yagij wrote:

Smooth... Sack... Exit...

I was thinking the same thing; what's the sack doing in there anyway? Must be a teabagger thing.....

"Sack believes there will be little increase in the spread between mortgage rates and the Ten Year Treasury yield when the MBS purchase program ends."

I think the best news is we will know in about 6-8 weeks so we don't have to continue debating it.

If anyone thinks we will have anything other than endless fiat-flinging, they are crazy. Invest accordingly.

CalculatedRisk wrote:

When the time comes to tighten monetary policy, the Federal Reserve will be embarking on a tightening cycle...drain reserves... operating in a framework...that has not been fully tested in U.S. markets.

In sum, we must:
* Tighten the sack
* Drain the sack
* Know the technique hasn't been fully tested.
.
That is too for me

greenchutes got his , only to have this thread start out even more than the last.

ghostfaceinvestah wrote:

anything other than endless fiat-flinging, they are crazy.

lately I need the reassurance...thanks

Cinco-X wrote:

Are we going straight from '31 to '37!?

With the injection of vast quantities of liquidity, time begins to dilate.

ghostfaceinvestah wrote:

If anyone thinks we will have anything other than endless fiat-flinging, they are crazy. Invest accordingly.

Good line. Monkeys Flinging Fiat.

noob goldberg wrote:

With the injection of vast quantities of liquidity, time begins to dilate.

It's the "pulling out" that makes it more like '37-

I don't have a problem. I can stop any time I want.

At least the text indicates that he understands the enormity of the tightening that will be necessary to contain inflation. IMO containing inflation to "only" single digits. When the velocity of money ticks up even slightly draining liquidity will recreate the same credit lockup that liquidity was intended to address.

Bank of the United States now.

yagij wrote:

The "pulling out" technique has always been a risky venture, and depending on the era, it has been an approved or disapproved course of action.

I guess it needs to be teste'd....

ghostfaceinvestah wrote:

If anyone thinks we will have anything other than endless fiat-flinging, they are crazy.

Feddie fling my way
Sho' look good to me
Now would you please
Fling my way

Less the than the embarrassing subtext of CA politics, really.

MrBeach wrote:

What I really want to know about are the secret $1 trillion in US equities held by the Fed and their plan to unwind those.

In all seriousness, the S&P collapsed more than 50% in under a year. Given that our entire way of life (Pensions, Insurance, Savings) is now levered to positive returns on the stock market, why wouldn't the Fed have been buying equities along with Treasuries and MBSs?

CalculatedRisk wrote:

Moreover, the exit from these facilities has been quite smooth. At their peak, these facilities provided more than $1.5 trillion of credit to the economy.

Debt, $1.5T of debt. And when the "liquidity" is drained the debt remains. I don't see what the liquidity did for the economy that the debt didn't do regardless. The liquidity was all about the banks, didn't help anyone else.

ghostfaceinvestah wrote:

The DeMauros are still in foreclosure. But by declaring bankruptcy 11 times, they have managed to hang on to their house and to continue living there — seven years after they made their last regular mortgage payment. "

Damn! What gives?

From Zero Hedge:
"Brian Sack, Executive Vice President and Undisputed Head of the Fed's Markets Group, Rumored Head of Mythical Plunge Protection Team. "

I bookmarked this xmas day zerohedge post.

"Out of the $2.22 trillion in expected 2010 issuance, $200 billion will be absorbed by the Fed while QE continues through March. Then the US is on its own: $2.06 trillion will have to find non-Fed originating demand. To sum up: $200 billion in 2009; $2.1 trillion in 2010. Good luck."

Brace For Impact: In 2010, Demand For US Fixed Income Has To Increase Elevenfold... Or Else | zero hedge 

It's like a bankruptcy Spinal Tap...

steelhead wrote:

Rumored Head of Mythical Plunge Protection Team

Cruise Director on the Titanic perhaps? ...lets get back to bingo, dancing and drinking folks...ignore the seawater around your ankles.

MrBeach wrote:

Given that our entire way of life (Pensions, Insurance, Savings) is now levered to positive returns on the stock market, why wouldn't the Fed have been buying equities along with Treasuries and MBSs?

I guarantee they were, there is no doubt in my mind. I doubt they bought equities outright, but futures.

