The Bilderberg Plan for 2009: Remaking the Global Political Economy The Bilderberg Plan for 2009: Remaking the Global Political Economy
After the meetings finished, Daniel Estulin reported that, “One of Bilderberg’s primary concerns according to Estulin is the danger that their zeal to reshape the world by engineering chaos in order to implement their long term agenda could cause the situation to spiral out of control and eventually lead to a scenario where Bilderberg and the global elite in general are overwhelmed by events and end up losing their control over the planet.
I REALLY love the smell of desperation from the elites
Some should note that the March numbers were revised from $661 to $648.3 with residential revised from $258.4 to $247.4 and commercial revised from $402.6 to $400.8.
Without the revisions, spending would have gone down in all categories. There is that pesky margin of error which systematically tends to err on the high side. I wonder what the likelihood is that April's numbers will be revised down in when the May numbers come out next month?
History shows that bear markets break almost every market player, almost every one. Those that were wrong at the beginning forget to change their game plan, those that were right at the beginning eventually make the same mistake.
Glod as a currency alternative no longer makes any sense (hard to transfer electronically) --and this market no longer makes any sense. I used to be paranoid and really believed in a PPT--no more. The headless chickens rule Wall St--and using good sense leads to a loss. GM bk as good news is the last straw--glod and oil gonna go up. Methinks buying a natural resource company--mining or oil/gas is the only safe bet. Inflation in what we all need--deflation for everything else.
Capitalism is easily destroyed by insanity and greed. Democracy won't last much longer either.
Wouldn't want to fade it, but it still seems pretty remote to me... the numbers needed to get there are simply staggering. That's not to say they can't do it ($50k checks jammed in every mailbox), but history has shown it's dangerous to underestimate deflationary forces.
relying on ANY gov't #'s is suicide unless you know what's coming out. The serfs here (me included) don't know so we sit and watch this shaking our heads. This rise really has nothing to do with being a bull or bear in the grand scheme. It's about how much capital can be destroyed while trying to give the impression it's all going to be just fine. Think of what we could have accomplished as a country with working capital given to the system from just this year alone.......staggering to even contemplate.
I don't know why I continue to run my streaming realtime action list anymore. The numbers don't bear much of any relationship with the reality I see and read about.
A bet on high inflation seems premature, but probable sometime in the not distant future. But making the call on reversal (including partial) from deflation to hyper-inflation seems much more than risky now.
All the talk about 'balloons' in recent years seems focused on unsustainable and non-fundamental increases in asset worth. I find the balloon more appropriate because of the balloon-pin prick analogy. Collapse at any moment is the danger that scares me, and when it comes, as it must, I don't trust the 'market' to treat me fairly with its invisible hand because it is so clear that the market is controlled and rigged for the big boys.
I think we are approaching the moment of maximum danger in the next (six?) months ahead. It could go either way, and blackjack or lotteries seem like safe harbors compared to 'investment'.
"Obama and his Wall St bought and paid for economic team have put all their chips on the Banking Oligarchs !"
Km4 +1
Make no mistake we have an oligarchy running the USSA. We should commission a statue of Charles Ponzi himself, the father or modern American capitalism somewhere near Wall St. It could be a public works project. Create temporary jobs.
There's a certain irony in Travellers replacing C. (for those not in the know, C's acquisition of Travellers was the reason for the repeal of Glass-Steagal)
as far as GM is concerned the action in that (so far) smacks of some entity buying up shares to prop it up. Yes it opened at like .50 and has risen to $1.00 however there has not been any type of capitulation that would cause the remaining shorties to cover. I would jump on it had it reached a real price of about .20 however as Jim points out above, it's just another bubble waiting to be popped.
I just saw a news item in my ticker that said:
"GM not filing......" don't have the rest of it as it's been removed.
If that is the case this is the biggest case of bait and switch of all time.
Eric (profile) wrote on Mon, 6/1/2009 - 10:38 am
Taleb fund is going to bet on hyper-inflation.
Anyone want to step up and fade that action?
Not me.
Last night I reread a NYT story from earlier this year on how VaR totally blew up the financial system. Taleb, who was a major part of the article, has been railing against VaR for a dozen years. He was right, too. It's amazing that many financial execs didn't know that "you won't lose $50 million dollars in the next week, 99% of the time" does not equal "you have a 1% chance of losing $50 million in the next week." More like, "you have a 1% chance of losing $50 million (with an unlimited upside)." It's that last little detail that kills you.
"GM's bankruptcy filing is the fourth-largest in U.S. history and the largest for an industrial company. The company said it has $172.81 billion in debt and $82.29 billion in assets."
Anyone wanna bet that there will be a "successful capital raise" by a bank today?
"This rise really has nothing to do with being a bull or bear in the grand scheme."
It's only a rise if you price the market in USD.
As compared to oil, the market is down.
I am not sure what people, including on this board, don't get about hyperinflation. When has hyperinflation ever occurred against a backdrop of economic growth? Never. In fact, it always happens against a backdrop of economic weakness, where governments print dollars to pay for overspending, and people lose confidence in that currency.
Sound familiar?
What we have been seeing is a reaction to that hyperinflation pressure, as people bail out of the worst fiat currencies (the USD being the worst of the worst) and into "hard currencies" like CAD, AUD, and the hardest of them all, oil itself.
My prediction is we see the S&P at 1200 by the end of the year, and oil at $150 a barrel, unless BB realizes his mistake and stops printing dollars to buy every trash asset in the country.
ac (profile) wrote on Mon, 6/1/2009 - 10:57 am
Taleb fund is going to bet on hyper-inflation.
If the hyperinflation meme picks up enough momentum that might force the Fed to start draining liquidity and/or raising rates.
Maybe that's the whole idea...
Can they do it fast enough or carefully enough not to crash the economy even worse?
Timmy Geithner threw a party for the dumb that failed.
Benny Bernanke's band was there and they began to wail.
The band was jumpin and the joint began to swing.
You shouldve heard those feckless CEO turds sing.
Lets rock, everybody, lets rock.
Everybody on the whole was hocked
and dancin to the bailout rock.
The slow motion train wreck that is the American economy
has now begun to slam into the ground.
There have been 'scrapes' up until now but GM is the first big dent.
Once the largest employer... It only gets worse from here.
All the govenrment spending up to this point was simply
an attempt to inflate an airbag before impact.
They knew it was coming.
Next big hits? California and Michigan.
California is the 5th largest economy in the world.
crash and burn.
We’ve lost our love for cars and forgotten our debt to them and meanwhile the pointy-headed busybodies have been exacting their revenge. We escaped the poke of their noses once, when we lived downtown, but we won’t be able to peel out so fast the next time. In the name of safety, emissions control and fuel economy, the simple mechanical elegance of the automobile has been rendered ponderous, cumbersome and incomprehensible. One might as well pry the back off an iPod as pop the hood on a contemporary motor vehicle. An aging shade-tree mechanic like myself stares aghast and sits back down in the shade. Or would if the car weren’t squawking at me like a rehearsal for divorce. You left the key in. You left the door open. You left the lights on. You left your dirty socks in the middle of the bedroom floor.
damn, YLSP... I had something to say... ah yes...
perhaps it was lawyerLiz talking about people talking to themselves...
although this might seem like a sign of mental instability to the general populace it's not
really, unless the person is speaking gibberish why should thinking out loud be stigmatized?
people who take medications for AADD tend to have this small side effect...
I was never a bull, or a bear, strictly, and to be honest I have almost no good reason to be predicting "the market" at all, for all I know the basket of stocks that is the S&P could be 200 by the end of the year.
That statement was less a prediction and more to make a point - the level of anything as priced in fiat currency is meaningless in and of itself. Let's say the market DID get to 1200, but oil was at $150. Are Americans more or less wealthy in general? Given the impact of oil throughout the economy, I would argue less.
My bigger point was that BB's activities are a game changer, and not necessarily in ways that will be beneficial.
March 18th was the day I piled into the oil trade and "hard currency" (my terms) trade in a big way (well, actually, a few days later after I thought things through). That was the day BB announced he was increasing his purchases of MBS from $500B to $1.25T.
At $500B, he was just another market participant, albeit a big one, at $1.25T he is the market. That is plenty of money to corner that market for new issuance, and given the way issuance is done, he could corner the market for certain coupons.
What that action (along with all the other ridiculous TALF, PPIP, etc programs) signaled to me is that money, as priced in USD, had basically lost all meaning. If BB was willing to print more and more dollars to prop up just about any financial market, and enough to corner one of the largest markets in the world, the value of that currency, as measured in its ability to buy things that matter, is on a fast trip to zero.
A classic situation for hyperinflation.
So back to my statement about the market, again it was more a point about the relative value of things as measured in a unit that is rapidly losing value.
Biggest head fake in the history of world finance. When historians codify the 2007-2012 era they will look at Q2 2009 as the period when the pilots were flying the instruments and not looking out the window. March spending to April reported is down on preliminary numbers and only up on revised to preliminary comparisons. That's called flying the instruments and it is often fatal.
36 Congressmen Ask Obama to Return Authority Over Auto Bailout to Congress--But White House Says Its Not Over-Reaching Its Power
White House (CNSNews.com) - A bipartisan coalition of 36 members of the House of Representatives--including 30 Republicans and 6 Democrats--has sent a letter to President Obama asking him to return to Congress its constitutional legislative authority to oversee the bailout of the auto industry.
In December, Congress failed to pass a bill authorizing a bailout of Chrysler and General Motors. President Bush and now President Obama, however, proceeded with a bailout process even without legislative autority. That process has cost the taxpayers billions of dollars and given the Executive Branch unilitaral and unprecedented authority to control what happens to the two major auto companies.
BTW, the MBS market is selling off again in lockstep with Treasuries. IMHO the Treasury market will be the most interesting market to observe in the next 6 months or so. I don't have a position in it yet (other than keeping what USD I need short term in short term instruments).
But it is this market that will be the true test of just how much BB will debase the USD to tilt at his deflation windmill.
Currently, he is not yet a big enough player to move the market, but just enough to keep a lid on it.
As supply increases, his commitment to date becomes less and less impactful.
To keep rates down, he will have no other choice than to step up his commitment from $300B to, say, $1T.
If he does that, he could keep rates low, in the 3s on the 10 year, but that would be the end of the USD, and oil goes to $150 for sure, along with a commensurate rise in other commodities.
If he doesn't increase his commitment, I would guess the 10 year hits the 5s by year end.
"First, we will expand the restriction on oral communications to cover all persons, not just federally registered lobbyists. For the first time, we will reach contacts not only by registered lobbyists but also by unregistered ones, as well as anyone else exerting influence on the process. We concluded this was necessary under the unique circumstances of the stimulus program.
ac (profile) wrote on Mon, 6/1/2009 - 10:57 am
Taleb fund is going to bet on hyper-inflation.
If the hyperinflation meme picks up enough momentum that might force the Fed to start draining liquidity and/or raising rates.
Maybe that's the whole idea...
Can they do it fast enough or carefully enough not to crash the economy even worse?
Anything's possible, but looking at oil prices and treasury yields right now I would have to say no.
Inflation fundamentally involves robbing creditors. If the creditors see that they are going to be robbed you're going to get capital flight. That will crash the economy and it may be starting now.
You cannot base an economy on theft and deception and scams. Unfortunately the current administration does not seem to have learned from our past mistakes.
I'll take sides and say I am a Grizzly Bear. Most if not all are pricing in a normal recovery. How often do we hear about the 81 recession? We have a consumer infrastructure sadly the best in the world. Look at RE, retail, malls, advertising, tech all of these people will have to retool and not all will be successful at making that change.
In its bankruptcy petition, G.M. said it had $82.3 billion in assets and $172.8 billion in debts.
The company’s Saturn unit, which G.M. began in 1990 to compete with foreign-made cars, also filed for bankruptcy on Monday. G.M. has said it will phase out the Saturn brand by 2012.
G.M.’s Saab unit is already under bankruptcy protection in Sweden. The German government last week picked Magna International, a Canadian car-parts maker, to buy G.M.’s Opel unit, which is based in Germany.
The company will also have to shed 21,000 union workers and close 12 to 20 factories, steps that most analysts thought could never be pushed through by a Democratic president allied with organized labor.
