Tim Duy: "A Return to a Nasty External Dynamic?"
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CalculatedRisk on Fri, 05/29/2009 - 5:09am (75 comments)
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Friday Firsty
Everything is wrong.
High priced energy will bring us out of our funk. Hoocoodanode!
so if I am understanding Krugman correctly: If you can't see price increases then there is no inflation?
Ouch! Poor Bucky. I can guess where commodities are going today.
Euro - USD 1.4098 +0.0135 (0.97%)
USD - JPY 95.9100 -0.9700 (-1.00%)
GBP - USD 1.6148 +0.0196 (1.23%)
CAD - USD 0.9093 +0.0114 (1.27%)
USD - HKD 7.7510 -0.0019 (-0.02%)
USD - CNY 6.8279 +0.0001 (0.00%)
AUD - USD 0.7980 +0.0124 (1.58%)
So basically the situation is "fluid." Short term, commodities. Followed by a weak dollar and the rise in cost of imports? Longer term, in the US money gets more expensive. Except the Fed is dedicated to do anything, and everything, to make sure that does not happen. The problem with that policy is it requires the rest of the world to play along. The Fed's international stick is "if you don't, we go down, and you know you can't recover as fast as us; or without us.
Wow this guy is full of flawed assumptions....still.
I stopped watching CNBC as I couldn't stomach any more green shoots from Erin and her Airhead freinds - so I moved to Bloomberg and for a few weeks it was okay but something has changed and they are now as bad (if not worse) than those idiots over at CNBC. Loser of the year award has to go to their reporter Kathleen Hays. Her take on the GDP revision "we all know we have just been through a brutal recession so this shouldn't come as a suprise".
Sooo... bond market dislocation = a good thing ? This guy is a bigger bear than he thinks !
Does it ever end?
"rising yields simply imply that market participants are gaining confidence to put their money to work in more risky endeavors."
====
or, they imply that market participants see increasing risk that they won't be paid back at all, or that they will be paid back with dollars that are worth much less. Neither of those cases is bullish.
Loser of the year award has to go to their reporter Kathleen Hays.
She is so bad that even CNBC canned her sorry ass, years ago.
[Ouch! Poor Bucky]
You're not kidding. But how come the long bond doesn't react negatively to such a USD beating ?
"The problem with that policy is it requires the rest of the world to play along."
Ben was bluffing. All he had was a Chinese straight, and everyone could see his hand.
"Byzantine_Ruin"
All you say is nice and "the right way" but when it comes to survival your own family, all bets are off. Let say these flyoverstans destroy Paris, France. Would the whatever Parisians are left, have a right to kill every fucking American south of Dixie line?
"On the other hand, higher yields may undermine support for the housing market, thus extending the downturn."
=====
if by "may" you mean, "absolutely will", then I agree
Rosenberg weighed in on this - his comments at finansblogg.com » Blog Archive » buying opportunity in bonds
"6. The yield curve (2s/10s) has massively steepened to 275bps. This is unsustainable and is going to flatten but the question is how? Will it be by the Fed raising rates and taking away the carry? With the unemployment rate heading above 10%, hardly likely. The output gap is so big that the funds rate, in theory, should be closer to -5% than 0%. So which entity is going to be the one that starts to take advantage of this massive ‘carry trade’?
The banks, that’s who. They are the ones with the cash - over $1 trillion on the balance sheet, which is not only a record but more than triple what was considered a normal level in the past. At the same time, even with private sector borrowing on the decline, the commercial banks have not added anything - nada - to their cache of Treasury securities this year. But, it’s one thing to have the curve at 170bps as it was four months ago and the huge 275bps spread the market is offering today. The banks have never before had so much cash to be put to work in the most attractive carry trade in Treasuries in recorded history."
Because that what exactly we are looking forward. These motherfucking flyoverstans and their missile silos.
OT: Don't know quite what to make of this - it may be nothing.
Received a note in yesterday's mail indicating I'd be dealing in future with a 'client's service center' instead of my long-time stockbroker. Called just now to make a pre-open trade. Directed to a manager who seemed rattled and rather guarded when I asked where I would be calling in future and who could execute trades for me this morning.
Is UBS in immediate difficulties?
And what do you know. It's all good news for the market. You gotta love it when they blow off bad news like it doesn't matter. It will come back to haunt them(and everyone else).
