They have undershot escape velocity, they needed more than leveling out by now

OMG! A sheople walking the hall just said " dow hit 10,000 woohooo!...man is he in trouble.

I don't dare tell him to look at the dollar, as he obviously is clueless anyhow.

H1N1 update:

CDC H1N1 Flu | Situation Update

Hence the "pushing on a string" metaphor.

Stop confusing Mr. Sixpack.

Dow 10K, all the way!

Just inflate the bubble for ever

Just inflate the bubble for ever

Or at least until the 2010 elections.

Yup, gold will only continue to rise. As will oil, and other commodities.

The dollar deflationists do not understand the MBS market, and what the Fed is doing in that market.

It matters not what happens in the underlying housing market, the MBS buys are monetary inflation that can never be withdrawn.

Do not underestimate the damage all this dollar printing is going to do to the USD.

Within a few months I fully expect bank runs, not out of concern for the banks, but because people panic to convert their USD deposits into something other than USD.

I remember 1999, I was applying to college in the US. At the time 1 usd was about 9.5 NOK (I remember because I had to fill out the financial aid forms). Of course, right now 1 USD=5.55 NOK

Yes, and the Senior Associate Director of the Division of Research and Statistics is Mr. William (White) Wascher.

We also have Mr. Small, Project Manager of the Division of Monetary Affairs. Somebody needs to tell them that's not a Small project.

"Vietnam type entanglement in the markets"

Awesome analogy. I have said that Bernanke's meddling in the MBS market will be his Waterloo, but Vietnam is probably a better reference.

He has no clue at all what he is doing there, and in undoubtedly being advised by others who have no clue.

Reading these minutes only makes me more sure of my prediction for a hyperinflationary depression. This is going to be a disaster.

shill wrote:

I don't dare tell him to look at the dollar, as he obviously is clueless anyhow.

Hearing some happy talk here at work also. 401k's recovering. Most people aren't planing on selling their houses anyway, so that housing-problem is fading. The virtual wealth affect. Things are looking up dude. Yeah, like totally. Sure paid off to stay in stocks dude. Yeah, dude, gotta think long-term dude. Totally. Feel sorry for those pussies that sold! HA!!! (High-five) Dude, Merica rocks, dude.

• We were wrong and don't know what we are doing

Welcome to the meeting, Federal Reserve. You are now ready for Step 8, "make a list of all those you have harmed and become willing to make amends."

rps wrote:

I'm not a f***ing consumer, I am a United States Citizen. Damn corporate media.

You will be assimilated!

Hearing some happy talk here at work also. 401k's recovering. Most people aren't planing on selling their houses anyway, so that housing-problem is fading. The virtual wealth affect. Things are looking up dude. Yeah, like totally. Sure paid off to stay in stocks dude. Yeah, dude, gotta think long-term dude. Totally. Feel sorry for those pussies that sold! HA!!! (High-five) Dude, Merica rocks, dude.

No doubt.

Wait a month or 2 when they get the sticker shock at the grocery store.....That Dude analogy will turn into a Deer in the headlights look for sure.

ghostfaceinvestah wrote:

It matters not what happens in the underlying housing market, the MBS buys are monetary inflation that can never be withdrawn.

... [add] without accepting REAL deflation... in money supply, velocity & resultant prices [everything - including asset prices].

Until that path is 'accepted' if ever inflationary policy will rule - even in the face of severe deflationary pressure [of which we still got plenty].

Yep...will fiscal and monetary policy be in the hands of alumni of Citibank, or of Goldman? Or maybe it's time to turn it over to former employees of J.P. Morgan.

Our two party state - the party of GS and the party of JPM.

So yeah - I've missed the boat on buying gold, clearly. I've got almost $15,000 sunk into my 401k so far this year. Could have been buying gold all this time.

