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Art Cashin: "The Fed Is Walking A Tightrope In A Hurricane" And Other Observations
The head of floor operations at UBS, who has followed the Dow since its triple digits days, and has been covering the market for the past 40 years, shares his ever amusing insights with Eric King. Art Cashin, whose daily comments on "napkin charting" and requisite market "nimbleness" are now legendary, and have appeared many times on the pages of Zero Hedge, discusses such matters as market topping, various levels of deterioration within the economy, the ongoing wage deflation, the shift of US society to a welfare state, the deflationary collapse of the economy, and the imminent response by the Fed: never one to mince words, Cashin observes with pinpoint accuracy "if you ask small businesses why aren't you borrowing, their answer is 'send me a customer, don't send me credit.'" and concludes "the Fed is walking a tightrope in a hurricane and it's going to be tough." We just found the understatement of the weekend.
On the near-term market charting:
It certainly feels like it could be getting into a kind of topping mode.
On the economic headlines:
While we are seeing the headline numbers are pretty bad, behind the headlines there are some equally disturbing numbers. The government, we are hearing, because of tight budgets, people are being asked to take 1, 2 or even 3 furloughs a week without pay. That's wage deflation, and that's gonna put a strain on things: consumers are going to hold back.
On the headline improvements in Non-Farm Payrolls (well, one can scrap that after yesterday):
The layoff seem to be slowing because business was taking the other approach. If you want to stay working I am going to have to cut your salary and/or your benefits.
On the traditional dynamo of economic growth - small businesses:
Small businesses account for 50% of our GDP, they account for 60% of new hiring. We are not seeing new hiring because small businesses are not buying into this. So the recovery has not hit main street yet. If you ask small businesses why aren't you borrowing, their answer is "send me a customer, don't send me credit."
On whether the stimulus is losing its ability to impact the economy:
Back in February 2009 I wrote, "there is nothing stimulative in the stimulus package." It was more social engineering. Number two, it was trickled into the economy: politicians may have outsmarted themselves figuring if they put it all in too early we would have a snap recovery, and it would start to wear down as you go into the election. By trickling it in, we never got a full recovery. And it may be that they have to pay for it now. The most popular political bumper sticker I here is 'if you're in, you're out.'
On whether we are wallowing through what could be depressionary cycle:
Well, are certainly wallowing through a no-growth recovery. For example the GDP that came out included a very large estimate in non-durable inventories. [discussed previously on Zero Hedge] We are beginning to see some of the bulls downgrading GDP growth to about 1.5% [as Goldman did on Friday], which is barely above stall speed, and certainly not the kind of growth we need to get people jobs.
On whether the Fed will raise rates and/or do Quantitative Easing, and on the leaderlessness at the Fed.
We've had more and more signs of potential deflation and the Fed is terrified of that...They've got to come up with something inventive, something as they call it, 'new quantitative easing.' And yet that brings the concern if they do something that is dramatically different, will people say 'What do they know that we don't know? What is the big cause of this?' So the Fed is walking a tightrope in a hurricane and it's going to be tough."
Link for full King World News interview.
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Unfortunately, the tightrope was bound to two trees which were uprooted by a class 5 tornado spawned by said hurricane....the walking will be somewhat aimless and gravity bound.
"... The Fed Walking A Tightrope in a Hurricane" ... lol...
I couldn't resist to illustrate this glorious moment but with a twist...
http://uploadnow.org/image/321899-final.png
Marvellous spontaneous illustration.
Cashin’s phrase was
"the Fed is walking a tightrope in a hurricane and it's going to be tough."
You got it right.
I’m thinking, if you’re walking a tightrope in a hurricane, it’s not tough. You’re dead. It’s just a matter of time.
Where did he get a name like “Cash In”?
Is he a born bear?
the walking will be somewhat aimless and gravity bound.
Here's the tornado:
http://www.youtube.com/watch?v=X2CYjcQSUXg
Here's what happens after the tornado drops you down on the yellow brick road.
http://www.youtube.com/watch?v=zA7bLBJBHJI
CA: Its the road less traveled. ZH is helping the lost find it.
And Toto, too?
CA: Theres a german shepherd in Deutschland that inherited €10mil who might accept Toto's counsel.
Love the first.
Not sure the second works that well.
Supposedly the entire film syncs up with the album to a greater or lesser degree. It's all on youtube, but I've only watched these two so far. I like the second one, actually made me LOL with those Munchkins dancing to Floyd. Video could be smoother and less compressed, though.
P I N K F L O Y D both vids music.
hey, i printed out something that was posted a while back that i never thought about. darn if i forgot to include who posted it. long but highlights.
scarecrow = farmers not understand how bankers were screwing them.
tin man = industrial laborers desperate for lubricant current seas.
dorothy = average white stupid american girl. nuff said.
yellow brick road = gold standard led to emerald city D.C. NY = WS
wizard = u s PREZ book is terrified of the evil witches of the west = western bankers ensconced in O Hiiiiiiiiii O
good witch of the north = P E O P L E
munchkins were generally enslaved who live in terror of the evil witches the banksters.
