(an interoffice email exchange)
>
> On Fri, Sep 19, 2008 at 9:50 AM, David wrote:
> So creating liquidity for toxic assets RTC style.
>
maybe, jury is still out on how that might work
>
> Make the government a little money and inspire confidence in banks, ok.
>
> We are thinking that this is overtly inflationary for financial assets (maybe all
> assets?)
>
supports a lot of equity value by removing a large element of risk, but cost to shareholders still unknown
fixed income going higher in yield, prices there going down
>
> Should I expect this to re-inflate the commodity asset bubble in the medium
> term???
>
not directly. crude price up to the Saudis.
>
> Do you think the dollar’s rally will help cap any commodity asset price rise???
>
yes, in the competitive markets. crude is not a competitive market. saudis merely set price and let quantity adjust
>
> PS- I expected to come in today to $110+ crude, $8+ gas, and $900+ gold.
>
as above. crude up even with dollar up, but gold down.
warren
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