(ht/ZH)
Chinese Selloff Intensifies As Traders Expect Imminent Rate Hike Following China State Council Comments
EXCERPT:
"the Shanghai Composite has dropped 3% in early trading following a statement by the China State Council which on Monday said it will revise penalties to crack down on price violations to tackle inflation, which has been interpreted by traders as an imminent December rate hike"
Translation: Rate Hikes? What? Can't the Chinese figure out a way to make Kung Pao Catfood?
So I guess were about to test Mr. Ritholtz's RESILIENT MARKETS theory (as expressed here)...
WARNING LABEL - I'm just doing due diligence here by posting the link... But I strongly suggest you AVOID reading the BARF-O-RAMA of a comment section on that thread... Last Night, when the thread came out, Frank Gore (of the San Francisco 49ers) was having a great game until someone read him a few comments from Ritzy and his plebes, and Gore promptly fractured his hip!
Anyway, the bottom line is that we have another Shanghai Surprise going here... While it may mean NOTHING in the
Shanghai Surprise (quite possibly, the WORST MOVIE EVER)
Release date: August 29, 1986
Writer: John Kohn, Robert Bentley
Awards won: Razzie Award for Worst Actress (Madonna)
Director: Jim Goddard
Starring: Sean Penn, Madonna
Shanghai Surprise (according to Urban Dictionary)
"Going home with a casual sex buddy only to find that she/he is not the gender you had once believed"
Translation: Do you REALLY require a translation on that one?
My last link was going to be to an article that basically had the title "Federal Employees OUTRAGED at pay freeze announced by Obama"...
Yes... that gets filed in the YGBFKM department...
Anyway... I lost the link (so hopefilly I'll find it again)... In looking for it, I came across this comment on some blog...
"It's bad all around, but I really get tired of federal employees being kicked upside the head whether things are good or bad. This constant us/them stuff get's really old.
You'd be surprised at how many feds have multiple degrees who are not working in their chosen fields either and are not making the money that's supposed to come with those degrees..."
I shouldn't even editorialize that comment... I should just play it like an Alfred Hitchcock movie (who avoids filming blood & gore, and lets the suspense "terrorize" the minds of the audience... Hint: I bolded the key words in the reasoning of that genius... In America... people... if you smoke pot, go to keg parties, and get laid for 7 years, you're "entitled" to a fatty guaranteed wage in the public sector to compensate for the loss of private sector work which doesn't exist because the government and their banking friends have polluted that possibility for all eternity...
Am I close?
Uncanny - Add or subtract about 20 years... and voila!
Gore out for season and Bradshaw benched the same week
ReplyDeleteWTF man!
@wunsacon,
ReplyDeleteprevious thread.
there is no job security at large banks simply b/c they are apparently TBTF, do you know anyone that works at BAC, for example? How secure do they feel about their job? None of them are referring to their work situation as "stable employment", trust me.
If the music stopped a decade ago in software engineering what can the government do about it?
the more people adopt this mentality of "government jobs are the only stable jobs in town" then the closer we are to the end game, imo.
CV,
ReplyDeleteI did like one comment on the thread at BR's from "the pearl" regarding markets being rigged, it's the same comment I've made myself a long long time ago here "if markets are rigged, how come the people claiming as much aren't 'all-in'"
sadly the pearl reveals itself as a linear thinker in another post within the same thread, linear thinkers have small minds.
I have Bradshaw in another league- he still got some decent carries-
ReplyDeleteI put in Donald Brown instead with the news of Bradshaw- but should have stuck w/ him (but I won anyway)-
w/ Tolbert, Fred Jackson and Rivers- tough to lose-
as an aside- just wondering- since BR was brought up as a discussion point-
did anyone check Ritholtz's comment from a few days ago that he pared down his CD collection from 3000 to 2000-
wow! that's a lot of CD's
b22-
ReplyDeletere rigged market- BR accepts the idea of rigged markets w/ this response to a comment-
“You write of a rigged market like its something new . . .”
the way I see it- a market can be rigged (meaning- to the advantage of some versus others)-
just like a horse race can be rigged but it doesn't mean that a horse (any horse) can't come up lame
ahab,
ReplyDeleteI've made the same point that Barry has there countless times, markets aren't rigged, stacked against is more appropriate as is any business you compete against as an outsider, using the term rigged is nonsense.
Has the Fed had a certain advantage over all of us since they were founded? Of course they have.
Does that make them all knowing about the future and therefore the best traders....lol, don't we already know the answer to this?
If not, here's a phrase that might jog your memory
sub-prime is contained
. . .or "there is no housing bubble"
ReplyDelete@ben22 (8:45)
ReplyDelete""the pearl" regarding markets being rigged"
---
Well... apparently Ritzy is complicit in perpetuating the idea that the MARKETS ARE RESILIENT...
Since he's an "expert"... (and, since, of course, the MYTH is something that keeps him in Grey Poupon and Red Ferraris)...
Well, what else is he going to say?
He's Anthony Mozillo (without the tan)...
"the MYTH is something that keeps him in Grey Poupon and Red Ferraris"
ReplyDeleteand CD's as well apparently
ben22, I agree with you.
ReplyDelete@ahab (9:04)
ReplyDelete“You write of a rigged market like its something new . . .”
---
I hate to say this... But the "rigged" description (of ANY markets) in history can largely be traced to something that begins with a "z" and sounds like a mammal that supposedly supports the title "King of the Jungle"...
RIGGED only means "money lenders" apparently prosper, and victims allow themselves to be victims...
The truth is... That should be considered a fair exchange... The problem is, when it reaches the end game stages... There become VICTIMS who are actually collateral damage...
Ritzy's just there to skim profits off all the wreckage... Somebody else can decide whether one is morally bankrupt for doing so...
I find it interesting- BR's acceptance of the stock market w/ the big players having a 100% successful trading record (say what?- hello- what am I missing?)
ReplyDeletebut if it was a monopoly of any other stripe- BR would have much to say in opposition
Man I thought I had a lot of CD's but I'm not even close to 2,000, let alone 3,000, I think I'm around 1,000 or 1,100.
