Comments on: Debtwatch No. 25: How much worse can “It” get? http://www.debtdeflation.com/blogs/2008/08/04/how-much-worse-can-it-get/#utm_source=feed&utm_medium=feed&utm_campaign=feed Analysing the Global Debt Bubble Mon, 15 Mar 2010 23:37:19 +0000 http://wordpress.org/?v=abc hourly 1 By: SEO Training http://www.debtdeflation.com/blogs/2008/08/04/how-much-worse-can-it-get/comment-page-3/#comment-5124 SEO Training Sat, 11 Oct 2008 07:17:10 +0000 http://www.debtdeflation.com/blogs/?p=74#comment-5124 A very interesting and predictive post. I read an article in the Fin Review last week that predicted 2.8 million mortgage defaults in the USA in the next 12 months. That is very, very scary indeed. It wouldn't surprise me if Russia, Iran, or North Korea take advantage of this crisis and the upcoming US election to launch some sort of attack or grab for territory. A very interesting and predictive post. I read an article in the Fin Review last week that predicted 2.8 million mortgage defaults in the USA in the next 12 months. That is very, very scary indeed.

It wouldn’t surprise me if Russia, Iran, or North Korea take advantage of this crisis and the upcoming US election to launch some sort of attack or grab for territory.

]]> By: Anton http://www.debtdeflation.com/blogs/2008/08/04/how-much-worse-can-it-get/comment-page-3/#comment-5105 Anton Fri, 10 Oct 2008 07:49:11 +0000 http://www.debtdeflation.com/blogs/?p=74#comment-5105 Keith, Your research into the AGEST cash fund sends alarm bells to me as I am with AGEST and have just read the Macquarie PDS which in effect says "no care, no responsibility" I moved across to the cash fund about 6 months ago thinking it was 100% safe. I suppose nowadays nothing is safe Keith, have you campared any other cash funds? Keith,

Your research into the AGEST cash fund sends alarm bells to me as I am with AGEST and have just read the Macquarie PDS which in effect says “no care, no responsibility”
I moved across to the cash fund about 6 months ago thinking it was 100% safe. I suppose nowadays nothing is safe
Keith, have you campared any other cash funds?

]]> By: Keith http://www.debtdeflation.com/blogs/2008/08/04/how-much-worse-can-it-get/comment-page-3/#comment-4747 Keith Wed, 17 Sep 2008 09:13:33 +0000 http://www.debtdeflation.com/blogs/?p=74#comment-4747 Brightspark, Steve, Sorry this is a late reply, so might not be read. After the above, I was able track down, via the AGEST (my old super fund) website, that the 'cash' option was invested in "Macquarie Treasury Plus Fund" and "Macquarie True Index Cash Fund". Amazingly, since I looked this up, the super fund website page has been changed to reflect the fact that the Treasury Plus fund is no longer used in the cash option... I was able to access the PDS for these products at the Macquarie website. The PDS for True Index fund listed risks of concern to me, like "swap counterparty risk", "liquidity risk", "spread risk", etc. I wondered if these risk were generic to other offerings, but they are not. In each case the PDS correctly points out that Macquarie is only the manager of the fund, and any deposits you place in the fund are not a liability of the Macquarie Bank. Having just read about the implosion/bailout of AIG and Lehman, the above risks become pretty pertinent. As an example of some of the fall-out of the Lehman bust, one of the oldest money market funds in the US has just lost $785 million in Lehman debt paper that suddenly became worthless. As to why they were holding such paper was probably due to the securitization morass that is the US financial system. In any case money market funds are supposed to be safe. I don't want to worry anyone unduly, but if you don't know what you own in terms of your super holdings, I think you should take resolute steps to find out. Let me know if I can be of any assistance. Brightspark, Steve,

Sorry this is a late reply, so might not be read.
After the above, I was able track down, via the AGEST (my old super fund) website, that the ‘cash’ option was invested in “Macquarie Treasury Plus Fund”
and “Macquarie True Index Cash Fund”. Amazingly, since I looked this up, the super fund website page has been changed to reflect the fact that the Treasury Plus fund is no longer used in the cash option…
I was able to access the PDS for these products at the Macquarie website.
The PDS for True Index fund listed risks of concern to me, like “swap counterparty risk”, “liquidity risk”, “spread risk”, etc.
I wondered if these risk were generic to other offerings, but they are not.
In each case the PDS correctly points out that Macquarie is only the manager of the fund, and any deposits you place in the fund are not a liability of the Macquarie Bank.