Forty percent of the company’s 6,000 dealers will close, the workers’ union will be forced to finance half of its $20 billion health care fund with stock of uncertain value in the restructured G.M., and bondholders, including many retirees, will be forced to take stock worth 10 cents for every dollar they lent the company.
ghostfaceinvestah (profile) wrote on Mon, 6/1/2009 - 11:25 am
"S&P at 1200? Since when did you become a bull?"
I really meant that as a joke, but you clarifications are well-taken.
BTW, an earlier poster seemed to suggest that before hyperinflation set in, BB would tighten liquidity and raise rates. How that could be done without crashing the economy and severely limiting future attempts to finance the humongous US debt is beyond me.
"...What we are seeing is a collapse of crony Capitalism...which is very different from free market Capitalism."
Hard work doesn't matter. Doing or being better doesn't matter. What does? Connections, deep pockets, inside info, and — most perverse — a lack of ethics. The less ethics matter to you, the more you'll bid, for example, to run the government's books.
It's a shame that our President — who's actually pretty bright — has turned out to be the economic equivalent of Dubya, at the time we needed economic competence the most.
Business as we knew it is fast coming to an end. Here's what the Obamaconomy looks like. The government champions funds. Funds champion corporations. Corporations champion markets and industries. No one champions people (because they don't count).
Hmm, the only cafe in my office building is ceasing operations, effective immediately. Who knew that tenant-firm downsizing is a bad thing? Anyway, more green shoots for y'all!!
If you ask me what I see fundamentally: I see dead people
What I see in the market: celebration that there will be even more dead people.
I'm positioned between these scenarios with the caveat that the only real way I can keep pace with the destruction of the dollar is in oil, silver and food. That's not to say it's the only way...just my way.
The rest of what's going on is pure and utter bullshit that allows a few to profit at the expense of MANY. Continued failure is rewarded...that's what is missing from capitalism....actual failure. China has a more capitalistic market than us........but failure in it's system means you get taken for a ride never to return....at least at the gov't level.
The shit spouting from Timmay's mouth about reducing the trade gap from it's present to about 3% is pure fantasy. But hey if the Chinese believe it....I suspect they don't..that's completely up to them.
THose are just lies. If that is true, then why is the fed providing more liquidity even as it sees green shoots.
Here is a quote from an article in WSJ
Many analysts believe the Fed plans to hold these securities until they mature in 10 years or so, with no plans to sell them into the market, so the losses will probably never be realized.
+10....I'm not that good a writer but that, essentially, is what I meant when saying it's not about being a bull or bear."
Thanks, MS, when I say it took me a few days after March 18th to decide my move I meant it. I thought about the impact of the Fed's moves for several days.
And that impact, along with all the other crazy things the Treasury and Fed were doing, convinced me of one thing: the USD was becoming meaningless, because the Fed seemed willing to print dollars to take on all kinds of toxic assets. And probably even worse, the Treasury was willing to issue endless amounts of debt, and the Fed would print dollars to buy it. How crazy is that?
In the time period where I have been earning most of my money, say from 1990 to 2008, the value of money was relatively stable in terms of purchasing power. Sure the dollar fluctuated against other currencies, oil moved up and down, there were bubbles, etc., but for the most part a dollar was something you earned through either hard work and/or risk-taking (sure, sure, there were exceptions, but in general it was true).
Now, BB is just willing to print as much money as is politically expedient? I am no economist, just a simple player in the MBS market, but I believe we have seen this game before. When the Fed signals it was willing to corner a market (MBS) to achieve what, let's be honest, are political goals, and print money to do it, I just thought, I need to move some of my wealth out of this particular store of value.
As for being bull or bear, you are right, to me it isn't about that, it is maintaining (and hopefully growing) my ability to purchase goods and services. For now, as long as BB is willing to print dollars with abandon, I will be converting most of the dollars I make into something else.
OT- The locks are being changed this morning at the chicken wing joint across the parking lot from me. The guy just told me his sales were down 60%, and he had taken one day off in '09. They're done.
Nothing is happening with GM stock today that isn't absolutely typical of a bankruptcy. I don't know the reason for these counterintuitive moves when it becomes certain a common stock is going to be wiped out, but they're normal.
Federal Reserve puzzled by yield curve steepening
Sun May 31, 2009
WASHINGTON (Reuters) - The Federal Reserve is studying significant moves in the U.S. government bond market last week that could have big implications for the central bank's strategy to combat the country's recession.
But the Fed is not really sure what is driving the sharp rise in long-dated bond yields, and especially a widening gap between short and long term yields.
Do rising U.S. Treasury yields and a steepening yield curve suggest an economic recovery is more certain, meaning less need for safe haven government bonds and a healthy demand for credit? If so, there might be less need for the Fed to expand the money supply by buying more U.S. Treasuries.
Or does the steepening yield curve mean investors are worried about the deterioration in the U.S. fiscal outlook, or the potential for a collapse in the U.S. dollar as the Fed floods the world with newly minted currency as part of its quantitative easing program. This might be an argument to augment to step up asset purchases.
Another possibility is that China, the largest foreign holder of U.S. Treasury debt, has decided to refocus its portfolio by leaning more heavily on shorter-term maturities.
With officials still grappling to divine the factors steepening the yield curve, a speedy decision on whether to ramp up the Treasury debt purchase program or the related plan to snap up mortgage-related debt seems unlikely.
@ Gavshire Hathaway (profile) wrote on Mon, 6/1/2009 - 9:00 am
“We believe in a strong dollar,” Geithner said in a question-and-answer session after a speech to students at Peking University.
“Chinese financial assets are very safe,” Geithner said. His response drew laughter from the audience.
water boy' Geithner is tasked with reassuring China that its massive US bond holdings are safe despite concerns.
HA !!!....US economy carries about $20 trillion of excess debt. Until that debt is eliminated, the idea of a healthy boom is a mirage.
Geithner on his knees begging China please please please keep buying our debt because Obama and his Wall St bought and paid for economic team have put all their chips on the Banking Oligarchs !
No wonder the Chinese are LAUGHING because Obama has has turned out to be the economic equivalent of Dubya
I'll take sides and say I am a Grizzly Bear. Most if not all are pricing in a normal recovery. How often do we hear about the 81 recession? We have a consumer infrastructure sadly the best in the world. Look at RE, retail, malls, advertising, tech all of these people will have to retool and not all will be successful at making that change."
I don't disagree at all that the economy is in the toilet, and there is little hope that it will recover IMHO, for the reasons you mention. Relative to the ROW, America is pretty bad at producing anything of value.
But I just go by what is happening in my market, MBS. There will be about $1.5T - $1.8T of new issuance this year, and the Fed is going to buy $1.25T of it? And how? By printing dollars?
And then, look at today. The govt is giving how much to GM? And where does that money come from? Issuing debt which is monetized by the Fed? And BHO says he is going to accelerate the govt purchase of cars? Where is that money coming from?
Money as we know it has lost all meaning IMHO. Who's to say that, say, the airlines are not the next at the trough, now that oil is rising and eating into their profits? What happens then? Based on current patterns, the Treasury will guaranty their debt, which the Fed will turn around and buy that debt.
I too am bearish on the US economy in general. Ultimately you have to produce more than you consume, and the US has been terrible about that for decades.
What is unclear to me is the value of using the USD as a unit of measure anymore.
we've got hyper-inflation already.......it started in early March.
Wait until it shows up at the consumer level.......but we have this "small issue" of that power to purchase already having been destroyed.
Many analysts believe the Fed plans to hold these securities until they mature in 10 years or so, with no plans to sell them into the market, so the losses will probably never be realized.
If the cash flow doesn't justify the prices they paid the losses will be realized whether they sell or not.
In the time period where I have been earning most of my money, say from 1990 to 2008, the value of money was relatively stable in terms of purchasing power. Sure the dollar fluctuated against other currencies, oil moved up and down, there were bubbles, etc., but for the most part a dollar was something you earned through either hard work and/or risk-taking (sure, sure, there were exceptions, but in general it was true).
According to the BLS inflation calculator, $100 in 1990 had the same purchasing power as $164.83 in 2008. I'm not sure I would call that stable.
I am completely with you as far as moving wealth outside of dollars. What is hard to figure out is whether Fed printing is fueling the run up in stocks, commodities, and interest rates or if it is just speculation. There has been a huge destruction of credit that is still going on and huge destruction of income as unemployment skyrockets. Those trends seem to be locked in for at least the rest of the year. I expect more housing trouble through 2011. Those are all strong deflationary forces that the Fed is trying to counter.
I expect the game to end in a hyperinflationary blow out within the next 15 years, but I am not sure it is coming this soon.
"The rest of what's going on is pure and utter bullshit that allows a few to profit at the expense of MANY. Continued failure is rewarded...that's what is missing from capitalism....actual failure."
MS, I agree completely. Again, in my market, Fannie and Freddie failed, there is no way anyone could argue otherwise.
And yet, they still continue to function, their stock still trades (????), they still issue debt and MBS.
And BB buys it all.
"I'm positioned between these scenarios with the caveat that the only real way I can keep pace with the destruction of the dollar is in oil, silver and food."
Again I agree, see my other post, there is no question the economy is deteriorating, but BB seems to be willing to print unlimited dollars to prop up failures at the highest levels (which is why I think he will go down in economic history as The Great Enabler).
My play has been mostly oil, and CAD/AUD as strong commodity currencies, mostly because I am not a big commodities futures trader and was looking for a quick escape in mid-late March, and since those trades have worked I have stuck to them. But PM or any commodities is not a bad play either.
Do this thought experiment: what if BB actually did drop money from a helicopter, or handed it out like Santa Claus? Every man, woman, and child in the US was given, say, $10K, or better yet, make it $100K. Would you feel wealthier?
"While America was "inventing" Twitter so Americans could waste more time on useless bullshit, China built three nuclear power plants and two refineries."
Look at the Bond market. It is a larger market twice as larger as the US stock market. Even the FED cannot successfully game the market over the long term. Common stock is a relatively small market and is open to easy manipulation.
Federal Reserve puzzled by yield curve steepening
Sun May 31, 2009
WASHINGTON (Reuters) - The Federal Reserve is studying significant moves in the U.S. government bond market last week that could have big implications for the central bank's strategy to combat the country's recession.
I'll save them some effort:
Nobody wants to hold onto a 10-30 year commitment for your worthless trash garbage dollars.
Stop acting like a bunch of thieves and wild animals and maybe people will actually take you seriously.
"Every man, woman, and child in the US was given, say, $10K, or better yet, make it $100K. Would you feel wealthier? "
Not at all....but it's the intent they are looking for-total psychology at work. The only real reason they have not done that is that it can't do it in the same way it's doing it for the system. Digital $'s are completely different then actual physical one's...they can't do the stimulus BS again for that would undermine the very argument they hoist up as the reason for "up"...
I must say that in all my year's of trading I've never seen the laws of math, physics and agreements get pushed out for even more flag-waving false patriotism. This makes Bush 1/2 look like a church picnic......but the food sucks at this one.
Twittering fits in with our BS consumer infrastructure. The only reason people are behind it is because of its potential as a marketing tool. Our biggest Tech powerhouses are essentially retailers/Advertisers nothing more. Amazon, Apple (computers but a cheap Linux computer can do the same thing), Goog, Rim (although one could argue improve business prodcutivity)
Treasury yields up sharply yet dow up over 200. GM declaring bankruptcy, but their current common is up and trades near 90 cents. I don't get any of this.
"Every man, woman, and child in the US was given, say, $10K, or better yet, make it $100K. Would you feel wealthier? "
I Say yes. If it is done over time.
In the beginning there was 100 US dollars. When the population increased that 100 dollars could not simply be divided up 1k times. Eventually everyone was given 100 dollars. This makes everyone happy but also devalues the 100 dollar bill. Over simplified I know.
You can't look for understanding. IMO you either play the fundamentals and wait or look at star charts and hope you're right. That is how you have to trade ice cold...
