Fed MBS Purchase Program 92% Complete
Submitted by
CalculatedRisk on Mon, 01/25/2010 - 2:57pm (172 comments)
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not second?
Also 99 and 44/100 percent pure.
Pure something, that is.
Administration and Fed officials expressed confidence that rates will rise only modestly -- perhaps a quarter of a percentage point.
In line with CR's estimate. (omg. CR is an Administration or Fed official.)
Who would be stupid enough to lend at 30years at 4.8% to Joe 6 Pack?
everything is coming up roses, green shoots for all
JP- we should be so lucky to have CR running things!
Given where the MBA purchase index has been going, I don't expect to see a big move in mortgage rates when the Fed stops purchasing.
JP wrote:
I thought the CR estimate was 35 basis points, but I am too lazy to go back and look.
iceman wrote:
Who would be stupid enough to lend at 30years at 4.8% to Joe 6 Pack?
We need a mirror icon...
East bound and down, loaded up and truckin, we gonna do what they say can't be done.
.
You did not bring stability. Stability would imply the government has an indefinite capacity to sustain such purchases at such low yields. As evidenced by Mr Barr's own point that private buyers come in when the market is stable. What they did was try and goose the market in a low fiscal impact manner, at the expense of gross risk to the taxpayer. Who is going to be hedging that convexity, can the Treasury-Reserve also "stabilize" inflation without harming growth, how are private participants supposed to act if the Treasury-Reserve's only plan is to sell the MBS, take the cash, and bury it?
Thread music
(also the best video I have seen this year)
Yes, 35 to 50 iirc. (Sorry, didn't mean to misrepresent his numbers.) I can't locate my link to the scatter plot post...
Edit: This is one of them but wasn't the one I remembered
The Impact on Mortgage Rates of the Fed buying MBS
Hard equity loans run from 10 to 18% here.
You cant get them anymore.
Indeed, never give a sucker an even break...
Who would be stupid enough to lend at 30years at 4.8% to Joe 6 Pack?
.
My regional bank did. And they don't even sell their mortgages. I've had different mortgages with them for the past 8 years. They never sold one, and I always got great rates from them. Current is 4.875.
I guess if they can borrow at 0% still, they're okay. But if their rates go up, I imagine they'll be praying for more foreclosures.
7 1/2%
Outsider wrote:
They can't borrow at 0%. All 0% loans from the Federal Reserve must flow through a primary dealer.
Oops. What is their rate then, once it goes thru a primary dealer?
EvilHenryPaulson wrote:
Remember the initial move to purchase MBS was to counter the Chinese selling of Agency securities (more than $100 billion from Sept 2008 to Dec 2008) which increased spreads over Treasuries. And most of the money used to buy the MBS was recycled from the various emergency loan programs. So instead of lending money directly to banks, the money went to Fannie-> Mortgage Lender -> Home Buyer -> REO holder or Previous Mortgage holder. The Fed ended up with Agency bonds on its balance sheet instead of bank loans. Which strangely improved the balance sheet of the Fed and the balance sheet of the banks. (Don't ask about Fannie and Freddie's balance sheet; you don't want to know.)
100bps rise in spread within 3 weeks, easy, rates may actually drop as the reduction in liquidity tanks the stock market and rallies the bond market.
Outsider wrote:
LIBOR? Whatever the yield on their outstanding debt is? Deposits would be a big factor. All gets rolled together in their reported cost of funds.
EvilHenryPaulson wrote:
Effective Fed Funds rate. About 12 bps last I checked. That's 0.12%.
ghostfaceinvestah wrote:
You sweet talker, you...oh to ride the coat tails of more Treasury issuance for a 30 year lock...
That's 0.12%.
Close enough to zero for me.
ghostfaceinvestah wrote:
These two competing forces will be interesting to watch as they resolve. I think that after rates rise, long bonds might be a good buy (edit: of course, factoring in that I know nothing).
Therein rubs the lie, white as the driven snow...
92% complete reminds me of this...
Funny that everyone is making predictions of rate changes when the Fed MBS purchases stop and not how long it will take to start purchasing again.
I've mentioned this before, but during the 80's housing bust in Houston, there were people who brought cashiers checks to closings, and others who bought a bigger nicer house and told the bank they were going to rent it out, and then mailed in the keys after closing. Sometimes they bought 2 new cars prior since they wouldn't have the credit to do so later on.