Your point is right on, that was one of my thoughts during the crisis - our whole economic system is incredibly levered to the stock market. Like you said, pension funds, private retirement funds, university endowments, insurance companies.

There is little debate that a Plunge Protection Team was discussed sometime in the past. For exactly a situation like we had last year. 2+2...

CalculatedRisk wrote:

we will be using tools to drain reserves that are new and that will have to be implemented on a scale that the Fed has never before tried

That's the part that scares the bejeebers out of me. What new tools? On how big a scale? How much more is this gonna cost me?

steelhead wrote:

From Zero Hedge:
"Brian Sack, Executive Vice President and Undisputed Head of the Fed's Markets Group, Rumored Head of Mythical Plunge Protection Team. "

I guess this was the announcement of a downturn in the equity markets to keep the government bonds really cheap. Like appallingly low interest rates on the long bond, which we are selling a ton of this week.

So, this withdrawel of liquidity will be met with joy by the bankers, or is this just a shift of the manure back to the treasury by way of fannie and freddie?

Hmmmm, so many wheels within wheels.

Someday this war's gonna end...

Feckless Ness wrote:

What new tools?

Paying higher interest on reserves.

To reduce the supply of money, we will create more money. Brilliant.

Experts agree that free money is the best kind...

ghostfaceinvestah wrote:

To reduce the supply of money, we will create more money

I'm confused... ()

VLASENKO: Fiscal schizophrenia - Washington Times

black dog wrote:

7 years without a mortgage payment?

With a regular mortgage payment. The article looked like it was worded carefully.

2 derivatives + 2 derivatives = 60

Juvenal Delinquent wrote:

2 derivatives + 2 derivatives = 60

More like 2 derivatives + 2 derivatives = 22.

black dog wrote:

$200 billion in 2009; $2.1 trillion in 2010.

Hot bond-on-bond action.

Mook wrote:

After all, the Chinese shoulda known the risks when they bought all that US debt in the first place, right? Dooooooooooooooom!!!

Yes, for those sophisticated investors only, remember investments always involve risk, check with your broker. PT Barnum Rule applies.

"... in Sack's view the impact ... should be gradual." Uh oh--impact is a word used often to describe plane crashes.

"... in Sack's view the impact ... should be gradual." Uh oh--impact is a word used often to describe plane crashes.

I assume other lawyers or RE people could back out what you said, but I think there was some stuff in-between the lines that got missed by some of us.

roflmao

More like 2 derivatives + 2 derivatives = 22.

Nah. That kind of problem-solving my 3-year-old has already mastered, and I'm not willing to grant that level of sophistication to any of the principals in this drama.

I'm thinking that their thinking would be more along the lines of my 1-year-old. "What's 2 plus 2?" "Green!"

in all fairness, this will probably go just fine.

/ducks

Gee, and Tanta was needed with her brigade of equipped beady eyed steel toed doc reviewers to ensure that everything was correct- too bad all of those folks were laid off in 2003!

I have zero sympathy for the inwestor that holds the first, or should I say held the phantom first- as the second is now the first! I think the homemoaner might be the big winner here- let the litigation finish and start making payments to the second!

Someday this war's gonna end...

Cinco you know the answer to that one. It also leads to other chronic, debilitating chronic diseases like the Gee-MMMs. The M represents the current recovery process (stole it from somewhere but I forgot where now). As it happens, M is the first letter in Mortgage too which is also a derivative of the word Mort and in Latin that means...oh well nevermind. family blog, family blog.

To sum up: $200 billion in 2009; $2.1 trillion in 2010. Good luck.

Ain't nothing that price won't fix. snicker

Preparing for a Smooth (Eventual) Exit sounds like someone who just ate a laxative and is headed to the toilet. I don't like the smell of it.

Citizen AllenM wrote:

I have zero sympathy for the inwestor that holds the first, or should I say held the phantom first- as the second is now the first! I think the homemoaner might be the big winner here- let the litigation finish and start making payments to the second!

Fitting that Alice in Wonderland just came out.

Mook wrote:

But don't worry about keeping inflation in single digits. Our appointed officials can always look a few thousand miles south to Cristina Fernandez de Kirchner to take pointers in that regard. Besides, what's the worst that could happen? After all, the Chinese shoulda known the risks when they bought all that US debt in the first place, right?