O Hiiiiiiiiiiiiiii O
H Weyyyyyy O
I've read that the Scarecrow=farmers, Tinman=labor, Cowardly Lion=William Jennings Brian (see his "Crucified on a Cross of Gold" speech).
Not sure if Baum was pro-fiat or anti-fiat. Dorothy wears silver slippers (in the book) and follows the Yellow Brick Road (gold and silver= bimetalism) to the Emerald City (greenbacks). In Oz the wizard hands out paper to substitute for what our heroes lack (diploma=brain, testimonial=heart, citation=bravery), but that seems like parody to me and therefore perhaps Baum was a hard money guy?
Most of the story involves silver slippers walking on a golden road...Baum was definitely anti-fiat. Who could believe otherwise?
The Emerald City appeared green because all the inhabitants of that city were forced to wear green glasses (in the book). This is analogous to Wash DC as the color of money taints everything there.
The book you are speaking of is called "The Web Of Debt" written by Ellen Hodgson Brown. It is a relatively easy read with great comparisons between the Wizard of Oz and our current financial structure, along with how we got to where we are.
@Marla - Sneakers > DT8 7th Day > In an EF5 wedge vortex while dancing atop the wire with armies in lockstep with technovikings over the ruins. Respice finem indeed.
http://www.youtube.com/watch?v=4sXpKCfhaqU
http://www.youtube.com/watch?v=8osPCBAAfl4
On the second one.
How many chemicals and in want quantity should they be taken to become that creature?
But of course, you must consume one of these:
http://www.youtube.com/watch?v=q5ZQH2Uzpew
hey W I L D your really cute
not going down on ZH or anything, but matt taibbi coined vampire squid. but i have read previous posts, tracking device ZH, L O T S , you dis MT.
Please do not bother Cthulu. He is still awaiting the Great Ones.
I apologize for the double post but this, from Doug Noland at www.prudentbear.com is very much on topic.
2010 Vs. 2007:
Greek and periphery European debt markets have stabilized. The euro is above 133, having now recovered back to April levels. Global risk markets have rallied, and commodities markets are again heading north. Throughout the markets, risk premiums have contracted meaningfully. Debt issuance at home and abroad has rebounded. I have posited that the Greek debt crisis provided another critical juncture for global markets. Others contend that Greece is a small country with limited global impact. Moreover, possible effects from Greek problems have diminished as the crisis has subsided. I’m unswayed.
The current environment increasingly reminds me of the long, scorching summer of 2007. The subprime crisis turned serious in early June. And not to pick on Ben Stein, but this week I went back and reread his August 12, 2007 New York Times article, “Chicken Little’s Brethren, on the Trading Floor.” Mr. Stein’s perspective at the time was in tune with the majority of analysts and pundits: subprime was just not that big of a deal; markets had way overreacted.
From his article: “The total mortgage market in the United States is roughly $10.4 trillion. Of that, a little over 13%, or about $1.35 trillion, is subprime… Of this, nearly 14% is delinquent… Of this amount, about 5% is actually in foreclosure… Of this amount… at least about half will be recovered in foreclosure. So now we are down to losses of about $33 billion to $34 billion… But by the metrics of a large economy, it is nothing. The total wealth of the United States is about $70 trillion. The value of the stocks listed in the United States is very roughly $15 trillion to $20 trillion. The bond market is even larger.”
Efforts to quantify potential damage from subprime or, more recently, Greece completely miss a fundamental facet of analyzing Bubble Dynamics: both were examples of the marginal borrower abruptly being denied access to liquidity/Credit in a highly speculative, hence susceptible, (“Ponzi Finance”) financial environment - thus marking critical junctures for their respective Bubbles. The Mortgage/Wall Street Finance Bubble, in the case of subprime, and the Global Government Finance Bubble, with respect to Greece, marked critical inflection points for both market perceptions and stability.
Amid this past month’s global market rally, perceptions have shifted to the view that the European debt crisis is behind us. Recalling the summer of ’07, the subprime crisis “officially” erupted in early June with the halting of redemptions by two structured mortgage product mutual funds managed by Bear Stearns (these funds collapsed later in the month). From a July high of 1,555, subprime worries hit the S&P500 for about 10%, with the market trading below 1,400 intraday on August 16th. Living up to market expectations, the Fed was quick to the rescue.