Having just read about the implosion/bailout of AIG and Lehman, the above risks become pretty pertinent. As an example of some of the fall-out of the Lehman bust, one of the oldest money market funds in the US has just lost $785 million in Lehman debt paper that suddenly became worthless. As to why they were holding such paper was probably due to the securitization morass that is the US financial system. In any case money market funds are supposed to be safe.

I don’t want to worry anyone unduly, but if you don’t know what you own in terms of your super holdings, I think you should take resolute steps to find out.

Let me know if I can be of any assistance.

]]> By: The Outback Oracle http://www.debtdeflation.com/blogs/2008/08/04/how-much-worse-can-it-get/comment-page-3/#comment-4634 The Outback Oracle Tue, 02 Sep 2008 01:17:55 +0000 http://www.debtdeflation.com/blogs/?p=74#comment-4634 Bullturnedbear I see Steve has intervened and given his opinion on your observation. What itulip feedback i got was the same as Steve's opinion. (naturally enough) Bullturnedbear I see Steve has intervened and given his opinion on your observation. What itulip feedback i got was the same as Steve’s opinion. (naturally enough)

]]> By: The Outback Oracle http://www.debtdeflation.com/blogs/2008/08/04/how-much-worse-can-it-get/comment-page-3/#comment-4633 The Outback Oracle Tue, 02 Sep 2008 01:15:37 +0000 http://www.debtdeflation.com/blogs/?p=74#comment-4633 Anyway folks...there is no problem...I watched Alan Kohler last night on the ABC news...we're rolling in it (I presume he meant cash but bulls..t might be closer to correct) The CAD was down from 16 Billion for Q2 to $12.8B...whoopeebloodydo!! How can anyone with any brain whatsoever, let alone one with (presumably) some Economic training, think that is good? Anyway folks…there is no problem…I watched Alan Kohler last night on the ABC news…we’re rolling in it (I presume he meant cash but bulls..t might be closer to correct) The CAD was down from 16 Billion for Q2 to $12.8B…whoopeebloodydo!!
How can anyone with any brain whatsoever, let alone one with (presumably) some Economic training, think that is good?

]]> By: Steve Keen http://www.debtdeflation.com/blogs/2008/08/04/how-much-worse-can-it-get/comment-page-3/#comment-4631 Steve Keen Mon, 01 Sep 2008 21:20:23 +0000 http://www.debtdeflation.com/blogs/?p=74#comment-4631 Interesting observation about the size and timing of the US $168 billion stimulus package being all and more than the measured growth in GDP for the quarter. I can't confirm your intuition, but it is feasibly correct--and that casts a very different light on the surprise result. On super, I checked and the same applies to me--my 100% cash is a range of money market instruments. I expect there is "no cause for alarm" here--I certainly hope so. The notional definition of cash here should mean "highly liquid instruments" at the very least, and that should include things like 90 Day Bank Bills rather than CDOs. But I would be delighted if one of you could spare the time to grill your super fund and find out what their cash portfolio actually is right now. Interesting observation about the size and timing of the US $168 billion stimulus package being all and more than the measured growth in GDP for the quarter. I can’t confirm your intuition, but it is feasibly correct–and that casts a very different light on the surprise result.

On super, I checked and the same applies to me–my 100% cash is a range of money market instruments.

I expect there is “no cause for alarm” here–I certainly hope so. The notional definition of cash here should mean “highly liquid instruments” at the very least, and that should include things like 90 Day Bank Bills rather than CDOs.

But I would be delighted if one of you could spare the time to grill your super fund and find out what their cash portfolio actually is right now.