Excellent points but this time inflation won't save us. Too much debt at the short end. The Chinese were given too much time to prepare.

...or Austria or Hungary in 1921

Both of those countries had horrific hyperinflation, just not on the grand scale of Weimar.

Right now the banks say they "hold" the note and mtg, meaning are in the possession of it.

The mtg was originally made to some one else--like Fremont. The trail
stops there. No legitamate assignment to the present foreclosing lender, no
endorsement no nothing.

Foreclosure defense types have been arguing and winning to a certain extent,
saying this bank has proved no connection whatsoever with this mortgage,
but this is the first case that I know of that accepts that line of reasoning and
reversed the foreclosure and sent it back down for appropriate proof of ownership.

Which will take them months and years to figure out.

As it is, the Plaintiff bank argued it was the holder, well, just because it was.
Appeals Court sez to much paperwork error possilbe, you can't just assume it.

It's like I tried to foreclose your mortgage, on my bare say-so.

Happy dance, happy dance.

Rob Dawg wrote:

Too much debt at the short end. The Chinese were given too much time to prepare.

Yeah, Bernanke really screwed that up. He really should have just done a helicopter drop, caught the Chinese off guard.

lawyerliz wrote:

As it is, the Plaintiff bank argued it was the holder, well, just because it was.
Appeals Court sez to much paperwork error possilbe, you can't just assume it.

Calvinball comes to Court.

Poor old Gresham would be at a loss for words trying to differentiate good money from bad money, if he was around today...

Calvin LOST. Happy dance, happy dance.

lawyerliz wrote:

Appeals Court sez to much paperwork error possilbe, you can't just assume it.

Bet some faces went white on that one.

ghostfaceinvestah wrote:

Yeah, Bernanke really screwed that up.

what are you talking about?

Feds have been shifting heavily to the short-end since Clinton, to mask the true interest cost.

trading risk for money.

Warm, dry conditions signal threat of 2010 drought in B.C.
Terasen seeks 13-per-cent gas charge hike
Copper wire theft leaves hundreds in Surrey without 911 service

MrBeach wrote:

My fear is this: they will get massive inflation overnight due to currency collapse. At some point it will become evident that the only politically viable strategy is continuous currency debasement. It will take time for this knowledge to disseminate. The risk is we cross some event horizon and there will be turning back (politically speaking).

I was watching "Rick Steve's Europe" this weekend where they were traveling to Turkey. The Turks hedge against inflation by "always having a building under construction", and applying any spare cash to its construction. We probably need a strategy like that as well. I'm sure the Goldbugs will now chime in.....

ghostfaceinvestah wrote:

the money received from selling MBS to the Fed was in turn put into other assets.

Sigh. Yup. That's essentially what killed Greenspan's 2001 sticksave. Probably Japan, too.

Liz, excellent and congrats! I thought of you reading this the other day. There are more in spices too including whole black pepper, and some spice blends.

Mincing Overseas Spice Company Voluntarily Recalls Two Lots of Black Pepper

They almost never supply proper proof.

This is a big deal.

there is no place for spice racism in our polite society!

Meaning what?"

March 8, 2010

"Russia plans to have its first batch of reserves of low-enriched uranium prepared by the end of 2010 to ensure stable nuclear fuel supplies for International Atomic Energy Agency member countries in the event of emergencies, including “insurmountable political difficulties,” Russia’s state-run nuclear power corporation Rosatom said March 8, RIA Novosti reported."

I finally read the post.

7 1/2%.

Putsch yourself in Germany and the year is 1921...

As a result of WWI, the United States became the world's preeminent creditor nation. Now, 90 years later....

Aren't cycles fascinating?

TBTF was/is always about preserving massive equity holders AFAIK.

TPTB are going to wish they spent less bullets propping up housing - a tril a year would go a long way towards slowly elevating the russell 5000, whereas nothing can support the entire RE market.

Wow -- low-enriched uranium?

This is definitely not good news.

In times of “insurmountable political difficulties,” we need to have lots of U-235 on hand...

The government says its decisions on redesigning currency are guided by assessments of counterfeiting threats, from digital technology or old-fashioned printing presses (and inflationary capital controls.)

Will there be a premium on old 100 dollar bills?

