Interest Rate Swap Exposure which is slowly reaching $900 Trillion! Who cares about putting CDS on exchanges! That's only a $20 Trillion problem! Again, the powers that be are like the Northwest Airlines pilots.

Obama Regulation plan should be called: "Free Money For Jamie/Kenny/Lloyd Plan."

Financial regulation is a total absurd joke with the American Taxpayer as the punch line.

At the heart of a true sincere regulatory environment is:

They need to eliminate complex financial products across the board.

tradersutra.blogspot.com/2009/04/what-needs-to-happen-now.html