? One of the most important posts on iTulip??

[Jim Nickerson]

For me it is not always easy to grasp the implications of things that are posted on iTulip. Many are way over my head, and probably just as many are oblique in whatever may be the intended meanings--assuming some meaning is actually intended.

Sapiens, the "cryptic one," in his thread http://www.itulip.com/forums/newreply.php?do=newreply&p=16262

on 9/19/07 wrote:

Do not let the Fed’s cut diversion fool you.

There are massive amounts of derivatives that CANNOT be safely priced right now. There are massive losses currently hidden from the public. DO NOT PANIC.

Keep you liquid assets handy, you will come to a buyers market soon enough.

To which I replied: Nothing cryptic about your post here, except one might ask, as one could of many things that get posted on iTulip, is how do you really know you are correct in your assertion of the massive losses currently hidden from the public?


To which Sapiens replied:Jim, the reason I know, it's because I am right in the middle of it. I am wading in a un[de]terminable sea of dubious paper.
-Sapiens

I have asked on that thread if Sapiens wishes to reaveal more about what he knows with regard to his personal experience of "wading in an undeterminable-interminable sea of dubious paper"?

We all, I presume, read a lot of stuff on the web and on iTulip, and the question when individuals choose to make statements about what is going to happen with the markets is always for me: how does this "dude" know what he is writing about, or is he purely speculating about what may be going to happen and is looking for someone to agree or disagree?

Sapiens statements in bold blue above are potentially tremendously important, if Sapiens is privy to knowledge because of some position he suggests he occupies.

I for one would definitely like more insight about what Sapiens knows if he is willing to share it. I hope he is.

[Andreuccio]

I have asked on that thread if Sapiens wishes to reaveal more about what he knows with regard to his personal experience of "wading in an undeterminable sea of dubious paper"?



You asked on that thread what he meant by "unterminable" and guessed "undeterminable". I would guess rather that he meant interminable, that is, endless.

As to where Sapiens get his info and how solid it is, I'm as curious as you are.

[FRED]

For me it is not always easy to grasp the implications of things that are posted on iTulip. Many are way over my head, and probably just as many are oblique in whatever may be the intended meanings--assuming some meaning is actually intended.

Sapiens, the "cryptic one," in his thread http://www.itulip.com/forums/newreply.php?do=newreply&p=16262

on 9/19/07 wrote:



To which I replied:


To which Sapiens replied:

I have asked on that thread if Sapiens wishes to reaveal more about what he knows with regard to his personal experience of "wading in an undeterminable sea of dubious paper"?

We all, I presume, read a lot of stuff on the web and on iTulip, and the question when individuals choose to make statements about what is going to happen with the markets is always for me: how does this "dude" know what he is writing about, or is he purely speculating about what may be going to happen and is looking for someone to agree or disagree?

Sapiens statements in bold blue above are potentially tremendously important, if Sapiens is privy to knowledge because of some position he suggests he occupies.

I for one would definitely like more insight about what Sapiens knows if he is willing to share it. I hope he is.

Quick reminder on iTulip's confidentiality policy. We sometimes verify the identities of members to ensure that no one is overstating their claim to access to key information of value to our members. We can say that members may be surprised to know who some of their fellow members are, but we'll never say. Short of a subpoena, which we'd fight if we had grounds to do so, iTulip has not and will not reveal the identities of members unless they provide written permission for us to do so.

[Jim Nickerson]

Quick reminder on iTulip's confidentiality policy. We sometimes verify the identities of members to ensure that no one is overstating their claim to access to key information of value to our members. We can say that members may be surprised to know who some of their fellow members are, but we'll never say. Short of a subpoena, which we'd fight if we had grounds to do so, iTulip has not and will not reveal the identities of members unless they provide written permission for us to do so.

Well, that is not the reply I had expected. Make no mistake, Fred, I was not asking iTulip to identify the credentials of Sapiens. I was asking Sapiens to say something more about what he appears to know. What is revealed that would in this forum add to his credibility is up to him. As long as people use pseudonyms, I don't see where anyone's wish to maintain anonymity is compromised. Shit, for all I know Sapiens may be Hank Paulson, and Hank could say whatever he wishes under "Sapiens" and who would ever know?

[FRED]

Well, that is not the reply I had expected. Make no mistake, Fred, I was not asking iTulip to identify the credentials of Sapiens. I was asking Sapiens to say something more about what he appears to know. What is revealed that would in this forum add to his credibility is up to him. As long as people use pseudonyms, I don't see where anyone's wish to maintain anonymity is compromised. Shit, for all I know Sapiens may be Hank Paulson, and Hank could say whatever he wishes under "Sapiens" and who would ever know?

Don't get me wrong. Wasn't implying that you were asking for Sapiens' ID. But keep in mind that several members need occasional re-assurance of our policy.

The only way you can really know if someone has access to the info they say they do is if over time they provide information and over time events show it to be true.

[Jim Nickerson]

Don't get me wrong. Wasn't implying that you were asking for Sapiens' ID. But keep in mind that several members need occasional re-assurance of our policy.

The only way you can really know if someone has access to the info they say they do is if over time they provide information and over time events show it to be true.