In an atypical inter-meeting move, the Federal Open Market Committee (FOMC) cut the discount rate 50 bps on August 17th, 2007. With an escalating subprime crisis, speculative markets moved confidently in anticipation of another aggressive round of monetary easing. The S&P500 rallied over 12% in less than two months. After having traded at almost 5.30% in mid-June, 10-year Treasury yields sank below 4.33% by early-September. Despite escalating mortgage tumult, (“safe haven”) benchmark Fannie MBS yields fell from 6.40% in June to 5.40% by late-November. The drop in market yields incited a rush to refi mortgages in late-2007 and into 2008. Dynamics that would culminate in a historic Credit market seizure and liquidity crisis were being masked by melt-up/dislocation in the Treasury and agency markets.
With fed funds at near zero, the FOMC has had little room to cut rates in response to the Greek/European debt crisis and a faltering U.S. recovery. The markets, however, clamored and the Fed delivered assurances that additional quantitative ease would be forthcoming as necessary. Akin to the summer of 2007, markets have rallied in anticipation of a further loosening of monetary conditions. Ten-year Treasury yields closed today at 2.82%, down 113 basis points from the early-April (pre-Greece) high. Benchmark MBS yields are down 111 bps to 3.56%.
The 2007 subprime eruption and the Fed’s response had a profound impact on perceptions throughout various markets. The dollar index – which had traded above 82 on August 16th 2007 – was down to 75 by late-November. The prospect for additional dollar devaluation gave further impetus to buoyant commodities markets. The Goldman Sachs Commodities Index jumped from 485 in August to end 2007 above 600 - on its way to almost 900 by mid-2008. Crude prices almost doubled in 10 months. Many of the “emerging” markets ran to frothy new highs – right before the big fall.
The implosion of the Mortgage/Wall Street Finance Bubble unfolded over about 18 months. There were powerful countervailing forces. On the one hand, a marked change in market perceptions was leading to a reduction in the availability of mortgage Credit. As new buyers/speculators lost their ability to obtain mortgages, it quickly became apparent that many key housing market Bubbles would soon burst. The U.S. housing mania and economic boom were doomed. This led to a broadening panic out of private-label MBS and a liquidity crisis for the overheated ABS/CDO marketplace. The dominoes had started to tumble.
Meanwhile, the behemoth Treasury, Agency and GSE MBS markets (with GSE securities enjoying a combination of explicit and implicit government guarantees) enjoyed big rallies. Liquidity problems in subprime-related sectors were for awhile more than offset by liquidity overabundance in the more dominant fixed-income markets. Ironically, the initial bursting of the mortgage finance Bubble – with all eyes fixated on the Bernanke Fed – fostered destabilizing liquidity excess. The declining dollar; leveraged “dollar carry trades;” an unwind of bearish bond positions and interest-rate hedges; a mortgage refi boom and resulting hedging against MBS pre-payment risk; Fed-induced speculation on lower market yields; a bout of safe-haven buying; and large foreign central bank Treasury purchases all combined to create an over-liquefied and highly-speculative market backdrop. The resulting liquidity-induced rally throughout global risk and commodities markets only exacerbated systemic vulnerabilities to the unfolding Credit and economic crises.
I highlight the 2007/08 experience as a reminder of how bursting Bubbles and financial crises can (tend to) evolve over many months – with surprising ebbs and flows and occasional confounding twists and turns. I don’t see anything in the current backdrop that tempts me to back away from my view that the Greek crisis marked a critical change in market perceptions. Those that dismissed how the subprime eruption had fundamentally altered the financial landscape would later regret their complacency.
Today, I believe global faith in government policymaking has been badly shaken. There is now an appreciation that policymakers are running out of options. Confidence that fiscal and monetary stimulus ensures a sustainable global recovery has waned. There is recognition that massive stimulus can’t assure market stability; in fact, profligate fiscal and monetary measures will likely prove destabilizing. There is appreciation that global central bankers can’t guarantee normally-functioning markets. There is, these days, no denying that structural debt issues will be a serious ongoing problem. And, importantly, the world is increasingly keen to the severity of U.S. financial and economic problems. Indeed, the post-Greece backdrop beckons for reduced risk and less leverage. Yet the markets can – at least for a period of time – luxuriate in destabilizing policymaking-induced liquidity excess and dysfunctional markets.
The dollar is in trouble. Our currency has now dropped for nine straight weeks, sinking to a near 15-year low against the yen. Crude oil traded above $82 this week. Wheat prices are up about 50% over the past month. The last thing our struggling economy needs right now (in common with 2007/08) is surging energy and food prices.
And there is clearly interplay at work between tumult in the currencies and dislocation in our fixed income markets. Fed talk of QE2; rumors of the Administration forcing Fannie Mae/Freddie Mac to refinance and/or reduce principal on troubled mortgages; the potential for a wave of mortgage refinancings; and the likelihood that many have been caught on the wrong side of a major move in market yields have Treasury, agency and MBS yields in near freefall.