Doesn't get much more ruthless than that.
Why would anybody still expect mortgage rates to rise when the Fed stops buying? Treasury announced an unlimited backstop for Fannie and Freddie.
Merry freakin Xmas!
Ruthless humidity surely played a role...
did anyone post this yet, another hotel closing
Dayton Airport Hotel staff prepares for permanent closing
iceman wrote:
I often ask the question would you buy a 30 year bond or FDIC insured CD at 4.5%? I bet there would be a few takers, but not many.
Repeat the question but borrow short to do so? How many takers?
apologies
The Misesian Vision by Llewellyn H. Rockwell, Jr.
From the birthplace of aviation to the abyss, in a little over a century
taking the training wheels off
what could go wrong?
volker the viking wrote:
For what?
Leadership in dealing with the CRE bubble!
Coincidentally (or not) mortgage origination slowed at the same time, and the first month of the new, slower purchase rate saw the Fed buying a bigger percentage of originations than they had in the months prior.
Moreover, add this part ... who wants to buy a CD at 4.8% for 30 years backed by the earnings power of a randomly selected American homeowner?
Banker to admit multi-million fraud | Stuff.co.nz
Mr Slippery wrote:
I've been thinking that too. Probably a minority opinion around here, though.
Yalt wrote:
I agree. What's odd is that the Fed is on track to spend quite a bit between now and April 1, so there will be a definite drop-off in purchases after March. There may be a 'bump'. More likely, they will be announcing a new program in March.
Grim_Poppet wrote:
Whoa! Glad our bankers aren't like that-
YouTube - Barney Frank 2005: "This is not a housing bubble, it wont collapse"
Words of wisdom from the Banking Queen
Grim_Poppet wrote:
I couldn't spend that much. Why do people do something that stupid?
Yalt wrote:
An obscene amount of paper issued at the lowest rates ever?
No thanks.
There was a profitable parking lot I used to park in that
was removed to make way for a tall unprofitable condo
tower.
More parking is good.
Until there are no jobs to drive to work to use the parking spaces.
josap wrote:
They have people to spend it for them-
lawyerliz wrote:
Don't worry, it can be modified into a tall unprofitable parking facility with 6X more capacity
km4 wrote:
Your valid criticism of Barney Frank's disastrous role in the US housing finance market is devalued by including personal attacks on him.
lawyerliz wrote:
And I'll bet that the tall unprofitable condo tower had inadequate parking.
Agreed, a must see...
I liked the bartenders serving drinks to Keynes~
Juvenal Delinquent wrote:
They should have had Keynes trying to hoover up the white line in the middle of the street, on the way out of the bar...
Oh, it's going to be extremely adequate for a long, long time.
Didja catch Jesse's metal ETF chart, with GLD & SLV selling below the spot price?
That's like saying i've got a $100 Bill ETF, and your price is only $98 per...
A recognition that there's no there there?
Juvenal Delinquent wrote:
No, but those ETFs will sell for a greater and greater discount to spot over time. They pay their expenses out of their holdings.
you pay a price for wanton mendacity that includes character assassinations.
It's not like it doesn't happen here often patientrenter so come down from your BS soapbox
patientrenter wrote:
Says who? Anyone from Barney Frank to King B's pet dog is fair game. That includes them and other paid shills in the former and current US Government,their wives and any bimbos they sleep with. But you're right-why beat around the bush? Let's just take 'em all outside and string them to a tree-save the dog and forget the said 'personal attacks'.
"Get 'er done"!
"Coincidentally (or not) mortgage origination slowed at the same time, and the first month of the new, slower purchase rate saw the Fed buying a bigger percentage of originations than they had in the months prior."
Indeed, easy to slow purchases in an up-rate market.
It continues to vex me. No one even questions that the Fed is authorized to purchase MBS in the first place.
There are many worse things to be vexed about.
I must say adieu and wend my weary way to Miami.
Rob Dawg wrote:
Me too. Why I haven't won the Lotto by now is a complete mystery.
More of a recognition, that they want to so undercut physical competition, as to make it a no-brainer for the remote-control investors to buy there instead. A 1/10 oz gold coin would cost you around $125 today, the GLD ETF is only $107, despite there being $109 in spot value.
Their motive?
Rob Dawg wrote:
Didn't the Fed pretty much get a free pass to do what ever they wanted?
