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Saved by 13 people (-3 private), first by anonymouse user on 2008-05-17


Public Sticky notes

left wing

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claw back

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First, we're seeing the end of the carry trade, the investment of cheap, low-interest loans raised in yen and dollars for investment in higher yielding financial markets, such as those of the emerging economies, Iceland and - to an extent - the UK.

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A second phenomenon is the one I described in my note of earlier this morning ("Hungary, Goldman and Regulators"), namely that the conversion of Morgan Stanley and Goldman Sachs into banks is sucking the juice out of hedge funds.

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on hold

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stupendous

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skim off

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predecessor

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Finally, the global economic slowdown has prompted a re-evaluation and re-pricing of risk, in the jargon.

Or, to translate, investors have in the course of 14 months gone from the mad conviction that busts had been abolished to the fear that everything's going bust.

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$10,000bn

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the real economy

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$50bn in loans

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retooling

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2.5m job losses

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Trying to reorganise the auto industry in bankruptcy would be as close to reorganising the whole US economy as you could get," he said. "The vast supply chain involves thousands of businesses, millions of existing jobs and just as many retirees, as well as whole communities and states".

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In practice, it means banks who sell their debts to the Treasury would receive cash equivalent to something like twice the value in their books of these poisonous assets.

In other words banks would book a profit from selling to taxpayers!

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