Entire Nations Collapsing

[Random.Capital]

Quote from achilles28:

Is there debt no longer serviceable from the global slowdown or are sovereign/government funds invested in US assets? both?

"According to latest US Treasury data...total foreign holdings of long-term USD securities increased from US$7.8 trillion in 2006 to US$9.8 trillion in 2007, with US$1.3 trillion of this annual increase from increased foreign holdings of US long-term debt securities, including US Treasuries, agencies, agency ABS and corporate bonds. Foreigners are dominant in some of these markets. For example, some 57% of the marketable Treasury securities are held by foreign investors."

(Courtesy Morgan Stanley)

We know pretty exactly what the Treasury sold overseas, so call it roughly $5 trillion in outstanding USD-denominated non-gov't debt floating around the globe. I imagine a fair number of these folks are hoarding USD like mad right now...

 

[Random.Capital]

Now we wait and see if this is a one-off, or the first domino...

Taiwan's financial regulators reportedly have ordered that nation's insurance companies to pare their holdings of the debt and mortgage-backed securities of Fannie Mae (ticker: FNM), Freddie Mac (FRE) and Ginnie Mae securities, according to a report on the Internet site of Asian Investor magazine.

Such an order would be a stunning rebuke to Washington, coming a little more than a month after the federal government effectively nationalized the mortgage giants.

(Courtesy Barrons)

 

[Rufawana]

I cannot find any references in the media to South Africa being in danger of defaulting on its debt.

 

[Nashequilibrium]

Quote from Rufawana:

I cannot find any references in the media to South Africa being in danger of defaulting on its debt.

Well, its just to show how ignorant the financial world is. South Africa is actually one of the strongest countries handling this credit crisis. They didint need to stop short selling, assist any banks or hold any emergency meetings. The I,F has actually applauded South Africa for its sound financial system this week, because the financial system is basically untouched by the credit crises, except for currency loses due to capital flight back to dollar denominated assets. The european and US hedge funds are all pulling out of the SA equity market which they propped over the last few yrs.

Its surprising as i saw a blog entry also putting SA in the same lineup as Brazil, argentina ect, which is puzzling since when you take a look at the data SA is solid. Your money is more safe at an SA bank than a US or European bank right now..........just need to find a way to hedge the currency risk, lol.

At the end of the day, when everyone is sitting on cash and the dust settles, then they are going to be saying why the hell are we hold dollars when they realise that the dollar is not sustainable at these levels, especially afetr the bailout plan. You will have hedgies shorting the hell out of the dollar especially if there is a lot of cash sitting on the side. I look forward to August 2009.

 

[asap]

Quote from Rufawana:

I cannot find any references in the media to South Africa being in danger of defaulting on its debt.

me too.

anyone pls provide a link to the source that indicates several countries at risk of default, including portugal - a eurozone country.

thanks

 

[Cygnus Atratus]

Quote from Rufawana:

I cannot find any references in the media to South Africa being in danger of defaulting on its debt.

-Look up spreads on South African debt

-Consider a housing boom that rocketed c460% in 9 years (read up on parabolic price moves)

-Recent carry trade currency status (EPFR Global did a great study on it)

-Double digit inflation

-Speculative money outflows, particularly hedge funds (typical of most commodity producers countries in last 7 months)

-Masses and masses of under/unemployed young people (42%)

-Add in a likely populist government a.k.a Jacob Zuma for 5 years

-Not to mention decline in Platinum & Gold prices

Its what university educated people and fancy fund magers call Mosaic Theory. You look at eclectic mix of data to formulate a hypothesis and proceed to SHAFT your target stock,commodity,currency or country.

DISCLOSURE: Long USD/ZAR since May, thats gone parabolic too, maybe should close out position

 

[CaptainObvious]

Prepare for war, it's the only way out.

 

[Rufawana]

Captain, please qualify the context of your statement. Where?

 

[CaptainObvious]

Quote from Rufawana:

Captain, please qualify the context of your statement. Where?

The world eventually. Will probably start with the Ruskies taking over a pipeline, and expand from there.

 

[Trvlwanderer]

Quote from Rufawana:

Captain, please qualify the context of your statement. Where?

GAAT

Georgia, Armenia, Azerbaijan, Turkey. Roll the dominoes to Croatia, Kosovo.....the former Russian "stans".

Why do you think we are strategically positioned in Iraq and Afghanistan?

Mainstream media will make you stupid by design.