Fiscal Cat 5 Hurricane Warning [Ticker]

Detailed market commentary at The Market Ticker and Ticker Classics (The Year 2009 In Review)
Seeing huge swings in your account value? On margin? Read my "Come to Jesus" Ticker? If not, please do. Click here.
BlogTalkRadio - Mondays at 3:30 Central - Yes, TickerGuy has a radio show (kinda)
See The Federationists on their new web site and forum.
Donate to obtain GOLD ACCESS for enhanced privileges. Interested in T-Shirts, caps and coffee mugs? Click here.

RSS available

MarketTicker Forums Read Message in Ticker

User: Not logged on

Showing Page 1 of 4

First

Last

User Info

Fiscal Cat 5 Hurricane Warning in forum [Ticker]

Genesis
Posts: 71432
Incept: 2007-06-26

KD^2

http://market-ticker.org/archives/622-Fi....

----------
"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

2008-10-22 08:12:52
Permalink

Architect
Posts: 780
Incept: 2007-07-11

london UK

Depression and the collapse of currency value at the same time?

2008-10-22 08:22:18
Permalink

Sloonie
Posts: 496
Incept: 2008-04-16

waaaaay up North

spell alert
Those in the media who are chucking at the folks stockpiling beans and rice
should be chuckling.

Another great one, and thank you, KD.

Last modified: 2008-10-22 08:26:02 by sloonie

2008-10-22 08:24:58
Permalink

Emdeplam
Posts: 1419
Incept: 2008-01-10

USA/Germany

Awesome...very clearly stated for the rest of us!

Gen, if we see dislocation in T's, does that change your thoughts on a 'safe-haven?' ...would the Yen or Japanese bonds be better versus US or German bonds or bank deposits?

----------
http://www.alizee-forum.com/gallery/

2008-10-22 08:26:31
Permalink

Tesla
Posts: 8179
Incept: 2008-04-03

Delaware

Quote:

We may be literally days away from a second, far more serious credit and equity market dislocation, this time originating outside the United States.

Can you elaborate on this ? Is it defaulting countries like Ieland, Hungary, etc, or something else ?

----------
"Neither the wisest Constitution nor the wisest laws will secure the liberty and happiness of a people whose manners are universally corrupt." Samuel Adams

I'd rather die on my feet than live on my knees. - Emiliano Zapata

2008-10-22 08:28:54
Permalink

Genesis
Posts: 71432
Incept: 2007-06-26

KD^2

No Emd, this second round will not originate here. It is going to originate either in Asia or Europe, and everyone will get smashed.

Europe and Asia are both insanely vulnerable, with Europe being in SERIOUS trouble due to their irrational and in fact criminal leverage ratios in their banking systems.

----------
"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

2008-10-22 08:30:11
Permalink

Txteamtech
Posts: 83
Incept: 2008-02-15

Karl, all I can say is: God I hope you are wrong.

2008-10-22 08:41:29
Permalink

Fortune
Posts: 1455
Incept: 2008-04-21
A deep dark place...scary

So considering what I have been hearing from Obama and McCain, I find it doubtful that we're about to cut spending by 50%. Slight understatement. Having said that, then what? A Tsunami of dollars to flood the world attempting to bail out the dollar short squeeze as this is making every dollar denominating debt increasingly more expensive, especially for large debtor nations. From the ashes, does the Phoenix, a new monetary system take flight?

----------
It's a toss up.
It is the Rule of Law that transforms assets into money: Martin Armstrong
Math IS: Karl Denninger

2008-10-22 08:46:33
Permalink

Ludanjack
Posts: 1343
Incept: 2007-07-29

Ft. Lauderdale

I'm scared...really.

----------
"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

2008-10-22 08:49:25
Permalink

Krisb
Posts: 163
Incept: 2008-05-04

Vancouver BC. Canada

Karl, Is it possible that authorities are manipulating credit markets to instill confidence?

2008-10-22 08:56:25
Permalink

Casperghost
Posts: 329
Incept: 2008-02-20

Gerat ticker. The entire way through it I was thinking to myself "but they will never do it". You summed up those thoughts perfectly in the closing sentence.

Heaven help us for they have destroyed us all.

2008-10-22 09:00:01
Permalink

Pacifltd
Posts: 100
Incept: 2007-07-24

Miami FL

KD, I have screamed at all our reps till I am blue in the face that mal-investment in insolvent institutions is a waste of our precious capital and that new banks with gov seed money would be a much better alternative..........5-10 new, clean banks would be a confidence booster and kickstart private sector lending renewal as opposed to the crowding out of the private sector and other unintended consequences that have occured from all of the failed rescue/bailout attempts....I think once a couple more lashings are dished out by the credit or equity market that some important ears might be better able to listen....I pray that there is still time & thanks to you for your efforts.

2008-10-22 09:23:05
Permalink

Thoreau
Posts: 399
Incept: 2007-08-30

Online

so the big question is...will they default or will they print?

2008-10-22 09:44:10
Permalink

Dvanderp71
Posts: 436
Incept: 2007-08-05

Amsterdam
Online

"We may be literally days away from a second, far more serious credit and equity market dislocation, this time originating outside the United States."