Those of you on my list should have my June Strategy report in your mailbox, its sort of on the long side this month. Once again thanks to CR for letting me use his great chart porn, and to all the commentators here for the insights you provide me with and the chance to be a sounding board for my ideas. If you are not on the list and would like to be, shoot me an e-mail at dhvd_2004@yahoo.com and I will send you a copy of the report and add you to the list.
hello from Cambodia... court recess this week (no, I'm not up on a sex related charge...)
anybody read that last column of Paul K's OP-ED COLUMNIST; Reagan Did It - NY Times?
it was such a hack job.... and from Super K?
it was wrong in so many ways... both parties allowed the S&Ls to stay in business, once the passbook savings
rate was de-regulated they were toast (up to then they got an extra 50 basis points, no?) so new regs allowed all those
community S&Ls to stay alive.... Paul seems to have forgotten the political calculus...
bearly (profile) wrote on Mon, 6/1/2009 - 12:19 pm reply Ignore user Obama ramping up fleet purchases. Will the USG be buying only GM/Chrysler no-bid contracts
Bearly, 'when i was in the Navy in 84-90 i remember dodge/ chrysler K cars and some dodge Pups we had to drive around in .... hated em..
May have been part of the old Chrysler restructuring..so yes we may see it.
Treasury yields up sharply yet dow up over 200. GM declaring bankruptcy, but their current common is up and trades near 90 cents. I don't get any of this.
I can think of at least one person in this forum who said over and over again that all these attempts to artificially drive up asset prices would simply render them meaningless.
Fortunately though consumer confidence is up, and confidence is what counts in a confidence game.
Once this bear market rally ends, and it will, if we see a re-test of the lows, we will, there will be no floor on when the new lows are made. The US equity market will be dead for a decade, if not a generation.
The car purchases pisses me off. Of course they will over pay then report the sales success that GM and Chrysler had. Well at least someone will be driving in new cars.
Imperial Presidency plus Imperial Policies equals Consequences of Empire.
Hell Dawg we've been an Empire since Manhattan & Alamogordo.
During 1944 & '45 one seventh of all the electric power generated in the US was diverted to Manhattan and NOBODY except a small number in the WH & defense circles knew about it. Even Truman knew nothing.
Black Star Ranch (profile) wrote on Mon, 6/1/2009 - 11:23 am
"While America was "inventing" Twitter so Americans could waste more time on useless bullshit, China built three nuclear power plants and two refineries."
(semi-snark)... no, Twitter is essential to deepening the narcissism of the youngest generations, and our primary industry these days is in providing alternate realities. Everybody gets to live their own Truman show, but get enough people broadcasting the trivial details of their lives all at once, and there will be no one interested in receiving the broadcast! Individual obscurity in mass-traffic media channels is the new Dark Age
SO....you guys have gone from Depressionistas and Deflationistas to Hyper-Inflationistas?
I actually think it's possible that widespread fears of inflation may force the government to pursue more deflationary policies (e.g. hike rates). But anything can still happen at this point.
For inflationary default to really work it has to be a surprise.
I don't think many people would be surprised by inflation at this point.
"According to the BLS inflation calculator, $100 in 1990 had the same purchasing power as $164.83 in 2008. I'm not sure I would call that stable."
CC, point well taken, again inflation, like the value of fiat currency, is relative. I would argue that zero inflation should be the goal, but relative to what we are going to see, a 40% decline in purchasing power isn't so bad. i.e. our dollar now buys 50% less oil than three months ago.
"What is hard to figure out is whether Fed printing is fueling the run up in stocks, commodities, and interest rates or if it is just speculation."
A lot of it is related. If the price of oil doubles, certain companies are certainly worth more, in USD.
The big question is, is the price of oil based on speculation? A lot of people argue it is, but I would argue it is being used as a store of value, much like PM. So what if there is a lot of oil being stored? At least BB can't print more of it.
"I expect the game to end in a hyperinflationary blow out within the next 15 years, but I am not sure it is coming this soon."
I think it all depends on what BB does.
If he announced tomorrow that he is stopping all dollar printing, no more MBS purchases, no more Treasury purchases, no more PPIP, TALF, etc. then I think it could be all avoided and we just go into a wicked recession with all that entails (including probably a falling stock market, I am certain commodities would fall).
But based on his apparent mindset, I only see more and more expansion of toxic asset purchases, more Treasury purchases, etc. Then I think we see hyperinflation within the next year. I mean, classic hyperinflation: people converting dollars into something else as soon as they are received type of hyperinflation.
If something (dollars) is being given out for free, what value does it have?
"I don't think many people would be surprised by inflation at this point"
I see inflation in 1-2 years...unless the Fed can pull the rip cord on their excess liquidity, I dont have much confidence they will be able to. Also, the run up in commodities, esp oil, is nearing another bubble...more leveraged speculation if you ask me.
To my colleagues on CR, I have a treat for you.
99.999% of the people viewing this documentary will not get it because they do not have the back ground information to understand it, I do not care so much about those people who don't get it. I care about the .001% of the people who do get it. I am now placing a call to the people who do get it to join me.
dryfly (profile) wrote (in reply to...) on Mon, 6/1/2009 - 9:46 am
Imperial Presidency plus Imperial Policies equals Consequences of Empire.
Hell Dawg we've been an Empire since Manhattan & Alamogordo.
"ResistanceIsFeudal (profile) wrote on Mon, 6/1/2009 - 12:47 pm
...get enough people broadcasting the trivial details of their lives all at once, and there will be no one interested in receiving the broadcast! Individual obscurity in mass-traffic media channels is the new Dark Age"
The frequent appearance of genius here, such as the above, is why I can't quite quit this forum...
Concur, they have to reign in the excess trillions but cant now, of course, they dont have the ytrillions to pay for the welfare programs either, so my bet is once they can get back some of the trillions, it will be a considered a "savings" or revenue" anthen reused to support another "program" and never leave the system, ...inflation in 1-2 years depending on passage of entitlement programs, lasting 4-5 depending on how much more they need to print to support Citi, Chrysler, GM and AIG, et al....
1937, Roosevelt raised bank reserve requirements, tipping us back over into recession.
In 1997, when it looked like Japan was coming out of its deflation, they raised consumption taxes to offset budget deficits.
I wonder when, and in what guise, the liquidity-withdrawal moment will come for us, this time?
Likewise the Fed raised rates earlier in the 1930s. They key question though is not whether these things were done "voluntarily" but whether they had to be done to prevent a breakdown in the credit markets (creditor flight).
It seems to me that the economic historical revisionists like to say that all economic evil is a product of governments being too tight with money, but I think they may overlook the fact that sometimes governments have to be tight with money in order not to alienate their creditors.
I think the economic textbooks tend to oversimplify real world problems.
“One of Bilderberg’s primary concerns according to Estulin is the danger that their zeal to reshape the world by engineering chaos in order to implement their long term agenda could cause the situation to spiral out of control and eventually lead to a scenario where Bilderberg and the global elite in general are overwhelmed by events and end up losing their control over the planet."
Is this real? They'd have to be out of their minds to try something like that. Perhaps you'd have to be out of your mind to think you had control over the planet.
"SO....you guys have gone from Depressionistas and Deflationistas to Hyper-Inflationistas?"
Roubini (and others, I'm sure) indicated short term deflation followed by inflation. That's probably the mainstream notion here as well, and the question is really, how hard the swings will be, and when they'll happen.
Real GDP decrease either takes the form of less money (deflation) or less money value (inflation).
They are actively gaming this over the 200DMA and are trying to get the techies to buy into it. The volume after it pierced that is not that exciting....but volume didn't matter in 2007 either.
Inflating Assets will help prop up the banks by making their debt "smaller" but it will wreak havoc on the greater economy. Energy prices will rise food prices will rise. Consumers will get crushed jobs will get crushed and equities will get hammered. This will put further pressure on the banks lending because the spread will not be much different than what it is today.
They are actively gaming this over the 200DMA and are trying to get the techies to buy into it. The volume after it pierced that is not that exciting....but volume didn't matter in 2007 either.
Ciao
MS
There's been a lot of hopes that institutional money would start to flood in at the 950 level, so my theory was that everything would be done to try to pump the markets above that.
The only problem is that the bond market isn't cooperating and in the end if it keeps up everything is going to hell.
WASHINGTON, June 1 /PRNewswire-USNewswire/ -- Consumer advocate Ralph Nader today issued the following statement on GM's bankruptcy filing:
Today's bankruptcy declaration in federal court by General Motors is an avoidable, crude weapon of mass devastation for workers, dealers, auto suppliers, small businesses and their depleted communities. For GM's voiceless owners -- the common shareholders -- it is a wipeout.
The proximate cause of the bankruptcy was supposed to be the inability of GM and the government's auto task force to reach an accommodation with GM's bondholders. But late last week, the bondholder problem was moving toward rapid resolution, and was clearly resolvable. Why then are GM and its multibillion government financier proceeding with bankruptcy?
The bankruptcy and the GM restructuring plan are the product of a secretive, unaccountable, Wall Street-minded government task force that assumed power because of a Congressional abdication of historic magnitude. By all rights, the restructuring plan should have been submitted to Congress for deliberative review and decision.
There is little doubt that GM's chronic mismanagement and the deep recession require restructuring and scaling back the auto giant. But the bankruptcy and restructuring plan appear poised to do so in ways that will needlessly harm the stakeholders meant to be helped by Washington's rescue of GM?
"I don't see how anyone can't see what they've managed to trigger."
This failure to recognize the illusion of control has happened again and again for the past thousands of years. I've just read a document in translation from the 18th dynasty of ancient Egypt which talks about an era of events out of control, of chaos, of a war of all against all. People demand order, and the 'elites' give it to them if they can, but the elites can suffer as much from the illusion of control as the rest of us.
The past several weeks, BB has been hinting that he was done with QE for the time being; that higher interest rates meant investors were comfortable taking on risk again, etc. Looks like the speculators that tried to front-run the FRB blinked first.
the hole in BB's thesis is that the risk/investment is supposed to take place in the US. Doesn't really help us if the risk-taking is in BRIC...
Those small actions in the 1930's and in Japan in the 90s did not ruin a recovery. The reason is that hey fell back down is that the banks had not yet realized the full extent of their losses.
"Look at the Bond market. It is a larger market twice as larger as the US stock market. Even the FED cannot successfully game the market over the long term."
If BB wanted to, he could.
What if he said "I am going to buy every new Treasury bond created at a yield of X.XX%, and print new dollars to do it, for the next ten years"?
He has already hinted he would do that in a speech he gave several years ago.
I would not underestimate have far this fool is willing to go in his Quixotic battle against that perceived demon, deflation.
To him, depressions and recessions are nothing but monetary phenomena that can be combated simply by printing dollars. The business cycle can be eliminated entirely through proper monetary policy.
If you believe that, I have some worthless pieces of paper with dead men's faces to sell you (for oil, only, please).
“someone from the IMF pointed out that its own study on historical recessions suggests that the US is only a third of the way through this current one; therefore economies expecting to recover with resurgence in demand from the US will have a long wait.” One attendee stated that, “Equity losses in 2008 were worse than those of 1929,” and that, “The next phase of the economic decline will also be worse than the '30s, mostly because the US economy carries about $20 trillion of excess debt. Until that debt is eliminated, the idea of a healthy boom is a mirage.”
Hey I was just leaked from a reliable source, the plan to rebuild GM.
Apparently the Car CZar was pitched this idea from some "lobbyist" named Lyle Lanley that had a bunch of fancy drawings and photos ,...
well basically, all the GM plants will convert to bullet monorail construction with the first being in Springfield....
Apparently there was a successful bullet monorail built in North Haverbrook based on the photos from the proposal, though no one has verified i am told....
Apparently a Sebastian Cobb will oversee the conversions....
Ghostface of course they can influence the market. However if BB tried to fix rates there would be a line around the the island of Manhattan of people wanting to sell. If they don't like the rates they have a buyers strike. The fed is large the Fed has big balls but cannot resupply the entire global capital markets.
but wouldn't BB just continue the same policy? He's gone down the QE route already....there is nothing to stop him from becoming the entire market (IMO he is already and the number's we get don't reflect what he's done to the individual equity markets).
I really don't see how the game changes to cause the bondy's to throw in the towel.....
I know how it's supposed to work...should've had some affect on it by now. It hasn't.
C&C:
Also, the run up in commodities, esp oil, is nearing another bubble...more leveraged speculation if you ask me.
Oil feels like a bubble, it has markings of a bubble: Oil demand is very weak, and yet prices are going up; if demand doesn't pick up we're looking at the world running out of storage, even if you include all the oil tankers in the world, in about 6-8 weeks. But I fully expect it to go up, dramatically, because big boys will load up and perform a "shoot the moon" play.
