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Genesis Posts: 71433 Incept: 2007-06-26 
KD^2 
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http://market-ticker.org/archives/1357-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
2009-08-21 08:31:12
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Mscreant Posts: 79 Incept: 2009-02-22 State of Anomie
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I wonder if the government needs the banking/financial industry to go along with so many "stories" in order to keep things afloat and prevent chaos/revolution, that the trade off is that they are letting them, in exchange, plunder everything. In other words is the government in fact bribing the financials to keep quiet and do dishonest things so that the facade stays up.
2009-08-21 08:38:27
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Amgrace Posts: 1304 Incept: 2008-02-15 
New Castle, PA 16101
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Hmmm - FWIW - Asian bond volume was highest of '09 last night. From AcrossTheCurve: Busy Bond Buyers August 21st, 2009 8:36 am I may end up doing some cutting and pasting. Here is an email from a dealer (unnamed) which describes the very heavy trading volume in Asia last night: FYI- today was the biggest volume day of 2009 for USTs in Asia time (defined as before 3pm in Tokyo, which is 7am in London). I am referring to the on-screen trading of cash Treasuries. Biggest players were basis/futures accounts, an unusual occurrence in Asia. BrokerTec at 3pm had traded 3.4 bn Treasuries. For reference, a ‘normal’ day in 2009 has been 1.0 - 1.5 bn by 3pm. In July, during the CIT-possible-bailout situation, there were a couple days of ~2.5 bn. The last time there were at 3.4 bn was in mid-2008, before liquidity began to consolidate to NY time ---------- "In an informal survey at a recent meeting of 150 or so institutions, those admitting to feeling nervous about underexposure to risk outnumbered those feeling too aggressive by a neat 10 to 1! This also suggests how a speculative rally can keep going longer than reasonable investors expect." - Jeremy Grantham 07/2009
2009-08-21 08:46:54
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Pojo Posts: 34 Incept: 2009-08-05
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maybe there is a deep rift on "their side" and maybe, for agurments sake, Obama and Geither are opposed to Bernanke and Paulson. Maybe they keep trying to "allow" things to fail, but BB and P keep doing different **** to muck it up, and they artificially "rescue" the economy for 2 days. Maybe obama WILL prosecute when some major meltdown happens. He'll say "we never knew what BB and P [and Goldman et al] were doing. Now it is clear they are responsible and must be punished." maybe obama is just waiting for the right time to attack? I mean why attack now when you dont have a way to save the situation? why not let it fail and then come in on the white horse? again, i just dont believe that everyone on "the other side" is walking hand in hand on this. Obama is an outsider to the banking thugs
2009-08-21 08:47:26
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Tritumi Posts: 84 Incept: 2008-11-29 tokyo
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Would it be fair to consider the US$ itself the final bubble? As all asset classes are destroyed those of us in cash have been punished for prudence. Given the FED policy, what odds of taking away the punchbowl? Can Benanke turn on a dime? As KD has demonstrated over and over, there is a limit to the turbulence the market will accept. You can scam others into catching falling knives for a while. But when those falling knives become chainsaws... The internet rumors of a fall bank holiday will feast on this data point. Japanese elections underway now.
2009-08-21 08:49:57
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Pojo Posts: 34 Incept: 2009-08-05
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should i buy rubles? pesos? if the dollar gets destroyed, where to go next?
2009-08-21 08:52:00
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Alex Posts: 1649 Incept: 2007-08-03
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It's debtor nations vs creditor nations.