ReplyDeletethat is really a ton of discs, must have taken forever to get them all on the computer.
re: rigged
Barry is never going to agree that markets are rigged in the way people are normally stating it, that's not how I read his comments there. How could he, it would make his position null and void, useless, and I highly doubt he thinks that. I'm thinking that BR thinks he provides some value for his clients. If markets were truly rigged, analysis of any kind would be worthless.
anyone here attempted to count the DAX?
ReplyDeletemight be a completion to a large wave structure going on there, I don't have a count though.
I guess my point is- with BR's left leaning sympathies (not good/not bad- just saying)-
ReplyDeletehe would rail against a monopoly in another business that was setting price-
I see the Fed attempting that phenomena- who can deny that?
Well, the Fed has always had a monopoly over "money".
ReplyDeleteahab,
I think reality is that BR seems to be all over the map with his views and those views might also change depending on who is in office, I don't think anyone can categorize him at this point, I scratch my head over 78.6% of his statements anymore.
is today a replay of yesterday, the whole sell-off is over by 10 am?
ReplyDeletewe seem to be running out of time before another charge to the upside.
morning! CV, your post was too much! How you come up with these connections is beyond me..
ReplyDeletezerohedge, Chicago PMI production index comes at highest since April 2005. That's perfectly believable
ReplyDeleteYahooFinance, Unemployment extension unlikely; 2M jobless file for last checks http://yhoo.it/g7Xljr
I have to imagine that "who is Julian Assange" is on the minds of a lot of people these days.
ReplyDeleteThis bank leak should get a lot of play the next few weeks.
Happy Holidays!
On Tuesday 30th November 2010, @mrtopstep said:
ReplyDeleteus senate rejects proposal to ban congressional earmarks...politics as usual.
Some continued chatter about extending Bush tax cuts
scheduled 9:00 CT Consumer confidence survey 52.6
MORE CHATTER = You may want to read the #gold sight harveyorgan.blogspot.com he claims that comex may have an issue...he says they may not have enough physical for those wanting to take delivery.....I do not know about his reputation...keep in mind it is a gold website
alaidi, Consumer confidence 54.1 (exp 52) but prev revised down to 49.9 from 52.2. Highest since June
ReplyDeleteBloombergNow, BofA Mortgage Morass Deepens on Promissory Notes Issues http://ow.ly/3hu8R
ReplyDeleteso let's look at this poorly worded headline:
ReplyDeleteNeed for QE2 Seen in Electronics Manufacturing Services Pause
meaning- a slowdown in electronics manufacturing forced the hand of the Fed to embark on QE2-
"In the week before the Federal Reserve announced its $600 billion program to help spur the U.S. recovery, three makers of electronic equipment for companies such as Cisco Systems Inc. announced that demand for their products was weakening . . .Policy makers led by Chairman Ben S. Bernanke cited the deceleration in business spending on equipment and software when they announced Nov. 3 that the Fed would purchase Treasuries in a second round of quantitative easing"
so . . .the question is- what?
The Fed- what is their job again? My opinion- the full employment mandate needs to be rescinded as they can justify any action at any time for that reason alone
TLT went above 99 this morning. would have been nice to have traded some call options here when it went to the 94's. Missed that one.
ReplyDelete"My opinion- the full employment mandate needs to be rescinded as they can justify any action at any time for that reason alone"
ReplyDeleteExactly why this was one of the mandates!
http://www.fool.com/investing/general/2010/11/29/betting-on-bailouts.aspx
ReplyDeleteinteresting chart..
Fibonacciqueen, I would NEVER step in front of a freight train, but here is an area to WATCH in GOOG
ReplyDeletehttp://fb.me/KUTB4ved
I see EURUSD is probing new depths and gold moving into the penthouse suite. Yet the dollar is moving with gold.
ReplyDeleteyou basically had a minute or six to buy the lows this morning, bears aren't busting the 1173 and from a time perspective wave 4 is running out of it.
ReplyDeleteall have a good day
ReplyDeletemy fib markets on GOOG are different, I'm doing them C. Brown style and I'm not talking about Charlie.
ReplyDeletemarkers, that is.
ReplyDeletelook at GS chart on a daily..
ReplyDeleteJJC just popped 20 cents..
ReplyDeletekaren,
ReplyDeleteon that fool article.
I didn't really think I'd see the day when people were not just discussing but advising a "basket of big, bailout bank stocks" as a strategy.
UFB!
ben, i kno, right?!
ReplyDeleteit's all too much for me.. concentrating on copper to keep my sanity. oh, and then there is HYG.. (and JNK..) continuing to trend down.. hmm.
ben, it's POMO time! but you knew that : )
ReplyDeleteXRT making a comeback today.. XLF trend still down.
ReplyDeleteI love me some POMO
ReplyDeleteya heard
kevindepew
ReplyDeleteNarcissistic Personality Disorder to be eliminated from DSM-5
http://nyti.ms/hGxFxs
... because it's so rampant. Everyone has it.
Karen
ReplyDeleteXRT could still confirm the hanging man and HYG is completing the falling three method pattern.
AR, oh yes, i'm expecting that hanging man to die.. sorry it's not a bit more swift, however! HYG is our canary for now.. waiting for $copper to turn tail, too.
ReplyDeleteBTW how do you revise a survey?
ReplyDeleteAR! what a great point, LOL.
ReplyDeletegtotoy
ReplyDeletehttp://schrts.com/hYeng0 $COPPER - Watch this 317 support like a hawk, looks good today
he meant 371..
ReplyDeleteokay, wake me when we get to 1160..
ReplyDeleteon the meaningless consumer confidence #:
ReplyDeletehttp://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aub7HyHJjJAs
http://finance.yahoo.com/news/September-home-prices-fall-rb-2119682774.html?x=0
ReplyDeleteGLD and $copper making new highs on the day.. together : )
ReplyDeletereally wondering about the dollar here, it's given us overlap so now I'm not concerned we were impulsing down, while it also doesn't look impulsive up, objectively neither did the move that started last november and ended this June, but that was still a huge move and a great trade opp.
ReplyDeletecheck $tyx.. that is interesting!!