If that things blows, I fully expect several TBTF company to go bankrupt with that trade and ask for govt bailout. So taxpayers will ultimately be used to back any trade; even irrational and extremely risky ones.
The precedent for this has been set in economic history, they're fools not to game it for max gain. Swing this for oil, next will be food and then to move to electricity. We've shown financial companies that their best option in this system, is to shoot the moon; if they succeed, they'll make hideous amounts of money and shear a layer of skin off the masses; if they fail, they'll get uncle Sam and the loss will be borne by the masses.
I simply don't see why they won't do that. It's such a profitable strategy.
Okay I'll yield to those with more knowledge/experience on the US treasury market. But I see it like this.
Think Star Wars IV; Han Solo and Greedo. Han shot first and he won! The first person to sell their treasuries, first mover will be the winner. However instead of 2 people at a table you have about 4 world economic powers sitting at a table. They are just staring each other down right know feeling each other out...
The market is like the brain, the economy is the body. The market has a desperate 'will to believe' we have hit bottom, and does not want to think about the long term side effects of the Feds medication (fiat money). The medication is like giving arsenic for syphilis-- a poisonous cure. In the meantime, the market is feeling better, with massive 'opiate painkillers,' so it's up.
10yr & 30yr auctions next week. Who will be bidding alongside Ben as he tries to drive prices up ? Maybe waiting until he's done to see where the natural demand lands up would be a wise choice... looking at the fortune cookie now.
What if he said "I am going to buy every new Treasury bond created at a yield of X.XX%, and print new dollars to do it, for the next ten years"?
He has already hinted he would do that in a speech he gave several years ago.
I imagine that all foreign holders of US Dollars would go out and buy any commodity they could find that was priced in US Dollars until they either ran out of US Dollars or couldn't find any more commodities priced in US Dollars.
Long term I feel that the FED, US Gov, and CEOs could give a F about the equity market. They are propping up so the insiders can sell (stock, businesses, offices etc). Going forward it will be more important the USSA citizens buy the debt that others won't touch. Remember Obama bonds?
That statement was less a prediction and more to make a point - the level of anything as priced in fiat currency is meaningless in and of itself. Let's say the market DID get to 1200, but oil was at $150. Are Americans more or less wealthy in general? Given the impact of oil throughout the economy, I would argue less.
Oil will go up when the dollar goes down in value.
But U.S. stocks will not go up when the dollar goes down in value.
U.S. stocks are denominated in dollars. The capital gains they create and the dividends they pay out are denominated in U.S. dollars, which are becoming more worthless. Stocks don't perform well when the currency they are denominated in is crashing.
Real assets benefit from hyperinflation and currency devaluation by holding their value.
Financial assets (stocks, bonds and cash) get trashed in hyperinflation and currency devaluation.
Gross talks his book. He wasn't talking to anyone in particular with that. I said it before....they will not downgrade the hand that feeds the system. Gross saying that just gives him an out and makes him appear sane.....and he said it might get downgraded in 2-3 year's not that it was worth whatever rating they have assigned to it.
Chicago Dude:
I imagine that all foreign holders of US Dollars would go out and buy any commodity they could find that was priced in US Dollars until they either ran out of US Dollars or couldn't find any more commodities priced in US Dollars.
Tsk... Finish your analysis!
Now what happens to the commodity sellers who get stuffed with gobs of USD now? Those dollars do not vanish into thin air or get burned now does it?
At the end of the day, all the dollars OUTSIDE the USA have to go through repatriation in order to finish it's lifecycle. They either return to the USA because they bought something USA produces (and that something cannot be more USD or USD-producing-assets, or else we're back to the same game, even bigger now); or they remain locked outside the system, transferring from one owner to another or recycled back to USA as UST (which produces for USD as they mature, worsening the problem...).
Now, last I heard, the US don't produce much non-USD-producing (i.e. "real" ) goods; so there's little to buy to really dispose of the USD. If the world is looking to net-decrease it's USD holdings, it's going to drink the ocean through a really small straw.
The way I see it, the USD is like a CDS whose true value is WAY LOWER than what's being reported/marked; and all the holders of USD are similar to sucker mark-to-market banks we see everyday. They cannot allow USD to mark to real value; as that'll make their own books insolvent; so the facade continues.
This is the best game in town yet.
Balance (and USD destruction) returns when the Net holders allow the USD to be recognized to be lower than their own currencies. Based on the collective race to the bottom devaluation action seen so far, there's zero chance of that happening.
This morning, I read an inspiring story about GLL Centres, a London-based non-profit
operating gyms for the benefit of the community. (check their site at gll.org). This is
truly brilliant thinking, as it uses the current environment to subtly undermine the status quo. The non-profit model would be a brilliant
Total credit market debt as a percentage of GDP has risen from 130% of GDP in 1952 to 350%
of GDP today. The various bailout and stimulus schemes enacted in the last year will drive
this percentage above 400% in the near future. When a country allows this much debt to
accumulate versus its GDP, they have done something seriously wrong. The country’s
politicians, business leaders, and citizens have all contributed to this disaster.
I completely second your opinion Alberto. The economic meltdown has affected everything and construction spending is no different. Debt accumulation is a first sign of a flimsy economy and countries are built on much more stronger foundations!
Residential and Non-Residential Construction spending is only one facet of this global debacle. Let's hope the future has something different in store, something more positive.
The Bilderberg Plan for 2009: Remaking the Global Political Economy
The Bilderberg Plan for 2009: Remaking the Global Political Economy
After the meetings finished, Daniel Estulin reported that, “One of Bilderberg’s primary concerns according to Estulin is the danger that their zeal to reshape the world by engineering chaos in order to implement their long term agenda could cause the situation to spiral out of control and eventually lead to a scenario where Bilderberg and the global elite in general are overwhelmed by events and end up losing their control over the planet.
I REALLY love the smell of desperation from the elites
Slow.....down CR
Wow CR! Rapid fire blogs! Thanks, we are just so beholden by your awesomeness...
(edited: double post)
We had to pig the thread, in order to save it!
better pig this market, in order to save the double-inverse holders
Perhaps Timmay is feeding the market Chinese Gooseberries today?
3.65% on the 10 year ponzi-note.
Dow soaring. Financials weak. Treasuries plummeting. I smell a reversal from +185 right now.
And GM is still not at zero, because ?????????????
Some should note that the March numbers were revised from $661 to $648.3 with residential revised from $258.4 to $247.4 and commercial revised from $402.6 to $400.8.
Without the revisions, spending would have gone down in all categories. There is that pesky margin of error which systematically tends to err on the high side. I wonder what the likelihood is that April's numbers will be revised down in when the May numbers come out next month?
thanks artanis65, I had been wondering about the revisions
History shows that bear markets break almost every market player, almost every one. Those that were wrong at the beginning forget to change their game plan, those that were right at the beginning eventually make the same mistake.
Taleb fund is going to bet on hyper-inflation.
Anyone want to step up and fade that action?
Glod as a currency alternative no longer makes any sense (hard to transfer electronically) --and this market no longer makes any sense. I used to be paranoid and really believed in a PPT--no more. The headless chickens rule Wall St--and using good sense leads to a loss. GM bk as good news is the last straw--glod and oil gonna go up. Methinks buying a natural resource company--mining or oil/gas is the only safe bet. Inflation in what we all need--deflation for everything else.
Capitalism is easily destroyed by insanity and greed. Democracy won't last much longer either.
Wouldn't want to fade it, but it still seems pretty remote to me... the numbers needed to get there are simply staggering. That's not to say they can't do it ($50k checks jammed in every mailbox), but history has shown it's dangerous to underestimate deflationary forces.
China Pushes Hard
http://snipurl.com/j7d33
Is Mr. Geithner trying to persuade China to reflate a new version of our financial bubble?
Of course he is because financial engineering and consumer spending ( 70% of GDP ) are key drivers for the debt laden ‘bubble’ US economy.
And Obama and his Wall St bought and paid for economic team have put all their chips on the Banking Oligarchs !
This will not end well….
relying on ANY gov't #'s is suicide unless you know what's coming out. The serfs here (me included) don't know so we sit and watch this shaking our heads. This rise really has nothing to do with being a bull or bear in the grand scheme. It's about how much capital can be destroyed while trying to give the impression it's all going to be just fine. Think of what we could have accomplished as a country with working capital given to the system from just this year alone.......staggering to even contemplate.
Ciao
MS
We're all Humpty Dumpty now!
ponzi note = +1
Just heard the news about Citi being delisted. Hallelujah! Few bright spots for me today.
I don't know why I continue to run my streaming realtime action list anymore. The numbers don't bear much of any relationship with the reality I see and read about.
A bet on high inflation seems premature, but probable sometime in the not distant future. But making the call on reversal (including partial) from deflation to hyper-inflation seems much more than risky now.
All the talk about 'balloons' in recent years seems focused on unsustainable and non-fundamental increases in asset worth. I find the balloon more appropriate because of the balloon-pin prick analogy. Collapse at any moment is the danger that scares me, and when it comes, as it must, I don't trust the 'market' to treat me fairly with its invisible hand because it is so clear that the market is controlled and rigged for the big boys.
I think we are approaching the moment of maximum danger in the next (six?) months ahead. It could go either way, and blackjack or lotteries seem like safe harbors compared to 'investment'.
"Just heard the news about Citi being delisted. Hallelujah! Few bright spots for me today. "
AFAICT they've just been removed from the DJIA.
Tim,
Do you mean Citi being dropped or It's stock going up on the news?
"Obama and his Wall St bought and paid for economic team have put all their chips on the Banking Oligarchs !"
Km4 +1
Make no mistake we have an oligarchy running the USSA. We should commission a statue of Charles Ponzi himself, the father or modern American capitalism somewhere near Wall St. It could be a public works project. Create temporary jobs.
Travellers and Cisco replace GM and C.
There's a certain irony in Travellers replacing C. (for those not in the know, C's acquisition of Travellers was the reason for the repeal of Glass-Steagal)
Nate housing
Yes sorry poor choice of words... being taken off the Dow.
Obama and Co have shown that they will use all of our $$$ to ensure the collapse never happens.... again... never ever!
Taleb fund is going to bet on hyper-inflation.
If the hyperinflation meme picks up enough momentum that might force the Fed to start draining liquidity and/or raising rates.
Maybe that's the whole idea...
as far as GM is concerned the action in that (so far) smacks of some entity buying up shares to prop it up. Yes it opened at like .50 and has risen to $1.00 however there has not been any type of capitulation that would cause the remaining shorties to cover. I would jump on it had it reached a real price of about .20 however as Jim points out above, it's just another bubble waiting to be popped.
I just saw a news item in my ticker that said:
"GM not filing......" don't have the rest of it as it's been removed.
If that is the case this is the biggest case of bait and switch of all time.
Ciao
MS
Eric (profile) wrote on Mon, 6/1/2009 - 10:38 am
Taleb fund is going to bet on hyper-inflation.
Anyone want to step up and fade that action?
Not me.
Last night I reread a NYT story from earlier this year on how VaR totally blew up the financial system. Taleb, who was a major part of the article, has been railing against VaR for a dozen years. He was right, too. It's amazing that many financial execs didn't know that "you won't lose $50 million dollars in the next week, 99% of the time" does not equal "you have a 1% chance of losing $50 million in the next week." More like, "you have a 1% chance of losing $50 million (with an unlimited upside)." It's that last little detail that kills you.
"GM's bankruptcy filing is the fourth-largest in U.S. history and the largest for an industrial company. The company said it has $172.81 billion in debt and $82.29 billion in assets."
Anyone wanna bet that there will be a "successful capital raise" by a bank today?
"This rise really has nothing to do with being a bull or bear in the grand scheme."
It's only a rise if you price the market in USD.
As compared to oil, the market is down.
I am not sure what people, including on this board, don't get about hyperinflation. When has hyperinflation ever occurred against a backdrop of economic growth? Never. In fact, it always happens against a backdrop of economic weakness, where governments print dollars to pay for overspending, and people lose confidence in that currency.
Sound familiar?
What we have been seeing is a reaction to that hyperinflation pressure, as people bail out of the worst fiat currencies (the USD being the worst of the worst) and into "hard currencies" like CAD, AUD, and the hardest of them all, oil itself.
