My mind boggled to read that between DB, GS and JPM there is a total of $190T in debt (10x US Govt debt). Their combined asset backing of $3.58T is probably the same as US Govt's asset backing (just guessing as I don't know).
Regarding speculation on US Govt. intervention, if the US Govt. cannot sort out its "meagre" debt of $19T, how does it hope to bail out a debt pile 10 times larger?
The market would probably be sniffing around by now, either in preparation for a flight of capital or isolating contagion. Should the scenario be bad, it would be interesting to see if a 10%-20% drop in USD be immediately be offset by a 10%-20% increase in POG.
Russia and China probably consider this urgent meeting as requiring astute political chess manoeuvres on their separate parts even though they deem it a poker bluff on USA's part.
Not surprised if Putin and Xi are good mates and do often catch up for some coffee and cake (or tea and dim sims). And why not? If US and Eu can be bosom buddies, the ROW leaders can do the same thingy too.
March/April'16 events of interests so far:
- Panama Papers
- 4 closed meetings by Fed BOG under expedited procedures 28/3, 6/4, 11/4, 12/4. (A reality check: maybe these meetings are procedural and we are reading too much into them.)
Cheers, R.
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