The green shoots talk is increasing the appetite for risk and leading to a jump in mortgage rates, and a return to the commodity bull market, sending gas prices up.
Ironically, the green shoots will kill off the green shoots.
Isn't the problem the lack of credit flowing into the tulip bulb market? If the credit doesn't flow into tulip bulbs, isn't that bad?
Agreed - that segment this morning with her read on GDP was painfully bad...
"You're not kidding. But how come the long bond doesn't react negatively to such a USD beating ?"
I do not know. The bond market makes unexpected moves to me. But I think long bonds will continue to trend up as either inflation, abandonment by foreign buyers or mad treasury issuance will keep the pressure on. I am more of a short dollar, long commodities guy, given my lack of understanding of bonds.
burnside
Sounds like "in order to continue our high standards of customer service we have decided to consolidate our customer care in order to provide you with timely bla blah. We firmly believe this result in a higher blah blah"
translation - layoffs
The Pavlovs on Wall*Street claim that they merely pulled a lever a few trillion times, and the reinforcement they were doled out is theirs fair and square, but that dog won't hunt.
OT: Nice dynamic in CRE.
Starbucks demands 25% rent cuts: Starbucks Pushing Landlords for 25% Cut in Cafe Rents (Update2) - Bloomberg.com
Starbucks Pushing Landlords for 25% Reduction in Cafe Leases
Starbucks Pushing Landlords for 25% Cut in Cafe Rents (Update2) - Bloomberg.com
This is inflationary right?
timmyone: absent launch codes all you have is a hole in the ground, get it? Now, using both hands, try to find your ass.
BSR: I plugged one of those melons with some Everclear, I'll leave it on your stoop tonight.
We are being investment embargoed, cut off.
Current total outstanding Treasury debt: about $7T
Amount Treasury needs to issue this year: about $3.5T
Amount Treasury will need to issue next year: about $3T
Previous record issuance: just over $1T
So treasury market is hurling all over itself like a rugby team after a weekend bender? Whocoodanode?
nova, thanks. That was my first notion, too, and most likely the right one. Though I've seldom heard anyone sound so caught-off-guard. Brokers come and go - I'd think it was pretty routine?
Ironically, the green shoots will kill off the green shoots.
The economy is now autotoxic.
timmyone (profile) wrote on Fri, 5/29/2009 - 9:31 am
All you say is nice and "the right way" but when it comes to survival your own family, all bets are off.
You see inclusionism or universality as a weakness. In reality, it's a terrible weapon against which no hierarchic system can endure. Liberty, Equality, Fraternity. Everyone in our society sees it as a bug because it obstructs the centralizing technocracy they've been programmed to embrace. Yet where has that centralizing technocracy gotten you? Bankrupt and hated and in possession of the ruins of an empire that endured only a half-century?
And yet you still cannot grasp the sword of the universal republic.
Let say these flyoverstans destroy Paris, France. Would the whatever Parisians are left, have a right to kill every fucking American south of Dixie line?
The most important thing when maintaining a prison camp is to set the inmates against one-another by encouraging the formation of gangs. By setting the inmates against one-another, the administration can keep the ambitions of the captives from growing outside their context. Welcome to the open-air prison camp, sucker. Remember, "I'm just looking out for me and mine". You have the best shackles in the whole fuckin' cellblock, whoo!
CR
Where do you stand? In your view are rising yields the result of positive sentiment or a souring American dollar?
RE: business news--try Fox Business Network. They parade their moneybabes, perched on stools, way hot. But not as hot as Trish Regan.
"Ironically, the green shoots will kill off the green shoots.
The economy is now autotoxic."
That is what happens when you over irrigate your green shoots.
I smell a new post coming.
"The US economy contracted violently again in the first quarter, falling at a revised 5.7% annual rate after sinking 6.3% in the fourth quarter, the Commerce Department reported Friday"
And yet, crazy profits for the 19 TBTF?
So are we all Macke or are we all the "car people"?
This guy sounds like Macke... I have no idea what the hell is going to happen!
racial (profile) wrote on Fri, 5/29/2009 - 9:49 am
The economy is now autotoxic.