ReplyDeleteinteresting because it is the inverse of gld..
ReplyDeletechiming in on the "rigged" statements... maybe each separate item, ie... housing, banks, energy, corn fields, left-handed widgets, etc... are rigged which in turn affects how the "market[s]" reacts might be correct?
ReplyDelete...non-positivistic thinkers may disagree though
TheKirkReport
ReplyDeleteP&F pattern in the Dow is suggestive of a break to 10,500 (Jeff Cooper) http://bit.ly/gHTBrI
art cashin, spain could be the new lehman
ReplyDeletehttp://www.cnbc.com/id/40432551
1156 anyone? Then one last push to re-affirm the belief the FED is in control?
ReplyDelete"Do not fight the FED!"
Gotta run. Back in a few. Don't let the SPX take out the "number that shall not be named".
ReplyDeleteBack at the DEFAULT workstation...
ReplyDelete(CV had to make a midweek trip out to the farm to take care of some business)... Which brings me to this comment from yesterday...
karen said...
I have one more wheelbarrow full of sand to dump before dark and then, 'I will be back!'
November 29, 2010 7:49 PM
My dear... Wheelbarrow?... You ought to consider a utility grade FRONTLOADER for these tasks... A basic John Deere, or a BOBCAT would suffice...
But then again... when it comes to FRONTLOADING... There's always LB on hand to offer a hand with the same flexibility and maneuverability that a Bobcat has to offer...
"market[s]" reacts might be correct"
ReplyDeletemarkets don't change trends in a reaction to news, this has been illustrated countless times. Neither would markets "react" to manipulation. This is another way of describing a feedback loop, markets get rigged, markets react to rigging, then a new rigging is thought up and markets react again, over and over again forever....but f-loops don't exist in markets either because trends change and sometimes there is no news at all when they do which is referred to as a "technical move", though if you believe the Wizard and many others, they (f-loops) certainly do exist, it's the whole idea of QE.
Of course, there's reality and then there's textbook theory, hold the nautilus shell up to the golden spiral, they don't fit.
Completely confused on what positive thinking has to do with any of that though, it either is or is not, positivity has got nothing to do with it.
Oh... and also...
ReplyDeleteSILVER BITCHEZ!
you know what, now I get it, anon
ReplyDeletethe power of positive thinking makes anything possible!
going to watch Oprah re-runs now.
don't forget to believe in yourself
@anon
ReplyDeleteWhen my crop yields start to become RIGGED in a way that they all turn out like Jack in the Beanstalk plants...
Then wake me me up... Because I'll be SURE to have been asleep & dreaming...
anyone seen the new goldman sachs ads?
ReplyDelete@ben22
ReplyDeleteI have a NEW idea for a GS ad...
Stock price $157 and dropping...
Catchy huh?
JPM $37
ReplyDeleteI'm thinking they (&GS) must be short PHYSICAL SILVER for the Dec 10 delivery...
Blythe? wanna chime in?
So many "Masters" of the Universe...
ReplyDeleteSo small a universe!
So the question still remains in the "new economy"...
ReplyDeleteWhat will be the going rate for a "pole dance" from this woman...?
http://reduxpictures.com/wp-content/uploads/2010/01/BB_Bloomberg_Markets_Jan10_01.jpg
Trichet: We’re Screwed!
ReplyDeleteBy Jamie Coleman || November 30, 2010 at 17:37 GMT
Trichet: More than ever, we need a sense of direction. The situation will continue to be demanding for a period of time…
What more do you need to hear than the head of the central bank basically saying ‘we’re screwed”…?
CV,
ReplyDeleteshould have some sort of pool where we bet on which bank gets outed in wiki leaks early next year
I'm going with JPM and their magic mountain of derivatives, notional value some several multiples of US Annual GDP.
http://dealbreaker.com/2010/11/what-kind-of-dirt-does-wikileaks-julian-assange-have-on-a-big-us-bank/#disqus_thread
ReplyDelete@ben22
ReplyDeleteBased simply on the points you mentioned there, they'd be a high candidate...
I'd have my $$ on BAC (but basically because, in essence, they're just FNM, or FRE at this point... With Wells Fargo on their heels)...
The scariest phrase in the dictionary for JPM???
"I'll stand for delivery"...
@karen
ReplyDeleteSeems to me that Julian Assange is quickly becoming the Salman Rushdie of this generation...
is this EVER going to hit the fan???
ReplyDeleteNov. 30 (Bloomberg) -- Fannie Mae and Freddie Mac are facing growing resistance as they attempt to push failed home loans off their books and onto the balance sheets of banks including Bank of America Corp. and JPMorgan Chase & Co.
The two government-owned mortgage companies are enforcing contracts that require lenders to buy back loans that didn’t meet underwriting standards. At the end of September, the companies reported, banks hadn’t responded to $13 billion in buyback requests. A third of those were at least four months old and Freddie Mac has begun to assess penalties for the delays.
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aR0qtEY01Fpg
Surge In GLD December $145 Call Volume
ReplyDeletehttp://www.zerohedge.com/article/surge-gld-december-145-call-volume
---
Blythe Masters... inching closer to becoming a pole dancer by the minute...
CV, perhaps some of these images will be of use to you one day.
ReplyDeletehttp://kimjongillookingatthings.tumblr.com/
Well, BAC seems the obvious choice doesn't it, maybe too obvious, and is that a big deal, it would seem to me you ask most people about BAC and they'd say they were in trouble especially since just recently they got a lot of buzz over foreclosuregate,.... well, not everyone, there are a few prominent hedgies that have a little stake in there....
ReplyDeleteJPM would likely provide the biggest blow if it were them, for a lot of reasons, if you are going to make a big deal over the leak, it should be a big deal.
The thing though about it is that what is it going to show, that bank executives are corrupt?....is that news? it wouldn't even be news if they showed a big bank was insolvent, well not news to us anyway.
I could see the American people doing a collective
DUH
if that's what comes out of this is that they are "corrupt" and make bad choices
@karen
ReplyDeleteRead the exchange between you, me & ben (all really on separate tasks)... since (12:41)...