August 2 – Bloomberg (Caroline Salas and Jody Shenn): “For all the good the Federal Reserve’s $1.25 trillion of mortgage-bond purchases have done, they’ve also left part of the market broken. By acquiring about a quarter of home-loan bonds with government-backed guarantees to bolster housing prices and the U.S. economy, the Fed helped make some securities so hard to find that Wall Street has been unable to complete an unprecedented amount of trades. Failures to deliver or receive mortgage debt totaled $1.34 trillion in the week ended July 21, compared with a weekly average of $150 billion in the five years through 2009… The difficulty of executing transactions may eventually drive investors away from the $5.2 trillion mortgage-bond market, which has historically been the most liquid behind U.S. Treasuries, potentially causing yields to rise, according to Thomas Wipf… The unsettled trades also stand to exacerbate the damage caused by the collapse of a bank or fund. ‘You’re adding systemic risk into the market,’ said Wipf, chairman of the Treasury Market Practices Group and the… head of institutional-securities group financing at Morgan Stanley. ‘Investors are taking on counterparty risk in trades they didn’t intend to take on.’ An incomplete agreement can lead to a ‘daisy chain’ of unsettled trades because a broker-dealer acting as a buyer in one transaction may fail to deliver those bonds as a seller in another, according to Alexander Yavorsky, a senior analyst at Moody’s… Investment banks are required to hold capital against both sides of the trades, which also makes the agency mortgage-backed market less attractive to make markets in…”
It is worth noting that Treasurys held in reserve by foreign central banks at the New York Federal Reserve Bank have surged $74bn in just seven weeks. Dollar weakness appears, once again, to be forcing foreign central banks back into the role as “backstop bid” for the dollar in global currency markets. These dollar balances are then “recycled” back into our Treasury market, a dynamic that does not go unrecognized by the speculator community. This presses market yields only lower, increasing the risk of prepayment on mortgage securities and forcing additional interest rate hedging (further exacerbating the decline in market yields). And once a market dislocates, many will pile on in search of easy speculative profits.
With Treasury, Agency and MBS prices melting up (yields in melt down), key markets enjoy extraordinary, albeit destabilizing, liquidity abundance. Understandably, market participants dismiss talk of U.S. structural debt issues. Many will justify the move on fundamental grounds – “It’s deflation, stupid!” Ironically, collapsing yields, the sinking dollar, surging commodities, recovering global risk markets and the onslaught of global liquidity create a backdrop conducive to future inflation surprises.
Reminiscent of 2007/08, the initial crisis phase has unleashed wild volatility and instability throughout various markets. Some can see that the glass is less than half empty, while attentive central bankers and sinking yields have most viewing things as positively full. The havoc and misperceptions create an increasingly dysfunctional market landscape. Over time, the volatility, uncertainty and escalating market stress will prove a subprime-like wrecking ball on confidence. I need to go back and count the number of trading sessions in 2008 between seemingly over-liquefied markets and Credit market seizure.
My expectation remains that markets, having disciplined Athens and initiated austerity in the euro-zone, will inevitably set its sights on Washington profligacy. Too reminiscent of the Mortgage/Wall Street Finance Bubble, the markets seem determined to ensure that this disciplining process is methodically delayed until the very maximum levels of Credit excess, speculative froth, market distortion, and systemic vulnerability have been achieved.
Nice article. Thanks for sharing. Yes, it has been feeling like the summer of 2008 deja vu. Was scratching my head then. I'm back to scratching. Part of me has been wondering if QE2, should it finally emerge from the mist of many rumors, will finally fire up the bond vigilantes in earnest.
An interesting look at the current complacency in Europe by Edward Hugh: http://www.creditwritedowns.com/2010/08/one-chart-to-rule-them-all-one-chart-to-find-them-out.html.
Thanks for the link. Very interesting article.
Yes, it has been feeling like the summer of 2008 deja vu.
http://www.youtube.com/watch?v=IcsVPis1iNs
Didn’t read it all.
It’s late.
Greece enters its “rescue” with debt to GDP at 130%.
The plan is that the “rescue” will have succeeded by 2014 when Greece has debt to GDP of 150%.
Someone is either lying or they’re taking the piss.
There can be no doubt that the EU/ECB/IMF/World Bank have decided that Greece WILL restructure its debt.
Why does Greek debt carry a yield above 10%?
http://www.bloomberg.com/apps/quote?ticker=GGGB10YR:IND
You are absolutely correct and you know that the Lazard folks are over there working mighty hard on the size of the haircut. When that haircut gets announced, the markets will be shaken and the political order in the world will likely never be the same.
bullshit. the fed is merely making sure there is enough money to paper over all the debt. tightrope? hurricane? please
"money to paper"
"Paper money"
Is that not the point.
Not to worry, in lieu of a safety net we are using near dead taxpayers to cushion the fall.
better pile 'em deep then PK. not much padding left in those wallets...