The tarponomic process is superior to all other forms of economic activity. Once you institute a tarponomic system, it will supplant or destroy all conventional economics by simple efficiency. Its only weakness is external -- how long the tarponomic process can be capitalized.
falling at a revised 5.7% annual rate
===
but better than expected, rally monkey time
we are all Macke now
OFF THE RAILS!!!!!!
BR: LOL,
tarponomics is limited only by the hoopajoop multiplication rate, which is itself infinite and self-reinforcing
Look at that loony fly!
91+ cents. Parity here we come!
Volker the viking (profile) wrote on Fri, 5/29/2009
timmyone: absent launch codes all you have is a hole in the ground, get it? Now, using both hands, try to find your ass."
Except for the survivors. Gonna teach about mercy and commie Jesus! And how your kinds were all wrong. (and mine kinds watching over the kindergarten
Nissan dealer to liquidate assets: Former Saints star Deuce McAllister says he's learned a lot
The short version of the story is that Deuce McAllister Nissan filed for Chapter 11 in March, and is now in Chapter 7.
I can haz Nissan Quest for cheap?
Post collapse, from another post another day: It has long been posited that the North American continent would (d)evolve into nine regional units, ones that make sense economically, culturally etc. The weaning of power from the current federal systems would leave them with control over money, defense, the mail, etc.
Recent evolutionary events would leave it with nothing. It will be up to the regional governments to hold power through the monetary system, thus placing resource rich regions in the transcendent and severely rationing influence to places such as the Atlantic seaboard. Remember, Canada and Mexico will be a part of this.
In the changing world, this will become not unlike the nation states of Greece. Please excuse my hubris.
Isn't it a little weird how the stock market is just ignoring all that's going on in Pakistan and North Korea?
For my nightly news on TV, I watch BBC World America. They have a much better perspective on what's really important in the world than U.S. MSM. Every night this week, they've led with Pakistan for at least 15 minutes.
What's happening in Pakistan is critical and threatening to world financial order.
And Obama still refuses to mention the word "Taliban" in the context of an enemy.
What has changed in a fundamental way in the past two weeks is that the Pakistani govt. and people now regard the Taliban as bona fide terrorists.
"Isn't it a little weird how the stock market is just ignoring all that's going on in Pakistan and North Korea?"
Navel gazing or manipulation? Low volume, yes?
Metal prices are going ballistic both ways....could not resist ordered 40 ounces of silver....
Yummy.
The only problem with every weapon ever devised by mankind, is that sooner or later your adversary or even somebody you perceive to be many rungs below you, acquires it as well.
Doesn't matter if it's a knife or a nuke...
stock market has largely been ignoring reality for years....except for a few select incidents
As an off subject interesting topic, I invite you to a debate proposed by an interesting web project:
Crisis meter | world crisis | share, measure and make your crisis statistics
See how people evaluate how much the world economic crisis is affecting them.
Regards,
Alex
shill writes: "Metal prices are going ballistic both ways....could not resist ordered 40 ounces of silver...."
Online or in person?
What is the wait time to receive?
How much over spot did you have to pay?
What form, eagles, junk coin, bullion?
"falling at a revised 5.7% annual rate - but better than expected, rally monkey time"
Actually, the expectations were -5.5%, so it was worse than expected. The Chicago PMI was 34.9 vs expected 42.0, but never mind Mich Sentiment-Rev came in at 68.7 vs expected 68.0, so everything is great. Anyone with an ounce of brains will end up like Macke.
shill (profile) wrote on Fri, 5/29/2009 - 7:06 am
Metal prices are going ballistic both ways....could not resist ordered 40 ounces of silver....
Yummy.
Unfortunately most people buying PMs these days won't be able to hold them through the second half of the recession and thus will be forced to sell to me at my price.
The fact that the Pakistani army has sought out a decisive engagement with the Taliban is the tell - however, the season and the tide of refugees may do the Taliban's work - drag thisout through the current harvest season and eliminate the food supply for the IDP's and eliminate any surplus in other regions due to those same extra mouths to feed...that seems to be a recipe for destabilization, period.
Unfortunately most people buying PMs these days won't be able to hold them through the second half of the recession and thus will be forced to sell to me at my price.