But all talking about the same thing...
Funny! :-)
"At the end of September, the companies reported, banks hadn’t responded to $13 billion in buyback requests"
ReplyDeleteis that line real funny to anyone else, $13 billion bill comes in the mill
oh honey, just throw that one on my desk, I'm going to put that off for a while, want to make sure we have cable for Christmas instead, love that Elf movie.
@karen
ReplyDeleteJeezy Peezy!
How many GENERALS does KJIl2 have anyway?
... but on that note... I'll bet Obama has more CZARS!
@ben22
ReplyDelete"The thing though about it is that what is it going to show, that bank executives are corrupt?....is that news? it wouldn't even be news if they showed a big bank was insolvent, well not news to us anyway"...
---
Well, perhaps the next BLOW will send "2&20" Ritzy into the same unemployment line as the mortgage bankers that he demonized only a few short years ago...
CV.. i had noted that, too! i was posting my comments prior to refreshing the thread.. so i was laughing with each "reply" being posted before I eve commented!
ReplyDelete@anon
ReplyDeleteThat "coal-fired" Volt description is CLASSIC!
Although CV hates having his own logic grouped together with the likes of Rush Limbaugh :-/
what just happened this last ten min ??
ReplyDeletekaren said...
ReplyDeletewhat just happened this last ten min ??
...Obamaman was on the tube talking tax cuts
take your pick Karen,
ReplyDeletesecret POMO
double secret POMO
PPT
gnomes from Zurich
robert prechter was on CNBC saying "all in short"
Obama said stocks were a buy
David Tepper saw some money on the ground
It was technical
@ben22
ReplyDeleteNope...Nope...Nope
Stocks rebounded in the past 10 minutes on...
...drumroll...
THE ECONOMY!
(Where's Bloomberg to offer CV a phat contract? - for my multiple degrees & the money that's supposed to come with those degrees)?
CV,
ReplyDeletego back to school already:
http://www.youtube.com/watch?v=NRpQNdlttDs&feature=related
...and speaking of Obama...
ReplyDeleteWhy can't he just "take his talents to South Beach" for the next two years and coach the Miami Heat?
Maybe he'll have better luck with "DREAM TEAM 2"
@ben22 (1:17)
ReplyDeleteLOL... Kayne West was "booed off the float" by the crowds at the Macy's Thanksgiving day parade...
http://finance.yahoo.com/news/WikiLeaks-says-it-was-under-apf-384035835.html?x=0
ReplyDeletethey must have all been college grads in the crowd CV, PhD's even.
ReplyDeleteIs Kanye West an idiot....Yes
Is he an idiot that makes good records....also Yes
New blog post: Pimco manager sees 10% euro drop http://www.forexlive.com/150305/all/pimco-manager-sees-10-euro-drop
ReplyDeletehttp://www.theglobeandmail.com/report-on-business/move-to-tiny-houses-thrives-in-us-slump/article1818919/
ReplyDeleteMove to tiny houses thrives in U.S. slump
...With my enormous fat head, I would never buy one of these.
The dollar short squeeze just isn't happening.
ReplyDeleteThe XRT candle is horrific.
Would $copper just give it up already?!
@ben22
ReplyDelete"Is Kanye West an idiot....Yes
Is he an idiot that makes good records....also Yes"
---
OK ben... I know you're a MATH afficianado... So CV is going to solve those two mathematical descriptions of KW, and come up with the common denominator (in both expressions) of "IDIOT"...
My mathematical reasoning skills are illustrated here...
http://www.vashtie.com/blog/wp-content/uploads/2010/05/slide_6997_93028_large.jpg
http://3.bp.blogspot.com/_jizoPL28qCY/Rogh9H7wluI/AAAAAAAAAVg/PFma_c2jHns/s1600-h/answers+trigonometry.jpg
@karen
ReplyDelete"New blog post: Pimco manager sees 10% euro drop http://www.forexlive.com/150305/all/pimco-manager-sees-10-euro-drop"
---
Or... one might say...
"Pimco Manager SAW 10% euro drop"
Tense is important here...
AAPL not looking to healthy today, posted yesterday 308 before 318?
ReplyDeleteyesterday bought 20 $280 Jan-11 puts($3.40), will see how that works out into next week.
the sentiment on the dollar has been so low, so extremely bearish, we might just see a long slow climb higher, it's going to take a lot for all that sentiment to be shaken out.
ReplyDeleteWe've gone months now where even the 30 day ma's on trade futures showed dollar bulls below 10%, we never even made a new low, but if you only saw sentiment and got to read headlines you'd have thought DX was in the low 60's, maybe worse.
@Amen
ReplyDelete...as we speak...
1-1-8-6...lol
CV,
ReplyDeletelol.
I think you pass, an A for certain if you believed in yourself while you did those problems.
@ben
ReplyDelete"the sentiment on the dollar has been so low, so extremely bearish, we might just see a long slow climb higher, it's going to take a lot for all that sentiment to be shaken out."
---
I might go along with that in THEORY...
But in PRACTICE... I doubt anything happens any longer than what it's going to take working through Portugal & Spain...
And think about this...
If one wants to say that Greece & Ireland have now become "templates"... How long does anyone really think the decision making process for the succession of other countries is going to take? (save for adding a few zeros to the end of the bailout numbers and/or moving the interest rates a couple of basis points here or there)...?
My point is... THINGS ARE SPEEDING UP... Whic means the dollar... IMO... might come right back under attack in a quicker time frame than people expect...
Especially when one starts to think that by way of FUNDING... When Portugal & Spain get added to the scrapheap, who do you think is going to end up footing that bill Robin Hood?
JM2cents
Remarkable is hardly the word on my tongue!
ReplyDeletehttp://www.fundmymutualfund.com/2010/11/remarkable.html
i swear there is going to be an epic short squeeze on the dollar.. just don't hold your breath!
ReplyDeletefurther.. as a safe haven.. the dollar is a lot cheaper than gold.. and more practical for europeans to hold.