My prediction is we see the S&P at 1200 by the end of the year, and oil at $150 a barrel, unless BB realizes his mistake and stops printing dollars to buy every trash asset in the country.
The market is down even in terms of USD's, let alone oil.
1st of May to 1st of June - 10% drop in the dollar.
How'd'ya like them apples?
ac (profile) wrote on Mon, 6/1/2009 - 10:57 am
Taleb fund is going to bet on hyper-inflation.
If the hyperinflation meme picks up enough momentum that might force the Fed to start draining liquidity and/or raising rates.
Maybe that's the whole idea...
Can they do it fast enough or carefully enough not to crash the economy even worse?
Found this...
BAILOUT ROCK
WilliamBanzai7
Timmy Geithner threw a party for the dumb that failed.
Benny Bernanke's band was there and they began to wail.
The band was jumpin and the joint began to swing.
You shouldve heard those feckless CEO turds sing.
Lets rock, everybody, lets rock.
Everybody on the whole was hocked
and dancin to the bailout rock.
ghost-
I'm with you on the theory however you and I trade in what denominated asset?
That's why it sucks....I'm in comms. but it's just keeping pace with the destruction IMO. And as soon as you sell you are back into $'s.
Ciao
MS
ghostfaceinvestah (profile) wrote on Mon, 6/1/2009 - 11:00 am
My prediction is we see the S&P at 1200 by the end of the year, and oil at $150 a barrel
gfi,
S&P at 1200? Since when did you become a bull?
The slow motion train wreck that is the American economy
has now begun to slam into the ground.
There have been 'scrapes' up until now but GM is the first big dent.
Once the largest employer... It only gets worse from here.
All the govenrment spending up to this point was simply
an attempt to inflate an airbag before impact.
They knew it was coming.
Next big hits? California and Michigan.
California is the 5th largest economy in the world.
crash and burn.
Sure glad the CDS on the GM debt won't have any unforeseen consequences, right?
Isn't it wonderful how the GM BK is a non-Event!
We now are so blase about it that the market actually is rising.
Don't think this happened by chance. At the cost of under 100B Timmie and Co. kept the soap opera going until everyone was sick of it.
Imagine what would have happened if there was no intervention by gov't
I can't believe that new home starts are going up, even though it's spring. Where is this happening? Who will be the buyers?
Comrade Elmer Fudd (profile) wrote on Mon, 6/1/2009 - 11:10 am
Sure glad the CDS on the GM debt won't have any unforeseen consequences, right?
Not a problem, 'insurance' is now fully guaranteed by Uncle Sam.
Imagine what would have happened if there was no intervention by gov't
Sorry, I can only watch one "let's pretend" movie at a time.
@ghostfaceinvestah - I think you're right on the money.
SOT, but cute article by PJ on how we lost our love for the auto..
The End of the Affair
We’ve lost our love for cars and forgotten our debt to them and meanwhile the pointy-headed busybodies have been exacting their revenge. We escaped the poke of their noses once, when we lived downtown, but we won’t be able to peel out so fast the next time. In the name of safety, emissions control and fuel economy, the simple mechanical elegance of the automobile has been rendered ponderous, cumbersome and incomprehensible. One might as well pry the back off an iPod as pop the hood on a contemporary motor vehicle. An aging shade-tree mechanic like myself stares aghast and sits back down in the shade. Or would if the car weren’t squawking at me like a rehearsal for divorce. You left the key in. You left the door open. You left the lights on. You left your dirty socks in the middle of the bedroom floor.
What happened today ? Did Ben misplace his paddle ?
what use is prognosticating about fundamental economics in a Command Economy?
all our so called science has turned to blather.
damn, YLSP... I had something to say... ah yes...
perhaps it was lawyerLiz talking about people talking to themselves...
although this might seem like a sign of mental instability to the general populace it's not
really, unless the person is speaking gibberish why should thinking out loud be stigmatized?
people who take medications for AADD tend to have this small side effect...
the field of economics is destined to be equated with wacky conspiracy theories.
actual analysis using facts counter to the party organ will likely get you monitored.
this is a Command Economy.
i challenge anyone to explain how it is not.
or the actual write-offs (because that's what it is at this point not a write-down) on all that debt held at the "too big to fail" 'tutes.
Ciao
MS
"S&P at 1200? Since when did you become a bull?"
I was never a bull, or a bear, strictly, and to be honest I have almost no good reason to be predicting "the market" at all, for all I know the basket of stocks that is the S&P could be 200 by the end of the year.
That statement was less a prediction and more to make a point - the level of anything as priced in fiat currency is meaningless in and of itself. Let's say the market DID get to 1200, but oil was at $150. Are Americans more or less wealthy in general? Given the impact of oil throughout the economy, I would argue less.
My bigger point was that BB's activities are a game changer, and not necessarily in ways that will be beneficial.
March 18th was the day I piled into the oil trade and "hard currency" (my terms) trade in a big way (well, actually, a few days later after I thought things through). That was the day BB announced he was increasing his purchases of MBS from $500B to $1.25T.
At $500B, he was just another market participant, albeit a big one, at $1.25T he is the market. That is plenty of money to corner that market for new issuance, and given the way issuance is done, he could corner the market for certain coupons.
What that action (along with all the other ridiculous TALF, PPIP, etc programs) signaled to me is that money, as priced in USD, had basically lost all meaning. If BB was willing to print more and more dollars to prop up just about any financial market, and enough to corner one of the largest markets in the world, the value of that currency, as measured in its ability to buy things that matter, is on a fast trip to zero.
A classic situation for hyperinflation.
So back to my statement about the market, again it was more a point about the relative value of things as measured in a unit that is rapidly losing value.
Biggest head fake in the history of world finance. When historians codify the 2007-2012 era they will look at Q2 2009 as the period when the pilots were flying the instruments and not looking out the window. March spending to April reported is down on preliminary numbers and only up on revised to preliminary comparisons. That's called flying the instruments and it is often fatal.
ghost-
+10....I'm not that good a writer but that, essentially, is what I meant when saying it's not about being a bull or bear.
Ciao
MS
marketwatch never fails to entertain:
Good call on the market
President Obama made the case for buying stocks in early March and had you done so then you'd be way ahead now.
(front page right now)
uce
See bipartisanship at its best.. Personally I would feel better with one politician destroying it than 500+
CNSNews.com - 36 Congressmen Ask Obama to Return Authority Over Auto Bailout to Congress--But White House Says Its Not Over-Reaching Its Power
36 Congressmen Ask Obama to Return Authority Over Auto Bailout to Congress--But White House Says Its Not Over-Reaching Its Power
White House (CNSNews.com) - A bipartisan coalition of 36 members of the House of Representatives--including 30 Republicans and 6 Democrats--has sent a letter to President Obama asking him to return to Congress its constitutional legislative authority to oversee the bailout of the auto industry.
In December, Congress failed to pass a bill authorizing a bailout of Chrysler and General Motors. President Bush and now President Obama, however, proceeded with a bailout process even without legislative autority. That process has cost the taxpayers billions of dollars and given the Executive Branch unilitaral and unprecedented authority to control what happens to the two major auto companies.
Ireland set to go bust, claims economic historian
Ireland set to go bust, claims economic historian -
Europe, World - The Independent
A dire warning that the Republic is a prime candidate to go bust has come from one of the world’s leading economic historians.
“The idea that countries don’t go bust is a joke,” said Niall Ferguson, Harvard professor and author of The Ascent of Money.
“The debt trap may be about to spring” he said, “for countries that have created large stimulus packages in order to stimulate their economies.”
His chosen prime candidate to go bust is “Ireland, followed by Italy and Belgium, and UK is not too far behind”.
Argentina is top of his list of shaky countries but “the argument that it can’t happen in major western economies is nonsense”.
And America the most Debt of any nation in the world chugs along like no tomorrow....the fall will be mighty indeed.
Nice Bloomberg article on how the GM BK was handled. And Obama's role in directing it.
It is refreshing to have a guiding intelligence once more at the top
This is so typical now:
http://www.earthtimes.org/articles/show/lear-elects-to-exercise-30-day-grace-period-for-pending-interest-payments,843640.shtml
Lear just decides to give itself a free pass...for the time being.
Look at the stock.
Ciao
MS
BTW, the MBS market is selling off again in lockstep with Treasuries. IMHO the Treasury market will be the most interesting market to observe in the next 6 months or so. I don't have a position in it yet (other than keeping what USD I need short term in short term instruments).
But it is this market that will be the true test of just how much BB will debase the USD to tilt at his deflation windmill.
Currently, he is not yet a big enough player to move the market, but just enough to keep a lid on it.
As supply increases, his commitment to date becomes less and less impactful.
To keep rates down, he will have no other choice than to step up his commitment from $300B to, say, $1T.
If he does that, he could keep rates low, in the 3s on the 10 year, but that would be the end of the USD, and oil goes to $150 for sure, along with a commensurate rise in other commodities.
If he doesn't increase his commitment, I would guess the 10 year hits the 5s by year end.
restricting EW's critisisms? Roubinis?
.." as well as anyone else exerting influence on the process...."
Update on Recovery Act Lobbying Rules: New Limits on Special Interest Influence | The White House
"First, we will expand the restriction on oral communications to cover all persons, not just federally registered lobbyists. For the first time, we will reach contacts not only by registered lobbyists but also by unregistered ones, as well as anyone else exerting influence on the process. We concluded this was necessary under the unique circumstances of the stimulus program.
President Bush and now President Obama, however, proceeded with a bailout process even without legislative autority.
They proceeded with Executive authority. Duh.
If they're gonna make an argument, at least make a good one otherwise don't waste people's time. We're busy overseeing the dismantling of the empire.
Imperial Presidency plus Imperial Policies equals Consequences of Empire.
ac (profile) wrote on Mon, 6/1/2009 - 10:57 am
Taleb fund is going to bet on hyper-inflation.
If the hyperinflation meme picks up enough momentum that might force the Fed to start draining liquidity and/or raising rates.
Maybe that's the whole idea...
Can they do it fast enough or carefully enough not to crash the economy even worse?
Anything's possible, but looking at oil prices and treasury yields right now I would have to say no.
Inflation fundamentally involves robbing creditors. If the creditors see that they are going to be robbed you're going to get capital flight. That will crash the economy and it may be starting now.
You cannot base an economy on theft and deception and scams. Unfortunately the current administration does not seem to have learned from our past mistakes.
Ghostface MS
I'll take sides and say I am a Grizzly Bear. Most if not all are pricing in a normal recovery. How often do we hear about the 81 recession? We have a consumer infrastructure sadly the best in the world. Look at RE, retail, malls, advertising, tech all of these people will have to retool and not all will be successful at making that change.
latest from KD:
We Are In Looneyville - The Market Ticker
I agree with most of his observations except this one:
"Yes, this is all daytraders playing around - I get that. "
daytrader's, no matter how many of them, can't support what's going on in GM today...not today or any other day.
Ciao
MS
In its bankruptcy petition, G.M. said it had $82.3 billion in assets and $172.8 billion in debts.
The company’s Saturn unit, which G.M. began in 1990 to compete with foreign-made cars, also filed for bankruptcy on Monday. G.M. has said it will phase out the Saturn brand by 2012.
G.M.’s Saab unit is already under bankruptcy protection in Sweden. The German government last week picked Magna International, a Canadian car-parts maker, to buy G.M.’s Opel unit, which is based in Germany.
The company will also have to shed 21,000 union workers and close 12 to 20 factories, steps that most analysts thought could never be pushed through by a Democratic president allied with organized labor.
Forty percent of the company’s 6,000 dealers will close, the workers’ union will be forced to finance half of its $20 billion health care fund with stock of uncertain value in the restructured G.M., and bondholders, including many retirees, will be forced to take stock worth 10 cents for every dollar they lent the company.
ghostfaceinvestah (profile) wrote on Mon, 6/1/2009 - 11:25 am
"S&P at 1200? Since when did you become a bull?"
I really meant that as a joke, but you clarifications are well-taken.
BTW, an earlier poster seemed to suggest that before hyperinflation set in, BB would tighten liquidity and raise rates. How that could be done without crashing the economy and severely limiting future attempts to finance the humongous US debt is beyond me.
JP,
So true! I wonder if 90% of the journalist and those talking to them even have a clue what they are talking about....
