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Genesis Posts: 71432 Incept: 2007-06-26 
KD^2 
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http://market-ticker.denninger.net/2008/....
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-05-02 09:29:07
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Ludanjack Posts: 1343 Incept: 2007-07-29 
Ft. Lauderdale
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Quote:If you're not day trading then you come up with your thesis, doing your own work, you stay in a position that cannot get you into margin trouble, and then you sit back and wait to see if you're right or wrong. No finer words written. This bull**** rally isn't throwing me off this BEAR's back! ---------- "This is only something that can be fixed after we kill all the players that carry the virus, because the virus only dies when the host is dead. The hosts are the sick financial institutions being run by crooked executives, regulated by incompetent regulators, appointed by blissfully ignorant politicians and at the end
2008-05-02 09:38:11
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Interested Posts: 2689 Incept: 2007-10-07
SC Online
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KD, You should cover the birth / death adjustment of +267k. Almost double last months and the biggest since last April. But last April we had a headline add of +88k. And 45k of this years "adjustment" -- from construction firm "births". http://www.bls.gov/web/cesbd.htm
2008-05-02 09:46:52
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Mvo Posts: 493 Incept: 2007-06-27 
NYC
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Karl, I think the fact that FED has commited a half of their balance sheet to prop credit markets is irrelevant. They can expand it, and I believe this is exactly what they are doing now by pushing FFT artificially low and throwing enormous slosh to defend FFT. Perhaps the very same Ts they swapped for junk are being bought via TOMO and swapped to the banks again. The only way I see this game hitting the wall is when FFT/EFF is zero.
2008-05-02 09:49:25
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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Of course that's when the game ends. But that's not when the market gives up on this. Look, the Jobs Report is horse****; the Birth/Death was huge, and if you look inside it its obviously crap. ADDS in finance? Yeah, ok - pull the other one. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-05-02 10:18:59
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Interested Posts: 2689 Incept: 2007-10-07
SC Online
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In the Ticker man!
2008-05-02 10:24:00
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Yal Posts: 3544 Incept: 2007-06-27
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KD, I salute you man. this is one of the best tickers ever if not the best. A real classic.
2008-05-02 10:39:32
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Mvo Posts: 493 Incept: 2007-06-27
NYC
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Karl, I am not arguing about fundamentals, just saying Fed's balance sheet "limit" will not stop their bull**** until credit market does.
2008-05-02 10:41:33
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Eternalblue Posts: 4230 Incept: 2007-08-09
sokali
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heh, i saw that fed expansion headline and the market spike, i could only think, the market is collectively smoking ****, that's ****ing terrible news, it means all the bull**** about "crisis over" was exactly bull****. ---------- my miniblog; http://economicpsychosis.blogspot.com/
2008-05-02 10:45:40
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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Mvo, there is no evidence that they're expanding anything. The "inflate to the moon" thesis is founded on there being additional assets that can be pledged as collateral behind those loans. Well, where are you going to find those assets? Remember, the test is that you have to replace the $10 trillion in wealth that's evaporating and then cover the $2.5-3 trillion in credit losses that it generates. We currently add $5 in debt to get $1 in GDP. This ratio was under 2:1 in 2000; it is rising exponentially as the debt coverage ratio is also rising exponentially. You cannot get away from the math that underlies all of this. It is simply not possible. The error the 2000 "its all over" callers made is that they didn't forsee being able to suck every homeowner in the nation into the vortex. Ok, that was a mistake. But now the vortex has taken its due, and to continue the charade you need a bigger asset base against which to do it again. There isn't one. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-05-02 10:49:26
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Jv Posts: 40 Incept: 2008-02-01
Columbus,Ohio
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This round of shorting I have been trading a bit angry so point is well taken in the ticker. With that said **** THE BULLS
2008-05-02 10:56:54
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Mvo Posts: 493 Incept: 2007-06-27
NYC
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Karl, I 100% agree with all you said in regards to impossibility to "restart" the credit and monetary base growth. My point is entirely different. All I am saying that 800-900B balance sheet can be expanded in order to throw in another 50, 100, or even 500B to swap junk for Ts. I am NOT saying that it will restart inflation and credit growth - not even near. What I am saying that Fed can go beyond the limits of a current balance sheet simply by expanding it via pushing more slosh until EFF/FFT reach zero, and I belive this is what they are doing right now. Just think about it - Fed increases the slosh (liability up) by buying back the Ts (assets up). Now, once they have more Ts on their balance sheet - they can swap them again, lower rates and repeat the cycle. Obviously, when they cannot lower FFT anymore - the game is up. Last modified:
2008-05-02 11:24:45 by mvo
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Ruffcut Posts: 2205 Incept: 2007-07-07 Mushagain
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Technicals only represent the tape. Fundamentals show the supposed true value and future earnings of a company. The larger variable is PERCEPTIONS. If the wallstreet forces can modify perceptions, they won the battle to fight and pump another day. Home buyers were recently convinced to "buy more house than you can afford" from "buy as much house as you can afford" They became trusting of the mortgage lenders and that the rally will continue. "Hurry, jump in before its too late!" There are always stocks that are not valued properly in all past markets. How did Yahoo sky rocket to $200, when they could not show a profit? Pure lunacy. Future earning power is only a prediction, and hopefully convincing enuff to influence PERCEPTIONS. ---------- Support locally, and **** off globally!
