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| User Info | How You Totally Blow It As A Central Banker in forum [Ticker] | |||
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Genesis Posts: 71421 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
2008-03-25 16:35:24
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Matt Posts: 3820 Incept: 2007-06-26 
Bothell, WA
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Quote:Oh, and today I was polled by the University of Florida on consumer confidence and expectations. I gave it to them straight, long and hard. Awesome 
---------- "Market players should be buying things even though they are overvalued, Cramer advised. Although this may seem irresponsible, traditional market thinking is not going to get people anywhere right now."
2008-03-25 16:41:19
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Mtgspy Posts: 6121 Incept: 2007-10-27
Online
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You nail my sentiment exactly. How could the populace be continuously coerced to buy risk in this country even as previous REALIZED risk has not been paid off? This sort of management will lead to people taking more and more of their money out and just watch the market from afar, not encourage investments. ---------- It sounds antiquated, merchantilistic - until you figured out that I was hoarding for war.
2008-03-25 16:56:51
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Dvanderp71 Posts: 436 Incept: 2007-08-05 
Amsterdam
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Interesting, especially when keeping in mind that almost all other countries in the world are keeping rates steady or are raising them - Australia, EU, China, even Iceland as I understand it. Question is, where will that dollar carry trade money go? Back into Japan? China? BRIC? Other emerging markets? Europe? Probably everywhere where interest rates are higher, indeed. Last modified:
2008-03-25 17:04:20 by dvanderp71
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Genesis Posts: 71421 Incept: 2007-06-26
KD^2
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How about Iceland? 
---------- "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
2008-03-25 17:13:02
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Exorcism Posts: 301 Incept: 2007-11-30
Denver Area Online
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Once again thanx for the insight, I, like you, also am feeling the inclination to regurgitate.
---------- The fact that we live at the bottom of a deep gravity well, on the surface of a gas covered planet going around a nuclear fireball 90 million miles away and think this to be normal is obviously some indication of how skewed our perspective tends to be. -Douglas Adams
2008-03-25 17:29:05
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Marketpirate Posts: 788 Incept: 2007-11-30
New York
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KD how do I go about taking my U.S. dollars, and investing in Iceland? I heard their interests rates are arounf 15%. Keep up the good work by the way.
---------- Make love, not loans.
2008-03-25 17:45:52
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Meatpuddle Posts: 630 Incept: 2007-07-26
Madame Merriweather's Mudhut Malaysia
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The US carry trade is a disaster for a number of reasons but the easiest way to describe it is that all investment capital moves OUT of the ZIRP country to other places that have a better return. And because our manufacturing base has been hollowed out, and our "financial innovations" found to be nothing more than scams, there really isn't a good reason for capital to stay here any longer, other than the US having a giant military where we can bully people into dollar recycling. Speaking of which, I'm sure you guys noticed that the only dollar recycling that is going on any longer is from the petro-producing nations and NOT from the Asians anymore. Even the Arabs will tire of the endless games and won't want to continually throw good money after bad like they've been doing. I just want to reiterate that the end-game for these hucksters is dissolving the GSE's in a manufactured crises of epic proportions, ****ing over the Asian and Arab bagholders and cherry-picking the assets out of the GSE debt pile for mere pennies on the dollar (as Stockmonger mentioned.) Nothing I've seen recently makes me think anything different about the end-game plan. ---------- "the idea that you're "entitled" to a 5 or 6 percent 30 year mortgage is horse****, and so is the housing prices that it has created." - Genesis
2008-03-25 18:01:40
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Clarencebeeks Posts: 1929 Incept: 2008-01-11
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Marketpirate, this Icelandic bank even has a branch in your home town: http://www.landsbanki.is/english/
2008-03-25 18:04:07
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Shoobedoowa Posts: 1321 Incept: 2007-06-27
Western Canada
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I'll add a couple of key differences between Japan, when they became the carry trade funder of the world, and America. 1. Japan was a nation of savers, as opposed to the U.S., which is a nation of debtors. 2. Japan's population has been decreasing. Therefore, even with no GDP growth, GDP per capita continued to increase, ensuring no decline in living standards. The U.S. has a growing population.
2008-03-25 18:22:26
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Mtgspy Posts: 6121 Incept: 2007-10-27
Online
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Shoo, But the US has many black guys and mexicans. Et pluribus unum. 
---------- It sounds antiquated, merchantilistic - until you figured out that I was hoarding for war.
2008-03-25 18:57:21
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Mrholty Posts: 1015 Incept: 2007-07-27
Wisconsin
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I am continually amazed by J6P and the government's wish to keep everything the way it is damn the future. It is a truly scary and sobering sight.
2008-03-25 19:00:09
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Ksfq Posts: 1017 Incept: 2007-07-11
California
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I have a question. Is there any paper discussing and quanitifying negative effects of carry trade on Japanese economy in 90s?
2008-03-25 19:00:13
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Pensicostreet Posts: 719 Incept: 2007-06-26
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Great ticker Kd, I do have a question, if we became a carry trade country, wouldn't people sell our bonds(ie short the currency) receive the cash and invest it elsewhere, my question, wouldn't our interest rates go up because the bonds are shorted(sold down)? Forgive my naivete.