Oh and +8 for the dismantling comment,
The Beginning of the End of Business As We Know It
The Beginning of the End of Business As We Know It, Pt 2 - Umair Haque - HarvardBusiness.org
"...What we are seeing is a collapse of crony Capitalism...which is very different from free market Capitalism."
Hard work doesn't matter. Doing or being better doesn't matter. What does? Connections, deep pockets, inside info, and — most perverse — a lack of ethics. The less ethics matter to you, the more you'll bid, for example, to run the government's books.
It's a shame that our President — who's actually pretty bright — has turned out to be the economic equivalent of Dubya, at the time we needed economic competence the most.
Business as we knew it is fast coming to an end. Here's what the Obamaconomy looks like. The government champions funds. Funds champion corporations. Corporations champion markets and industries. No one champions people (because they don't count).
Funny watching this action all morning, I have been humming the tune
" Revolution " by the Beatles.....quite fitting if I do say so myself.
Hmm, the only cafe in my office building is ceasing operations, effective immediately. Who knew that tenant-firm downsizing is a bad thing? Anyway, more green shoots for y'all!!
Tim-
If you ask me what I see fundamentally: I see dead people
What I see in the market: celebration that there will be even more dead people.
I'm positioned between these scenarios with the caveat that the only real way I can keep pace with the destruction of the dollar is in oil, silver and food. That's not to say it's the only way...just my way.
The rest of what's going on is pure and utter bullshit that allows a few to profit at the expense of MANY. Continued failure is rewarded...that's what is missing from capitalism....actual failure. China has a more capitalistic market than us........but failure in it's system means you get taken for a ride never to return....at least at the gov't level.
The shit spouting from Timmay's mouth about reducing the trade gap from it's present to about 3% is pure fantasy. But hey if the Chinese believe it....I suspect they don't..that's completely up to them.
Ciao
MS
THose are just lies. If that is true, then why is the fed providing more liquidity even as it sees green shoots.
Here is a quote from an article in WSJ
Many analysts believe the Fed plans to hold these securities until they mature in 10 years or so, with no plans to sell them into the market, so the losses will probably never be realized.
" ghost-
+10....I'm not that good a writer but that, essentially, is what I meant when saying it's not about being a bull or bear."
Thanks, MS, when I say it took me a few days after March 18th to decide my move I meant it. I thought about the impact of the Fed's moves for several days.
And that impact, along with all the other crazy things the Treasury and Fed were doing, convinced me of one thing: the USD was becoming meaningless, because the Fed seemed willing to print dollars to take on all kinds of toxic assets. And probably even worse, the Treasury was willing to issue endless amounts of debt, and the Fed would print dollars to buy it. How crazy is that?
In the time period where I have been earning most of my money, say from 1990 to 2008, the value of money was relatively stable in terms of purchasing power. Sure the dollar fluctuated against other currencies, oil moved up and down, there were bubbles, etc., but for the most part a dollar was something you earned through either hard work and/or risk-taking (sure, sure, there were exceptions, but in general it was true).
Now, BB is just willing to print as much money as is politically expedient? I am no economist, just a simple player in the MBS market, but I believe we have seen this game before. When the Fed signals it was willing to corner a market (MBS) to achieve what, let's be honest, are political goals, and print money to do it, I just thought, I need to move some of my wealth out of this particular store of value.
As for being bull or bear, you are right, to me it isn't about that, it is maintaining (and hopefully growing) my ability to purchase goods and services. For now, as long as BB is willing to print dollars with abandon, I will be converting most of the dollars I make into something else.
I thought this little clip was good!! Per Reuters:
“We believe in a strong dollar,” Geithner said in a question-and-answer session after a speech to students at Peking University.
“Chinese financial assets are very safe,” Geithner said. His response drew laughter from the audience.
"If the hyperinflation meme picks up enough momentum that might force the Fed to start draining liquidity and/or raising rates."
they can't "drain liquidity"
that would mean selling something.
clearly they intend to only buy.
the moment they stop buying everything, everything collapses.
MS
I agree with all the above...
OT- The locks are being changed this morning at the chicken wing joint across the parking lot from me. The guy just told me his sales were down 60%, and he had taken one day off in '09. They're done.
Nothing is happening with GM stock today that isn't absolutely typical of a bankruptcy. I don't know the reason for these counterintuitive moves when it becomes certain a common stock is going to be wiped out, but they're normal.
The New American Muscle Cars... designed and made in China where the long arm of the Obama Administration can't cram down the design specs.
Federal Reserve puzzled by yield curve steepening
Sun May 31, 2009
WASHINGTON (Reuters) - The Federal Reserve is studying significant moves in the U.S. government bond market last week that could have big implications for the central bank's strategy to combat the country's recession.
But the Fed is not really sure what is driving the sharp rise in long-dated bond yields, and especially a widening gap between short and long term yields.
Do rising U.S. Treasury yields and a steepening yield curve suggest an economic recovery is more certain, meaning less need for safe haven government bonds and a healthy demand for credit? If so, there might be less need for the Fed to expand the money supply by buying more U.S. Treasuries.
Or does the steepening yield curve mean investors are worried about the deterioration in the U.S. fiscal outlook, or the potential for a collapse in the U.S. dollar as the Fed floods the world with newly minted currency as part of its quantitative easing program. This might be an argument to augment to step up asset purchases.
Another possibility is that China, the largest foreign holder of U.S. Treasury debt, has decided to refocus its portfolio by leaning more heavily on shorter-term maturities.
With officials still grappling to divine the factors steepening the yield curve, a speedy decision on whether to ramp up the Treasury debt purchase program or the related plan to snap up mortgage-related debt seems unlikely.
@ Gavshire Hathaway (profile) wrote on Mon, 6/1/2009 - 9:00 am
“We believe in a strong dollar,” Geithner said in a question-and-answer session after a speech to students at Peking University.
“Chinese financial assets are very safe,” Geithner said. His response drew laughter from the audience.
water boy' Geithner is tasked with reassuring China that its massive US bond holdings are safe despite concerns.
HA !!!....US economy carries about $20 trillion of excess debt. Until that debt is eliminated, the idea of a healthy boom is a mirage.
Geithner on his knees begging China please please please keep buying our debt because Obama and his Wall St bought and paid for economic team have put all their chips on the Banking Oligarchs !
No wonder the Chinese are LAUGHING because Obama has has turned out to be the economic equivalent of Dubya
The Dow has rallied 2000 points from its low (about 30%). It not just daytraders(sic) playing around.
"Ghostface MS
I'll take sides and say I am a Grizzly Bear. Most if not all are pricing in a normal recovery. How often do we hear about the 81 recession? We have a consumer infrastructure sadly the best in the world. Look at RE, retail, malls, advertising, tech all of these people will have to retool and not all will be successful at making that change."
I don't disagree at all that the economy is in the toilet, and there is little hope that it will recover IMHO, for the reasons you mention. Relative to the ROW, America is pretty bad at producing anything of value.
But I just go by what is happening in my market, MBS. There will be about $1.5T - $1.8T of new issuance this year, and the Fed is going to buy $1.25T of it? And how? By printing dollars?
And then, look at today. The govt is giving how much to GM? And where does that money come from? Issuing debt which is monetized by the Fed? And BHO says he is going to accelerate the govt purchase of cars? Where is that money coming from?
Money as we know it has lost all meaning IMHO. Who's to say that, say, the airlines are not the next at the trough, now that oil is rising and eating into their profits? What happens then? Based on current patterns, the Treasury will guaranty their debt, which the Fed will turn around and buy that debt.
I too am bearish on the US economy in general. Ultimately you have to produce more than you consume, and the US has been terrible about that for decades.
What is unclear to me is the value of using the USD as a unit of measure anymore.
Did FASB suggest what mark-2-market the Fed should adopt ?
we've got hyper-inflation already.......it started in early March.
Wait until it shows up at the consumer level.......but we have this "small issue" of that power to purchase already having been destroyed.
Ciao
MS
Many analysts believe the Fed plans to hold these securities until they mature in 10 years or so, with no plans to sell them into the market, so the losses will probably never be realized.
If the cash flow doesn't justify the prices they paid the losses will be realized whether they sell or not.
ghostfaceinvestah wrote:
In the time period where I have been earning most of my money, say from 1990 to 2008, the value of money was relatively stable in terms of purchasing power. Sure the dollar fluctuated against other currencies, oil moved up and down, there were bubbles, etc., but for the most part a dollar was something you earned through either hard work and/or risk-taking (sure, sure, there were exceptions, but in general it was true).
According to the BLS inflation calculator, $100 in 1990 had the same purchasing power as $164.83 in 2008. I'm not sure I would call that stable.
I am completely with you as far as moving wealth outside of dollars. What is hard to figure out is whether Fed printing is fueling the run up in stocks, commodities, and interest rates or if it is just speculation. There has been a huge destruction of credit that is still going on and huge destruction of income as unemployment skyrockets. Those trends seem to be locked in for at least the rest of the year. I expect more housing trouble through 2011. Those are all strong deflationary forces that the Fed is trying to counter.
I expect the game to end in a hyperinflationary blow out within the next 15 years, but I am not sure it is coming this soon.
“Chinese financial assets are very safe,” Geithner said. His response drew laughter from the audience.
Perhaps he was comparing them to US assets.
Obama ramping up fleet purchases. Will the USG be buying only GM/Chrysler no-bid contracts ?
"The rest of what's going on is pure and utter bullshit that allows a few to profit at the expense of MANY. Continued failure is rewarded...that's what is missing from capitalism....actual failure."
MS, I agree completely. Again, in my market, Fannie and Freddie failed, there is no way anyone could argue otherwise.
And yet, they still continue to function, their stock still trades (????), they still issue debt and MBS.
And BB buys it all.
"I'm positioned between these scenarios with the caveat that the only real way I can keep pace with the destruction of the dollar is in oil, silver and food."
Again I agree, see my other post, there is no question the economy is deteriorating, but BB seems to be willing to print unlimited dollars to prop up failures at the highest levels (which is why I think he will go down in economic history as The Great Enabler).
My play has been mostly oil, and CAD/AUD as strong commodity currencies, mostly because I am not a big commodities futures trader and was looking for a quick escape in mid-late March, and since those trades have worked I have stuck to them. But PM or any commodities is not a bad play either.
Do this thought experiment: what if BB actually did drop money from a helicopter, or handed it out like Santa Claus? Every man, woman, and child in the US was given, say, $10K, or better yet, make it $100K. Would you feel wealthier?
SRS has been destroyed...
"While America was "inventing" Twitter so Americans could waste more time on useless bullshit, China built three nuclear power plants and two refineries."
........pretty much says it.
The Silver Bear Cafe
DOW 9,000.... today!
Look at the Bond market. It is a larger market twice as larger as the US stock market. Even the FED cannot successfully game the market over the long term. Common stock is a relatively small market and is open to easy manipulation.
As of today, its the "long bombed."
Federal Reserve puzzled by yield curve steepening
Sun May 31, 2009
WASHINGTON (Reuters) - The Federal Reserve is studying significant moves in the U.S. government bond market last week that could have big implications for the central bank's strategy to combat the country's recession.
I'll save them some effort:
Nobody wants to hold onto a 10-30 year commitment for your worthless trash garbage dollars.
Stop acting like a bunch of thieves and wild animals and maybe people will actually take you seriously.
Oil just quantitatively eased back over $68/bbl.
10 year USD ponzi yield up to 3.68%. UPDATE: 3.696%
Read WSJ online content for free
How To Read The WSJ For Free Online (NWS)
"Every man, woman, and child in the US was given, say, $10K, or better yet, make it $100K. Would you feel wealthier? "
Not at all....but it's the intent they are looking for-total psychology at work. The only real reason they have not done that is that it can't do it in the same way it's doing it for the system. Digital $'s are completely different then actual physical one's...they can't do the stimulus BS again for that would undermine the very argument they hoist up as the reason for "up"...
I must say that in all my year's of trading I've never seen the laws of math, physics and agreements get pushed out for even more flag-waving false patriotism. This makes Bush 1/2 look like a church picnic......but the food sucks at this one.
Ciao
MS
DOW 9,000.... today!
Ok then what?...your point is? I am sure they were hooting and hollering in 1932.