FOMC translation: we'll continue buying MBS (bailouts) to restore bank stability (no jail time) and resume honest practices. The consumer remains cautious (because they've been screwed) and may return (dependent on how fast we hit them with taxes) to normal spending. Later we will gather to meet (sing koombaya) to discuss further tools (scams) for the economy.

Someone define "economic recovery." The parasitical lazy-ass elitists must be thrown off the backs of the working labor force.

"Change does not roll in on the wheels of inevitability, but comes through continuous struggle. And so we must straighten our backs and work for our freedom. A man can’t ride you unless your back is bent."
Martin Luther King, Jr.

And if they don't solve fundamental problems, there'll be real battles in the street two years later.

Well, I don't expect them to solve the problems, but I'll have my concrete.

Our two party state - the party of GS and the party of JPM.

And the two parties can have their analysts constantly upgrade each other's stock.

Rob Dawg wrote:

Replacing the Demicans with the Republicrats solves what exactly?

Kicks the political can down the road another year or so. Instead of everyone being pissed off, half the country will think things are about to get better.

Ghostface blows up the universe with this point.

NOTaREALmerican wrote:

You will be assimilated!

Your purchasing power is all you are allowed. Your purchasing choices will be pre-determined. Your only resistance, your only statement, your only affirmation will be at the checkout counter.

Rob Dawg wrote:

Replacing the Demicans with the Republicrats solves what exactly?

It confuses the voter rage targeting systems, so that the can may be kicked down another cycle.

dryfly wrote:

But not until 'Dancing With The Stars' is over...

The people are sheeple -- until they're not.

Tax cheats brought to heel? Check.

Tax Evaders Face Choice: Pay or Pray - NY Times

"Hot off the press. Virginia's september revenue collection report. Big Miss."

Stimulus v 4.0 will cover those problems.

Nothing money printing and deficit spending won't solve.

Most of their expenses are probably labor and benefits, so those fools won't feel the effect of all the money printing and realize they have been taxed through inflation.

At least not immediately, if ever.

I have gone back and counted the occurrences, but this particular meeting minutes report talks about the stock and bond markets an awful lot. The "mission creep" from inflation watchdog to market minder proceeds apace.

scone wrote:

The "mission creep" from inflation watchdog to market minder proceeds apace.

That's because their mission is 'Mission Accomplished'.

barfly wrote:

Deadline Nears for Holders of Undeclared Offshore Accounts - NYTimes.com

It will be interesting to see if this results in more expatriation. The U.S. is the only country that tries to tax overseas income.

Well, I'm definitely going to stock the chicken coop now, and think I'll buy a couple of cows.

And more concrete.

"Within a few months I fully expect bank runs, not out of concern for the banks, but because people panic to convert their USD deposits into something other than USD."

your average university educated American can't even correlate the rise in the market to the drip in the usd or rise in gasoline pump prices.

.gov is banking on this inability to connect the dots and I have a feeling they will be proven correct.

@ ghost,

I'm warming to your pov.

But I still think TPTB need to create an 'event' first to provide political cover for a massive stimpack.

mp wrote:

There is going to be one hell of a political battle come next fall.

For what? The elections aren't until 2010; this is still 2009, right?

dryfly wrote:

No but he was wearing a hockey goalie mask...

HA!!! Snow Appears to Fall on 2 Sides of Financial Regulation - DealBook Blog - NYTimes.com

Don't forget the rebar...

Hey, concrete without epoxy-coated rebar is like a day without sunshine.

"It will be interesting to see if this results in more expatriation. The U.S. is the only country that tries to tax overseas income."

Canada does this as well I believe. I seem to remember something about global income when I filed Canadian taxes. Actually the us was pretty late to the game in starting to tax overseas income.

'worth'

ok then round 2 of stimpack...........I recall some joke about breast and nipple and sucking and crying...oh well maybe later

Just look at it this way, $15,000 individual pieces of wallpaper. - Shill

How much longer until its cheaper to use Dollar Bills for actual wall paper? I figure about another 90% debasement so at the rate of printing maybe 2 years.

