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| User Info | The Idiocy of Bernanke's Bubbles and CNBS in forum [Ticker] | |||
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Genesis Posts: 71421 Incept: 2007-06-26 
KD^2 
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http://market-ticker.org/archives/692-Th....
---------- "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
2008-12-17 08:57:58
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Emdeplam Posts: 1418 Incept: 2008-01-10 
USA/Germany
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Great job Gen, you are gifted in the way you can take these complex issues and boil them down into 'simple talk'. Thanks.
---------- http://www.alizee-forum.com/gallery/
2008-12-17 09:09:52
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Supercleanfund Posts: 1204 Incept: 2007-11-12
The Island City, CA
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Amazing ticker.... going out to everyone I know.
---------- - * - * - * - * - * - Never underestimate the power of wishful thinking.
2008-12-17 09:15:40
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Tienkou Posts: 3158 Incept: 2007-09-09 
Connecticut Online
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Karl, I'm afraid that it is already too late. We have two outcomes from this. 1) Be forever a slave to gov debt, we will never pay down the principle. We haven't in the last 60 years. 2) Repudiate the debt and start over. Both are extremely painful and will cause massive dislocations in our economy. But only the second option gives us any hope of remaining a free people. ---------- Barack Hussein Obama - The last President of the First American Revolution. The US Congress has abdicated its role as a governing body. The most dangerous man is the one with nothing left to lose. Our government is making more of them everyday.
2008-12-17 09:16:04
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Mo Posts: 5501 Incept: 2007-06-26
Florida
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Wouldn't buying out half the mortgages for $7T also have halved the CDS losses? ---------- "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."
2008-12-17 09:27:07
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Genesis Posts: 71421 Incept: 2007-06-26
KD^2
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Mo - actually, more than that, because it would have essentially stopped all the defaults. If your equity is positive and you can't pay you can sell the house; there is no loss to take at the bank. ---------- "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
2008-12-17 09:28:10
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Basscatcher Posts: 15 Incept: 2008-02-01 st joseph missouri
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does the "other player" hold 77?
2008-12-17 09:31:01
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Mo Posts: 5501 Incept: 2007-06-26
Florida
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Then why not do it? Write down the principle to an affordable level and eat the losses - maybe $4T. I'll tell you why. Because then it's game over for the Fed, the banks and the government. No one takes money seriously anymore. Everyone knows its a con, a racket. I can't tell you the number of people who have said things in a discussion of the economy like 'they told us we couldn't afford national health insurance' after seeing the amount of money thrown at the banks. People don't believe anymore. And belief is necessary so people pay their debts, vote, etc. ---------- "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."
2008-12-17 09:31:42
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Genesis Posts: 71421 Incept: 2007-06-26
KD^2
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Yep. The problem is that we can't afford this either. ---------- "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
2008-12-17 09:32:58
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Mo Posts: 5501 Incept: 2007-06-26
Florida
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What they were trying to prevent was people seeing the BIG CON. But they see it anyway. The jig is up. Not sure if someone from the Fed realizes it, as they don't talk to Joe Sixpack or Joe 201K. Not sure if politicians realize it yet either. The system HAS TO be blown up now that no one takes it seriously. ---------- "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."
2008-12-17 09:37:43
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Architect Posts: 780 Incept: 2007-07-11
london UK
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KD Any idea when the bond market rolls over?It's been predicted for months both here and on other sites. Clearly anyone holding treasuries will be totally screwed at that point. The brits are worried at2%...
2008-12-17 09:39:40
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Ravenly Posts: 332 Incept: 2007-08-19
Ohio
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Wow. Just, WOW! This is by the far the best ticker I have read yet. I read it twice and will probably read it again to let it all sink in. Thanks again, Gen. I don't know what I would do without this place.
2008-12-17 09:40:09
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Emdeplam Posts: 1418 Incept: 2008-01-10
USA/Germany
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Gen- you have long recommended T's to protect conservative investors and I believe hold a large amount Given recent actions what guidance would you give the ultra conservative investor? Still T's in his/her name? World Gov bond funds? FDIC? Hedges? Sorry, I hate to ask such a direct question, but your advice before I passed along, and helped a lot of people with the 'return of capital' thing... it seems to me the risk of the reserve currency is rising but (I am not a gold fan) the alternatives are not very evident as well ---------- http://www.alizee-forum.com/gallery/
2008-12-17 09:40:46
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Genesis Posts: 71421 Incept: 2007-06-26
KD^2
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Short-term Ts, if they fail to return principal, will mean the end of government and you may as well own guns. My view on that has not changed. People going out the curve are not looking for safety. They are front-running Bernanke and going for capital gains, and like all bubbles driven by this sort of "animal spirits" trade it will end VERY badly. Everyone keeps asking the "when" question as this cycling happens. Its the wrong question unless you are trying to game it yourself and then I come back to my usual advice - playing parabolic blowoffs is ****ing stupid and you deserve what you get if you do it. The problem with this one is the consequence of the bubble when it pops. The instantaneous destruction of the government's ability to deficit spend is the most serious threat we face to economic stability, the threat is real, and unless Bernanke is corralled NOW it WILL happen. ---------- "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 Last modified:
2008-12-17 09:45:55 by genesis
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Eternalblue Posts: 4230 Incept: 2007-08-09
sokali
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quick note, according to yahoo data, the tnx has not been anywhere this low in 50 years
---------- my miniblog; http://economicpsychosis.blogspot.com/
2008-12-17 09:44:10
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Sboady Posts: 50 Incept: 2008-03-02
Cape Horn
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Gen, the TOS thumbnails are loading very very slowly again -- at least for me. Just noting, it may be eating the server.