BSR
Twittering fits in with our BS consumer infrastructure. The only reason people are behind it is because of its potential as a marketing tool. Our biggest Tech powerhouses are essentially retailers/Advertisers nothing more. Amazon, Apple (computers but a cheap Linux computer can do the same thing), Goog, Rim (although one could argue improve business prodcutivity)
Is it too early to start drinking?
Is it too early to start drinking?
Pull that old JD out of the filing cabinet.
Treasury yields up sharply yet dow up over 200. GM declaring bankruptcy, but their current common is up and trades near 90 cents. I don't get any of this.
"Every man, woman, and child in the US was given, say, $10K, or better yet, make it $100K. Would you feel wealthier? "
I Say yes. If it is done over time.
In the beginning there was 100 US dollars. When the population increased that 100 dollars could not simply be divided up 1k times. Eventually everyone was given 100 dollars. This makes everyone happy but also devalues the 100 dollar bill. Over simplified I know.
You can't look for understanding. IMO you either play the fundamentals and wait or look at star charts and hope you're right. That is how you have to trade ice cold...
ice-
no pre-market in GM told me all I needed to know. Fix was in then.
Ciao
MS
Those of you on my list should have my June Strategy report in your mailbox, its sort of on the long side this month. Once again thanks to CR for letting me use his great chart porn, and to all the commentators here for the insights you provide me with and the chance to be a sounding board for my ideas. If you are not on the list and would like to be, shoot me an e-mail at dhvd_2004@yahoo.com and I will send you a copy of the report and add you to the list.
hello from Cambodia... court recess this week (no, I'm not up on a sex related charge...)
anybody read that last column of Paul K's OP-ED COLUMNIST; Reagan Did It - NY Times?
it was such a hack job.... and from Super K?
it was wrong in so many ways... both parties allowed the S&Ls to stay in business, once the passbook savings
rate was de-regulated they were toast (up to then they got an extra 50 basis points, no?) so new regs allowed all those
community S&Ls to stay alive.... Paul seems to have forgotten the political calculus...
bearly (profile) wrote on Mon, 6/1/2009 - 12:19 pm reply Ignore user Obama ramping up fleet purchases. Will the USG be buying only GM/Chrysler no-bid contracts
Bearly, 'when i was in the Navy in 84-90 i remember dodge/ chrysler K cars and some dodge Pups we had to drive around in .... hated em..
May have been part of the old Chrysler restructuring..so yes we may see it.
considering where Paul got a few paychecks from are you really surprised?
I'm not.
Ciao
MS
Treasury yields up sharply yet dow up over 200. GM declaring bankruptcy, but their current common is up and trades near 90 cents. I don't get any of this.
I can think of at least one person in this forum who said over and over again that all these attempts to artificially drive up asset prices would simply render them meaningless.
Fortunately though consumer confidence is up, and confidence is what counts in a confidence game.
SO....you guys have gone from Depressionistas and Deflationistas to Hyper-Inflationistas?
Once this bear market rally ends, and it will, if we see a re-test of the lows, we will, there will be no floor on when the new lows are made. The US equity market will be dead for a decade, if not a generation.
F Doodle
The car purchases pisses me off. Of course they will over pay then report the sales success that GM and Chrysler had. Well at least someone will be driving in new cars.
Imperial Presidency plus Imperial Policies equals Consequences of Empire.
Hell Dawg we've been an Empire since Manhattan & Alamogordo.
During 1944 & '45 one seventh of all the electric power generated in the US was diverted to Manhattan and NOBODY except a small number in the WH & defense circles knew about it. Even Truman knew nothing.
Black Star Ranch (profile) wrote on Mon, 6/1/2009 - 11:23 am
"While America was "inventing" Twitter so Americans could waste more time on useless bullshit, China built three nuclear power plants and two refineries."
(semi-snark)... no, Twitter is essential to deepening the narcissism of the youngest generations, and our primary industry these days is in providing alternate realities. Everybody gets to live their own Truman show, but get enough people broadcasting the trivial details of their lives all at once, and there will be no one interested in receiving the broadcast! Individual obscurity in mass-traffic media channels is the new Dark Age
SO....you guys have gone from Depressionistas and Deflationistas to Hyper-Inflationistas?
I actually think it's possible that widespread fears of inflation may force the government to pursue more deflationary policies (e.g. hike rates). But anything can still happen at this point.
For inflationary default to really work it has to be a surprise.
I don't think many people would be surprised by inflation at this point.
I wonder what kind of business people here could have built with 100 billion in seed capital....
Timmay must be having some interesting negotiations over there. Perhaps they're one sided?
Hu: "Here's what I want"
Timmay: "No way!"
Hu: pushes the sell button
Timmay: "No, no, wait, alright alright -- it's yours"
Never was in the deflation camp......we already had it at the same time they (gov't) were "concerned" about inflation....i.e. last year.
Ciao
MS
"According to the BLS inflation calculator, $100 in 1990 had the same purchasing power as $164.83 in 2008. I'm not sure I would call that stable."
CC, point well taken, again inflation, like the value of fiat currency, is relative. I would argue that zero inflation should be the goal, but relative to what we are going to see, a 40% decline in purchasing power isn't so bad. i.e. our dollar now buys 50% less oil than three months ago.
"What is hard to figure out is whether Fed printing is fueling the run up in stocks, commodities, and interest rates or if it is just speculation."
A lot of it is related. If the price of oil doubles, certain companies are certainly worth more, in USD.
The big question is, is the price of oil based on speculation? A lot of people argue it is, but I would argue it is being used as a store of value, much like PM. So what if there is a lot of oil being stored? At least BB can't print more of it.
"I expect the game to end in a hyperinflationary blow out within the next 15 years, but I am not sure it is coming this soon."
I think it all depends on what BB does.
If he announced tomorrow that he is stopping all dollar printing, no more MBS purchases, no more Treasury purchases, no more PPIP, TALF, etc. then I think it could be all avoided and we just go into a wicked recession with all that entails (including probably a falling stock market, I am certain commodities would fall).
But based on his apparent mindset, I only see more and more expansion of toxic asset purchases, more Treasury purchases, etc. Then I think we see hyperinflation within the next year. I mean, classic hyperinflation: people converting dollars into something else as soon as they are received type of hyperinflation.
If something (dollars) is being given out for free, what value does it have?
"I don't think many people would be surprised by inflation at this point"
I see inflation in 1-2 years...unless the Fed can pull the rip cord on their excess liquidity, I dont have much confidence they will be able to. Also, the run up in commodities, esp oil, is nearing another bubble...more leveraged speculation if you ask me.
C&C
This will be a mild-medium Depression. I'll stick with that.
Take a name,
The market will be dead meaning below 7-8k in the dow and below 7-8 hundred in the SP
To my colleagues on CR, I have a treat for you.
99.999% of the people viewing this documentary will not get it because they do not have the back ground information to understand it, I do not care so much about those people who don't get it. I care about the .001% of the people who do get it. I am now placing a call to the people who do get it to join me.
The Calling - Full HD Version
Google Videos Error
1937, Roosevelt raised bank reserve requirements, tipping us back over into recession.
In 1997, when it looked like Japan was coming out of its deflation, they raised consumption taxes to offset budget deficits.
I wonder when, and in what guise, the liquidity-withdrawal moment will come for us, this time?
TNX just shot up to 3.72%
dryfly (profile) wrote (in reply to...) on Mon, 6/1/2009 - 9:46 am
Imperial Presidency plus Imperial Policies equals Consequences of Empire.
Hell Dawg we've been an Empire since Manhattan & Alamogordo.
December 10, 1898.
When will GM be removed from the indices? Or is this all just a big joke?
"I'll save them some effort:
Nobody wants to hold onto a 10-30 year commitment for your worthless trash garbage dollars.
Stop acting like a bunch of thieves and wild animals and maybe people will actually take you seriously. "
LMAO!!! So true.
Whoa, TNX blowout!
C&C-
Why don't you see it now? I'm not trying to be a smart-ass but I don't see how anyone can't see what they've managed to trigger.
Ciao
MS
"ResistanceIsFeudal (profile) wrote on Mon, 6/1/2009 - 12:47 pm
...get enough people broadcasting the trivial details of their lives all at once, and there will be no one interested in receiving the broadcast! Individual obscurity in mass-traffic media channels is the new Dark Age"
The frequent appearance of genius here, such as the above, is why I can't quite quit this forum...
GM China ventures 'unequivocally' part of new co.
As suspected the American Tax payer forked over GM and all the trimmings....and the best part is you/we had zero to say in it....
Do we have a working f****** Congressional body anymore...?
C&C ,
Concur, they have to reign in the excess trillions but cant now, of course, they dont have the ytrillions to pay for the welfare programs either, so my bet is once they can get back some of the trillions, it will be a considered a "savings" or revenue" anthen reused to support another "program" and never leave the system, ...inflation in 1-2 years depending on passage of entitlement programs, lasting 4-5 depending on how much more they need to print to support Citi, Chrysler, GM and AIG, et al....
1937, Roosevelt raised bank reserve requirements, tipping us back over into recession.
In 1997, when it looked like Japan was coming out of its deflation, they raised consumption taxes to offset budget deficits.
I wonder when, and in what guise, the liquidity-withdrawal moment will come for us, this time?
Likewise the Fed raised rates earlier in the 1930s. They key question though is not whether these things were done "voluntarily" but whether they had to be done to prevent a breakdown in the credit markets (creditor flight).
It seems to me that the economic historical revisionists like to say that all economic evil is a product of governments being too tight with money, but I think they may overlook the fact that sometimes governments have to be tight with money in order not to alienate their creditors.
I think the economic textbooks tend to oversimplify real world problems.
“One of Bilderberg’s primary concerns according to Estulin is the danger that their zeal to reshape the world by engineering chaos in order to implement their long term agenda could cause the situation to spiral out of control and eventually lead to a scenario where Bilderberg and the global elite in general are overwhelmed by events and end up losing their control over the planet."
Is this real? They'd have to be out of their minds to try something like that. Perhaps you'd have to be out of your mind to think you had control over the planet.
below 7-8 hundred in the SP
5-8 hundred in the SP for a decade.
"SO....you guys have gone from Depressionistas and Deflationistas to Hyper-Inflationistas?"
Roubini (and others, I'm sure) indicated short term deflation followed by inflation. That's probably the mainstream notion here as well, and the question is really, how hard the swings will be, and when they'll happen.
Real GDP decrease either takes the form of less money (deflation) or less money value (inflation).
They are actively gaming this over the 200DMA and are trying to get the techies to buy into it. The volume after it pierced that is not that exciting....but volume didn't matter in 2007 either.
Ciao
MS
Inflating Assets will help prop up the banks by making their debt "smaller" but it will wreak havoc on the greater economy. Energy prices will rise food prices will rise. Consumers will get crushed jobs will get crushed and equities will get hammered. This will put further pressure on the banks lending because the spread will not be much different than what it is today.
5-8 hundred in the SP for a decade.
Makes me want to price up a ten year 500-800 strangle.
They are actively gaming this over the 200DMA and are trying to get the techies to buy into it. The volume after it pierced that is not that exciting....but volume didn't matter in 2007 either.
Ciao
MS
There's been a lot of hopes that institutional money would start to flood in at the 950 level, so my theory was that everything would be done to try to pump the markets above that.
The only problem is that the bond market isn't cooperating and in the end if it keeps up everything is going to hell.
Knew it would happen... Nader speaks on GM...
WASHINGTON, June 1 /PRNewswire-USNewswire/ -- Consumer advocate Ralph Nader today issued the following statement on GM's bankruptcy filing:
Today's bankruptcy declaration in federal court by General Motors is an avoidable, crude weapon of mass devastation for workers, dealers, auto suppliers, small businesses and their depleted communities. For GM's voiceless owners -- the common shareholders -- it is a wipeout.
The proximate cause of the bankruptcy was supposed to be the inability of GM and the government's auto task force to reach an accommodation with GM's bondholders. But late last week, the bondholder problem was moving toward rapid resolution, and was clearly resolvable. Why then are GM and its multibillion government financier proceeding with bankruptcy?
The bankruptcy and the GM restructuring plan are the product of a secretive, unaccountable, Wall Street-minded government task force that assumed power because of a Congressional abdication of historic magnitude. By all rights, the restructuring plan should have been submitted to Congress for deliberative review and decision.