Most countries tax overseas income. The US is alone in taxing global income of citizens not resident in the US. It's a logistical nightmare and I'm not sure if the income is worth the hassle for the US treasury.

"Banks reserves still have to be lent out in order to become spendable money"

I have read some pretty convincing articles that loans actually come first and reserves afterwards which goes against standard economic orthodoxy.

If that is true the new reserves are like pissing in the wind.

Companies That Have Refunded Bailout Money | Eye on the Bailout

*Members discussed the importance of maintaining flexibility to expand the asset purchase programs should the economic outlook deteriorate *

Read: There is no limit to the amount of toxic assets we will allow the banks to unload onto the taxpayer.

I still can't belive this can happen, without any congressional oversight or voter input. If there is one thing worth fighting against, this is it IMO.

poic wrote:

If that is true the new reserves are like pissing in the wind.

I think that they still make the zombies appear to be alive-

bankerwannabe wrote:

If there is one thing worth fighting against, this is it IMO.

I'm sure, as we speak, YOUR Representatives in Congress - of the Greatest Nation in the entire whole wide universe, are working in YOUR behalf to address this grave injustice.

As always: ask NOT what your country can do for YOU, but what YOU can do for YOUR country.

10,000 is a key number for a lot people who are stuck to sell out...

...or, they just get greedier. one or the other

no need to worry about the economy. government support forever.

RockyR wrote:

no need to worry about the economy. government support forever.

Why does that not make me feel better about this?

It looks like the market just opened for the day, BTW. We're back over 10K Dow.

"no need to worry about the economy. government support forever."

Why does that not make me feel better about this?

Because Rome collapsed trying to do just that?

Andy Xie discussing the central banks, their options and lack thereof, going forward. He sees 2% growth, 5% inflation-- more or less a long term stagflation.

Andy Xie: For Economic Stimuli, a Revolving Exit Door 

It must be fun when you get to run the Economic experiment, write the history book detailing the results and have full control over all editorial changes as well as own the publishing house.

We be jammin'!!!!

Thanks JBR, another excellent article.

"I'm trying to be cautious," said Mike Chouinard of Moreno Valley, California, who quit his job as gasoline refinery worker to invest in foreclosures full-time. "I don't want to end up the one without a seat when the music stops.""

Awesome stuff, this.

I think I just heard maria ...

Fed Members Pushing For QE 2.0 | zero hedge

Oil up just over 1%, natural gas down just over 3%, glod flat to down...

So can we now put a stake through the heart of the $8k housing credit? All that stimulus is keeping my sideline cash on the sidelines.

mrktwtch ticker..

3:12p Banks must lend despite the risks: regulators

3:12p Govt. must lend despite the risks: regulators

fixed it for ya marketwatch

poic wrote:

Canada does this as well I believe. I seem to remember something about global income when I filed Canadian taxes. Actually the us was pretty late to the game in starting to tax overseas income.

poic,
In Canada, just like every other country has done since forever, if you reside in Canada you pax tax on your income irrespective of source. What the US does, I believe only NK does the same, is to tax US non-resident citizens who live/work abroad on their before-tax overseas income. There is a tax credit up to a fixed amount, but that has risen as fast as the USD has fallen relative to overseas costs of living and tax.

"So can we now put a stake through the heart of the $8k housing credit? "

Didn't you read the Fed minutes? There is a risk there still may be failure in the housing markets. Failure will not be allowed. The tax credit will pass.

The only failure will be in the USD.

Maybe they can extend the credit to everyone and not just first timers. I haven't been stimulated yet.

ghostfaceinvestah,
Do you think sustained MBS intervention will be enough to keep house prices flat through this winter? House prices are the base of this pyramid

she plugged something in and it's buzzing

NateTG wrote:

I'm still stuck with my simple hypothesis that surplus nations deflate, and debtor nations inflate.