I think someone could say, I work in a "whatever-type-business-it-is" that deals with derivatives, and this is what I see. Of course, no one knows if the the individual is lying or telling the truth, and then time, as you suggest, could bear out the validity of whatever statements were made.

SeanO for example has chosen to identify his business to the extent that it certainly adds validity to what he may opine or offer as fact about real estate matters, and one can determine that I as one who was an oral surgeon probably does not know his ass from his elbow.

[zoog]

Heh, don't scare the groundhog, Jim, we may never find out of he sees his shadow or not.

[c1ue]

Jim,

I mentioned previously that JPM has a really low Tier 1 cap ratio compared to the industry average.

You have probably seen already that many of the major banks are using SIVs - think Enron off balance sheet vehicles.

We all collectively already have internalized the scale of the subprime/Alt-A/neg-am MBS debacle.

Put that all together and the result: Someone or several someones is choking on hidden bad debt.

Think Japan.

[Jim Nickerson]

Jim,

I mentioned previously that JPM has a really low Tier 1 cap ratio compared to the industry average.

You have probably seen already that many of the major banks are using SIVs - think Enron off balance sheet vehicles.

We all collectively already have internalized the scale of the subprime/Alt-A/neg-am MBS debacle.

Put that all together and the result: Someone or several someones is choking on hidden bad debt.

Think Japan.

C1ue, no disrespect to your thinking on these matters, but to me your thoughts though perhaps perfect, are the thoughts of someone on the outside looking in, vs. what might be the truth revealed if one is actually on the inside (of something?). Sapiens, at least to me, has suggested he is on the inside, and the closest thing I know of anyone on iTulip to being on the "inside" is EJ or SeanO, but even such as they might not be privy to as much as one who is actually dealing with all this derivative stuff.

[Andreuccio]

Put that all together and the result: Someone or several someones is choking on hidden bad debt.

Think Japan.

Uh, just out of curiosity, if that's true, how would it affect the Yen?

[Andreuccio]

one can determine that I as one who was an oral surgeon probably does not know his ass from his elbow.



Good thing you weren't an orthopedic surgeon, then, or a proctologist.:D

[Jim Nickerson]

Good thing you weren't an orthopedic surgeon, then, or a proctologist.:D

I don't get your point about it being good that I wasn't an orthopedist. Edit: Yes, I do get it: elbow and ass

But with regard to proctology, I could not count the number of people who upon learning I was in dentistry would say, "ooh, how can you stand to put your hands in people's mouths." Shows how ******* dumb people are.

[Jim Nickerson]

Uh, just out of curiosity, if that's true, how would it affect the Yen?

C1ue can give you his answer, but the thing that continues to guide my simple thinking on the yen is that there is supposedly a tremendous short position on it, and presumably at some point that will be covered--thus driving up the value of the yen. I've got about a 10% position in FXY.

[Andreuccio]

C1ue can give you his answer, but the thing that continues to guide my simple thinking on the yen is that there is supposedly a tremendous short position on it, and presumably at some point that will be covered--thus driving up the value of the yen. I've got about a 10% position in FXY.

10% FXY is about where I'm at, too. I wonder, though, if it's a bet well placed. How much will the Yen appreciate against the dollar when/if the carry trade unwinds? How will that compare against the appreciation we might have seen in, say, Gold, for instance.

[raja]

I have a chunk in FXY, too.

I'm not so concerned about how it will compare to gold, since I view them as somewhat different types of risks, and therefore a form of diversification that is desirable.

However, to answer your question perhaps you could get an idea of how much you'd make with FXY by looking at historical highs, then compare that with how you think gold might perform. The figures of $2000-$3000 per ounce get bandied about a lot for gold, but no one really knows.

If you do the calculations for FXY and gold, please let us know the results . . . .

[c1ue]

C1ue, no disrespect to your thinking on these matters, but to me your thoughts though perhaps perfect, are the thoughts of someone on the outside looking in, vs. what might be the truth revealed if one is actually on the inside (of something?).

I'm no insider. But I am a tea-leaf reader by interest and experience.

Quote:
Originally Posted by c1ue http://www.itulip.com/forums/images/buttons/viewpost.gif (http://www.itulip.com/forums/showthread.php?p=16367#post16367)

Put that all together and the result: Someone or several someones is choking on hidden bad debt.

Think Japan.

Uh, just out of curiosity, if that's true, how would it affect the Yen?

Nothing - Japan's debt (at least thus far) is not an issue as their current account surplus isolates its effect from the Japanese population.

However I was not talking about Japan having the bad debt, I was talking about how the Japanese banks hid their bad debt with collusion from the government - thus resulting in 13 years of banking (and economic) stagnation.

It is entirely possible that we're seeing the financial industry equivalent: stagnation until time erases a lot of the bad debt still lying about in SIVs, MBS's, CDOs, and the like.

As for the yen - there are many economics based reasons for why the yen should appreciate vs. the dollar.

But they don't mean a hill of beans vs. Japan's geo-political alliance with the USA.

Only if the dollar collapses will there be any real likelihood of a yen/dollar divergence - and even then I would expect the yen to be on the weaker side still range bound vs. the dollar.

After all - a weaker yen plays to Japan's export strengths.

There is certainly some analysis that could be done to understand where the inflection point is of Japan value add vs. raw material cost as affected by yen value, but I haven't done it.