Why I haven't won the Lotto by now is a complete mystery.
That's easy. You just haven't bought enough tickets.
Juvenal Delinquent wrote:
The pyramid is short of new players?
josap wrote:
Not quite; they're still trying to achieve sole regulatory authority and become a govt. within the govt.
lawyerliz wrote:
Like Constitutional abuse of authority and loss of freedom and subsequent debt servitude? The ONLY reason we haven't passed through this economic series is due solely to extraconstitutional efforts.
josap wrote:
Apparently not, judging by the amount of bitching about Bernanke.
Check this at about 3:50 in...so amazing that they cant even get the story right, when it's THE story -- RECASTS! Not interest rate RESETS. Oy...
YouTube - The Housing Collapse of 2010 Will Be Worse Than 2008
At least they get most of the rest of the story right...sigh (anyone know when this was broadcast?)
It seems that they have always done whatever they wanted-even before 1913. The FED spokesperson's authority is just make-believe smoke and mirrors.
It continues to vex me. No one even questions that the Fed is authorized to purchase MBS in the first place.
Rob Dawg,
Senator Bunning questioned it publicly. Bernanke simply said the Fed was indeed authorized to purchase Agency crap and the issued died.
I've read the regs. I don't see where the Fed has the authority to buy anything but Ginnie Mae MBS.
The entire system is corrupt - top to bottom. Credit/checkbook money - what a sham.
What would've happened if the Fed hadn't purchased MBS? Just curious. (What was their purpose, and how successful was it?)
You can't win if you don't play!
Crickets, eh?
Well, here's what a quick google tells me about the whys and did it work:
Did the Fed Buying MBS Make a Difference? | Cato @ Liberty
The dollar from 1913 to 1933 was very stable financially in terms of worth, and then the bottom falls out slowly, to where it takes almost 17 of today's dollars to equal 1 1933 dollar.
(What was their purpose, and how successful was it?)
outsider,
Multiple purposes. Primarily to save the banks and the banking system by preserving the aggregate value of issued credit (including trillions in unpayable and eCONomically harmful debt).
Judging by the size of the bankster bonuses, I'd say the program has been an enormous success. Is it any wonder that the financial propaganda network (CNBC) is so CONcerned that helicopter Ben might not get re-appointed?
km4 wrote:
When someone you generally disagree with makes a good argument, are you more or less likely to be convinced by it if they then add a personal attack on someone you like?
Barney Frank is a saint to the left wing of the Democratic party. Any personal attack on him is considered by his loyalists as evidence that everything the speaker says is of little value.
Angry Saver wrote:
Denninger has been posting about this in bold CAPS for some time. The law seems pretty clear, unless you can stretch the exigent circumstances to mean the Fed can do anything in a time of emergency.
I would consult with my elected representatives, but I have too many fights going already.
The spirit is willing, but the flesh is spongy and bruised.
Huh:
Apple's upside comes from accounting shift MarketWatch First Take - MarketWatch
But it appears that Wall Street's first quarter estimates don't include the positive impact of a major new accounting rule related to revenue recognition for certain products, namely how Apple can now account for sales of its popular iPhone and Apple TV.
The new accounting rules let Apple recognize substantially all of the revenue and product cost for the iPhone and Apple TV when those products are delivered to customers. Apple had been using subscription accounting, which deferred significant amounts of revenue and cost of sales related to those devices over a longer period.
Remember when Enron played these games? Well, apparently no one else does, either.
The spirit is willing, but the flesh is spongy and bruised.
A fellow Futurama fan, I see.
I think I'm going to try to run my household books like these Wallstreet assholes do. Just add a zero or two over here, subtract a zero there....Voila! I'm rolling in cash!
Nuke wrote:
Huge.
broward wrote:
The Fed has a free pass, as long as it continues to pursue an easy money policy. What's happening now is that the Senators are trying to win a place in the losing side of the vote on Bernanke. There are only 40 slots available for that, so they are very excited about who gets into the group and who doesn't. The actual outcome? A foregone conclusion. Ben saves bankers and their political friends. They don't want to lose him.
Like I said before, this change hurts future earnings and pumps up earnings for quarters that are already past.
I hardly think this is Enron-like in any way.