ReplyDeleteCV,
ReplyDeleteAs long as deflation remains the primary threat, which it most certainly is today, then the dollar has the potential for substantial rally, regardless of any short term bailout events, the only thing that makes me so hesitant in being extremely long is the wave count isn't clear.
Not many markets that we can look back on can rival the conviction seen in the dollar or in the pm's right now, bull and bear respectively, doesn't mean that sentiment can't last, but it's extreme to say the least.
also, I think people are living in la-la land if they think we can go on and on just by slapping on 0's, that works until it doesn't, but it is certainly not the model, bailouts working.... that is based on public perception, which changes for endogenous reasons, and good luck modeling that.
"the dollar is a lot cheaper than gold..."
ReplyDeleteby the same logic...
"a cheap paper plate is a lot cheaper than wedgewood china"
as for PRACTICALITY?
Depends on how many times you need to use it and other things of that nature...
One may argue, then, that the cost of one wedgewood china plate, over time, is actually cheaper than a whole closet full of paper plates...
bac at low of day again.. with an h&s on ten min 2 day chart. just sayn'
ReplyDeleteLefty had a Wedgie when he was a child...often.
ReplyDelete@ben
ReplyDeleteDEFLATION = banks are toast
...that much we've learned
With that in mind... the riddle of "we can go on and on just by slapping on 0's, that works until it doesn't" will go on until the Fed is disbanded...
So if the Fed is disbanded... a new $$ system will have to come along to replace it... Kennedy tried that in 1963 and got assassinated for it...
If the Fed continues... "Goods" will continue to inflate...
just for fun: http://www.bespokeinvest.com/thinkbig/2010/11/30/2011-year-end-price-targets.html
ReplyDeletei love a good rumour! CGasparino
ReplyDeleteSources say Bank of America has no indication that they are target of Wikileaks
and BAC does have the chart of a terminally ill patient..
ReplyDeleteCV,
ReplyDeletec'mon man
in deflation SOME banks are toast, there are still many healthy banks in the US, they just aren't on every street corner, you don't know their names iow. One of the many reasons deflation is healthy.
I've grown really tired of this notion that deflation is death for all, like anything else there are people that will thrive and there are people that will fail regardless of the economic backdrop. Deflation won't be any different.
As for this "kennedy tried that in 1963"
trend extrapolation dude!
I promise you at some point in time the Fed WILL be disbanded and there will be a new money system, like anything else though, I have no idea when that will happen, but your statement is made in a way that makes it sound like it will or could never happen. I disagree, there is no central bank that's been around forever, nor will there be.
As for the notion that this "will go on", I think it's important to keep in mind that the bailouts thus far have been really small, Greece, Ireland....pfft, rounding errors. Tiny. Spain is something different, we haven't really gone down that road yet.
We'll see what happens when the names change to California and Illinois, it's not that easy.
I know people hate to hear this because it doesn't "make sense" to them but the dollar is going to be the best thing going domestically if we get a big deflation collapse. You are going to want to have dollars and as many as you can get. They might be worth far less outside the US but the dollar is what people in the states will use to transact for most things in the event we get that outcome.
Now, I wonder if your curious how many new clients asked me about have a stash of cash versus a stash of gold the last two years.
Hint: They aren't looking for anything colored green.
Hint: They aren't looking for anything colored green.
ReplyDeleteis it colored silver also?
http://pragcap.com/deep-thoughts-david-gerstenhaber
ReplyDelete"If the Fed continues... "Goods" will continue to inflate"
ReplyDeleteCould have made the same exact statement in early 2008 when they started to quickly cut rates and oil was blasting off above $120/bbl. I suppose you could have even said the same about housing at one point or another, in fact, I'm sure people did. It's all part of the "don't fight the Fed" mantra.
and then......
the Fed's textbook clan doesn't understand the financial/economic dichotomy, they use the same tool(s) to try and create the same outcome in both instances but they couldn't be more different and therefore neither are the outcomes.
anon,
ReplyDeleteoddly enough, a lot of my clients own bags of silver and bought it way before they met me, stuff they've had for a long long time, way more than own physical gold, pretty obvious why you'd see that I guess.
http://www.bloomberg.com/news/2010-11-30/unemployment-in-germany-declined-to-lowest-level-in-18-years-in-november.html
ReplyDeleteGerman Unemployment Falls to 18-Year Low as Economy Leads Europe Recovery
“The German economy stands at the eve of a virtuous circle for domestic demand,” said Carsten Brzeski, an economist at ING in Brussels. “Combined with a general-feel-good factor, German consumers seem set to finally spend their way out of the recession during the Christmas shopping season.”
...and yet...AND YET...the unemployment rate is 7.5%......this may be as good as it gets in our futures...
http://www.ritholtz.com/blog/2010/11/wikileaks-5gb-of-dirt-on-bank-of-america/
ReplyDeletei wish uup would just get up!
ReplyDeleteKaren,
ReplyDeletelike BR, and like I was saying above
what's on there that could be so bad for the banks that we don't already know?
Janes Addiction made Nothings Shocking about a decade and a half too soon.
C'Mon AAPL, break below that $311 price... I dare ya!
ReplyDeleteyou know we should be buying BAC here, right? : )
ReplyDeletepersonally, i don't like that two year rounded top but with the Fed at our back, it's a no brainer.
the Fed at our back = TA
ReplyDeleteP&F on aapl is 276, FYI..
ReplyDeleteno way that H&S is gonna play out tho.. too obvious.
http://www.charlierose.com/view/interview/11321
ReplyDeleteCharles Ferguson on his documentary 'Inside Job'
The @CMEGroup raises margin requirements on soybeans http://ow.ly/3huDg
ReplyDeletehttp://finance.fortune.cnn.com/2010/11/29/u-s-bank-credit-spreads-widen/
ReplyDeleteLB is aware that spreads are wider... the "compression trade" has been a victim of the Euro debt crisis.
ReplyDeleteNice legs, Karen..
Still in your homeland, LB?
ReplyDeletehttp://www.naturalexpressions.org/Tattoo_Cosmetics.html
ReplyDeleteKaren,
Lefty told me what he'd like you to get him for Xmas...he's a DIY sort of guy...
here's a fitting quote from St. Warren near the start of the decade:
ReplyDelete"Over the years, Charlie and I have observed many accounting-based frauds of staggering size. Few of the perpetrators have been punished; many have not even been censured. It has been far safer to steal large sums with pen than small sums with a gun."