]]> By: BrightSpark http://www.debtdeflation.com/blogs/2008/08/04/how-much-worse-can-it-get/comment-page-3/#comment-4630 BrightSpark Mon, 01 Sep 2008 15:42:07 +0000 http://www.debtdeflation.com/blogs/?p=74#comment-4630 Bullturnedbear Consider also that in the same quarter the US ran a Current Account Deficit of $180 Billion. That is they imported another $180 Billion worth of goods that they did not pay for (about the same per capita as us). If you take this into account the shrinkage is even more. Any "growth" that they have had has been borrowed! Or perhaps recent "growth" (in the US and here) has always been an illusion. Keith I have the same concern, the "interest only" option in my super fund could be "third tranche" CDOs for all I know! This Could be worse than the "growth" option! I do not know and I cant find out what IS going on! How can we find out? Bullturnedbear
Consider also that in the same quarter the US ran a Current Account Deficit of $180 Billion. That is they imported another $180 Billion worth of goods that they did not pay for (about the same per capita as us). If you take this into account the shrinkage is even more. Any “growth” that they have had has been borrowed! Or perhaps recent “growth” (in the US and here) has always been an illusion.

Keith
I have the same concern, the “interest only” option in my super fund could be “third tranche” CDOs for all I know! This Could be worse than the “growth” option! I do not know and I cant find out what IS going on! How can we find out?

]]> By: Keith http://www.debtdeflation.com/blogs/2008/08/04/how-much-worse-can-it-get/comment-page-3/#comment-4629 Keith Mon, 01 Sep 2008 09:31:25 +0000 http://www.debtdeflation.com/blogs/?p=74#comment-4629 Hi Steve, Thanks for your comments. I have just noted your comments about superannuation, and being 100% in cash. I was similarly in 100% in the cash option of my fund, but then I tried find out what 'cash' meant. The fund's website informed that the cash option was composed money market securities. I attempted to correspond with my fund to find out what this meant, but I was never favoured with an answer. Given the times in which we now live, this seemed like a pretty clear signal to move to another fund that could give me answers. fwiw cheers, Keith Hi Steve,
Thanks for your comments.
I have just noted your comments about superannuation, and being 100% in cash. I was similarly in 100% in the cash option of my fund, but then I tried find out what ‘cash’ meant. The fund’s website informed that the cash option was composed money market securities. I attempted to correspond with my fund to find out what this meant, but I was never favoured with an answer. Given the times in which we now live, this seemed like a pretty clear signal to move to another fund that could give me answers.
fwiw

cheers,
Keith

]]> By: The Outback Oracle http://www.debtdeflation.com/blogs/2008/08/04/how-much-worse-can-it-get/comment-page-3/#comment-4628 The Outback Oracle Mon, 01 Sep 2008 01:23:22 +0000 http://www.debtdeflation.com/blogs/?p=74#comment-4628 Bullturnedbear....I hope you don't mind. I took the liberty of posting your question on Itulip with appropriate credit to you. There are a lot of blokes with a lot of brains and technical expertise in there so hopefully someone will answer for us. Cheers Bullturnedbear….I hope you don’t mind. I took the liberty of posting your question on Itulip with appropriate credit to you. There are a lot of blokes with a lot of brains and technical expertise in there so hopefully someone will answer for us.
Cheers

]]> By: Bullturnedbear http://www.debtdeflation.com/blogs/2008/08/04/how-much-worse-can-it-get/comment-page-3/#comment-4625 Bullturnedbear Sun, 31 Aug 2008 07:57:10 +0000 http://www.debtdeflation.com/blogs/?p=74#comment-4625 Hi All, Question! GDP for the last quarter was just announced in the US as an annualized rate if 3.3%. I checked and their annual economy is about $14 Trillion. Therefore $3.5 Trillion for the quarter. During that quarter though, the Government pumped $168 Billion into the economy via extra tax rebates and one off payments. $168B over $3.5T is 4.8%. Therefore their economy shrank by a massive amount if you excluded the Government pumping. Am I reading this correctly? No reports I have read have referred to this? Hi All,

Question!

GDP for the last quarter was just announced in the US as an annualized rate if 3.3%. I checked and their annual economy is about $14 Trillion. Therefore $3.5 Trillion for the quarter. During that quarter though, the Government pumped $168 Billion into the economy via extra tax rebates and one off payments. $168B over $3.5T is 4.8%. Therefore their economy shrank by a massive amount if you excluded the Government pumping. Am I reading this correctly? No reports I have read have referred to this?

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