With new $100 bill, Franklin gets a makeover - U.S. business- msnbc.com

Heard they were juiced with Anabolic Loan Steroids...

Cinco-X wrote:

The Turks hedge against inflation by "always having a building under construction", and applying any spare cash to its construction.

In effect, transferring their paper money to laborers in exchange for real product (buildings). Our system used to be better - our strong legal system allowed up to tap the productive power of people well into the future through debt and equity. Somehow, somewhere we lost the core confidence and trust this system requires.

Now we literally fake it - by quantitatively easing value that does not exist - is not backed by anyone's promise of productive endeavor and handing it off as the real thing.

for no good reason to link

http://s1001.photobucket.com/albums/af140/Ghung/?action=view&current=crowded_train.jpg

broward wrote:

"Can we agree that whoever it is, the death of your paper is... inevitable, Mr Anderson?"

Promise of indefinite ZIRP should destroy paper currencies. That it hasn't suggests that the Fed still has considerable credibility left. Why, I don't know. But apparently market participants are confident that the Fed will pull out of ZIRP at the right moment.

MrBeach wrote:

Fed will pull out of ZIRP at the right moment.

familyblog

pavel.chichikov wrote:

Why not? What other practical option is there?

Fair question. A rational response would be for capital to seek out sounder footing. An alternative is to turn around and take every dime possible by gently preying on the gullibility of J6P and Congress in this setup.

broward wrote:

ghostfaceinvestah wrote:
Yeah, Bernanke really screwed that up.
what are you talking about?

The Feds only job is to protect the creditor class, and they have done a fine job!

broward wrote:

But I'm firmly convinced now (yuk yuk) that most people are deeply programmed.

It is stunning that the Fed went from 5% interest rates to ZIRP & trillion+ in QE in under 18 months. This transition alone should have shattered any credibility the Fed had whatsoever.

That they took these actions to backstop the TBTF banks they regulate should have been enough to separate the Fed from its regulatory duties.

Instead, we got a) Bernanke's reappointment b) Near collapse of financial reform and c) Preening central bankers.

Sad really.

broward wrote:

Heck, I see the intractability of some beliefs every day on this site.

What's more typical, Broward, credulity? Tentative acceptance of information, subject to review/fresh inputs? Ideas tested against ideology/orthodoxy?

You really think those future generations are gonna pay?

I don't.

RockyR wrote:

I don't think we're going to plunge back into the abyss. That's all.

I agree - the abyss has been largely backfilled by government guarantees and now ZIRP. Nevertheless, assets are still wildly overvalued. Lets see what happens when the Fed begins to backoff the accelerator.

Gotta go...

OT, but VASIMR could make a comeback after the NASA cuts:
SPACE.com -- New Rocket Engine Could Reach Mars in 40 Days

Can we afford a rocket big enough to carry the 111th Congress on a one-way trip?

burnside wrote:

Tentative acceptance of information, subject to review/fresh inputs? '

Most people don't bother.
I remember when I lost faith in our media.
Until Waco, I believed we had a trustworthy media.

Likewise, I believed many things like "the free market", "FDR was bad", etc, until around 2001-2002 when I came out of my stupor. There are many things I can't prove, though.

The latest bit on democraticunderground is a petition for Obama to dump Rahm.

Very sad to watch, the desperation to maintain belief in their 2008 vote.

MrBeach wrote:

It is stunning that the Fed went from 5% interest rates to ZIRP & trillion+ in QE in under 18 months.

Yep. It's gonna take a long, long time to recover from that kind of deflation.

sm_landlord wrote:

OT, but VASIMR could make a comeback after the NASA cuts:
SPACE.com -- New Rocket Engine Could Reach Mars in 40 Days
Can we afford a rocket big enough to carry the 111th Congress on a one-way trip?

Can we afford not to?

Hiring IRS Agents now by the hundreds, what does that tell you.

MaryAnn wrote:

Hiring IRS Agents now by the hundreds, what does that tell you.

That this can only be solved by force now.

But I've assumed that for several years, I've been hoping until this week that I'd be wrong.

MaryAnn wrote:

Hiring IRS Agents now by the hundreds, what does that tell you.

Hopefully that they're going after the people who falsified their income to qualify for loans.

Realistically, they have probably found a way to define delinquency down and come after honest people.