Reminds me of this comic from Nov. '08
http://taxingtennessee.blogspot.com/2008/10/im-ok-i-landed-on-taxpayer.html
Hahaha! For the non-banking part of the population, we get to join the "club" club: http://dilbert.com/strips/comic/2009-09-20/
Funny -- I especially liked the Mission Statement.
The FED is seeing C- beams glitter in the dark at the Tannhauser gate!
Time to Die...
“The FED is seeing C- beams glitter in the dark at the Tannhauser gate!”
What if the Senate, like Deckard, didn’t realise it (he) was also an Android?
One android (Deckard) interviews another (Rachel).
One of them knows they’re both androids. One dosen’t.
The Senate interviewing the FED?
http://www.youtube.com/watch?v=g-DkoGvcEBw
Quoth the albino monk, “The FED is seeing seabeams glitter in the dark at the Tannhauser gate!”
Replicant "expiration date" hopefully in just under 3 months. If that doesn't do the trick, another 2 years and just shy 3 months probably will. Let's hope they don't pull a Rachel.
Art Cashin today at Eric King:
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/8/7_Ar...
Heard this earlier this morning, it was good.
Art's counterpart from the conspiracy realm - Bob Chapman
http://theinternationalforecaster.com/International_Forecaster_Weekly/Fe...
Isn't Chapman the guy who plagiarized ZH in a former blog post?
wow not even an attempt to alter the text or provide a citation just cut and paste, and people actually pay for this dude's stuff - Tyler should ask for a royalty
DMCA takedown notice with the shame that accompanies it, or quietly make it go away $$.
I had read Chapman's piece and noticed the used of "Donk" which I had previously seen at ZH but I did not realize that it was out and out plagiarism. I simply thought that the term "Donk" was out there in certain circles and both ZH and Chapman had used it.
Thanks for the heads up.
Shameful. A word-for-word ripoff of Tyler's work.
I thought that it was elephants with great memory, not fuzzy cute racoons. - Ned
fuzzy yes (suitable for coats / hats)
cute no
they're carnivores / cannibals
there was this night, there was this babe, we were, well involved. Then there was this noise. All kinds of 'coons (momma and the babies) hanging off of my Dad's back portch. They made a bunch of noise, and, well, it interrupted things.
- Ned
Sorry ...
What did the babe say ... "Oink" ?
I've listened to and read Bob C. many times, had some interesting things to say, very long winded, didn't know what to make of him.
Not anymore, epic fail Bob. Who does shit like this? What a wanker and a douche.
I now hope to learn that Tyler approved of this posting, or that Bob Chapman has the login password for Tyler Durden.
Interesting possibility. Nice outside-the-box sort of observation.
Maybe Bob is one of the Tylers, doing a little pro bono?
chindit so nice to see you again.
now that i have learned about the goddess of memory. i am really/excited. cause i am currently having stand out moments of M E M O R Y. you know
i l i v e d the 60's. so when the miniskirt came out, my mother of course bought/got me into one. of course i was called into guidance councelor for a shortness violation. mrs. upton, only 5ft tall with a hunchback, im sorry i don't mean to demean hunch back people.
Miniskirt - Wikipedia, the free encyclopediadamn i forgot what i was going to say. anyway.
oh i remember, goddess of memory
B L E S S Y O U R F U C K I N G H E A R T
If you are not velobabe in different attire, then ZH has some doppelgangers.
In fiction, folklore, and popular culture, a doppelgänger ( pronunciation (help·info)) is a tangible double of a living person that typically represents evil.
not evil, am I.
LOL!!! Rocky, nice snag!!
Art Cashin walks a tightrope himself every time he is interviewed on the floor at CNBC. He is careful not to disturb the pretty picture that is usually painted by the anchor folks. He will not be with us much longer so I hope he breaks loose and gives his real opinions more often -- on the air. His memoires would be a best seller.
I know it's different in all parts of the country, but ONE thing everyone has in common, that has cash, and wants,needs to spend it is this, business included.
"if you ask small businesses why aren't you borrowing, their answer is 'send me a customer, don't send me credit.'"
GET rid of Obama's( NEW)$$$$$$$$$$$ Policies, and let me know WHERE the hell I / We stand, after they ALL take effect( esp the hidden shit), and I WILL SPEND...and hire, and do business.
As long as HE is in the Peoples House, turning this nation into a broke whore, NO one in their right mind is going to buy anything, hire anyone, they do not absolutely need............
And that's the end of that story.
Lot's of states have DECENT economies, the NE Coast is buying new cars like crazy, the Texas metropolitan area auto sales ( DFW area) are up over 30% over a year ago................)
Get some SANE policies, and stop SOCIALISM, and we get America back on track.............
We KNOW that's not going to happen, so we will continue to do what we have been ................getting screwed.
And watch HIM,and his Progressive marxist whores burn the U.S. to the ground...........
I say HIM because HE has done the most damage, the fastest of all the traitorus fks.