Here's another thing on the lawfulness of the Fed buying MBS. Just a quick google, I have no political point to this, and don't know much about mises.org:
The Fed Bought What? - John Paul Koning - Mises Institute
Clauses 3 to 6 of the Guidelines for the Conduct of System Operations in Federal Agency Issues ensured that Federal Reserve operations could not engage in temporary purchases of securities issued by federal agencies like Freddie Mac and Fannie Mae.[2]
In an August 1999 Fed meeting officials temporarily suspended clauses 3 to 6, giving themselves the authority to freely purchase Ginnie Mae–, Freddie Mac–, and Fannie Mae–issued MBS on a provisional basis without hindrance on size and timing. The reason given: it needed full reign to inject money into the banking system in preparation for the year 2000 crisis.[3] The period for which the temporary suspension was to extend was from October 1, 1999 through April 7, 2000.
The year 2000 crisis proved a dud. But rather than removing the temporary suspension on buying MBS, the Fed renewed the suspension in 2000 and 2001 before permanently striking off clauses 3 to 6 in 2002.
Does that answer the question on whether it's legal?
The law seems pretty clear, unless you can stretch the exigent circumstances to mean the Fed can do anything in a time of emergency.
Mr. Slippery,
IIRC, the exigent circumstances clause referes only to loans, not purchases.
Imo, KD has done a great job of highlighting the financial fraud. The caps and bold print don't bother me at all. Then again, I do have "Angry" in my nom de guerre.
I do not think this accounting change means what you think it means...
km4 wrote:
I hate it when people I agree with decide to pursue a less effective path to advance their case. Carry on....
Thank You Anonymoustoo for a fitting close to the last thread........"God help us and the dollar when it happens"
What, there are only 8% of all mortgages not already bought up by Fannie & Freddie?.....get busy you slackers!.
Not only is my mortgage not sold by the bank, but it is neither a Freddie nor Fannie.
What does that say about the bank? Are they conservative? Suicidal?
justaskin wrote:
Once they have all of the mortgages they can nationalize the mortgage market.
Outsider wrote:
Depends. Can you look up their info online?
Outsider wrote:
Maybe they're Conservatively suicidal? If you don't know, call the '700' club, Pat will tell ya.
i think at 92%, for all intents and porpoises, you can consider it nationalized.
Can you look up their info online?
What info would I be looking for?
CR, I think your estimate of a "35-50" (?) basis point shift in mortgage rates was relative to treasuries. But T-bond rates are not independent of mortgage rates - investors always have a choice.
The reality is that the Fed has financed the federal deficit by buying MBS, while individuals and mutual funds sold MBS and bought Treasuries. But what rate will the Treasuries have to offer before people will buy all $1 or $2 trillion of them? And who will have funds to lend out for mortgages, if $2 trillion in capital has to flow into Treasuries this year? And next year doesn't look much better, does it, really? There is no V on the financial charts! (Or is the plan to allow the big banks to lever up again?)
just got a report on rmbs remittance reports for January, these are the monthly reports the master servicers put out to the tranche inventors.
basically the remits were as expected, that is, delinquencies continued to climb, at a slightly slower pace than december, prime 60+ dqs were up 52bps vs 55bps last month.
just a slow drip, drip, drip to oblivion.
Captain Morgan, one time only. The DJIA will probably drop 500 points from today's low within the week. There's no way to know the future. I bet on probabilities. Today was an inside day on a descending chart, no less in a major reversal pattern. This is a DSI pattern, something I wrote about on Mish.. Gaudia Ray. Go read it there.
But because this is a 4 day decline, and steep, the leverage to drive this 1500 points is not as strong as the last major drop, in 07.
Here's the technical stuff one time only for you. The market has a multiple day declining pattern, lower lows and lower highs, symetrical in the pattern created. Today, the market traded "inside" the prior day. Higher low and lower high. This is a well known pattern to me, well proven in time, but has not been seen by the lumpens like you in years and years, more like decades. So, it will repeat. What will happen is that the market will continue to be symetrical. From this pause point, a desperate attempt to reverse direction, the market will continue the direction of the original move. Today's inside trading is the trigger. It has been pulled. The options are only 2. There may be a trading day tomorrow of an attempted rise, as in reversal, which WILL FAIL, or the market will complete the symmetrical decline, down 500 points from today's low. This will occur very swiftly, within a few days, maybe 5 trading days, including the possible attempted rise tomorrow.
This is as close to free money as it gets.
You can row my boat after this occurs. I know very little about the markets, but when it comes to the obvious moves, this is one of them.
