Russia Closes the Market

Tom Lasseter/McClatchy: Russia shutters its markets again as deeper problems emerge:

Alexei Rybnikov, the head of a major Russian exchange, told Bloomberg news Wednesday that the situation in Moscow is "pretty much the same thing" as when heavily leveraged speculators fueled the 1929 stock market crash in the United States.

The bear dove into the fountain,
the bear dove into the foun-tain,
the bear dove into the foun-tain,
and cracked his head and died.

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that this could ultimately prove to be one of the few means the US Feds have available to staunch bloodletting in American markets.

The underlying problem in our markets is the big money lenders are unwilling to lend to counterparties whose solvency they are unable to judge and whose ability to repay loaned money they're unable to calculate.

The restoration of capacity to make those judgements is held prisoner by the complexity / inability to judge the value of underlying assets.

As I understand it, the net value can't be assessed of these mortgage-backed instrument in which are co-mingled parts of tens or hundreds or thousands of mortgages.
That's because Gramm's founding legislation built into itself Enron's demand that such instruments remain unregulated which created a vaccuum in place of the accounting that would inform investors and lenders what the instrument is truly worth.

Market confidence can't be restored until investors and lenders can value these things. That's not going to happen any time soon as far as I can tell.

The begged question is How long can they let the bloodletting continue? Or, maybe, When do they close the markets?



"So your party is the only party that can save the country from the mess that your party created?" - attrib. Jon Stewart

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"I hope we shall crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government in a trial of strength, and bid defiance to the laws of our country." - Thomas Jefferson

At this point, isn't it a complete loss of confidence and ability to trust?

which is why I think the only place that they could even begin to think about putting a floor in place under the house of cards is by freezing the daily process of its progressive collapse.



"So your party is the only party that can save the country from the mess that your party created?" - attrib. Jon Stewart

-----
"I hope we shall crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government in a trial of strength, and bid defiance to the laws of our country." - Thomas Jefferson

Shut down temporarily the markets to get the speculators out of the mix?

way back. But you know how it goes, writing a thing is no guarantee it will be read - or understood - even by pollyannas of the highest order:

"It seems superfluous to constrain trading in some of the newer derivatives and other innovative financial contracts of the past decade," Greenspan writes. "The worst have failed; investors no longer fund them and are not likely to in the future."

In his Georgetown speech, he entertained no talk of regulation, describing the financial turmoil as the failure of Wall Street to behave honorably.

"In a market system based on trust, reputation has a significant economic value," Greenspan told the audience. "I am therefore distressed at how far we have let concerns for reputation slip in recent years." [Peter Goodman on Greenspan - IHT/9 Oct]

And lest we forget, Paulson & Co., the first and largest hedge fund to bet against recovery, added his Greeness to it's roster.

Guns don't kill people, *people* kill people. Grumble. Somethin' about high priests and birth control . . . .

... he's making the news with Obama's advocacy of birth control too!

NYSE: SEC and NYSE Settle Enforcement Actions Against Goldman Sachs Unit for Role in Customers' Illegal Trading Scheme:

The SEC Order and the NYSE’s Decision (NYSE Hearing Board Decision No. 07-33) allege that Goldman’s customers carried out the illegal short-selling scheme by placing their orders to sell through the firm’s REDI System© – Goldman’s direct market access, automated trading system – and falsely marking the orders “long.” Relying solely on the way its customers marked their orders, Goldman executed the transactions as long sales.

Cost 'em $2 million in fines for that one. How many more "automated" systems are being gamed?

The bear dove into the fountain,
the bear dove into the foun-tain,
the bear dove into the foun-tain,
and cracked his head and died.

I Think, but it did give me a big smile in all the crashing news going on and the Brains haven't any idea what the hell is going to happen next!!

Keep in mind Russia has Oil to Sell, plenty of it, and guess who has Zip of Anything to Sell!!!

Do We Need Change, You're Damn Right We Do, And The World Needs Us To Change, Now!!

"The wise man points to the stars and the fool sees only the finger - and discusses it 24/7 on cable."