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| User Info | Oh Boy, Threats! in forum [Ticker] | ||||
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Genesis Posts: 71435 Incept: 2007-06-26 
KD^2 
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http://market-ticker.org/archives/1559-O....
---------- "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
2009-10-30 12:03:24
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Ironman09 Posts: 1513 Incept: 2007-08-08 La La Land Online
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BAC APR 45%...FYI. Not paying interest but they jacked the rates..
---------- NOTHING WILL HAPPEN. NOTHING WILL CHANGE. LIFE WILL GO ON. BE POSITIVE. ENJOY TODAY. DONT WORRY ABOUT TOMORROW. PARTY ON.
2009-10-30 12:30:56
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Kuhio Posts: 206 Incept: 2008-12-31
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Karl, I don't think we really want to know what's on the Fed's balance sheet. If it was ever revealed, we could truly get a Mad Max situation going. One thing that is saving our bacon right now is that the Chinese haven't fully decoupled from the US economy, nor have they completely diversified away from the $USD. How do we know? Why, if they had covered themselves short, then all they would have to let slip to the world is that they haven't bought a single T in 2009. The implication? Ben has been printing the ENTIRE allotment ($trillions) all along (just as I suspect). That would have the same exact effect as opening the Fed's books - perhaps more so since imaginations tend to run wild during hysterias. Then, while the US is in an uproar & markets are crashing to literally -0-, China moves on Taiwan and executes whatever other strategic plays they've been planning all along. What are we gonna do? Beat our pud? Game, set & match. We've got the most uniquely unqualified president sitting at the helm of a country whose economy has been completely captured by a criminal gang. We have no idea of the peril we face. OT: @Leicestersq, if you believe the '08 crash was precipitated by a sudden, irrational pricing dislocation, then there is simply no reason to debate/discuss the issue. This is, in fact, what happened in '29, as all other factors in the overall economy were sound. The prescription was to increase liquidity, just as JP Morgan did in '07. I guess that is why they were called "panics". However, as Karl and countless others have demonstrated time and time again, asset values were greatly overstated, and had been for years beforehand. The sudden 'dislocation' wasn't an aberration, it was finally a real mark-to-market. If you can't accept that, then you're wasting your time here. There are plenty of other forums where people start under the assumption that the Fed is a force of good and discuss policy prescriptions on how best to engineer economic growth. Last modified:
2009-10-30 12:53:21 by kuhio
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Mayorquimby Posts: 5868 Incept: 2008-09-18 
Ponzi Planet
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Debt default and reset need not = Mad Max.
---------- It's a PONZI ECONOMY and it already HAS collapsed. Now they need more ponzi!
2009-10-30 12:49:03
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Realist Posts: 95 Incept: 2009-07-14 Pennsylvania
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Excellent commentary. I just noticed another trend in the data. Look at the GDP data. Notice how its decreasing with time? ------------------------------------------------- A trillion here, a trillion there and pretty soon you're talking about real money ************************************* Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist. - Kenneth Boulding, economist
2009-10-30 12:58:28
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Geoff Posts: 1547 Incept: 2007-08-18
NYC Online
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Karl: Maybe change "in fact of the fact" to "in light of the fact", in the "Bernanke ran his "Depression Avoidance Playbook"" paragraph. ---------- C'est nous qu'on ose méditer de rendre à l'antique esclavage! Or something like that. Last modified:
2009-10-30 13:01:23 by geoff
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Kuhio Posts: 206 Incept: 2008-12-31
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@Mayor - Go back and read Karl's ticker. If the stock indices came anywhere near the lows he mentioned, we would indeed have Mad Max. After all, isn't the threat of just such a crash how Paulson blackmailed Congress? I seem to recall something about "martial law" if the banks were allowed to fail. There has got to be a reason why each and everyone of our so-called political "leaders" is willfully breaking the law. Why don't they follow Karl's advice? Because GDP would contract by 25-35%, that's why. That means all savings & pensions would be valued at -0-, and all levels of gov't from federal, state, county, city & districts would be BK. Oh yes, Mad Max in every sense & meaning of the phrase.
2009-10-30 13:01:19
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Newbtrader Posts: 3261 Incept: 2007-08-24
Bubbleville, VA
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Is it just me or is the claim that the Fed is "independent" a complete ****ing joke? It's quasi-independent imo, because the Fed chairman is appointed by the President! If it was truly independent, the chairman would be selected by the other folks in the Fed. So, the claim that they're "independent" is a complete joke imo. Greenspin said many times how the President "influences" their decisions.. What BS.
---------- "So try and figure this **** out. Catholic men and jewish women, no hats. Catholic women and jewish men, hats. Somebody's got the whole thing totally ****ing backwards." -George Carlin
2009-10-30 13:03:23
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Xanares Posts: 1288 Incept: 2008-11-10 
London
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They are a joke because they don't follow the law; they don't even ignore it they break it too and congress does nothing about it. If they want to keep their socalled independence they have to shape the **** up and clear the bs out.