That's the tech analysis. Go back test it, overnite, and take your position in the night market as this is as good as it gets.
As to the others here, I invite any one of you to call it before it happens. Very few here have this skill. And as I said, Cap'n, either I'm right or I'm gone. And if I'm right, it'll reflect your ignorance, and on that I'll turn all your future thought processes. I don't mind sudden death playoffs when it comes to slamming minds.
This thought process will prove itself in a few days. Then maybe someone else who knows will step forward and share one thing that makes real sense to them, too.
You initiated it...and I repeatedly explained my point to you !
km4 wrote:
Carry on mixing personal attacks with good logical arguments..... Did I start that?
outsider,
There are two different governing clauses. One deals with repurchase agreements (basically loans), the other deals with outright purchases. The clause governing purchases clearly states that the purchased security MUST be backed by the explicit full faith and credit of the U.S.
Fannie and Freddie have NO such U.S. gaurantee. Ginnie does. As I see it, the Fed is violating the law. You know, they have to destroy the village to save it. Expediency trumps our CONstitution apparently.
GDD9000 wrote:
not until they set rates, terms and make loans directly.
patientrenter wrote:
Nope-
Lets keep the focus on the issue. No need to diss B Frank.
GDD9000 wrote:
I don't know if you guys are just joking around or not, but the 92% complete is NOT 92% of all outstanding MBS.
It is 92% of the monetary value they set out to purchase, which is still a significant percentage.
Take the 5ton dually training wheels off the economy ? Naaa. The Administration won't allow it. I mean, just today Obama announced more giveaways. He's just like Oprah!
patientrenter wrote:
I no u r but what m I?
Where are the constitutional attorneys?
GDD9000 wrote:
The MBS outstanding for Fannie and Freddie is approximately $12 Trillion. The Fed is purchasing $1.2 Trillion. That is only 10%. The 92% refers to how much of the authorized $1.2 Trillion they have already purchased. If you prefer, you can say they have purchased 9.2% of the market.
Outsider wrote:
1600 Pennsylvania Ave.
Don't we have any others to choose from?
Rajesh wrote:
The bad asset part. Yes?
Wasn't Obama a professor of Constitutional Law ?
Hoocanode
Slumdog wrote:
"We have reached the third degree where we devote our intelligences to anticipating what the average opinion expects the average opinion to be." -- Keynes 1936
Slumdog wrote:
The target price is 8700. The high probability number will be 9000. I can't speculate beyond that point at this time.
Fasten seat belts. The ride started today.
Short term memories. I called the top on this on the day it turned. Now I'm calling the next phase down. 500 pts, quickly. And if anyone complains at 425 pts, it's 2010 and it's time to stop taking so many mood modulators.
Obama has the answers to everything. Just don't look for results.
The MBS outstanding for Fannie and Freddie is approximately $12 Trillion.
Rajesh,
The total amount of residential mortgage debt is under $12 trillion. Of that, (last time I looked) FNM & FRE account for ~ $5 trillion.
Oh well. Enough dooming for one evening. After a while you just get depressed.
When I do get overwhelmed with this, I go to my new favorite video. In case it helps anyone here, I'll post it:
YouTube - Frostie Dancing To Shake Your Tail Feather! Bird Loves Ray Charles!
Here's an excellent one GW Law - Faculty Directory
Mr Slippery wrote:
This is a well known pattern to me, well proven in time, but has not been seen by the lumpens like you in years and years, more like decades.
"We have reached the third degree where we devote our intelligences to anticipating what the average opinion expects the average opinion to be." -- Keynes 1936
Mr. Slippery, it just is as it is. I see it as Fibonacci numbers. It's not sophisticated. In fact, it's the exact opposite. This probability game works only when there is high stress in the environment. That there is. In 3 days, I believe we will be under 10,000, and the rest is straight down from there.
Frostie Dancing looks like my parrot dancing. Mine loves old rock and roll, Alice Cooper is number 1 with the parrot.
Slumdog wrote:
Cramer is not going to be a happy camper...
Slumdog wrote:
You said the same thing about gold.
As is his wife.
Coincidentally, I purchased some SDS today. So I'll be watching to see if Slumdog's prediction works out.
"
January 25, 2010, 4:27 pm
The Tyranny Of Markets
Gah. I hate, hate, hate it when people say that we have to do something, not on its merits, but because otherwise we would damage market confidence. Nobody really knows how the markets will react; the right thing, always, is to pursue policies that look right on the substance.