That is the 64 quadrillion question.

warlock wrote:

Strategic territory being given to former enemy (Danzig corridor etc.)
Admit it - you've never heard of the Danzig corridor have you?

Modern day Gdansk [SP?] Home of Lech Wallessa [Sp?]

RockyR wrote:

can you clarify that statement?

I believe that the only solution to our current problems is a dissolution of the Federal gov't.

Lobbyist Ben Dover wrote:

Theft by taxes, what a novel idea!

it won't work.

broward wrote:

I believe that the only solution to our current problems is a dissolution of the Federal gov't.

ah. right on, brother.

RockyR,

They have been doing it for ever and are just getting better at it.

broward wrote:

RockyR wrote:
can you clarify that statement?
I believe that the only solution to our current problems is a dissolution of the Federal gov't.

I was thinking more along the lines of a Reformation. Bloodier and far more emotionally cathartic.

greenchutes wrote:

Actually, warlock, that's the key one, and you're utterly wrong. We do have massive reparations to pay in the form of debt and entitlements.

On the bright side, we owe them in USD, not some other currency, and we can print as many of those as we want.....Weimar Germany owed France reparation in Francs......

Cinco-X wrote:

I wonder if they'll go without a fight. Stern words only....

I think it's unlikely that they'll go. It has to happen at a State level and from what I can see on FreeRepublic and DemocraticUnderground, the majority of the population is unable to get past the LEFT/RIGHT paradigm as they fight for control of the money fountain.

I think the country is baked, one way or another.

broward wrote:

I think the country is baked, one way or another.

And getting very surreal:
"Palin Crossed Border For Canadian Health Care
First Posted: 03- 8-10 11:59 AM | Updated: 03- 8-10 12:26 PM

Former Alaska Gov. Sarah Palin -- who has gone to great lengths to hype the supposed dangers of a big government takeover of American health care -- admitted over the weekend that she used to get her treatment in Canada's single-payer system.

"We used to hustle over the border for health care we received in Canada," Palin said in her first Canadian appearance since stepping down as governor of Alaska. "And I think now, isn't that ironic?"

The irony, one guesses, is that Palin now views Canada's health care system as revolting: with its government-run administration and 'death-panel'-like rationing. Clearly, however, she and her family once found it more alluring than, at the very least, the coverage available in rural Alaska. Up to the age of six, Palin lived in a remote town near the closest Canadian city, Whitehorse.

Officials at several hospitals in that area declined to give out information on patient visits. "

noob goldberg wrote:

So far no full-blown AIGs for me, but I did test SIV-positive

Brokerage may be hazardous to your health.

anyone got an ear to the ground for law school internships and MBA hiring? is it still at 2009 levels? if so, how big can the backlog grow before the system breaks down?

Samdog wrote:

Patrick Henry

?

Waiting for Micheal Moore to go to Cuba for his heart attack!

Samdog wrote:

Wow!
Patrick Henry would be damn proud ...

:blushes: You just earned yourself permanent residency status and voting rights in Dawgifornia.

Palin/Drone 2012

Rob Dawg wrote:

You just earned yourself permanent residency status and voting rights in Dawgifornia.

BTW, Has Arnie put your castle up for sale yet?

SM, you've probably met spector - you tell us how the castle sale is going!

greenchutes wrote:

What is a "law school internship", Hank? Do you mean on-campus recruiting of incoming 2Ls for summer firm work?

that's what I mean, internships for people who have entered but not yet exited law school

Rob Dawg wrote:

You just earned yourself permanent residency status

I'm deeply disturbed by the withholding of tax refunds and CA's appropriation of money before it's even earned.

That puts us squarely into Sheriff of Notthingham Land.

We're no longer dealing with rational people.

Incredibly poor judgement which permanently damages credibility.

pavel.chichikov wrote:

The assumption being that there will be future generations.

Gotta love that dry slavic humor!

Oooooooooooo. scary.
. . . . . . . . . . .

Isn't this just what Pearl and I have been talking about for awhile?

RockyR wrote:

well, it certainly puts us into "us vs. them" land.

But "us" is not fighting back.

greenchutes wrote:

SM, you've probably met spector - you tell us how the castle sale is going!

Heh, I meant Dawg's future castle in San Simeon.

