Dear DK,

Two quotes from the above article?

""What’s going to happen as this bubble unravels?""

""What’s going to happen as the value of the underlying securities on which the derivatives are based upon devalue further?""

Well, in my view it will not take long before China will have cooked up some kind of a rescue plan.

U.S.A. has an enormous debt to China which now is in China’s advantage.

One will have to reorganize the I.M.F. in such a way that its members will come from the West AND the East from now on.

I have red somewhere that negotiations about this are already taking place unofficially and will be official after the American election is over.

Kishore Mahbubani’s book: “The NEW Asian Hemisphere” might be an inspirational one at this moment to read.

Now it is China’s and India’s time.

But I assume you know this already :). And you know already too what is going to happen.
I cannot imagine that world leaders do not know this too.

In Harb’s words: “It is all in the Scheme Of Things”.

Uncle Sam: "Play by our rules!"
China: "You have rules?"
US: "We make them up as we go along. But that's not the point. We make the rules, you play by them."
China: "Um. OK. Our understanding of your rules is like this: Americans want lots of stuff and they want it now and they want it on credit. So our job becomes to make lots of stuff very cheaply, then lend you money to buy it with. Then you get your cheap junk, and you end up owing us lots of money."
US: "We're going to change all that so we never have to pay it back."
China: "Well, then, we better collect now. Game over. Pay up."
US: "You're cheatin', Hombre!"
China:"That was your rules we were playing by!"
US: "We got more nukes than you do!"
China: "What has that got to do with anything?"
US: "I'm just letting you know, we got more nukes than you."
China:"OK, then. We won't make you pay up yet. We'll just devalue the dollar so you keep racking it up. How about taking care of that interest?"
US: "We'll pay the interest because we got taxpayers we can soak it out of. But just remember who makes the rules."
China: "We'll see how long that lasts. We'll take the check, thank you. Try to pay on time next month, OK?"

Lol Yogi, perhaps it really is time to put all you EGO males together on Mars to fight it out and we women will rescue the earth :)

Mieke

Pop a bubble and watch what happens ....

As I've said before concerning credit default swaps, in insurance, there is a term called "moral hazard," which is a term that describes those who lose their natural aversion to risk and, thus, become themselves a risk.

This whole shadow market has been like botox to the free markets which no longer track the path closest to collective sanity, but are wandering off in strange new directions, numb to feedback, following no cues.

Bush said that the markets got drunk. He should know what that is.