2009-10-30 13:08:34
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Karlmarxghost Posts: 2641 Incept: 2009-01-26
Stealing Your Property
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Change his last name from Hoenig to Muhammad and change his occupation from FED head to sheep herder and you would have yourself a terrorist. I mean lets face it threatening to blow up the economy is just as bad if not much worse as threatening to blow up buildings....
---------- My views are my view and mine alone. Karl or ticker forum does not endorse or necessarily agree with my views. DO not trade on my views or take them personally.
2009-10-30 13:10:30
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Lowbeyond Posts: 6905 Incept: 2008-02-11
CO Online
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People in government especially politicians think that they are smarter then everyone else, only they can save you. 1/2 the country believes that the state can solve everything for free so we have a large percentage of politicians in power that believe the same. As for asset values, PE of ~140 is not sustainable. Either you value them at their approx real Value, or we can simply try and blow more bubbles to inflate them again. That seems what they are trying to do now. Seems like you like it too. It wasn't Mad Max in the Depression. All that is is fear mongering, nothing more. ---------- Maybe it was a birdy bread-bomber from the future?!
2009-10-30 13:15:18
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Curbyourrisk Posts: 1891 Incept: 2008-08-19 Long Island, New York
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VIX is up 25%! Someone.....somewhere.....knows something We losing a swap line this weekend witht he FED? ---------- Hopium: hope filled delirium preached by the White House and Swallowed whole by the American Sheeple. Why is Franklin Raines a free man? "We saved the world from disaster" - Ben Bernanke - Jackson Hole 08/21/2009 
2009-10-30 13:41:42
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Kuhio Posts: 206 Incept: 2008-12-31
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@Lowbeyond - "It wasn't Mad Max in the Depression." You guys really crack me up. Smart enough to read (and I assume follow) Karl's analyses, yet hopelessly failing in basic historical knowledge. 1929: % dependent on gov't transfer payments (welfare, food stamps, unemployment AND gov't jobs): 0-2% 2009: 49-51% 1929: farm % workforce: 20% (ie those able to provide subsistence survival) 2009: 2-3% 1929: SS, Medicare and other unfunded obligations: 0 2009: 30% of budget 1929: US, Mideast, Mexico, Venezuela, Nigerian & N Sea oil fields reserves: 90-100% 2009: depleted to who knows what levels? 1929: global defense requirements: nil 2009: 30% of budget 1929: interest on national debt: nil 2009: monstrous & growing If you don't get it, you don't get it. I can't help you out. There's a reason why the PTB have broken every law in the book. We are hopelessly wed to a Ponzi finance economy where new money chases old money to keep the squirrels running on the wheel. How many times does Karl have to flash his graphs? How many times must it be repeated that the math doesn't lie? Do you know we have enemies and rivals spanning the globe just waiting for a misstep? Yeah, fear mongering, nothing more. Last modified:
2009-10-30 13:45:00 by kuhio
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Dashingdwl Posts: 4564 Incept: 2007-06-26
los angeles
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Yeah bitches.... What Kuhio said. ---------- Think Green Tip.
2009-10-30 13:47:45
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Karlmarxghost Posts: 2641 Incept: 2009-01-26
Stealing Your Property
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Kuhio +1
---------- My views are my view and mine alone. Karl or ticker forum does not endorse or necessarily agree with my views. DO not trade on my views or take them personally.
2009-10-30 14:00:14
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Mtdm Posts: 106 Incept: 2009-07-23
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Ironman -- imputed interest rates based on minimum charges and fees is hardly the same thing as an actual rate of 45%. Your rate is pretty good at 8%.
2009-10-30 14:05:08
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Reza30 Posts: 233 Incept: 2009-02-15
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Quote:U.S. stocks, bonds and the dollar would collapse if investors perceive Congress violating the independence of the policy-setting Federal Open Market Committee, said Former Fed Governor Laurence Meyer, now vice chairman of Macroeconomic Advisers LLC. The hypocrisy is amazing. Just look at the dollar index. In fact, the dollar has lost 90% of its value since the Federal reserve took control of the dollar. 
2009-10-30 14:06:50
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Karlmarxghost Posts: 2641 Incept: 2009-01-26
Stealing Your Property
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I like your halloween pic better Reza :)
---------- My views are my view and mine alone. Karl or ticker forum does not endorse or necessarily agree with my views. DO not trade on my views or take them personally.