That works for me - question is how does that play in the forex? Because generally exporters have HUGE increases in money supply [their own money plus the incoming from exports]... the importers face the reverse problem [money leaving UNLESS they print]. The forex links the two to keep the exchange 'exchanging'.

How does that theory hold up wrt to money creation & destruction? Thought that one through? Not ripping ya - just asking.

"Do you think sustained MBS intervention will be enough to keep house prices flat through this winter? "

MBS purchases + $15K homebuyer credit + Interest only modifications + FHA 3.5% downpayment programs

Yes, in nominal terms, they can keep house prices flat through the winter.

1 currency now -yogi wrote:

But the looming financial crisis will change all that, I'm still completely certain.

how... in the world... can you be certain of that, or anything, in this environment? we've served up a zinger the and ROW has said they're willing to play ball. welcome to the new . it's the government . it could be the last .

enjoy the ride.

10K and1100

ghostfaceinvestah wrote:

MBS purchases + $15K homebuyer credit + Interest only modifications + FHA 3.5% downpayment programs
Yes, in nominal terms, they can keep house prices flat through the winter.

ghostfaceinvestah,
That implies that the shadow inventory must continue to absorb supply. Is there a limit to how many 90+ day delinquencies per actual foreclosure? ( http://www.creativeclass.com/creative_class/_wordpress/wp-content/uploads/2009/08/delinquencies-and-foreclosures.jpg  )

The fluffiness has come out of INTC. Paul should just shut up now.

" Some of the recent gains in activity probably reflected government policy support"

As Dr Hfuhruhurr would say "take out the probably, makes me sound wishwashy."

More like, "nearly all of the gains in activity reflected government policy support"

Do these maroons really enjoy fooling themselves this much, or do they just take us for idiots?

ghostfaceinvestah wrote:

MBS purchases + $15K homebuyer credit + Interest only modifications + FHA 3.5% downpayment programs

Yes, in nominal terms, they can keep house prices flat through the winter.

I doubt it. The Case-Shiller index will skew downward due to a higher percentage of sales being of distressed homes. Even if there is a $15K tax credit, the same credit will apply in the spring.

"And if everyone gets 15K to buy a house, that immediately increases prices by 15K"

does it really? No snark, genuinelly interested here.

If the credit brings more demand which results in more house owners putting their houses on the market doesn't that partially offset?

And all that was required to create this economic miracle was to repeal the Glass-Steagall safeguards created after the Great Depression, decimating the productive economy, amassing a mountain of debt that can never be repaid, restructuring the Dow Industrials every so often, most recently replacing such inconsequential names as General Motors and Citigroup, and of course the devastation of the US dollar and a general loss of reputation and credibility around the world for justice and liberty.

From over at Jesse's. He has been waxing poetic, lately.

RockyR (profile) wrote (in reply to...) on Wed, 10/14/2009 - 3:29 pm

how... in the world... can you be certain of that, or anything, in this environment?

IMO -- if debasement led to prosperity, it would be the unvarying policy of every state and would have an excellent historic record. It has neither.

So did someone calculate the Dow using the actual Dow components from the last 10K?

1 currency now -yogi wrote:

So did someone calculate the Dow using the actual Dow components from the last 10K?

No but zerohedge has a chart showing the dow adjusted for the devaluation of the USD since then - 7300 would be the level of the dow in 1999 dollars if I recall.

"Is there a limit to how many 90+ day delinquencies per actual foreclosure?"

Short answer - no.

Long answer - they won't remain 90+. The "tell" was the comment from JPM about going to IO mods, plus the recent move to force servicers to put more people into the existing mod program, accomplished by not requiring upfront documentation.

"stated income" IO mods will be coming, in order to kick the can further down the road, in hopes that eventually house price inflation will bail people out.

IMHO we are going back to a state where if you can fog a mirror and at least make a few minimal payments you will be allowed to retain your mortgage. Standards to get a new one will still be tough, but keeping your old one will get easier and easier.