Fortunately I wasn't at work the day Spector fired a gun during a session.
But there were a couple of other incidents - Once we got invaded by an armed crew looking for a certain producer who was in arrears on certain debts. The shotgun butt did a number on the little dials on the console. And his gold RR needed some repairs. Fortunately no discharges, but you could say we were a bit worried.

Which the US legal system allows its citizens to default on, in countries like Iceland for example this isn't possible. In addition the sale of securitised loans to the European banks - and subsequent repudiation of, has actually helped keep the dollar from dropping.

I'm not saying the mechanics of the financial situation aren't as fubar'd as they could be, but a large part of that is virtual money. In any way comparable to mainland Europe in the early 20's, when the French were physically carting off coal from the Alsace mines, which the germans needed for heating, it certainly is not.

Similarly with the predicted dollar currency collapse. Even in Iceland, where the currency halved in value in a couple of months, and the country is dependent on a lot of imports, there hasn't been anything that remotely resembles hyperinflation. Imports are around 20% of US GDP. Which means 80% of the economy could care less about the trading relationship of the currency.

I don't doubt that the trauma of not being able to afford top of the range european luxury cars for your wall street wheelers and dealers will be extraordinary - but i kind of think you'll survive.

Many years ago I knew a young woman on whom I had a mad crush. She was half El Salvadorean and half Scottish. One memorable thing about her - but of course not the only memorable thing - is that she could do a wonderful Bela Lugosi imitation: The drawbridge is up - you will have to spend the night.

She was slim, had long red curly hair, a pretty face and a very warm allure.

She rejected me utterly. But I still think of that imitation - and other things.

pavel.chichikov wrote:

is that she could do a wonderful Bela Lugosi imitation:

Do you know a guy named Ashburn?

Ha broward, the jokes on that guy just write themselves.

warlock wrote:

Even in Iceland, where the currency halved in value in a couple of months, and the country is dependent on a lot of imports, there hasn't been anything that remotely resembles hyperinflation. Imports are around 20% of US GDP. Which means 80% of the economy could care less about the trading relationship of the currency.

good point, we're all to concentrated on our own positions -- those who are further ahead, or behind are seldom looked at -- instead we tend to work backwards from results we want/fear

Not exactly. I think you and Pearl have been talking about double assignment.

I actually haven't come across that.

This is simply spending the money to hire the employees to do the work to
prove your case. It usually can be done. In this case, because Fremont is
involved, and I can't figure out why the 2nd is bothering, it is possible that there
is no one to properly sign the assignment, and really the court would authorize
that if they were asked nicely, with appropriate proof.

People who are living there free have a motive; people who are renting have a motive.
what motive would a 2nd have that's getting no money?

isn't this ll country?

Underwater borrowers: To walk away or not when you owe more than home is worth - South Florida Sun-Sentinel.com

"Michael Keigans is "underwater" on his mortgage, owing $80,000 more than his Deerfield Beach house is worth.

Keigans figures it could take a decade or two to recover the lost equity, so he's tempted to walk away, even though he has the money to pay. "Why keep putting money into a house that's going down in value?" he asks.

It's a question being debated in many households nationwide as the housing crunch continues. Some borrowers feel they have a moral obligation to pay the mortgage, but a growing number of homeowners and consumer advocates say walking away could be a smart business decision.

The scale of the problem is daunting: More than half of all residential mortgage holders in Broward County are underwater, California research firm First American CoreLogic said last week. In Palm Beach County, nearly half of mortgage holders fall in that category."

Maybe it was just me. I know Pearl is into the double assignment but I've also said all along that they were selling these things so fast half the time they couldn't be bothered to do that pertaining paperwork that actually assigns foreclosure rights to the new "owner" or "owners" as it were. I'm fairly certain something like that has to be the case with mine for them to do such an about face and give me something far better than necessary after I mentioned a note hunt to the "bad cop".

EvilHenryPaulson wrote:

Warm, dry conditions signal threat of 2010 drought in B.C.

That should be bad news for the two BC farmers who planted a total of 15 corn and 42 soybean plants. However, I wonder how dry it will be in the Peace River Valley where they grow lots of canola (but the real worrythere is an early frost...) or a little further east on the Canadian Prairies where they grow winter wheat. But then again wheat doesn't need much water.