"it works until it doesn't - and then you're dead"
Well said. I think the story you refer to about the central banks and SWFs is only partly right. They didn't want to get wiped out IF Fed/Treasury had to move. But I don't think they would have pushed Fed/Treasury this way, at this moment. In that "negotiation," the Fed/Treasury still held the mutually assured destruction trump card, and Paulsen doesn't strike me as a guy who would blink if bluffed. But WDIK.
FNM and FRE to next-to-nothing while the rest of the financials do a relative moonshot makes sense to me. So does an ensuing collapse of those same financials in a few weeks down the road. The amplitude depends a lot on exactly how much the worst mortgage books and MBSs on the banks books they'll be allowed to slough off on Fannie/Freddie via this new "modest expansion" Paulsen has engineered.
A question for you ... how do you see this impacting oil/gas, gold, US dollar, and other commodities??
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