Monday, March 1, 2010

Borrowing to Stay Afloat...


http://www.marketwatch.com/story/goldman-to-sell-2-billion-in-bonds-informa-says-2010-03-01

..."normally" beats selling off assets at fire sale prices, especially when you're carrying assets on your books absurdly above market price. Problem is, borrowing your way out of trouble is only feasible during inflation, during deflation, debt crushes you.

In other words, "fire sale price" is a inflationary term. The equivalent deflationary term is "overpriced."
Posted by fdralloveragain at 1:31 PM

6 comments:

  1. AnonymousMarch 1, 2010 at 7:27 PM

    The astounding thing to me about this issuance is that these are FDIC insured bonds.

    http://wallstreetpit.com/18165-goldman-plans-on-selling-2b-in-fdic-backed-bonds

    Now that Goldman Sachs is an FDIC insured institution, how much are the taxpayers on the hook for when this firm goes down?

    ReplyDelete
  2. Joe ShareholderMarch 1, 2010 at 10:34 PM

    It could be argued that the Fed has one goal in mind. Inducing inflation. Especially during times like these. And they're good at it. They've succeeded in causing inflation for one hundred years now. A bet against inflation is a bet against the Fed. A corrupt, dangerous, criminal, self willed machine. I'm not sure I'm up for the bet against the Fed. Help me understand FDR why we should bet against everything the Fed stands for. Help me understand because the easy money they've created so far has helped ease the downward slide I believe. They're not done yet. I'm sure Bernanke would ruin the middle class without hesitation to ensure his assets gain value.

    ReplyDelete
  3. AnonymousMarch 2, 2010 at 7:16 AM

    Do the people taking this money really care if the company is destroyed in the process?

    ReplyDelete
  4. AnonymousMarch 2, 2010 at 9:03 AM

    FDR

    Do you think GS and AIG avoided the big 2010 margin call by these sales? Have they dodged the bullets for another year?

    ReplyDelete
  5. AnonymousMarch 2, 2010 at 12:05 PM

    Can you post your current thoughts on gold (not GS, but the physical asset).

    The historic average between gold and silver is 16:1 with a range of (15-20 times).

    Currently gold is trading at 67 times silver.

    Are you presently short (DZZ) gold?

    ReplyDelete
  6. AnonymousMarch 2, 2010 at 3:37 PM

    FDRAOA -
    You responded to comment of mine as being as "false choice" when I suggested US treasury issue notes directly to pay off the debt while simutaneously as Ellen Brown suggests..

    http://www.webofdebt.com/articles/fiscal_responsibility.php
    and
    http://webofdebt.wordpress.com/chapter-37-goldbugs-and-greenbackers-debate/

    comments?
    Thanks for writings.

    ReplyDelete

Subscribe to: Post Comments (Atom)

The USA's political-economc system is best described as:

On Nov 2, 2010, I plan to vote (FOR or AGAINST) my incumbent congressman

 
Free Hit Counter