So sure enough, we have Tim Geithner arguing that Ben Bernanke needs to be confirmed because otherwise the markets will be troubled. To be fair, he seems to be reacting to a leading question. But it’s still a bad sign.
"
The Tyranny Of Markets - Paul Krugman Blog - NYTimes.com
I do not recall ever hearing a sitting Treasury secretary use the 'market confidence will be damaged' argument before. Have you?
They usually say 'We have no comments on how the market will react"; These guys are clueless.
The comment about the nationalization of the housing finance market is essentially correct. Practically all of new FNM/FRE mortgages sold over the last year were bought by the Fed. The fact that there were trillions of FNM/FRE mortgages outstanding before that is irrelevant to the current pricing and availability of mortgages.
Add in the govt guarantees on FHA mortgages, and there's not a lot of private market left, and they have to follow the price set by the govt. It's not surprising. The govt said they were going to target keeping home prices high, and you only can do that by increasing demand (hence all the FHA guarantees to generate FHA loans, and the Fed feeding of FNM/FRE) and decreasing supply (hence the foreclosure moratoria and HAMP and enormous pressure on servicers to forbear).
Doyle Lonnegan: I'm putting half a million dollars on Lucky Dan to win, third race at Riverside Park.
SNAFU wrote:
Well, since they darn well do know ( or at least have a pretty good idea) how markets will react to their actions, which way would you rather have it?
Mr Slippery wrote:
Let me fix it for you. "Factoring in that I know nothing and am a big risk-taker."
broward wrote:
And we are still under 10,000 USD/oz of
. He was right. Don't be a hater.
sm_landlord wrote:
They don't, I don't think, not in the month to month terms.
Today I reviewed some of the GD1 President's accomplishments:
Social Security
FDIC
FHA
Fannie Mae
SEC
Quite an impressive list. Oddly enough, all of these institutions are directly linked to the current hopeless condition of the nation. Maybe we should learn from history instead of trying to repeat it...
Just to play the devils advocate...Should the market take a big tumble with insiders bailing might that drive
back up? I just rambled over to Nates and they seem to be bearish was well over there. I'm not big on TA so I don't always understand their methodology but I do recognize tone 
bearly wrote:
If we follow Dogbert's Rules of the Universe, we have to undo everything FDR did, and when things get tough again, we have to reimplement them. Centralize that which is decentralized and decentralize what is centralized.
rich wrote:
So true. My thesis for the statement is that I believe the macro outlook is very weak, and that the debt burden will overwhelm whatever programs the government attempts in 2010. What I can't begin to calculate is how the macro nets out against potential lack of investor funds for the large amount of issuance.
SNAFU wrote:
Voters want their homes prices and stock prices to be high. Bankers want their reckless bad loans to become good again. Politicians want to be re-elected by voting homeowners, using campaign advertisements paid for by the bankers. What's not to like about asset bubbles forever?
Too many people have become hooked on the drug of high asset prices, and our politicians will pander to that.
Comrade Kristina wrote:
If
hits 10,000 USD/oz, it will because the USD has become that worthless, not that 
has become that valuable. (IMHO)
Rajesh wrote:
The MBS outstanding for Fannie and Freddie is approximately $12 Trillion. The Fed is purchasing $1.2 Trillion. That is only 10%. The 92% refers to how much of the authorized $1.2 Trillion they have already purchased. If you prefer, you can say they have purchased 9.2% of the market.
Angry Saver wrote
The total amount of residential mortgage debt is under $12 trillion. Of that, (last time I looked) FNM & FRE account for ~ $5 trillion.
Geeze, I was just having fun (although, anecdotally, my vintage 10/09 debt to HSBC got sent off to FHA in record time....)
So, who owns the company store these days?
Have we done anything to prevent another crash within the next few years?
What, if anything, should we do?
For those interested, a fresh Wisdom Speaker rant is now online here:
Do NOT Feed the Squid! » Preventing the Squid's Return
(Answers: I don't know either, but the post provides some context for taking a skeptical approach to any proposals...)
Visually, your graph suggests the slowdown hasn't been that significant-just a very slight flattening
I wasn't implying it would hit that high but I don't see 3K being out of line. I can remember a day when the Dow and Gold crossing at 4K didn't sound far fetched...In fact it was discussed right here on CR...
yagij wrote:
I'm not a hater, I'm a baiter.