There is little doubt that GM's chronic mismanagement and the deep recession require restructuring and scaling back the auto giant. But the bankruptcy and restructuring plan appear poised to do so in ways that will needlessly harm the stakeholders meant to be helped by Washington's rescue of GM?
There is more of course....
"I don't see how anyone can't see what they've managed to trigger."
This failure to recognize the illusion of control has happened again and again for the past thousands of years. I've just read a document in translation from the 18th dynasty of ancient Egypt which talks about an era of events out of control, of chaos, of a war of all against all. People demand order, and the 'elites' give it to them if they can, but the elites can suffer as much from the illusion of control as the rest of us.
Whoa, TNX blowout!
The past several weeks, BB has been hinting that he was done with QE for the time being; that higher interest rates meant investors were comfortable taking on risk again, etc. Looks like the speculators that tried to front-run the FRB blinked first.
the hole in BB's thesis is that the risk/investment is supposed to take place in the US. Doesn't really help us if the risk-taking is in BRIC...
AC
Those small actions in the 1930's and in Japan in the 90s did not ruin a recovery. The reason is that hey fell back down is that the banks had not yet realized the full extent of their losses.
It's nice to see the Bilderberg's have adopted my 3 phased scenario for tracking the economic collapse.
10 yr is blowing up...
Anyone seen Jas? How could anyone be so wrong for so long?
"Look at the Bond market. It is a larger market twice as larger as the US stock market. Even the FED cannot successfully game the market over the long term."
If BB wanted to, he could.
What if he said "I am going to buy every new Treasury bond created at a yield of X.XX%, and print new dollars to do it, for the next ten years"?
He has already hinted he would do that in a speech he gave several years ago.
I would not underestimate have far this fool is willing to go in his Quixotic battle against that perceived demon, deflation.
To him, depressions and recessions are nothing but monetary phenomena that can be combated simply by printing dollars. The business cycle can be eliminated entirely through proper monetary policy.
If you believe that, I have some worthless pieces of paper with dead men's faces to sell you (for oil, only, please).
When will GM be removed from the indices? Or is this all just a big joke?
June 8. Buy the Discard - Floyd Norris Blog - NYTimes.com
Shill......what?
10 yr is blowing up...
Anyone seen Jas? How could anyone be so wrong for so long?
Should we send him a get well card and a fruit basket?
Bloomberg.com:
Personal Finance
Expect even more dollar printing to be announced at the next Fed meeting. My guess is Treasury purchases to increase from $300B to $1T.
ac-
I'm not so sure about that.....the bond market is Pimco.....they need cooperation (and have gotten it) from them. What would really change the game?
Ciao
MS
“someone from the IMF pointed out that its own study on historical recessions suggests that the US is only a third of the way through this current one; therefore economies expecting to recover with resurgence in demand from the US will have a long wait.” One attendee stated that, “Equity losses in 2008 were worse than those of 1929,” and that, “The next phase of the economic decline will also be worse than the '30s, mostly because the US economy carries about $20 trillion of excess debt. Until that debt is eliminated, the idea of a healthy boom is a mirage.”
Phase one is complete, as they said we are only 1/3 of the way through the collapse. Phase 2 and phase 3 will be a doozy.
The Bilderberg Plan for 2009: Remaking the Global Political Economy
Hey I was just leaked from a reliable source, the plan to rebuild GM.
Apparently the Car CZar was pitched this idea from some "lobbyist" named Lyle Lanley that had a bunch of fancy drawings and photos ,...
well basically, all the GM plants will convert to bullet monorail construction with the first being in Springfield....
Apparently there was a successful bullet monorail built in North Haverbrook based on the photos from the proposal, though no one has verified i am told....
Apparently a Sebastian Cobb will oversee the conversions....
YouTube -
more to come.... keep it quiet...
Ghostface of course they can influence the market. However if BB tried to fix rates there would be a line around the the island of Manhattan of people wanting to sell. If they don't like the rates they have a buyers strike. The fed is large the Fed has big balls but cannot resupply the entire global capital markets.
Nice blowout you guys have going there on TNX yields. Thank god it doesn't affect me or my life.
There is an illusion of control, but not of effect, as long as it's essentially an unpredictable one. You might call it 'kicking a black box.'
Tim-
but wouldn't BB just continue the same policy? He's gone down the QE route already....there is nothing to stop him from becoming the entire market (IMO he is already and the number's we get don't reflect what he's done to the individual equity markets).
I really don't see how the game changes to cause the bondy's to throw in the towel.....
I know how it's supposed to work...should've had some affect on it by now. It hasn't.
Ciao
MS
"Should we send him a get well card and a fruit basket?"
LOL!!!
signed your buddy CR
correction...it has had some affect..just not on par with the amount of intervention.
Ciao
MS
C&C:
Also, the run up in commodities, esp oil, is nearing another bubble...more leveraged speculation if you ask me.
Oil feels like a bubble, it has markings of a bubble: Oil demand is very weak, and yet prices are going up; if demand doesn't pick up we're looking at the world running out of storage, even if you include all the oil tankers in the world, in about 6-8 weeks. But I fully expect it to go up, dramatically, because big boys will load up and perform a "shoot the moon" play.
If that things blows, I fully expect several TBTF company to go bankrupt with that trade and ask for govt bailout. So taxpayers will ultimately be used to back any trade; even irrational and extremely risky ones.
The precedent for this has been set in economic history, they're fools not to game it for max gain. Swing this for oil, next will be food and then to move to electricity. We've shown financial companies that their best option in this system, is to shoot the moon; if they succeed, they'll make hideous amounts of money and shear a layer of skin off the masses; if they fail, they'll get uncle Sam and the loss will be borne by the masses.
I simply don't see why they won't do that. It's such a profitable strategy.
Nice blowout you guys have going there on TNX yields. Thank god it doesn't affect me or my life.
Hahah... I hope you're not serious. It affects ALL long-term borrowing costs in this country.
it is a BIG deal.
ac-
I'm not so sure about that.....the bond market is Pimco.....they need cooperation (and have gotten it) from them. What would really change the game?
Ciao
MS
IMHO, Bill Gross coming out and saying US debt isn't really AAA debt anymore isn't exactly cooperation.
With friends like that who needs enemas.
Bloomberg is annoying...they post headlines and then the link shows "STORY TO FOLLOW"...WTH...
"The business cycle can be eliminated entirely through proper monetary policy."
It's not the business cycle, it's the credit cycle.
Okay I'll yield to those with more knowledge/experience on the US treasury market. But I see it like this.
Think Star Wars IV; Han Solo and Greedo. Han shot first and he won! The first person to sell their treasuries, first mover will be the winner. However instead of 2 people at a table you have about 4 world economic powers sitting at a table. They are just staring each other down right know feeling each other out...
ac (profile) wrote on Mon, 6/1/2009 - 1:15 pm
Anyone seen Jas? How could anyone be so wrong for so long?
Lucifer's inverted hammer claims another "can't miss trade" victim. Lot of people come here, talk for a while, blow up and blow away.
"Think Star Wars IV; Han Solo and Greedo. Han shot first and he won!"
Except we'll be revising it so that Greedo shot first...
The market is like the brain, the economy is the body. The market has a desperate 'will to believe' we have hit bottom, and does not want to think about the long term side effects of the Feds medication (fiat money). The medication is like giving arsenic for syphilis-- a poisonous cure. In the meantime, the market is feeling better, with massive 'opiate painkillers,' so it's up.
Someone called it a sugar high
Can I haz 4% TNX this week?
10yr & 30yr auctions next week. Who will be bidding alongside Ben as he tries to drive prices up ? Maybe waiting until he's done to see where the natural demand lands up would be a wise choice... looking at the fortune cookie now.
Hahah... I hope you're not serious. It affects ALL long-term borrowing costs in this country.
it is a BIG deal.
It even affects things outside the country. Which is why I'm posting from Mars.
Tim waiting for 2012 (homepage, profile) wrote (in reply to...) on Mon, 6/1/2009 - 1:32 pm
Who is rubbing the wall? and who has hands below the table?
"Blinky" Zoellick, take a name.
What if he said "I am going to buy every new Treasury bond created at a yield of X.XX%, and print new dollars to do it, for the next ten years"?
He has already hinted he would do that in a speech he gave several years ago.
I imagine that all foreign holders of US Dollars would go out and buy any commodity they could find that was priced in US Dollars until they either ran out of US Dollars or couldn't find any more commodities priced in US Dollars.
Things would get really expensive here at home.
Long term I feel that the FED, US Gov, and CEOs could give a F about the equity market. They are propping up so the insiders can sell (stock, businesses, offices etc). Going forward it will be more important the USSA citizens buy the debt that others won't touch. Remember Obama bonds?
Oil will go up when the dollar goes down in value.
But U.S. stocks will not go up when the dollar goes down in value.
U.S. stocks are denominated in dollars. The capital gains they create and the dividends they pay out are denominated in U.S. dollars, which are becoming more worthless. Stocks don't perform well when the currency they are denominated in is crashing.
Real assets benefit from hyperinflation and currency devaluation by holding their value.
Financial assets (stocks, bonds and cash) get trashed in hyperinflation and currency devaluation.
Market fundamentals are weakening by the day.
"Blinky" Zoellick, take a name.
Thanks. Forgot it was Zoellick. If I'd remembered, wouldn't of posted his comment
Ac-
Gross talks his book. He wasn't talking to anyone in particular with that. I said it before....they will not downgrade the hand that feeds the system. Gross saying that just gives him an out and makes him appear sane.....and he said it might get downgraded in 2-3 year's not that it was worth whatever rating they have assigned to it.
Ciao
MS
As it turns out, Jas was an optimist.
"The Dow has rallied 2000 points from its low (about 30%). It not just daytraders(sic) playing around."
No, it's the big bank trading desks and quant funds awash in free money the Fed has bestowed on them. But retail investors? I doubt it.
Chicago Dude:
I imagine that all foreign holders of US Dollars would go out and buy any commodity they could find that was priced in US Dollars until they either ran out of US Dollars or couldn't find any more commodities priced in US Dollars.
Tsk... Finish your analysis!
Now what happens to the commodity sellers who get stuffed with gobs of USD now? Those dollars do not vanish into thin air or get burned now does it?
At the end of the day, all the dollars OUTSIDE the USA have to go through repatriation in order to finish it's lifecycle. They either return to the USA because they bought something USA produces (and that something cannot be more USD or USD-producing-assets, or else we're back to the same game, even bigger now); or they remain locked outside the system, transferring from one owner to another or recycled back to USA as UST (which produces for USD as they mature, worsening the problem...).
Now, last I heard, the US don't produce much non-USD-producing (i.e. "real" ) goods; so there's little to buy to really dispose of the USD. If the world is looking to net-decrease it's USD holdings, it's going to drink the ocean through a really small straw.
The way I see it, the USD is like a CDS whose true value is WAY LOWER than what's being reported/marked; and all the holders of USD are similar to sucker mark-to-market banks we see everyday. They cannot allow USD to mark to real value; as that'll make their own books insolvent; so the facade continues.
This is the best game in town yet.
Balance (and USD destruction) returns when the Net holders allow the USD to be recognized to be lower than their own currencies. Based on the collective race to the bottom devaluation action seen so far, there's zero chance of that happening.
This morning, I read an inspiring story about GLL Centres, a London-based non-profit
operating gyms for the benefit of the community. (check their site at gll.org). This is
truly brilliant thinking, as it uses the current environment to subtly undermine the status quo. The non-profit model would be a brilliant
Total credit market debt as a percentage of GDP has risen from 130% of GDP in 1952 to 350%
of GDP today. The various bailout and stimulus schemes enacted in the last year will drive
this percentage above 400% in the near future. When a country allows this much debt to
accumulate versus its GDP, they have done something seriously wrong. The country’s
politicians, business leaders, and citizens have all contributed to this disaster.
I came across this interesting site.. Econ & Finance Articles Updated Daily
I completely second your opinion Alberto. The economic meltdown has affected everything and construction spending is no different. Debt accumulation is a first sign of a flimsy economy and countries are built on much more stronger foundations!
Residential and Non-Residential Construction spending is only one facet of this global debacle. Let's hope the future has something different in store, something more positive.
Thanks for sharing.
Kirk J. Steel
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