Forex Derivatives gonna take a lot of companies down worldwide

Forex Derivatives gonna take a lot of companies down worldwide
11-Apr-09
All these forex experts who predicted that the dollar would go lower are proven wrong. The dollar is kept strong for political reasons. There can be no economics in this value. How could the most indebted nation in the world have a strong currency? The Indian Govt. is now back with a new trick. It is allowing companies to restate accounts without marking to market forex derivatives until 2011. This will obviously inflate profits of these companies like Wockhardt and Tata Steel which is another smoke and mirrors 'India Shining' propoganda. The Govt thinks that the dollar will sink back to 40 levels by the end of this year and lower by 2011. They are right. The dollar strength has been broken since this month. I think this was a desperate measure to keep these companies above water (My guess is that Wockhardt and Tata Steel bet against the dollar at 40 in swaps which might expire in 2011). We have to stay away from the stock market. All the market numbers are manipulated. The banks are refusing to toe the line of the government to bring their loan rates in line with the soverign yield. They know that the RBI is actively rigging the yield curve. Wait until further inflation hits us. Then we could see greater unrest.

Worldwide there are many institutions mostly banks which have dealt with derivatives. I've heard the concentration of most of the derivatives is among the top 3 banks. J P Morgan's derivative positions are a couple of trillion dollars in notionals and could even bring that bank down. The reason why JP Morgan bought out Bear Stearns was because of Bear Stearns Derivatives book had a huge JP Morgan exposure. Bear Stearns failing would mean JP Morgan failing