2008-05-02 12:11:57
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Crazybobk Posts: 60 Incept: 2008-03-19 New York
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Excellent ticker, KD. (Correction, I think: Piper Jaffray)
---------- Gee, you think Ben was sitting there with his finger up his ******* twiddling his prostate while all this **** was going on? -- KD
2008-05-02 12:36:27
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Petercc Posts: 2 Incept: 2007-11-14
Seattle
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Thanks Karl, Great summary of recent market history. It helped me undeerstand better where we are. I really appreciate this forum even though I don't have much to add.
2008-05-02 13:14:05
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Blackswan Posts: 3601 Incept: 2007-11-06
Ponzi Roller Coaster Online
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There was job growth in real estate. BTW, I also have a date with Megan Fox tonight. Booyah.
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2008-05-02 14:33:19 by blackswan
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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Updated. Bond market dislocation warning sign just started flashing. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-05-02 14:31:43
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Ukvipersden Posts: 1241 Incept: 2007-12-01
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Superb stuff KD! ...and I do believe the BofE also said this week that the worst of the credit crunch was over - or words to that effect: unbelievable :)
2008-05-02 14:44:54
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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Ticker updated now that we know who the liar was on the TAF change. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-05-02 14:45:49
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Ukvipersden Posts: 1241 Incept: 2007-12-01
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^just read the update:  It looks like bernanke got what he wanted 
2008-05-02 14:59:48
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Eternalblue Posts: 4230 Incept: 2007-08-09
sokali
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damn for real they are taking CC and auto debt now? this is a shame i am not a primary dealer, I would collect used toilet paper, mark it $100 a square and ask for face value. ---------- my miniblog; http://economicpsychosis.blogspot.com/
2008-05-02 15:12:01
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Tz Posts: 465 Incept: 2007-09-18
Southfield, MI but in Owatonna, MN for a while
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From Argentina to Zimbabwe, countries with trashy credit ratings don't seem to have a problem inflating the currency. ---------- "I am become debt, destroyer of worlds"
2008-05-02 15:13:04
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Eternalblue Posts: 4230 Incept: 2007-08-09
sokali
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oh yeah, then i would use the fed's money to buy myself and short squeeze myself. ---------- my miniblog; http://economicpsychosis.blogspot.com/
2008-05-02 15:14:26
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Doctormad Posts: 1801 Incept: 2007-09-09
Ohio
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KD, Great ticker as always. I'm a little surprised by the muted reaction in CFC stock to the downgrade. Down only 9 cents right now. Apparently the significance of this hasn't been translated for the short bus riders, even on the very stock where the downgrade hit. I also don't think your analysis of the '01 market is flawed due to 9/11. The market was grinding down all summer long and had already rolled over a couple of weeks prior to 9/11 when the B2B stocks finally came unglued and big NDX stocks like CSCO and MSFT finally accepted that 30% longterm growth was a fanatasy. The terrorist attacks maybe accelerated the move, but the market was already heading down to new lows before the planes hit.
2008-05-02 15:38:34
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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That's what I said Doctor...... But if you don't like the 01 timeframe, look at 02! 
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-05-02 15:44:52
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