Slumdog wrote:
Funny how no matter what I Google search for on Mish's site nothing comes up of your writing. Do you mean something I wrote on Mish to mean commented on his site? Have a direct link?
I actually DO know much about the markets, and if you are right either means you are good, lucky, or both, and reveals absolutely nothing about me or my intelligence or knowledge. There are many people here who know much about the markets as well, many more so than I do.
I'm not sitting here claiming you are wrong, I'm pointing out how much you look like a spammer. Big difference. You are really starting to act like a troll on top of it.
Nice of you to make this one time offer for us peasants though...
Comrade Kristina wrote:
You can substitute 4k for 10k in my last comment. GLD & GOLD will never hit 4k, but the physical might.
broward wrote:
But are you a master at it?
The Fed finishes the purchases the toxic MBS and we force our leaders to selectively default on the trash.
Comrade Kristina wrote:
FWIW, Richard Russell talked about Dow and gold crossing, and did so very early on in the gold bull.
I do not remember specifics of what he said or if he mentioned price targets, but thought you might be interested in it.
Wisdom Speaker wrote:
(Answers: I don't know either, but the post provides some context for taking a skeptical approach to any proposals...)
Stabilizers... IMHO, TPTB are still looking for a 'white swan' and in the meantime, doing their worst in trying to patch up the speculative economy of recent memory, the which economy relies on the instability and fluctuation that lack of stabilizers and normalizers create in combination with high leverage. The game hasn't changed despite our encountering a game-changing credit event, and FIRE still commands most of our economic power despite its apparent failure. Policy responses, too, have been safe and compromising for the most part, despite being spun as 'radical' ideas to appease the populace.
agreed.
Mr Slippery wrote:
When I see a stock "beat" the "consensus" estimates, and yet the stock goes down, I always joke to myself that they must not have beat the market's expectations by as much as the market expected...
Thanks Capn' I'll check him out if I get a chance. I'm not trading or anything but I do find it interesting from a research standpoint. I just wish I understood more about trading commodities. I have always strictly traded stocks (and mostly for fun) and when I did that I liked playing IPO's in the Quiet Period. There was a group of traders that played them over on Raging Bull, I was good at research so I contributed that angle on the IPOs while others took care of the TA and other analysis.
Comrade Kristina wrote:
I suspect not. If we get another crash I think we're likely to have another credit-liquidity-contraction that drives the prices of all assets down, including this time the longer Treasuries. People will have to sell what they can get a profit for in order to cover speculative losses and margin calls elsewhere.
is a risk asset at this time. But 
will have a smaller decline than most speculative assets, because of the hyperinflation fears.
Outsider wrote:
think about that statement for a moment. Assuming different mortgages means two or more that is a maximum average life of 4 years on the mortgages that you have had with them. I would say close to 5% for a 4 loan not a bad deal = particularly over that period the funds rate has probably averaged around 3%
EvilHenryPaulson wrote:
nope if they are bank they get to borrow in the Fed Funds market which has been running around 0.17%.
CaptainMorgan wrote:
any body buying an ultra long bond futures contract is essentially doing that and there are many who do.
Rob Dawg wrote:
Are you looking for badges?
YouTube - We don't need no stinking badges!
crazyv wrote:
Different set of expectations on the outcome, and different risk and reward scenarios though.
But very good point.
Juvenal Delinquent wrote:
I told you to place it on lucky dan to place
JD,
Are you gonna be the village idiot about GLD and SLV?
As I've posted many times, GLD and SLV mirror the London fix of gold and silver bullion on a daily basis, less their cumulative expenses since inception. You will buy them at this spread and sell them at the same spread. Over a year, this spread increases by expenses, which are .4% annually for GLD and .5% annually for SLV.
Wisdom,
Excellent analysis.
Mr Slippery wrote:
Slippery,
It's hard to figure out over the short run. But it's pretty easy to figure out over the long run, isn't it? For all this debt to sustain and grow, you have to believe the next generation will be rich enough and dumb enough to buy off the older generation's bonds, right? Regardless Hu owns them.
As long as there is a next person to buy the hot potato, you're good.
yagij wrote:
They've been saying that about worthless paper currencies for 5,000 years.
It was equally true about Confederate currency 150 years ago.
What's new?
pigged