IMF to support further depreciation of the dollar in their Annual World Economic Outlook:

IMF to urge depreciation in dollar

Pakistan Daily Times | March 25, 2007

BERLIN: The International Monetary Fund will say further depreciation by the U.S. dollar is needed to help correct global imbalances in its latest World Economic Outlook (WEO), Germany's Sueddeutsche Zeitung said on Saturday.

Quoting from a draft of the WEO, the paper said the Washington-based fund argued “extraordinarily aggressively” for a correction in exchange rates, above all so as to reduce the massive U.S. current account deficit.

The dollar, which slid to a 2-year low against the euro last week, should continue to depreciate in the mid-term, while the yen, the Chinese yuan and currencies of oil-exporting countries in the Middle East should all appreciate, the draft WEO said.

That's hilarious- if the dollar is allowed to depreciate more, those who buy our debt will demand greater interest rates to compensate. You cannot escape an account deficit with depreciating currency, not if you rely on foreign credit.

I would say that if the housing market has turned so sour that you lose a half billion in a single quarter, mostly on derivatives, then we are far from hitting bottom. The first quarter of 2007 will be much worse for Freddie- if they can bring themselves to issue a report. They don't really like to.

March 23 (Bloomberg) -- Freddie Mac, the second-largest U.S. mortgage finance company, reported a $480 million net loss in the fourth quarter as fees from providing guarantees for bonds fell and it lost money on derivatives.

Freddie Mac hasn't released timely financial reports since disclosing in 2003 that it understated earnings by $5 billion to minimize earnings volatility. It plans to provide results for the first quarter of 2007 ``sometime after Memorial Day,'' a U.S. holiday on May 28, Freddie Mac Chief Operating Officer Eugene McQuade said today in an interview.

Freddie Mac stock has declined 8.1 percent this year amid investor concern that instability in the subprime mortgages may spread to the broader economy. Late payments on subprime loans reached a four-year high of 13.3 percent in the fourth quarter, according to the Mortgage Bankers Association in Washington.

Bernanke ignores the trillions of derivatives spiraling around this debt load, coiled like a spring. When a private cartel is placed in charge of the public's currency, a straight answer is hard to come by.

toronto star 3-27-07 wrote:U.S. could withstand effects of debt sale: Bernanke

Washington–Federal Reserve Board chairman Ben Bernanke says U.S. markets could probably withstand the effects of a sell-off of treasury bills by foreign investors.

"Because foreign holdings of U.S. treasury securities represent only a small part of total U.S. credit-market debt outstanding, U.S. credit markets should be able to absorb without great difficulty any shift in foreign allocations," Bernanke said in a March 16 letter responding to Republican Senator Richard Shelby of Alabama.

Probably? In this case, that's the same as saying, "We know something that you don't know. Don't ask again, or you'll get the same non-answer." If even 20% of the foreign investors dump T-bills, inflation *and* interest rates will jump, and the American consumer will shit a puddle of blood where he stands.

I started warning people in June 2006 to prepare for a big dollar slump, but it must have been a lucky guess, because I'm wrong about everything. The USD is squeezing up against critical support points. China is preparing to raise interest rates. The European Central bank will raise rates again. The BOJ will raise rates again. The Fed can either sacrifice the dollar or attempt to put the brakes on by raising interest rates, which will tip over the mortgage market, suck money out of consumer spending, and punish the retail and service sectors, causing hiring freezes and layoffs.

The US economy is right now in exactly the same position it was in the spring of 2001: on the precipice of a big recession. Then 9/11 happened, and Greenspan flooded the world with cheap dollars. Now, in spring 2007, we're at the lip of the same precipice, but with trillions more in debt piled on our shoulders.

I know you're lonely in this thread. I'll keep you a bit of company.

There is no "housing bubble."

My house has appreciated as expected.

I pay my mortgage.

I don't get tired of waiting for the other shoe to drop (y2K, avian flu, housing bubble, Godzilla) because it never does.


The dollar will be what we want it to be. Fuck China. Do you really think the global economy runs on actual dollars and cents? It runs on politics and perception.

I think that Dr Venkmen is saying that New York City houseing is not yet experenceing the problems relating to other areas of the country.

Don't gloat to long though when the layoffs kick in and a full on ressession starts to take it's toll. You may have noted that Blumberg announced something like a 60% cut in the cash flow statistics for the city next year.

Hold on to the seat of your pants and we will se how it goes. Hope you don't have any problems though as you seem to be a nice guy.

On other issues the numbers today seem pretty dire for the last 3 months. Some people thought that Bernanke's comments last week were to deflect some very bad numbers he had seen but were not yet relieced if todays are any indication it looks like we are in bad straits already.

The increase in property values in NYC for last year came out today. Property went up 1% in the city last year the year before it went up 19%. Staten Island is dropping not sure about queens. Hotel and Commercial property went up some more. Things are cooling.

Chicken Little wrote:

Dr. Venkman wrote:There is no "housing bubble."

Guess you missed it.

Guess so.

AP 12-27-07 wrote:NEW YORK - U.S. home prices fell in October for the 10th consecutive month, posting their largest drop since early 1991, according to a key index released yesterday.

The record 6.7 percent slide in the Standard & Poor's/Case-Shiller home price index also marked the 23rd consecutive month that prices either fell or grew more slowly than the previous month.

Wow. "grew more slowly"? Sounds like a slow slide rather than a bursting "bubble".

Chicken Little wrote:No wonder you can't even figure out the economics of mass transit. You must live inside a protective bubble yourself. The 'No Bad News' Bubble.

New Thread? The Economics of Mass Transit and the 'No Bad News' Bubble.

Chicken Little wrote:Please post to my threads regularly. I wish I had some bundled mortgages I could sell you. And some mutual funds. And some dollar futures. You look like an easy mark.

I'll post in "your" threads, since no one else seems to give a blue fuck. You've been talking to yourself in this thread for over a year!

Let us know when the sky really falls.

Apparently even Greenspan seems to be saying we are in a ressession.

The amount of monies that Citibank is leverageing and the losses are pretty scary when so many of the banks have consolodated.

Here in the UK someone said on the TV this morning that the housing market was at it's lowest point since the early 90's and it's going to keep dropping for another 2 yrs.