You are a lucky person. It is surely comforting to be able to focus your emotions on one pin point. I envy your ability to do that. For me it is much more difficult. Taking into consideration all the buildup to this day is taxing on the mind and the soul. There are many, many people so deserving of the turd of the year award. You can rest easy knowing that if one person were taken off the scene that all would be alright. I can't say the same for myself.
Rocky +1. My feeling is that this system (maybe neo-feudal corporatism??) is broke. You get rid of the Commander-in-Thief and another fool steps in.
It started in earnest when Nixon took us off the gold standard for good in '71 and accelerated big time under Reagan. The great Ronaldus "Fuck Our Grandkids to the Maximus" Reagan.
Have you not read anything on this site ?. Obunghole did not start us on the road to ruin, he just stepped on the accelerator.
Well apparently he decided to drive a Toyota...it doesn't appear that it's going to end so well.
"but ONE thing everyone has in common, that has cash,"
The thing is. You don't have "cash".
You have an illusion.
Without Obamma/Bush/Clinton maintaining that illusion you won't be spending shit.
Because you don't have shit.
You have "cash" and you say you can't spend/invest it?
Why?
Because it is illusory shit.
You're not asking for less Government. You're asking for more.
Wow. Obama is the problem, huh. Perhaps you should look a little closer when you watch Obama on tv. You sill see very fine strands reaching up to the ceiling which control his mouth, movements and thought processes. Look who is controlling those strings to see who is in charge. Obama and all our presidents are just Pinocchio's. Now move on from your myopic views, begin the mental journey into truth and insight.
Why all the Doom and Gloom?
Why do all the gold bugs constantly cheer lead the worst for the economy, when any potential stock market crash is likely to result in a crash in gold stocks which is 3x worse than any other sector?
Wonder why Eric King doesn't interview some of the CEO's of the top stocks today?
Like these:
??I think I might be missing the point. Are you saying we should commend this guy who thought the US housing market would be all good from here (this is September 09) and obviously it isn't?
Okay, sex still sell's and JLL is an international corp that can sell property in countries with real GDP. What does that have to do with a floor trader that has seen it all and knows our markets are a joke? How much will earnings be worth as the valuation metric (FRN) moves to zero? Infinite!! What will it eventually buy? Nothing. Good post's and great pic's! Take care..
Where will monie run to during a crash? Paper assets? Laughable.
LOL! Indeed. Robo, if we don't have deflation, we most certainly have stagflation. Gold will hold. You are smoking crack if you think this bull is free to run! LMAO!!!
The 1 year chart of MCD is lookin' quite tasty; even the 5 year is rockin'. Maybe that commercial they aired in France helped. And who hasn't stoppped in to the 24 hour McDonalds in Times Square at 5 a.m. on a Sunday morning crawl home to find a few hot trannies there?
http://www.youtube.com/watch?v=SBuKuA9nHsw
Wow. That was beautiful.
yeah it was kinda touching. mcdonald's ad campaign in europe dealt with other issues too, under the "come as you are" slogan.
Wouldn't buy until it breaks out of $72... firmly.
your approach is rather conservative but i don't necessarily disagree. friday's new
closing high doesn't have the feel of a false break-out. i have GS and LVS on the radar for
possible longs. and HOT is on the radar for possible short. just sayin'
that commercial they aired in France
Two all beef patties, special sauce...
Your video's fucking gay
I'm never gloomy when my face is buried in a nice pair of tits.
Clownish nonsense.
WACLY? Really? A stock that averages less than 50,000 shares traded a day......
This is all Bush's fault isn't it? Obama's? Wait a minute. What site am I on? Oh yeah, ZH. The Jews did it. I keep seeing black helicopters flying over my house but it's not raining money. Where are you Ben? Gimme, gimme, gimme.
nice avatar
Indeed!
Oswald is that you? Your face looks different. Remember, fault has to be placed where due. We get to determine our elected leaders and a nation of fools keep electing fools-no other choices yet. Be patient, your free FRN's are on the way before election day. Be careful of irreverent comments about Jew's-Christ was a Jew and all Christ followers are honorary Jew's. History is a foot note for God's plan for his people. Take care..
yo Tyler
Wilbur Ross (former Rothschild banker) was on Charlie Rose 8-3-2010
quote: "I really feel within 5 to 10 years, we (the US) could be a second rate power"
http://www.charlierose.com/view/interview/11150
The glass half full view is that by then, third rate will be second best.
There are no heroes.
saw the whole interview. Welcome to the new real. We clean up or we become 2nd or 3rd rate. No way out... just basic math at this point. Perhaps if we start teaching our kids that becoming an engineer is more important than playing pro football we can make some ground. There is no quick way out of this. (And if you believe in the future, you shouldn't hope there is... no more short term-ism!)