2008-03-25 19:00:30
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Slartibartfast Posts: 2454 Incept: 2007-12-04
San Francisco
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Mrholty: they are our downfall. What a lesson they are about to learn. ---------- Cthulhu R'yleh Goldman Sachs
2008-03-25 19:04:11
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Implosion Posts: 3210 Incept: 2008-03-20
99.9% of all crash calls are wrong!
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If the Fed's actions are going to continue to cause the dollar to plummet, then where is the safest place to park our cash to preserve our purchasing power? Are currency ETFs safe, or is there too much counterparty risk? One thing that stinks about investing in foreign currencies, is that currency gain is taxable as ordinary income. If I understand this correctly, the same government that can cause the dollar to fall in value can then tax your "gain" on the foreign currency which was really due to the government's bad monetary policy. ---------- "You better believe in the PPT! If you haven't by now, you will." - Chummin It's a Global Economic Meltdown (Music Video): http://www.youtube.com/watch?v=mzXTxAOQE....
2008-03-25 19:15:24
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Darknight Posts: 3293 Incept: 2007-08-10
The Wicked Forrest
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The U.S. currency also weakened against the Australian and New Zealand dollars, favorite targets of so-called carry trades, as a rally in European and Asian stocks encouraged investors to buy higher-yielding assets. http://www.bloomberg.com/apps/news?pid=n.... ---------- The price of apathy towards public affairs is to be ruled by evil men. - Plato
2008-03-25 23:00:19
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Bubbalicious Posts: 118 Incept: 2007-12-15
Columbus, OH
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someone else posted this on another thread today. i tried to find who it was, but couldn't so sorry to whoever it was. this guy, Heinrich Leopold, called the reverse of the carry trade a year a half ago. what he describes will happen sounds pretty accurate to me. he presents it from a more global POV. http://www.gold-eagle.com/editorials_05/....
2008-03-25 23:40:11
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Thisthatother47 Posts: 287 Incept: 2007-09-15
St Paul, MN
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You are on a roll with the tickers this week - great job! ---------- So I washed it down in gasoline And dried it with a match - ike reilly
2008-03-25 23:40:33
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Wisdom-seeker Posts: 546 Incept: 2008-02-25
California / Bay Area
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Not to worry, there's a well-documented lag of about 6 months between e.g. the European rates and the U.S. rates. Assuming that this is in truth a deflation scenario (which I also believe), then the looming collapse of the speculative commodities and oil bubbles will eliminate most of the inflationary pressure being seen by the non-U.S. central banks. Which will give them leeway to lower rates. Also, the flood of treasury supply the past two days suggests that the Fed + Treasury want to firm up a floor under the short end of the yield curve. I also suspect that much of the recent huge bid in short-term treasuries is tied into the deleveraging and quarter-end financial maneuvering/posturing, and may therefore go poof next week. Bottom line: the current U.S. / Overseas rate differentials won't last, so the carry trade worry should pass. [ Now, does my green star show up? I did a donation _and_ the impeachment petition... ] ---------- Find me via http://investorscooperating.blogspot.com..... I no longer post on TF (reasons: http://www.tickerforum.org/cgi-ticker/ak....). Don't abuse the creditors (foreign or not) because of our own (nation's) debt problems! We must pay off the thermonuclear bonds!
2008-03-26 01:17:19
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Yazooflesh Posts: 2428 Incept: 2007-08-02
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Agree with This that and the other...excellent! Your ticker is becoming most succinct day by day. Precarious times have a strange way of focusing the mind of genius!
2008-03-26 06:35:35
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Marsrising Posts: 204 Incept: 2008-01-10
USA
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"Oh, and today I was polled by the University of Florida on consumer confidence and expectations. I gave it to them straight, long and hard." So, did they finally cum to their senses? ---------- If the .gov gets desperate enough to take our IRA's or tax our ROTH's then we've gone down the rabbit hole. We'll, at that point, be doomed!
2008-03-26 09:34:48
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Ukvipersden Posts: 1241 Incept: 2007-12-01
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Excellent ticker: one of your best IMO :)
2008-03-26 14:06:52
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Zelonewolf Posts: 718 Incept: 2007-07-05
Newport, RI
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Genesis wrote..Oh, and today I was polled by the University of Florida on consumer confidence and expectations. I gave it to them straight, long and hard. My first thought when I read that was that a TF'er must have prank-called Karl. ---------- Three Laws of Thermodynamics: 1. There's no such thing as a free lunch 2. There's no such thing as a lunch worth what you paid for it 3. Everyone needs to eat lunch
2008-03-26 15:00:13
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Bradmwalker Posts: 228 Incept: 2008-01-20
Idaho
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Did Japan have a huge demographics shift in their "lost decade"? If not, the Boomers retiring (or attempting to retire) will be another negative factor that will make the US worse off than Japan.
2008-03-26 17:52:37
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