The only people kicked out of homes will be those who truly can't pay.

ghostfaceinvestah wrote:

The average house price in the US is 200K or so. that is a huge benefit.

The 15K tax credit much just ignite the housing bubble in the places the first round missed. Sort of leveling out housing prices everywhere at astronomical levels. In a no survivors kind of way.

If the de-leveraging in RE is being deliberately slowed, it's like a trickle of poison dragging the market for many years. Add high unemployment to that, also going on for many years. How long could it go on? A decade? 2 decades?

Byzantine_Ruins wrote:

IMO -- if debasement led to prosperity, it would be the unvarying policy of every state and would have an excellent historic record. It has neither.

reread: "the last bubble" part of my comment. who knows long this will work?

Some of the central banks could get into a "round robin devaluation scenario" according to Andy Xie (above). Rather unwisely...

S&P 500 surging near 1100! I'm doubting my bearish gut instincts!! Someone please help, talk some sense in me!

tncubsfan wrote:

S&P 500 surging near 1100! I'm doubting my bearish gut instincts!! Someone please help, talk some sense in me!

sense? DON'T SHORT! sit out if you have to, but DON'T SHORT!

What if it's not restricted to first-time buyers?

My question is now this.

I think that we've reached a point at which dollar devaluation is a definite. The dollar is going to be toasted in a major way and they really will "sky that POS"; the masses are being given a major headfake.

Actually, two questions.

1. Should I go back and purchase some more silver - assuming I can get it - despite it being at a high?
2. What will knock the market over? When does reality sink in?

Note: Rebar is wonderful stuff, but make sure that the mud is the right consistency...

No way they put the NAR ahead of the FDIC in the funding line, we now have a certain delay on any new market interventions - EHP

I don't know. NAR, the remodelers, the building association, the MBA, etc. etc. are screaming as loud as they can to all the Congresscritters they bought. In a rational world, you would be right, but it's a political world, first, last, and always, IMO.

Come on, 8 handle in SRS!!!!!!!!!!!!!!!!

Wow... SRS was just at 100. It's already down to 80?

Pakistanis flee border region ahead of offensive
By ISHTIAQ MAHSUD, Associated Press Writer Ishtiaq Mahsud, Associated Press Writer – 2 hrs 42 mins ago
DERA ISMAIL KHAN, Pakistan – Streams of civilians jammed into cars and trucks Wednesday to flee the militant stronghold of South Waziristan as the government pounded the area with air strikes ahead of an expected ground offensive against the Taliban along Pakistan's border with Afghanistan.
Yahoo! 404 - Page Not Found

ghostfaceinvestah wrote:

IMHO we are going back to a state where if you can fog a mirror and at least make a few minimal payments you will be allowed to retain your mortgage

I think that's the key assumption you have to buy to believe house prices won't decline further. I'm not sure if I believe it yet, but sadly it seems more believable than I would have thought possible 6 months ago.

Federal Housing Tax Credit: Home

Dollar hits 14-month low; Fed says economy better

Huh?

Somebody's really hammering the buy button on anything CRE related.

ghostfaceinvestah wrote:

Long answer - they won't remain 90+. The "tell" was the comment from JPM about going to IO mods, plus the recent move to force servicers to put more people into the existing mod program, accomplished by not requiring upfront documentation.

"stated income" IO mods will be coming, in order to kick the can further down the road, in hopes that eventually house price inflation will bail people out.

That would be huge, but in the end it's an accounting treatment to certify what has already been practice. It also implies that the banks as a cartel are unified in managing inventory and sales. Because houses can have high holding costs or limited amount of time before they start to expire without a positive equity owner, there will have to be an acceleration in foreclosures... probably before any kind of economic recovery. I could give them a couple years of holding together, but little more than that. I mean, what bank knowing they could survive the losses wouldn't pounce on the first opportunity to tank their competitors with a big short frenzy. What about a bank that sees their potential returns in a 200% gold rally worth acknowledging a 30% loss on a mortgage? It's a weak cartel, and not even a year old yet.