My great grandfather worked as a slack rope walker in his youth. I imagine that that's nearly as challenging as pushing on a string.
http://www.youtube.com/watch?v=y3XlrM6V9R8
Video provided as an example of the technique only -- that's not Pup.
Quantitative Queasing:
http://www.urbandictionary.com/define.php?term=Queasing
I feel your pain as do so many. How bad can it get? Read Revelation. What to do? Perservere, pray to God, buy whatever gold/silver you can afford, and spool up the new mandate this fall... if you're in, you're out. Especially-Love on your family! God Bless
I'll tell you how much worse it can get. The 40 million or so completely disenfranchised folks in the good ole' US of A, you know, the ones with absolutely nothing to lose, they generally are heavily armed and good shots.
Queasing - hadn't heard that - good one.
How about "d"-basing, as in the currency. If I had to guess, it is very similar to free-basing - an initial rush or high, followed by a crash. Multiple instances are known to cause fatal overdoses in practicing countries.
Very nice. If we can junk, shouldn't we also have a cheer? Does EVERYTHING on ZH have to be so.....negative? Even cynics have a sense of humor, often better than the pathologically positive.
Pixies / Debaser
http://www.youtube.com/watch?v=2mCoOlUjhlc
With ZIRP firmly cemented in place (Bernanke panicked in the fall of 08), the Remocrats and Depublicans borrowing (stealing) the future from America's children and grandchildren, and the PTB's only response is MORE OF THE SAME it will get much, much worse.
The Fed has painted itself into a corner with a can of its own paint. Through its shills the Fed is purchasing Treasuries and spiking the stock market. This Hindenburg only needs one spark.
Without a write-down of worthless assets and debt, we will be in this mess for at least a generation.
It is when the Welfare State can no longer afford food stamps- that will be the turning point. That will be worse than now.
It's time to cull the herd.
With ZIRP firmly cemented in place (Bernanke panicked in the fall of 08), the Remocrats and Depublicans borrowing (stealing) the future from America's children and grandchildren, and the PTB's only response is MORE OF THE SAME it will get much, much worse.
The Fed has painted itself into a corner with a can of its own paint. Through its shills the Fed is purchasing Treasuries and spiking the stock market. This Hindenburg only needs one spark.
Without a write-down of worthless assets and debt, we will be in this mess for at least a generation.
It is when the Welfare State can no longer afford food stamps- that will be the turning point. That will be worse than now.
The Fed has painted itself into a corner with a can of its own paint. Through its shills the Fed is purchasing Treasuries and spiking the stock market. This Hindenburg only needs one spark.
Yes ... but what will be the "All Spark" ??!!
What a wonderful term to introduce on the eve of the Fed meeting this week. Imagine these headlines:
"Fed debates whether to Quease."
"Markets feeling a little Queasy."
"Queasing 2.0 announcement expected soon."
"Voters express anger about out of control budget and Queasing."
+1000
I always love the humor of this site, lets us all take a moment to find something in this shit storm to lighten up the mood..
Walking a tightrope with inflation on one side and deflation on the other, the Fed works to keep us right in the middle. But where does it end?
When will the economy recover? When assets get marked down.
When will assets get marked down? When banks are prepared to take losses.
When will banks be prepared to take losses? After the economy recovers.
This tightrope is infinite--just ask Japan. The only way out is falling off.
Actually, there is ALWAYS a third way. That Third way is that we continue walking the tightrope, but doing so will result in heavier weight, increased weight such that the rope sags to the ground, with the ground being reality. We ALL will eventually have to touch ground, from the world of skyscrapers...
Market fundamentals based on "bad is good" are destined for a bumpy ride. We rally as the Fed jawbones QE2, yet fails to deliver all but anemic liquidity (FHA short refis with 10% write downs only for non-delinquent firsts; non-terminaiton of maturing MBS). This is an example of "Tightrope Walking": maintaining stimulative monetary and fiscal policy but with fear of overstimulating. That's remarkable considering we're in the midst of a dramatically depressed jobs market with wage/income deflation where it's usually a no-brainer to use ultra-stimulative policies. But the Fed perceives big inflation dangers within this depression (deflation). And the further global central banks go out on that deficit limb, the more fragile and tenuous the tightrope will become.
I want a horse, food, and water.
Enough for a week for me and this female.
Taylor's the man, but I would have asked for more than 50 rounds of ammo. I wonder how the Ape City rounds compare with Lake City rounds?
Robot Trader - there is very likely going to be a pull back , possibly double digits down to err say 1k in gold , if there is indeed a stock market whammy. But thats where the pain will end for gold - 2008s slide in gold was due to margin selling by all the idiots leveraged up in risk assets. Gold is not a risk asset. Ask yourself what becomes the ultimate safe haven when TSHTF. Ask a Greek perhaps. Or a very old German. Deflation , inflation , double dip , it all leads to the same outcome for gold. Only raising interest rates will undermine golds rise , as counter-intuitive as that sounds..
anyone with serious $$ sure does not have them all sitting as digits on some TBTF banks digital screen. The majority will be in finite goods of intrinsic value : PMs , fine art , diamonds , wine , luxury real estate. We are approaching the end game and the vast majority will be wiped out financially.