2009-08-21 08:56:39
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Andrew123 Posts: 107 Incept: 2009-07-05 California
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I ma having a harder and harder time believing Bernanke will change course. Maybe today will be the day, but I increasingly doubt it and view my short postions as foolish. As long as the dollar doesn't have a crash, the ower the dollar gets, the less risk of further loss and the more inclined foreigners will be to buy dollar debt. Bernanke hasn't shown any concern about inflation, in fact he welcomes it, as long as it manifests itself in higher prices for asset (which he in fact welcomes) as opposed to higher prices for goods and services. Teh writing is on the wall: have an orderly decline in the value of the dollar, boost asset prices, and deal with higher oil prices later. If bernanke does something to overtly kill the stock market rally, he does not get reappointed and gets blamed for everything. As long as the stock market stays elevated, he gets cheered and commended on what a great job he is doing. Gen, your thesis is that Bernanke will recognize the risk he is running and pull the plug, but he has said at every occasion that the risk is pulling easy money out too soon. He maybe wrong, but that is his mindset, and the idea that he will see the light seems to be without basis (unless you or someone else can point to one piece of evidence that he is worried enough about a currency collapse to pull the rug out from under the stock market). I really hope that I am wrong, but it seems like wishful thinking.
2009-08-21 09:04:47
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Genesis Posts: 71433 Incept: 2007-06-26
KD^2
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You're welcome to believe that Bernanke can control the FX market if you want. History says that neither he or any other central banker can. ---------- "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
2009-08-21 09:09:30
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Drhooves Posts: 181 Incept: 2008-01-09
Central IL
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Bernanke will continue down the same road, short of a bond or equities market crash, until he learns the hard way, as Gen points out, that it is the market, and not the FED, that's in control.... $10/gallon gas, anyone? ---------- "Hyperinflation? Show me the math!" -- Gen Last modified:
2009-08-21 09:20:47 by drhooves
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Spigot Posts: 109 Incept: 2009-03-02 
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Pretty much too late at this point. Prepare for significant 'disorderly'.
2009-08-21 09:11:34
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Stemmit Posts: 2035 Incept: 2007-09-07
NYS
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Quote:It's debtor nations vs creditor nations Yes, producer nations vs consumer nations. ---------- The path of the righteous man is beset on all sides by the inequities of the selfish and the tyranny of evil men. Blessed is he who in the name of charity and goodwill shepherds the weak through the valley of darkness, for he is truly his brother's keeper and the finder of lost children. And I will execute great v
2009-08-21 09:13:42
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Kidhorn Posts: 88 Incept: 2009-08-11 Rockville, MD
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I agree with Andrew123. Bernanke is hell bent on pouring money into the system no matter what. He knows the only way out is to deflate away private sector debt. I don't see China stopping massive debt purchases either. They print money and exchange it for printed USD. This doesn't sound like much of a currency risk to me. Both the US and China are better off continuing the current system then letting if fail and start a new one. The problem is how to get the money to the debtors. There's no way to do this that would be acceptable to the people with power and/or money, so the next best thing is to directly pay back the lenders. That's what I think the plan is. The gov't in various forms is going to buy up the bad debt with money printed and borrowed from Asia. The general populace goes broke, but the banking system remains in place so things don't completely collapse.
2009-08-21 09:15:41
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Wisc-xc Posts: 4828 Incept: 2007-07-14
outside chicago
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I said yesterday that given geopolitical reality BB is more or less a lone ranger on the world stage. This Ticker only reinforces that thesis. There is no honor among crooked debt merchants, especially globally. When push comes to shove it's every country for itself. Good luck Ben. You're going to need lots of it.
2009-08-21 09:17:25
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Patm15 Posts: 156 Incept: 2009-02-23
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http://financialsense.com/fsu/editorials.... Maybe PD's, Asian market rushing into treasuries because they believe these charts. Disclaimer: Not an interpreter of charts. Well a novice at best.
2009-08-21 09:17:55
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Spigot Posts: 109 Incept: 2009-03-02
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I suppose post WWII the USA could dictate terms but since the 1960's that leverage has been severely undermined. Yes, we account for 25% of the world's GDP but we've destroyed our credibility/stewardship. We are a significant net debtor. Our total outstanding dollar denominated debt is north of $50 trillion, over 400% of GDP. Pretty much we are a hollowed out shell. The world can go on without us, as it already is doing. My only problem is how to ride through the transition and be in a relatively safe position when the flood waters recede.