---------- ‘We Have to Go Spend Money to Keep From Going Bankrupt’ Vice President Joe Biden.
2008-12-17 09:51:46
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Architect Posts: 780 Incept: 2007-07-11
london UK
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They will pay back the existing short term... print money to do it. What happens when no one, except the Fed wants to take the long term? .. Declining currency, no return = no wish to purchase.The same idea could occur to future short term purchasers. Then what?
2008-12-17 09:52:03
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Genesis Posts: 71421 Incept: 2007-06-26
KD^2
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The problem isn't whether the principal is safe (it is) Its the coupon requirement. As Bernanke is forced to take up more of the supply the DX declines in direct proportion which forces more of the Ts out of private hands. This is an exponential function and will force the political decision to be taken - either the government and currency dies or The Fed gets put in a box and shackled. Bernanke is going to create a currency crisis. In fact, he's doing a damn good job setting it up right now; the speed of the DX's collapse the last few days is entirely of his making and this will combine with the treasury market to nail him. It is simply a question of what causes the first guy to smell smoke and head for the door. ---------- "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 Last modified:
2008-12-17 09:58:50 by genesis
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Eternalblue Posts: 4230 Incept: 2007-08-09
sokali
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also once the treasuries sell off, i gotta wonder how FDIC will work at all, if any more big banks collapse, there will not be any more free money to prop them or the deposits up with. ---------- my miniblog; http://economicpsychosis.blogspot.com/
2008-12-17 09:56:50
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Statusquojoe Posts: 2397 Incept: 2008-11-20
Land of the fees Home of the slaves.
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Thanks Karl, the tickers keep getting better I hope people are starting to take these issues seriously, although you seem to be in a very small minority of individuals who understand the problem and are calling for transparency. The Bloomberg FOI request has been suppressed by the MSM only the alternative sites are reporting on the issue. Perhaps the next "bullet, arrow, bazooka" in Ben's arsenal is a lock down on the internet, maybe that is the big issue the new administration will face come Jan 20th?
---------- "In short, you are the definition of moral hazard." Senator Bunning to Bernanke
2008-12-17 10:00:24
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Genesis Posts: 71421 Incept: 2007-06-26
KD^2
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Oh please. Keep the moonbat **** out of here.
---------- "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
2008-12-17 10:00:54
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Statusquojoe Posts: 2397 Incept: 2008-11-20
Land of the fees Home of the slaves.
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OK my apologies.
---------- "In short, you are the definition of moral hazard." Senator Bunning to Bernanke
2008-12-17 10:08:11
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Architect Posts: 780 Incept: 2007-07-11
london UK
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Have I got this right? The Fed prints to buy the T bills (initially the long bond, then increasingly the short bonds);this both drops the dollar and reduces the yield.. so no private individuals, organisations or CBs buy Treasuries, so the Fed has to keep printing in order to keep buying. Is the only way to stop this is to stop the .gov issuing or to stop the Fed buying ...or both?.
2008-12-17 10:08:23
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Supercleanfund Posts: 1204 Incept: 2007-11-12
The Island City, CA
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KD, I have some folks outside the TF reading this ticker.... and I get the question: If Karl is right, where should I put my money? I do not know what to tell them.
---------- - * - * - * - * - * - Never underestimate the power of wishful thinking.
2008-12-17 10:16:00
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Rickysa Posts: 293 Incept: 2007-08-22
Southern Pines, NC Online
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Help. I'm 45 and self employed. My wife and I work together and have contributed the max amount into our ret. fund (growth mutual) since I started work 17 yrs ago. All I understand about investment is compounded interest...bonds? treasuries? no clue We don't have work debt or debt other than mortgages on properties (2) purchased in the early 90's at 5% 30yr fixed. We have not lost any of what we contributed to our retirement, just the gains accrued. I trust Karl's track record and reasoning although I don't understand all of the particulars. We have positioned ourselves in a manner should the SHTF society-wise we will be able to care for ourselves. What should we do with our nestegg? Rick Last modified:
2008-12-17 11:07:59 by rickysa
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