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| User Info | Oh Oh - Monetary Flat Spin in forum [Ticker] | |||
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Genesis Posts: 71432 Incept: 2007-06-26 
KD^2 
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http://market-ticker.org/archives/703-Uh....
---------- "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
2008-12-30 09:32:02
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Zenthunder Posts: 4684 Incept: 2007-10-11 
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Quote:
been there - sucks. Good ticker.
2008-12-30 09:42:28
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Lemonaid Posts: 4782 Incept: 2008-01-20 
Detroit Metro
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Thanks for making a ticker on this.
---------- "There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." Ludwig von Mises
2008-12-30 09:55:48
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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No prob.... That graph is not (yet) proof that we have crossed the event horizon, but it is a definite warning that we're headed for it.
---------- "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
2008-12-30 09:58:26
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Digitalcolony Posts: 335 Incept: 2007-07-09
Seattle
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I learned something about M1, scuba diving and flying a plane this morning. All before breakfast. Great tight writing.
2008-12-30 10:00:25
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Curbyourrisk Posts: 1891 Incept: 2008-08-19 Long Island, New York
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Keep the ECO-PORN coming. I am completely addicted to this. My name is Curb......and I am an addict. ---------- 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 
2008-12-30 10:11:28
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Mattryan00 Posts: 11 Incept: 2008-09-06
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Karl - a fan of the ticker, but I love the concrete, rooted-in-fact tickers like these all the more. Keep up the good work and love the imagery of Helicopter Ben in a flat spin. Would you mind detailing the mechanics of how velocity can go negative, or at the very least < 1 ? In this case, it it just that the market participants fail to circulate the printed dollars into the system, and in the case of negative velocity, not only hoard the printed dollars but pull back existing credit lines along with it? Thanks in advance!
2008-12-30 10:13:54
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Dude59 Posts: 770 Incept: 2007-11-08
Waiting for forclosure in Las Vegas
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My name is dude, and I am an addict also. Thanks for the drug that gives a clear mind and vision, also called the truth.
---------- The Green shoots are Gangrene.
2008-12-30 10:21:21
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Gmak Posts: 10176 Incept: 2007-07-27
Re-inventing the future at the speed of time.
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I think that when you combine this with 1. Rising unemployment = drop in aggregate income 2. Declining debt = excess income not going to savings but to reduce debt (along with the expected defaults and write-offs) it is probably safe to say that the inflation argument can be put to bed for the time being.  Once Obama creates his 3 mm jobs, though.....  
2008-12-30 10:23:38
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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Quote:Would you mind detailing the mechanics of how velocity can go negative, or at the very least < 1 ? In this case, it it just that the market participants fail to circulate the printed dollars into the system, and in the case of negative velocity, not only hoard the printed dollars but pull back existing credit lines along with it? Thanks in advance! Exactly. Bernanke is printing but instead of circulating the money is being hoarded at a rate that exceeds his printing. He has established a negative feedback loop and if he doesn't figure it out and stop what is causing it the loop will tighten - at some point the "event horizon" is crossed and the cycle feeds on itself without further outside input (by him.) At that point we're ****ed. ---------- "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
2008-12-30 10:24:19
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Captbill Posts: 485 Incept: 2008-07-22
Arizona's West Coast
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KD: Great analogy--the pilot and the diver. You make an excellent point--the panic/instinct. I knew that about SCUBA diving and I knew that about flying (fly allot on simulator). However--when you're in the "real deal" even though you have been taught the RIGHT thing--the PANIC could make you forget because of --as you said--instinct. Very good!!! Can't wait for the 2009 Predictions
2008-12-30 10:27:12
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Phirang Posts: 8824 Incept: 2008-10-25
bar khoba's revenge
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I disagree that we'll have a deflationary death spiral: Bernanke has yet to launch the 'copters.
---------- The Treasury can issue debt on your behalf because the State can and will stomp the wealth out of you and your family.
2008-12-30 10:28:38
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Samadams Posts: 358 Incept: 2008-12-03
San Antonio, TX
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My name is Sam, and I am an econ-addict (hey, folks, an "eco" addict is one of the global warming crowd - let's get our terms straight). I didn't get to see the 2008 predictions when they came out (didn't know this site existed back then), and I'm fully intending to miss out on part of the celebrations to read it (my Crackberry helps). Great ticker, though alarming (like most economic/financial news these days). I don't personally think that Bernanke has the character to admit to himself that he's been wrong, let alone to the rest of the world, let alone be able to take the pressure of Congress and the press screaming at him as 20% or more of the economy goes into the ****ter. Time will tell, of course, and time will also tell whether that realization and the actions which accompany it will be helpful or be too little, too late. Karl, thanks VERY much for everything you've done for your readers. I have made back some of what I've lost over the last year or so, and expect to make back more as things turn down. It goes against my grain to short the market (or particular sectors), mainly because I tend to be an optimistic person regarding progress of all types, but it serves a legitimate function (esp. for my finances) and is not inherently immoral. Keep up the good work.
2008-12-30 10:35:46
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Phirang Posts: 8824 Incept: 2008-10-25
bar khoba's revenge
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To be a primary dealer means you must open your books to the Fed. The Fed has ALL the data in the world. They know EVERYTHING. For anyone to believe B'nanke didn't see this coming is naive. This is jawboning to keep the proles shocked while the US hashes out a new trade and banking paradigm with China, one where China is totally ****ed. 