2009-08-21 09:25:07
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Alex Posts: 1649 Incept: 2007-08-03
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The UK debt is £800bn and they have printed £175bn. So why hasn't the pound sold off a lot more?
2009-08-21 09:25:57
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Yaldor Posts: 1430 Incept: 2008-05-17
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Karl, I agree with you - with every word. But how can they do it ? This would mean admitting they are wrong and this would mean bringing on a GD 2.0. Two things they can not do. They may get GD 2.0 at the end but this would be 2-3 maybe 4-5 maybe 7-8 years down the line. all they need to do now is buy more time and they look like genius. It worked for Bush/Greenspan at least for few years. ---------- For every crash the probability of someone showing that he predicted it is near 1 . For every prediction of an imminent crash the probability of it being correct is almost zero
2009-08-21 09:26:05
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Widgeon Posts: 6529 Incept: 2007-08-30
OK Online
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Hey, we had the housing ATM that was sufficient to provide 5 years of breathing space. The question has been what could be next "assett" be that could borrowed against? Here it is ... our Children. Parents can take on debt secured by the future labors of their children ... Labor Anticipation Loans for everyone.
2009-08-21 09:31:20
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Newstar00799 Posts: 152 Incept: 2009-07-23
Canada
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Thanks Gen. You answered my Q's on a worst case outcome on securities and the dollar. In a case like below, I wonder if counterparties will reneg on Put Options. "If we do not withdraw the extraordinary actions and that revulsion breaks through we could easily see a technically-driven disorderly collapse in the dollar's value along with mass-selling of dollar-denominated securities." ---------- Bear Markets begin when optimism is high AND some policy/geopolitical, political road block develops that undermines economic confidence.
2009-08-21 09:32:09
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Themortgagedude Posts: 3930 Incept: 2007-12-17
saint louis
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Gen - the level where interest rates reach their equilibrium dooms you too. This ship has sailed. Put a fork in us. All your recommendations do my friend is speed up the default. And if so - so be it. I'm ready to start over I think. Just doing the math tells me we can't support our debt load at market rates of say 7% treasuries. Now if they would do all the right things we might have a chance, but that is not politically feasible.
---------- "These are interesting times. We don't trust the government, we don't trust the legal system, we don't trust the media, and we don't trust each other! We've undermined all authority, and with it, the basis for replacing it! It's like a six-year-old's dream come true!"
2009-08-21 09:36:21
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Daveincsa Posts: 133 Incept: 2009-01-25 In the South
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I can only image the 'It's Bush and the Republicans fault for bankrupting the Country' mantra by the Democrats and their allies in State Media. All the while taking or accepting ZERO responsibility for it themselves. Don't get me wrong, the Republicans deserve just as much blame as the Democrats do for the situation we find ourselves in. As I think about it the blame game has potential to be very ugly even violent.
2009-08-21 09:37:25
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Genesis Posts: 71433 Incept: 2007-06-26
KD^2
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The future is going to be..... interesting....
---------- "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
2009-08-21 09:37:51
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Lordhumongous Posts: 1973 Incept: 2008-09-29
USA
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Quote:The question has been what could be next "assett" be that could borrowed against? That would be the Social Security grifting operation and Treasury debt in general. ---------- Freedom. Is there anything it can't do?
2009-08-21 09:41:01
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Ndmaster Posts: 3 Incept: 2009-06-11
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Karl- does this mean you are reviseing your 2009 prediction for USD? From your beginning of the year predictions-"The Dollar will not collapse. This is not because we're in great shape or will truly recover, it is because the rest of the world is in worse shape than we are. Last year pundits were all calling for the dollar to collapse to 40 - it didn't happen. Now they're calling the dollar's strength a "Bear market rally." Nonsense; the simple truth is that while we're in bad shape the rest of the world is literally on the precipice of a full-on collapse. European banks are more-levered and less-transparent than our banks as just one example." Or, has quantitative easing changed your mind?
2009-08-21 09:51:15
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