No Cash Flow problems here!

Today, the Saudi money people got together and decided to
put a small $900 Billion Dollar fund together….to thwart
the possible short fall in the Mortgage Sub-Prime markets.
Hey, we are starting to talk now. Abu Dahbi’s $900 Billion
dollar fund is expected to be dwarfed by the Saudi Arabia
Public Investment Fund! OK, now we are talking serious cash
to hold back the suspected $4 Trillion Dollars in Hedge and
Derivative action out there. Hey, maybe that number is really
closer to $6 to $8 Trillion.

As they say in the trade….eventually, the truth will come
out. See it all started like this…Tony Montana and the Florida
mob (from the movie Scarface) needed to come up with a way to
launder their cash from Colombian Cocaine deals. They were
able to hire the greatest minds in the world – they had the
cash – remember! So, they came up with these great things
like: “How high is the sky funds?”. They invested their many
Billions and heck, the Saudis followed suit. Then the Russians,
then the Syrians, then the Japanese, then the Colombians. Oh
come on… could you resist this very pleasant way of
laundering “drug payoffs”, “Political payoffs”, or just storage
…..of illicit Gas and Oil payments?

Well, when this giant pyramid scheme was pumping along and
creating new housing, commercial buildings, propping up silly
governments, doing Cancer research…how could anyone complain?
Ah, but then the bottom fell out. Yep, they actually ran out
of people that wanted to buy houses! They even offered all those
illegal immigrants, they offered all of them “free money”, they
did just about everything that could be done – but sadly the
bottom still fell out! Ploop! Not enough Chinese millionaires
that wanted to buy property – we suppose!

Now, the Saudis and the Arab world in general are sensing that
this baby could fold up quick and they had better back up those
accounts or watch all that invested cash totally disappear. You
see, the Saudis are very smart. They know that the “Oil isn’t
going to last forever!” They know they have to invest in more
than US Treasury Bonds….at 4%. They know that raising the cost
of a barrel of oil…can only go on so long….before something
not so very pleasant could happen. The excuses can be endless
… as we all know! But let’s put this all into context – So far,
the very big Investment people are backing up banks, other
investment groups, Private Hedge Funds and Derivatives to the
tune of about $4 Trillion Dollars. Hey, maybe those Hedge Funds
and Derivatives are actually way bigger than that!

The article yesterday in the Register regarding Chriss Street and
how “safe and secure” his SIV’s were – was laughable! They all
act like “nothing is connected”, “nothing can go wrong”, “we are
indemnified!”, “the banks will have to pay”….lot’s of bull like
that. As Chevy Chases’s son Rusty said in National Lampoons
Vacation: “Think Mom is going buy that?”

There is little doubt that: “We live in interesting times!” As
we can see….the melting ice has reached Governor Arnold….and
the State of California…is looking at cut-backs..big cut-backs!
We might remind all….that every time the State has “cut-backs”..
guess what…Counties and Cities are sure to follow!

Is there a solution? Yes, probably – there will be new economic
paradigms to create. The great flows of cash…will need to find
other markets, which actually exist! The days of investing in
nothing hopefully will be diminished. Perhaps, there is a new
day coming and it may turn out to be better than the one we have
now! If the Saudis don’t invest their Oil Money in Hedge Funds
and Derivatives – then what? Your guess is as good as ours!

About Ron & Anna Winship

Independent News Producers/Writers and Directors for Parker-Longbow Productions. Independent Programming which includes a broad variety of Political, Entertainment and Professional Personalities. Cutting Edge - a talk the flagship of over 30 URL websites developed or under development. The Winships have been blogging for the Orange Juice since back when nickels had buffalos on them, and men wore onions attached to their belts, because it was the fashion back then.