The only lasting intervention I could see would be an increase in the HUD grants to cover all the underemployed and unemployed. Even with that, there would still be too much inventory at 1% interest rates (maintenance/tax costs make it a negative return)

homedad43 (homepage, profile) wrote on Wed, 10/14/2009 - 3:46 pm

1. Should I go back and purchase some more silver - assuming I can get it - despite it being at a high?

No idea.

2. What will knock the market over? When does reality sink in?

External stimulus. You can stack a house of cards very high until the wind picks up.

My personal suspicion is that Obama is courting war with Iran to mask the dollar's collapse and the oil spike.

"Or, you could have DON'T FIGHT THE TAPE tattooed to your forearm. Where you can see it before you hit the button."

better to tattoo it on your forehead so you can see it in the reflection on your monitor.

Byzantine_Ruins wrote:

It doesn't really matter if it's a couple months or a couple ye

i beg your pardon. it certainly does matter. that's like being given the choice of six more months to live, or two more years. which, btw, may be the levity of this situation.

homedad,

I know. Thanks. I didn't understand how everyone I knew bought 800k plus houses. I probably will not figure this out for another couple years.

mdwagner wrote:

That's how I see it as well. There will be no hyperinflation until lending is loosened up. The banks are the ones who print far more money than the Treasury. Right now, they're hoarding it in preparation for the massive credit defaults coming in the next couple years.

there won't be hyperinflation until that point in time when the sheeple figure out that "hey, i really DON'T have to repay my debts." at which point, the government pops.

I assumed it wouldn't be. The FTHB credit was only limited to people who didn't have a title registered in their name over the last 2 years, or something loose like that. The expanded pool of qualifying buyers, who would not have bought otherwise, will be very small.

Oh, I think you're way wrong about that. I'm sure TPTB will screw up the legislation, allowing all sorts of 'let's (cough) "sell" the house to the neighbors' silliness to go on.

Are we gonna get a closing >10k Pig?

WestSac_grrl wrote:

Does anybody think keeping this demographic poor and busy is actual happenstance?

Barefoot and pregnant works too.

And that's ball game. Crapadoodle that was way exciting today. Better go count all my lovely new little Zimbabwe dollars...

Groundhog Day on Wall Street

We may get the market wrap up, but I suspect nothing as trivial as 10K by itself will merit the
edit: doh!

ghostfaceinvestah wrote:

The only people kicked out of homes will be those who truly can't pay.

So at least 9-17% of the productive population?

get out of my brain

With my gambling money I will be loading up JPM puts. Boatloading.

Full disclosure: I have JPM puts already, so I'm talking my book/putting my money where my mouth is/have skin in the game. Also, I read Reggie M.

yogi
Not a bad choice. #1 in credit cards. Holiday season coming up. Feburary truth in lending or whatever the new CC regulations come into effect. Lot of chargeoffs and cardholders ejected

JPM has 4 large branches within 6 blocks of my apartment.
But it's those hundred of trillions that eventually must be accounted for...

Speaking of Duane Reade, sold off my DR junk for a double. Will try this game again next crash. Still muddling through Stephen Moyer's excellent distressed debt book.

It is no fun to be at the beach and have the other currencies kick sand in your face:

Shirakawa Signals Bank of Japan Is Likely to End Credit Steps - Bloomberg.com

Shirakawa Signals Bank of Japan Is Likely to End Credit Steps

"Oct. 14 (Bloomberg) -- Bank of Japan Governor Masaaki Shirakawa said companies are finding it easier to get funding, signaling the central bank will probably end its credit-easing programs this year.

“The environment for corporate debt issuance is in good shape, except low-rated debt,” Shirakawa said at a news conference after his policy board met in Tokyo today. “The need for policy to support the market is receding.”