The always readable Dr. John Hussman shares his views on today's markets, overvaluation, historic bull runs and chasing returns:

http://www.hussman.net/wmc/wmc061016.htm

Hussman's weekly commentary is a must read (along with Bill's). Jeffry Saut of Raymond James is terrific as well. Here's the link http://www.raymondjames.com/inv_strat.htm.

Capital inflows up substantially in August:

http://tinyurl.com/yzjqlb

Cause for more concern.

Industrial output down more than expected:

http://tinyurl.com/yerbbw

MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES

http://www.ustreas.gov/tic/mfh.txt

Swiss bank suffers big losses on derivatives

http://www.iht.com/articles/2006/10/16/bloomberg/bxsuisse.php

NEW YORK Credit Suisse Group, the second-biggest bank in Switzerland after UBS, lost about $120 million on South Korean derivatives in the third quarter, a stumble by equity traders struggling to catch the leaders in the securities industry.

The debacle, which was not reported to shareholders, resulted from the bank's failure to protect itself against swings in the value of South Korean stock options, said two people with knowledge of the matter. The loss equals about 13 percent of second-quarter revenue from equities trading for Credit Suisse, which is based in Zurich.

Brady Dougan, appointed in 2004 to run Credit Suisse's investment bank, pledged last year to catch up to competitors in derivatives. The bank's revenue from equity trading rose less than half as fast as that of Goldman Sachs Group and Morgan Stanley in the second quarter. After the South Korea blunder, Dougan has ousted one co-head of equities and made other changes.

(more at the above link)

JB, regarding treasury numbers,

interesting the total did not rise soo much as one would expect, with all that chatter about global inbalance. Big China sending BIG money to US and on and on. Chinas Position has increased by roughly 10% roughly the same as their GDP.....

More interestingly, is the more than double of the United Kingdom Position.........hm lets see, I would speculate, as the number for UK includes Isle of Man and other british tax havens, there is a large part of "difficult" money (russian oligarchs? arabic sheiks? corrupt chinese party highranks? african dictators? german tax evadors?) going into safe "Gods own land" ;) or better in the higher interest rates the Dollar offers?

Or did anybody notice a really BIG increase of wealth other there on the rainy isle?

http://www.financialsense.com/Market/wrapup.htm

I found this through a link through the Kirk report. Given the discussions reqarding liquidity infusions and the like here, I thought that Bill's readers [Bill we can do an FOB (Friend of Bill) moniker for your readers but that might be insulting to a few given it's attachment to Bill Clinton] might enjoy.

VERY thought provoking article: "Debt Buyers vs. the Indebted", in today's WSJ reports growing tension between hedge funds (who buy debt) and private equity firms (who sell debt).

LBO firms try to exclude particulary aggressive hedge funds from loan syndicates fearing that rising rates will cause interests to diverge: quick-buck hedgies vrs. more patient LOB operators ...

But don't hedgies also borrow from their HB&B lender/owners to leverage up before buying that debt? And can't HB&B also put the squeeze on hedgies (Amaranth)? And wasn't poor and non-standard documenting of structured loans what alarmed the NY Fed a year ago?

Sounds like multiple train wrecks in the making to me !

http://online.wsj.com/article/SB116104787602094665.html?mod=todays_us_money_and_investing

Looks like were getting setup for a stock bubble:

http://msnbc.msn.com/id/15280129/