Central banks have been and can be beaten by the markets

So did my make up swim this morning with nothing or anyone notable.

I am still feeling these conspiracy theories but not with H1N1a. This time it has to do with Chrysler. When Chrysler was taken private, Cerberus assumed all their debt as well, so there are no bond holders. Instead you have all these loans made by big banks. I am not sure what banks as I was not to interested in all the facts but when I saw the banks agreed to forgive, i.e. write off as a loss, $6.9 billion in loans in exchange for $2 billion and ten percent ownership of the "new" Chrysler I had to wonder. What bank currently has the leeway to accept a roughly twenty eight percent recovery rate plus ten percent of the new perpetual calls that will be issued which may also go to zero? Then it struck me- the banks that are owned by the government or accepted TARP funds from them were probably given the Ken Lewis treatment. Some federal official gave them verbal guidance as to what they should do with the loans. The term plausible deniability should come to mind. I can't wait until the banks then have to write down loans they were probably marking at 100 cents on the dollar to 28 cents on the dollar...

Taking it a step further I could infer it was also a warning to the GM bond holders. See what we did to Chrysler, go ahead and try to call our bluff. The thing is, the bond holders will and have ample legal and historical precedence to win. GM made the tender offer dependant on 90% of the bond holders approving the tender offer. Not gonna happen and is all posturing so when it doesn't GM and the government can lynch Wall Street again for "causing" GM to have to file.

I found it odd that the Fed felt the need to release a press statement that the government of Singapore will not take a controlling stake in Shitigroup. Instead they will convert their preferreds into common. I wold say what really happened was the Fed and or Shitigroup asked Singapore to pony up again. Singapore said no thanks we'll just convert.

There is an old adage on the Street that you don't fight the Fed. All of the shit going on though reminded me of when Soros broke the Bank of England in 1994. There is precedent for going against a central bank and winning that just happens to be the only one I have witnessed in my career.

The "photo-op" from yesterday was still all over the news. I really don't think President Obama should be held responsible for it. It was asinine and stupid. A friend sent me a video from his cell phone of the street level mayhem. It was pretty scary and you could hear the plane long before it was seen. The funny thing was that same clip made it onto the 11 o'clock news here.

All of this furor over H1N1a and tamiflu and relenza makes me pine for the days of Cipro- sort of...

I am starting to really believe that we are in the same spot on the geopolitical stage that the U.K. was between the World Wars. It kind of makes me worry that that means we may have a serious geopolitical disruption in the next 5-7 years and see ourselves go into decline like they did after WWII.

I went to the gym tonight and got my short run in and lifted. There were some serious hot guys there again. Yellow shorts was there and there was a new guy. I have seen him on the morning bus from time to time. I'm calling him blue shoes. I actually spotted him on the bench too.

The husband is taking a little side jaunt to Berlin currently. He is having fun.