LB,
ReplyDeleteI didnt' think you had a bad idea there, curious how much longer you'll roll with it though? or have you already gone on to something else?
also, care to make any comments on how Spain might be different than Greece, Portugal, or Ireland?
good quote, ben.. goes well with the Ferguson video i am watching.
ReplyDeleteKeithMcCullough
ReplyDeleteTricky Dick Bove out bullish again on $BAC here - thanks Buds
got a link for that video Karen
ReplyDeleteTMFInsideValue
ReplyDeleteGoogle ($GOOG) has dropped by more than the entire value of the rumored Groupon bid. My crystal ball says the market doesn't like the deal
ben,
ReplyDeleteI am out of the compression trade as of this morning. It may go on again into the close, with US employment data ahead. As you know I often combine the right trades and the wrong timing. LOL. I am 25% long US equity and 25% long US HY, 5% TIPS.
K.,
Yes. Meeting my brother in London tomorrow lunch and then flying to New York tomorrow night. It has been in the twenties (Fahrenheit) during my stay here, which the English generally agree is "a bit nippy", if not downright "brass monkeys".
ben, i posted it at 2:52 !!
ReplyDeletehttp://www.charlierose.com/view/interview/11321
Google thought they were buying Grope One...
ReplyDeleteBergenCapital
ReplyDeleteLook at monthly charts for equity indices. Bearish hammers that historically spell trouble. Most of the time this pattern -> shrp down mnth
wow.. bac broke 11.. 10.95
ReplyDeletedecember of 2007 was not an up month for the $spx (nor was november.) how many times have we compared 2010 to 2007?
ReplyDelete"As you know I often combine the right trades and the wrong timing"
ReplyDeleteUm, this is the perfect description of ME this year, lol.
BAC, on it's way to a 50% decline since April...wow
ReplyDeletebut hey, got that dividend going for you now
check out the monthly on gld.. can i have my dollar short squeeze tomorrow ??
ReplyDeleteben,
ReplyDeleteNote to self: When trading TBT, stops at the open are ALWAYS a bad idea. Been done by that a few times.
K.,
The Treasury market is still a repository for an enormous amount of HE FED induced liquidity that can seek yield into EOY. A small shift to higher yields due to decent employment numbers could liberate a lot of cash for hot asses... I mean assets.
We love BAC, especially now that JOHN E owns it and not us.
ReplyDeleteis gld gonna be an abandoned baby tomorrow? the possibility exists..
ReplyDelete@ben22
ReplyDeleteSorry... I was away for awhile...
Several points...
OK... I'm fine with what you say (about ALL banks not being toast)...
Let me counter with this... Let's say the dollar DOES hold on... (because "Europeans would much rather hold on to those than gold", and all that logic)...
GREAT! I'm fine with that too... But then what about...
- The value of the dollar versus gold and silver since Nixon took us off the gold standard?
- DOW crossing the price of gold
- Silver & gold coming into, roughly, a 16-1 ratio... eventually...
and... of course... the ULTIMATE reality... that all FIAT currencies will collapse (in the end)...
Sounds to me like the more DOLLARS that those crafty Europeans are holding onto, the more anxious they will be to eventually trade it in for gold or silver, or something they could eat, or wear...
CV,
ReplyDeleteyeah, fair points all around.
I rather see the death of fiat coming like a thief in the night, not when everyone is looking for it with high powered binoculars like they are now.
maybe it is now though, so I'm owning some pm's anyway.
@ben
ReplyDeleteThe luxury that BB has enjoyed thus far in the game... Is that through all this lever pulling (and to avoid the DEFLATION that you are right in observing), the US has basically been able to EXPORT "price" inflation to CHINA...
The time is nearing that China, when weighing out the cost/reward benefit of having a dollar peg, will have to say "sayonara" to that...
At that point... INFLATION will hang around the USA like Hans Solo shooting off his proton laser inside the magnetized garbage dump... It'll ricochet off the walls and they'll all have to duck to not get hit...
And the last time I checked... all these "goods" were priced in DOLLARS...
"can i have my dollar short squeeze tomorrow ??"
ReplyDeleteKaren, LB will squeeze you any time you like... for less than a $.
Triangles everywhere.
ReplyDeleteJENN! and H&Ses, too !!
ReplyDeleteHYG just made the leap above 89.. in direct contrast to the spx.. hmm.
ReplyDeleteUS credit is solid, as you point out, Karen. That usually indicates equities are not melting soon. Just sayin'....
ReplyDeleteYou just need to cover all your bases. Like making movies.
ReplyDeletewhat about a movie that has James Bond, Indiana Jones, cowboys, and aliens....?
should appeal to everyone here....
http://www.rottentomatoes.com/m/cowboys-and-aliens/trailers/11127373
As for me, I bought a few more cd's today...
Strong jobs number v continued Euro carnage, for gold...?
ReplyDeleteAnyone..? Nice H&S forming in silver too.
Hi Karen! This is my busy season so I'm not around much (my staff of elves is notably absent leaving me to make Christmas happen for 2 believers and one who knows to keep her mouth shut all on my own!) Had some good trades today though so that helps :-)
ReplyDelete@ben
ReplyDeleteOne final thing... as well... is this...
Even YOU say (all the time)... "Look at the S&P since 1998 and tell me where that's gotten you"...
Well... If you'd owned gold or silver, you wouldn't have been doing too bad...
Hell - I thought I was doing pretty good with gold by buying at $400... But Silver was $4 during the dot com heyday...
As people lose trust... FOR THE FINAL TIME... In the stock market (and think - many boomers are coming in to the "cashing in the nest egg" time period of thir life)...
What do you think they're going to do?
One of the "psychologies" involved in a collapsing stock market (and let's say that even a move to the 800's right now would qualify - which I'm sure even Neely would be on board for in 2011)...
Anyway... People are going to say "that's it"!... They just want out, and they don't want to own ANYTHING paper...