2009-10-30 14:08:24
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Mayorquimby Posts: 5868 Incept: 2008-09-18
Ponzi Planet
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Kuhio- I didn't say it would be great. I said it wouldn't NECESSARILY be Mad Max. I understand everything you posted. I understand people today are MUCH more reliant upon .gov and modern technology. My point is that .gov COULD handle things in such a way that the collapse would be more orderly and the "suck factor", while high, would not mean going back into the stone age. THAT is my hope. I'm not saying they won't screw it up royally. I'm saying they have it within their power to keep everyone fed and somewhat comfortable for a while until the rebuilding of a new economy begins. ---------- It's a PONZI ECONOMY and it already HAS collapsed. Now they need more ponzi!
2009-10-30 14:09:43
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Lowbeyond Posts: 6905 Incept: 2008-02-11
CO Online
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Yes Kuhio that is nice. There was not much of a gov't trough to feed off of. But was it mad max in that time ? That seems to be your premise. You seem to accept and be happy with the fact that we always must have ponzi finance else there will be mad max. We pay the piper now or worse later. You don't seem to want the price paid now. So is it later or never ? Or is it pay the price 1 second after you personally are dead ? ---------- Maybe it was a birdy bread-bomber from the future?!
2009-10-30 14:13:13
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Jhonab Posts: 215 Incept: 2009-03-24
Denmark
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Mayor - I suspect that QE, TARP, Talf et al, FED buying 1.25 Trillion of MBS, the Obama stimulus, the cash for clunkers, the housing bribe etc. IS the governemnts (and the independent FED's!) idea of preventing or at least holding back the crash or staging it in an 'orderly' fashion. But - I've just re-read the 'THE MARGINAL PRODUCTIVITY OF DEBT - Why Obama’s Stimulus Package Is Doomed to Failure' by Antal Fekete http://www.professorfekete.com/articles/.... in which he claims (with references to a certain mr. Denninger) that stimulus as well as monetary measures like QE has the opposite effect than the intended - that is, expanding credit into a crash will not hold deflation (debt liquidation) back, it will accelerate the crash because new debt only adds to the contraction, as a dollar spent (new credit) returns less than a dollar: "The marginal productivity of debt, once it is negative, any further addition of new debt will make the economy shrink more, increasing unemployment and squeezing prices. Bernanke can create all the money he wants and more, but he cannot make it flow uphill." He claims that the marginal productivity of debt turned negative in 2006 - that for each new dollar of credit poured in the economy, less than a dollar was actually the outcome - but his arguments are not that clear and he doesn't back his claim by data. Fed St Louis has a graph of the M1 money multiplier showing a free fall from autumn '08, that is now stalled - but it's still above zero. You could argue that QE and the alphabet soup, the TARP, the buying of MBS by the FED et cetera has stalled the deflationary crash (prevented thus far the value of one dollar in new credit to return less than a dollar in outcome). Am I correct in reading a chart of the M1 money multiplier as a chart from which the marginal productivity of debt can be inferred? And is it a fair assumption to think that the independent FED and free US government combined can hold the crash at bay as long as the marginal productivity of debt does not go below zero? If I'm off topic, please send me a nice death threat. Last modified:
2009-10-30 14:19:28 by jhonab
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Genesis Posts: 71435 Incept: 2007-06-26
KD^2
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Whether the marginal productivity has gone negative is an element of dispute, and difficult to know with certainty. Fakete is correct IF that has happened, but showing that to be a fact is difficult. ---------- "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
2009-10-30 14:21:50
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Jhonab Posts: 215 Incept: 2009-03-24
Denmark
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Karl, thanks for your reply. I've just found a newer version of the Fekete paper in which he expands on the problems associated with calculating the marginal productivity of debt - from july this year - and for others interested in this line of thinking, here it is: http://professorfekete.com/articles%5CAE....
2009-10-30 14:39:26
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Mayorquimby Posts: 5868 Incept: 2008-09-18
Ponzi Planet
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Quote:Mayor - I respectfully disagree 100%. All that BS is to keep the prior system functioning as before. What I'm talking about is what Gen mentioned- setting aside a few hundred billion to FEED people. Setting up a shadow infrastructure in case the dollar implodes. That kind of thing. But when I think about Katrina et al, my hopes are not very high. ---------- It's a PONZI ECONOMY and it already HAS collapsed. Now they need more ponzi!
2009-10-30 14:41:11
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Jhonab Posts: 215 Incept: 2009-03-24
Denmark
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Mayor - you would never ever have a western government saying: 'Folks, we've made such a mess of things that we have decided to buy a mountain of canned beans and some tents for you all, just in case'. If any government did this, social order would immediately dissolve. Same reason why a bank never says 'Well, look, you better come around to collet your money, cause we might be broke come next week'. In both cases the statements would become self fulfilling prophecies the minute they came to be known by the public. But of course the denial is part of the problem, as Karl has written about on numeorus occasions.
2009-10-30 14:51:01
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