This got me spooked, Karl. As in, terrified. I feel unprepared!

2008-10-22 09:47:04
Permalink

Weezie
Posts: 3601
Incept: 2008-05-19

Obama's personal message to the American people...

Ok, and I apologize for riding the short bus this morning, but this type of stuff is completely different from what I've ever perceived, so it might take me a couple of times through to get my head around it. (I'm not good at paradigm shifts.)

Would short term treasuries (ie. VMPXX) still be ok, or is everything just going behind the shed at once - dollar, ST & LT treasuries, foreign currencies, foreign bonds, gold, silver... everything except for literally food, water and medicine and a roof over your head (although allow deflation on that roof)?

----------
----------------------------
Do not write below this line.

2008-10-22 09:53:48
Permalink

Dvanderp71
Posts: 436
Incept: 2007-08-05

Amsterdam
Online

It looks like the currency markets are choosing Europe as the next victim, considering the dramatic fall in the Euro.

I am long yen. Fortunately.

2008-10-22 10:12:13
Permalink

Mo
Posts: 5502
Incept: 2007-06-26

Florida

Thoreau, they both end in the same place: default.

Printing might delay it, but just for a short time.

----------
"The World has been cancelled. It doesn't even look like the world. There is one island that is maintained and is said to be owned by the Sheikh and the rest looks like a pile of muck."

2008-10-22 10:14:01
Permalink

Bluebird
Posts: 524
Incept: 2008-05-02

Weezie, I have the very same concerns that everything gone at the same time, except for the extra canned goods.

2008-10-22 10:18:44
Permalink

R2judge
Posts: 302
Incept: 2008-04-13

Burbank CA

With requirements of 3 trillion, it sounds like a parabolic blowoff.

Also, i was just looking at the daily VIX and it scares me that it looks to me as if it is consolidating, rather than declining. If my impression is correct, it seems to me that the VIX is going to jump far higher than 81.

2008-10-22 10:48:07
Permalink

Cutemloose
Posts: 307
Incept: 2008-02-12

Southern England

If the equity market colapses, will there be a flight into treasuries.. is this how they will create the missing demand for the gov bonds they will issue?

Only thing that could go wrong is that the bond market crashes before the equity market.

----------
Disclosure: I am of the Austrian school, of Rothbardian persuasion. I believe in minimal government. Spent 5 years and possibly $1million to see if business can be run on this basis (leaderless). Good news for me is that it can, and profitably, bad news is that it only works with responsible people.

2008-10-22 10:58:35
Permalink

Genesis
Posts: 71432
Incept: 2007-06-26

KD^2

No Cutem, the equity market collapses first, then everything collapses at once even further.

This is what happened in the 1930s and they are on track to do exactly the same thing again.

----------
"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

2008-10-22 11:00:00
Permalink

Rtfg
Posts: 1917
Incept: 2007-06-26

Bazookaville
Online

Great Ticker again, I have several hundred Dec/Jan TLt puts I've been scaling into that have been dunked under water after these last couple of days. Gen, ya think that's enough time?

2008-10-22 11:06:04
Permalink

Fletchjr
Posts: 860
Incept: 2007-07-26

Minnesota
Online

KD, you recommend that we prepare for this dislocation.

Aside from stocking up on basic essentials and being debt-free, what is one to do with financial holdings? I can't tell if FRNs are going to be priceless or worthless, or both, depending on timing. Would other currencies be of value?

Maybe it not possible to predict what to do because TPTB may respond in unpredictable ways.

2008-10-22 11:11:24
Permalink

Ludwigvonmises
Posts: 273
Incept: 2008-10-10

Michigan

I remember Prechter saying a few years ago that .gov could declare a 'national emergency' ala FDR and raid everyone's 401k's/IRA's for 'the good of the country.' The money they take would be replaced with US Treasury Bonds. I used to think this was Tinfoil but now I'm not so sure. What do you think of this possibility Karl?

----------

Quote:

"That which MUST end, WILL end somehow".

Quote:

"At some point Washington is going to have to bite the bullet and force the pig through the python - that is, we must force the debt out of the system." Gen 02/01/10

2008-10-22 11:15:25
Permalink

Mo
Posts: 5502
Incept: 2007-06-26

Florida

Quote:

Now sure, The Fed can start printing money like mad and buy all these Ts, making their balance sheet expand like a balloon - or a bubble. And Bernanke, yesterday in his testimony, claimed that this didn't constitute "printing money" or "inflating the money supply."

He may be technically correct but in practice he's lying through his teeth, and unfortunately Congress is both too uninformed to call him on it and lacks the balls to stop him (which they can do through the threat of, if not actual, legislation.)

His production of money in exchange for Treasuries is nothing more than a sham sterilization action. He thinks this will go unnoticed by the markets, because he's swapping a dollar for an "illiquid" asset.

They'll sell some of the T's.

But most of them will go the route you just outlined, in my opinion.

Sort of like the Level III assets of the banks.

----------
"The World has been cancelled. It doesn't even look like the world. There is one island that is maintained and is said to be owned by the Sheikh and the rest looks like a pile of muck."

2008-10-22 11:15:58
Permalink

Showing Page 1 of 4

First

Last