Maybe they'll also even be afraid to hold those balances in "Bank of America" (which as karen points out - has the look of a dying stock)...
Again... What will they do with their stacks of cash?
And while you're thinking of that... Remember that JPM is short derivatives upon derivatives of PM's...
And the scariest phrase in the English language???
"I'll stand for delivery"
...and if the opposite happens???
ReplyDeleteDOW to 36,000 (as LB seems to be hinting)?
Well then I REALLY like PM's...
triangle became my least favorite shape in 2010.
ReplyDeleteI now prefer the cone, like a gnome hat.
CV,
3:43
sure about that?
china de-pegs and it does what to their export economy and cheap labor? Why would they want to do that, after all, inflation in China can be whatever they make it, like GDP. De-pegging hardly seems like it'd be in China's best interests for a lot of reasons, might be better for us though.
as for inflation in the US....oil prices soar and the largest consumers of oil, Americans, do what, exactly. Same with any other rapidly rising prices in the economy. The cure for high prices is high prices in economic terms.
I don't think it plays out like that, in general while I realize you are trying to look out, to make a forecast, as far as I can look there isn't anything making me think inflation is a big problem nor will it be for a long time.
the government can hardly keep up in masking the credit deflation as it is and it's not even that bad, people underestimate what it's going to take to monetize to the point of stoking iflation.
Credit is big
Notes are small
Well...this is not the way I expected the day to close...but I'm not complaining.
ReplyDelete@karen
ReplyDeletecatching up on comments...
"The @CMEGroup raises margin requirements on soybeans
Gee people... I wonder what "margin requirements" keep getting raised on, well, everything...
Further... Why aren't these things going DOWN?
Hell, they raised margin requirements TWICE on silver this past month, and it's nearing it's multi year high again...
Now I'm not going to be an **shole and say that a correction might not be in the works in the next month or two...
But jeez... This phenomenon is moving in a way that if you wait for that correction, it might end up being at the price it is today...
I keep kicking myself that I didn't buy more gold at $660, then $880, then $1000...
Yup... still drumming my fingers here waiting for that pullback!
CV,
ReplyDeleteI've learned a thing or two about average people's financial behaivor over the years, if people don't trust banks or stocks they are coming to a guy like me to find something they can make a lot of money in instead, lol. Greed never hides completely, regardless of conditions. So yeah, if gold were going up despite deflation then that's whay they are all going to want.
how about consider:
Gold is scarce right?
How much more scarce are notes compared with debts denominated in dollars?
What will people do in the event your 3:52 plays out? well that's what I'm saying, they are going to be looking for cash like everyone else, but there isn't any!
Hee hee. I'm back. TNTSNBN lives on.
ReplyDelete...triangle became my least favorite shape in 2010.
ReplyDeleteLB imagines Karen looking good in small flimsy triangular-shaped garments but apart from that....
Played some "strong dollar/strong jobs" trades into the close. We'll see how that lot pans out.
SPY dropping like a rock in the AH.
ReplyDeleteThat's it for my British trip - will join you all in the US on Thursday ahead of the MOST IMPORTANT JOBS NUMBER OF ALL TIME... ;-)
ReplyDeleteLB
CV,
ReplyDeleteif silver is in a real bull market the could raise the margin requirements every day, silver is still going to go up, another example of outside events not changing a larger trend.
As always I feel mixed about metals, RR, who is a giant gold bug, said last night that gold hasn't corrected more than 13% in couple years, I remember a lot of chatter in 07 about how there hadnt' been a real pull-back in the market for years.
I have no idea at all what the metals are going to do, but I'm thinking the outcome that would hurt the most people right now is a major slide in that space, not a basic correction.
either that or gold is going to $5k and higher, lol.
@ben
ReplyDelete"china de-pegs and it does what to their export economy and cheap labor? Why would they want to do that"
Precisely!... The point I'm trying to make here is the "thought process" behind theoretical maneuvers...
So we replace the "The fed is in control" logic, with the "if this happens, then this happens" logic...
It's really one in the same...
So let's say the idea of China "DE-PEGGING" is simply a modern day version of "M.A.D." (Mutually Assured Destruction), the nuclear arms race between the US & Soviet Union...
That didn't stop either side from accumulating more and more nukes for several decades, did it?
OK - so that seems like a vague argument, but hear me out...
If the US & China are these economic GIANTS (that are joined at the hip)... On one side, we have the Fed ("monetizing until the cows come home")... on the other side we have the Chinese (attempting to take control of all the natural resources around the planet on the back of the economic might gained by their "cheap labor & exports"...
Sounds like a good recipe for COMMODITY PRICE INFLATION for as long as that relationship persists...
I've said this before... Look when the stock market started to collapse after the highs in November 2007 (and through July 2008)...
Now go look at PM's, crude, and potash during the same time period...
Go ahead... I'll wait here and count my coins...
@Amen
ReplyDeleteTNTSNBN... lol
@ben
ReplyDelete"they are going to be looking for cash like everyone else, but there isn't any!
I disagree with that (in a certain way)...
I say "they are going to be interested in WHAT CASH USED TO BUY, but there isn't any"
Not so subtle of a difference there... Understandable when you're hungry, your roof leaks, and there's no toilet paper to wipe your ass with...
@LB
ReplyDelete"The most important jobs number of all time" - lol
have a safe trip! Let's hope THE ECONOMY holds on until you arrive...
CV,
ReplyDeletelet me try karen's KISS method
you know why pm's, oil, and potash were up still why the markets were collapsing, because that's the way it always works... people herded to what was still "holding up", then they all collapsed anyway, and even faster than stocks. I remember the monkey that works here bragging to me about his hot China stocks, POT and MOS in the spring of 08, he lost half his practice by December.
I'm just not getting it man, none of these things eliminate the deflation threat, I don't even think the inflation talk warrants much time for discussion now at all, and further, if that's the way it happened, if that was the "cause" of those prices rising, the recipe so to speak, why, after two rounds of QE and two full years of ZIRP all during a time in which China stepped up it's purchase of nat resources and slowed the purchase of debt, why then are those prices not at all time highs, what is oil, about half of it's peak price?
please dont' give me the lag time explanation....