---------- The Treasury can issue debt on your behalf because the State can and will stomp the wealth out of you and your family.
2008-12-30 10:38:49
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Arcone Posts: 2094 Incept: 2008-02-09
NYCville
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Diving without a buddy (and their secondary reg) is like taking a smoke break on the ledge of a high rise in a windy city. Unfortunately, this problem is a contagion that seems to be developing into an every man for himself situation. The USAs global buddies were happy to participate during the good times but are so entrenched in their own problems to render them utterly useless. No wonder the gun range I went to recently was jam packed. Buckle up is right. Last modified:
2008-12-30 10:43:41 by arcone
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Mrnome201 Posts: 598 Incept: 2007-07-24
NJ
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"M1's multiplier going below 1 strongly implies (but does not yet prove) that we have reached that "zero hour"." I'm a math guy and the M1 multiplier below one simply says that the money created via the increase in actual reserves is not (yet) increasing velocity (increases in demand deposits). The only way, in my view, that a multiplier below 1 strongly implies that we have reached "zero hour" is if the banks know this to be true and that's why they are not lending b/c more debt will further undermine the ability to service it. The "zero hour" approaches much quicker if the increase in debt is for consumption instead of for increasing output/production/productivity. ---------- "Listen you ****ers you screwheads, here's a man who would not take it anymore, a man who stood up against the scum, the ****s, the dogs, the filth, the ****" - Taxi Driver
2008-12-30 10:43:51
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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Quote:The "zero hour" approaches much quicker if the increase in debt is for consumption instead of for increasing output/production/productivity. Right. Now what has all of that debt increase been for (stated and targeted) thus far? Oops. ---------- "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
2008-12-30 10:45:18
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Creditcalmass Posts: 1145 Incept: 2008-06-04 4 train, NY
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Quote:I disagree that we'll have a deflationary death spiral: Bernanke has yet to launch the 'copters. Explain please.
2008-12-30 11:00:25
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Lemonaid Posts: 4782 Incept: 2008-01-20
Detroit Metro
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Wait... I thought HELOCing all your equity from your home for vacations, a boat, a flat screen TV, and a granite counter top was a productive allocation of debt. /sarcasm ---------- "There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." Ludwig von Mises
2008-12-30 11:00:40
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Halfbrite Posts: 555 Incept: 2008-10-13
Arizona via California
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Nice ticker - you have a gift for explaining highly complicated issues in a way that I can understand. Within the last 30 days I had the opportunity to chat w/2 friends in the banking industry. Both are 30ish, 1 works for a hedge fund in NY, the other in wealth management for BofA in Boston. HF guy said the entire problem is a few deadbeats didn't pay their mortgages - that caused the whole issue was a small problem that had already been fixed. BofA guy said they're advising the dow will be up 10% in 2009 and the whole problem was bad people not paying their mortgages. He admitted SOME bankers MAY have made bad loans, but said BofA took the TARP money, but didn't need it - if the govt was giving away free money, they of course would use it to benefit their shareholders. Of course the government could and would fix the problem. I know this is anecdotal, but both individuals had NO CLUE that a serious problem exists! They are both smart, knowledgeable and informed, but had not put the big picture together like Genesis does in his tickers. If people in the industry don't even recognize a problem in the above chart, what's the chances they will fix it? ---------- "The Second Amendment is in place in case they ignore the others" "Go Galt,and Go Now!"
2008-12-30 11:05:32
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Phirang Posts: 8824 Incept: 2008-10-25
bar khoba's revenge
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This is like saying the US was shocked by high oil prices in the 70's. HELLO!!! We created that crisis: it was part of the effort to dollarize oil. We also created this crisis, too. ---------- The Treasury can issue debt on your behalf because the State can and will stomp the wealth out of you and your family.
2008-12-30 11:07:58
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Jazumah Posts: 143 Incept: 2008-08-20 New York Online
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http://finance.yahoo.com/banking-budgeti.... CNBC is slowing beginning to quake in their boots. Isn't that the sign of "zero hour" too? I'm not so quick to predict an Iranian Revolution, but this current conflagration in the Middle East could be the "economic stimulus" that some people are looking for. That should make all nervous.
2008-12-30 11:10:16
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Alsace Posts: 937 Incept: 2008-10-27
Bear says: Come Get Some!
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Phirang wrote..I disagree that we'll have a deflationary death spiral: Bernanke has yet to launch the 'copters. That statement implies that printing can stop this spiral. I hope you aren't bringing up inflation again.  Ben's helicopters won't help this...did you even read the ticker? If he tries that....really tries that...we WILL reach that event horizon. ---------- Via ova capitum dura est.
2008-12-30 11:12:05
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Petersmom Posts: 475 Incept: 2007-08-24
Online
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Great, evocative Ticker. Now can KD or anybody explain why the Fed encouraged dollar hoarding by paying interest on reserves, then weeks later nuked its own policy by going ZIRP?
2008-12-30 11:13:39
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Phirang Posts: 8824 Incept: 2008-10-25
bar khoba's revenge
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Eurodollar market was collapsing at the time.
---------- The Treasury can issue debt on your behalf because the State can and will stomp the wealth out of you and your family.
2008-12-30 11:14:34
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