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Continuing uncertainty in ability to safely shut down damaged nuclear power plants in Japan. Japanese Yen has been strengthening due to expectation of Japan selling their US Treasury debt holdings and repatriating Yen for reconstruction purposes. When will Japan's central bank intervene to weaken the Yen?
FXY 123.71 +1.46. CurrencyShares Japanese Yen Trust. Big volume. Multi-year high.
YCL 34.52 +0.80. ProShares Ultra Yen. Illiquid.
YCS 15.05 -0.38. ProShares UltraShort Yen.
The March 5 issue of Barron's had several book reviews. I was struck by Richard A. Epstein's defense of financial fraud:
The guarantee offered by the clearinghouses will itself become a potential source of systemic risk, and putting these trades into an exchange straitjacket could hamper financial innovation
Clearinghouses have multiple benefits, some of which are:
transparent price quotes;
nightly mark-to-market;
margin calls;
clearinghouse guarantee of performance.
Without clearinghouses, we are left with a promise that may be backed by nothing. AIG's insurance-like promises had no financial backing without a reasonable means to perform, and were therefore fraudulent. Mr. Epstein's view that a clearinghouse would hamper "financial innovation" is simply cheer leading for more financial fraud at the expense of the American taxpayers.
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