@ben
ReplyDeleteI don't know if silver is in a bull market either... But I CAN'T get out of my head (inflation or deflation)...
- DOW crosses gold
- Silver 16-1 vs. gold
So plug in whatever number you want on that...
DOW 36,000 - Gold 36,000 - silver 2,250
DOW 1,000 - Gold 1,000 - silver 62.5
now... identidy the BETA vs. today's closing prices...
@ben (4:22)
ReplyDeletePerfect... CV' LOVES the KISS argument... In fact (using it to describe the Nov 2007 - July 2008 phenomenon)... I would classify it "exactly" as you'd described!
PEOPLE HERD INTO WHAT'S GOING UP
So where are we now?
- are home prices going up?
- are bank stocks going up? (since April)
- is the Euro going up?
- Google got itself past $600, but where is it now?
- Hell - has the S&P CLOSED a month (after APRIL) higher than, as Amen describes, TNTSNBN
Oh well... 2008 "might" have been...
...drumroll
THE OLYMPICS!
jk - sure as HECKFIRE they're piling into things that are going up... Last I checked, so are gold & silver...
& "the lag time explanation"???
ReplyDeleteI don't even know what that is... Sounds like a TWSWB's argument :-)
I say "they are going to be interested in WHAT CASH USED TO BUY, but there isn't any"
ReplyDeleteThat's pretty extreme CV.
Ok, lets consider the household budget, lets drop the discussion of taxes as an expense, it's typically the largest or second largest expense for most of my clients but lets just leave that alone for now, after that it's shelter
is shelter going to be so scarce that there aren't enough homes for people in the US in the near future? It would seem we have over a years supply of empty homes, and that is to say nothing of all the people that still own 2nd and 3rd homes. You still have to buy the shelter.
next on the list is either food or medical expenses depending on the client.
I hate to dismiss what would appear to be a valid concern that we could have a food shortage issue in such a way but I could easily point out that for nearly 300 years now people have warned that the population was so growing so large that we would never have enough food to go around.
Next maybe energy though I'm not sure that is larger than discretionary items, in fact, I know it's not. is oil getting driven higher right now because of demand? No, it isn't. What's that mean in deflation then, oil just somehow runs out?
After this the household wastes a lot of money on shit, like the latest iPod, but I doubt in deflationary collapse anyone is interested in those things like they are today.
As for the toilet paper problem
use leaves or something
:-P
alright off to a mtg, I'll be dreaming of deflation in the car
ReplyDeleteBen
ReplyDeleteThat's what the Sears catalog was used for...
@ben
ReplyDeleteKidding aside... I'm going to toss out another series of LOGIC that is starting to apply now, that didn't apply in '08...
1. Leverage
There was such a massive drop in prices because there was the mass deleveraging going on by a plethora of institutions... I frankly think that the price rout in PM's and commodities was exacerbated precisely by that phenomenon... IOW - when September 2008 hit, all these trading desks and hedgies had to immediately get out of what they'd been holding onto (and crowding into) for the past 10 months... So I think that was a huge overshoot...
2. Monetization
That was BEFORE Tarp, BEFORE the Recovery & Re-investment Act, BEFORE the Omnibus bill, BEFORE the change in FASB rules, BEFORE HC, BEFORE QE1, BEFORE QE2...
In 2008... People were afraid of what they were holding... Today, people are afraid of the idea that what they're holding, despite its price, may not end up being REDEEMABLE into anything physical...
3. China Growth
In 2008... The idea was still flourishing that "the China Growth Miracle" would eventually carry the world economy thru... So partly, the "commodity price inflation" was a reflection of that belief
In 2010... Although the China growth story still may be a myth (with regards to its power)... The fact remains that if REAL ECONOMIC GROWTH is going to happen anytime soon... Well... Either another internet gets invented... Otherwise - I'd suggest we all go to school and learn to be hedge fund managers like Ritholtz, because Lord knows, he's the only one making $$ while engaged in producing real economic widgets for a real economy...
So what I'm saying here... Is that we have 'similar' elements to 11/07-7/08, but we also hacve different ones...
The SIMILAR ones seem to suggest that a similar rise in commodity prices could develop (and go beyond peoples expectations) over the next few months...
The DIFFERENT ones might suggest that when that 'collapses' (which it surely will)... the next TROUGH might not be as radical as the one we saw in 2008 after Lehman...
To KISS, think of the argument in terms of crude...
- Crude collapsed, and so did demand (which has not significantly returned)... But then, WHY has crude risen back to $80 a barrel?
Answer? Because CRUDE is considered M-O-N-E-Y... So are PM's (and anything physical - for that matter)... The world knows now that if this famous GROWTH is ever going to occur, you need "stuff" to make that happen... We've made GROWTH happen with DEBT for far too long...
Just saying...
...and on that note (I say it here and it comes out there)...
ReplyDeleteUS Mint Sells Record 4.2 Million American Eagle Silver Coins In November
http://www.zerohedge.com/article/us-mint-sells-record-42-million-american-eagle-silver-coins-november
"In what is becoming a very sad development, the more money (pardon, monetary base) Bernanke prints, the more silver coins Americans buy. According to the US Mint, November sales of silver just hit 4.16 million ounces or coins, an all time record, since the introduction of the coin in 1986, and that does not even include the last day of the month. The number is roughly a 30% increase to the 3.15 million one-ounce Eagles sold in October, and well above the previous 2010 record of 3.6 million sold in May. So far in 2010, the mint has sold 32.8 million ounces of silver, higher than the previous full year record of 29 million coins set in 2009."
ok - I'm going to stop now because I'm even sounding like a SHILL to myself...
http://finance.yahoo.com/q?s=BEZ&
ReplyDeletebuy-out by ABB
smart move for ABB, bad news for the 'home team'..
AAIP
http://www.bloomberg.com/news/2010-12-01/world-food-prices-climb-for-fifth-month-to-highest-in-two-years-un-says.html
ReplyDeleteWorld Food Prices Climb For Fifth Month to Highest in Two Years