And what will they take as payment - FRN's?
explaining the divergence in the just published consumer sentiment numbers (higher to 68.7 from 65.1 in April) and the just published Chicago PMI numbers (lower to 34.9 from 40.1 in April) - the Bloomberg analyst suggests that consumers are watching Bloomberg and other media outlets and are feeling better with all of the talk about Green Shoots.
Mike in Long Island (profile) wrote on Fri, 5/29/2009 - 7:13 am
Unfortunately most people buying PMs these days won't be able to hold them through the second half of the recession and thus will be forced to sell to me at my price.
And what will they take as payment - FRN's?
Its either that or pay their taxes at the face value of their coinage. Sorry, I don't have an honest answer where FRNs stop being accepted at some value.
Actually, the expectations were -5.5%, so it was worse than expected.
======
economist expectations were -5.5, commerce dept estimate was -6.1
Dream on.
Ahh, yes; good ol' Macke.
"I don't know what is going to happen in the markets next week because THEY ARE ALL LUNATICS!"
And the milder but just as penetrating, "I don't really know how to respond ... Those people you are talking to [various "recovery has begun" guests] all sound crazy to me!"
Most insightful market analysis so far this year.
Wasn't Dawg going up to Canada to take factory delivery of CML's, or so he claimed.
how many "Adjusted dollars" will that be equal to?
Jack sat at his desk; the report ready to go off with the proper signatures. It was late on a Thursday, he was ready to go home, when the phone rang... "Caller Unavailable" flashed the caller ID.
"Hello, Jack Francis speaking..."
"Hi Jack, how are you?" asked the voice on the line... whenever these guys needed a favor, they always changed the messenger.
"Uh, ok.." he stammered... the call caught him off guard this time... he gets one of these once or twice a year... but heard nothing since the boss had changed...
"I saw your report. I need you to change a few numbers. On Sheet3 Cell Q50 multiply that value by 2... Sheet4 CellD5... divide that number by 3" seven or eight changes he wrote down on a paper to be shred once the changes were made.
"No problem..", he said without hesitation...
Jack had a vague idea who it was... someone high. Initially he had balked at the requests. However, he remembered who he replaced... lost his job suddenly... lost the mortgage... the new car... he's probably on the streets now. Jack liked his mortgage, he liked his car, he liked the vacations, he enjoyed the trips... life was just good enough... he wasn't a dreamer... he just wanted to have enough. After being with his department 15 year, he had nowhere else to go.
He dutifully complied with the request... in a couple of days he saw the headlines... "Numbers come in better then expected!". Well-done self, we saved the world from imminent collapse yet again!
I still wanna know the terms and conditions. I hear it takes awhile to fill orders. I wanna know if so.
Juvenal Delinquent (profile) wrote on Fri, 5/29/2009 - 7:19 am
reply ignore user
Wasn't Dawg going up to Canada to take factory delivery of CML's, or so he claimed.
Couple weeks but not at these prices. Good thing I made firm hotel reservations in USD when the rate was strong.
"30 Year Fixed 5.27%"
Ben's going to have to do something about that. That shoot is not very green.
If the so called "wealth" that wall street "earned" over the past two decades was real and not phony it wouldn't take tens of trillions in gov't guaratees to prop it up. The majority of wealth in America is now wholely dependent on the government. What a sham.
And I've come to believe that Obama is worse than Bush in some ways. For one, he is smart enough to understand the sham, yet he promotes it nonetheless. Bush was such the useful idiot. To this day, I don't think he understands our ponzi system.
Regardless of what party is in charge, the majority are totally screwed. They got run over by the sham on the way up and will now have to pay for it on the way down.
What a system.
BTW, nominal GDP is negative - again!
I can confirm that UBS PWM has made/is making deep cuts. This has been underway for a few weeks, now.
The optimistc view in this post assumes free market dynamics. We do not have a free market. Assume the worst case.
Byzantine_Ruins (homepage, profile) wrote on Fri, 5/29/2009 - 8:56 am
The tarponomic process is superior to all other forms of economic activity. Once you institute a tarponomic system, it will supplant or destroy all conventional economics by simple efficiency. Its only weakness is external -- how long the tarponomic process can be capitalized.
It is the nature of anti-life, comrade. Without production behind it, a credit-based economy is the insatiable parasite that feeds on the real economy until there is nothing left, then turns on itself.
We are Japan now as the new carry trade?