Inflation is grossly underreported by the CPI..it is not 2%. It is more like 7-16% as gas and food are not included. It rises with each drop of the dollar, and the drop is at a ‘45’ degree angle.
From Market watch today...by MarketWatch - 11/5/07 snip:
Citigroup Inc. in a quarterly regulatory filing Monday said its so-called level 3 assets as of Sept. 30 were $134.84 billion. Level 3 assets are holdings that are so illiquid, or trade so infrequently, that they have no reliable price, so their valuations are based on management’s best guess. The investment bank said its total liabilities related to level 3 assets at quarter-end were $40.36 billion, according to the Form 10-Q. Citigroup said it often hedges its level 3 positions..
Today, Bloomberg talked about Citigroups $11 billion problem..it is much larger. The whole problem is much larger and will be exposed a lot more each day. Lots of SIVs have to disclose their hidden values by Nov. 15th, and these equities are only ‘marked to model’, meaning their values are assumed...they will have to be ‘marked to market’..that is the rub..there is no market.
Some prices are going up, that's true. But there is not a one to one correspondence between the foreign exchange value of the dollar and the domestic value.
Citigroup Inc. in a quarterly regulatory filing Monday said its so-called level 3 assets as of Sept. 30 were $134.84 billion. Level 3 assets are holdings that are so illiquid, or trade so infrequently, that they have no reliable price, so their valuations are based on management’s best guess. The investment bank said its total liabilities related to level 3 assets at quarter-end were $40.36 billion, according to the Form 10-Q. Citigroup said it often hedges its level 3 positions..
Today, Bloomberg talked about Citigroups $11 billion problem..it is much larger. The whole problem is much larger and will be exposed a lot more each day. Lots of SIVs have to disclose their hidden values by Nov. 15th, and these equities are only ‘marked to model’, meaning their values are assumed...they will have to be ‘marked to market’..that is the rub..there is no market.
All those credit problems are a deflationary time bomb waiting to go off. I'd be far more concerned about that than inflation right now.