I've noticed a few gold bugs (fewer than usual) posting above. What is going to happen to the price of gold when the market collapses again? Is gold gonna shoot up? I seriously doubt it. Gold will slump and slump even harder than the market. Why? Because gold is not money. Here's the simple analogy: as everyone's losing their shirts but their costs and expenses stay the same they'll find their broker/landlord/banker isn't very interested in getting paid in little metal ingots and will insist they get their asses down to the pawnbroker where they will find a line of 500 people leading up to the window, the pawnbroker is saying, "Yeah, buddy. I feel your pain. But money is tight now and I can only give you $300 for that.." "Phwaat?" sez the gold bug, "but I paid $1100 for that!". "Sorry buddy, you should stay away from them apocalypse sites and not try to be a emotional speculator in future. Now do you want $300 or do you want to go to the back of the line and try again for $250...?"
Yeah fine Gold isn,t money.Gold is the original International money B.C. (before crap money ),always has a value,may fluctuate but always has a value.I,m sure in Germany in 1924 people would rather have had Gold than a currency that became worthless.Gold hasn,t appreciated,the value of nearly every other financial asset has crashed or have you been asleep for the last couple of years.The system is on its arse and it ain,t just huge debt,huge deficits,etc, that will gradually be seen to be unpayable ..... lets bring in derivatives ..... billions upon billions of $ worth of finance just waiting to go wrong ... products which were sold with barely understood implications.Now how about those $ in your pocket (once the banks start sliding you won,t see your $,s out of there) make the most of em because pretty soon they will be worth Jack Shit ,QE2,QE3,QE4,QE5,QE6,QE7,QE8,QE9,QE10,etc, will see to that.You assume your cash will be worth something - I don,t.
get their asses down to the pawnbroker where they will find a line of 500 people leading up to the window, the pawnbroker is saying, "Yeah, buddy. I feel your pain. But money is tight now and I can only give you $300 for that.."
As another poster on another thread pointed out, when the spot price of gold and silver plummeted in late 2008, prices at the coin shops remained substantially higher than spot and even then inventories soon sold out. Your speculation can not be reconciled with real world events.
actually, gold IS money. Someone give this guy a first year economics text please.
Gold is money. Your whole point is thus irrelevant.
Glass is half empty
One does not need an Ivy League economics degree...or be in the Princeton Harvard Yale Club to understand basic math...
In fact...what is happening is quite the contrary...
...............................
Here is the back of an envelope....and some real world street smarts....
..............................
Make it simple...
One has a box...
In it is the total economy....
There is currently a $1,000,000 collection in the box....which describes total credit and asset valuations....
$400,000 of credit and valuation is taken out of the box....
This means that the highest possible total is now $600,000....
......................................
The Fed has suggested dilution of money (counterfeiting), accounting legal ease (financial fraud)....and taking more from those that are producing goods and services (adding to the prices of the remaining productivity....this is government stealing)....
.....................................
What has to happen....but is not....
What has to happen....is that the box value moves back to $1,000,000 or above...
Since the backbone of growth is entrepreneurship and small business....and since the velocity of money means that ...that which produces velocity must be affected to the positive....
Then ...examing what is left to do....possible to do ....is total tax structure change....
...........................
Remember that the bottom line agenda is to make the Economic Box bigger again....and perhaps surpass the previous one ...in a more sustainable way....
This means a sharp upward increase in small business valuation and origination....
........................
How ?
Remove the individual and corporate income tax....
Replace with a broad based 15% max consumption tax.....
..........................
Want proof ?
Take any decent..basic economics department of any school...
Model the size of two economies...
1) With the current tax structure...and government size....
2) The economy resulting from the replacement of the individual and corporate income tax by a max 15% sole consumption tax....
The result will show a total economy many times the size of the current structure....in less than 10 years....
...........................................
Valuation = Income + Debt
All US government policies to date negate valuation....
Problem....there are no proposals to increase valuation....
........................................
It is utterly amazing what the supposed super economists are blabbing about...ie Stiglitz, Summers.....etc....Most all of their suggestions result in the negating of valuation....meaning that the already diminished box size....keeps contracting....
somethinghere::
http://www.mybudget360.com/middle-class-in-shambles-banks-job-losses-fin...
Dubai led to Greece which is leading to ...?
http://economic-undertow.blogspot.com/2009/11/wave-dubai-children.html
Yes, indeedy, there are market ebbs and flows but the constant is the energy cost of the credit superstructure, one cost that cannot be wished away is that of the absent customer who has been put out of his misery by the rise in fuel costs ... to date! What of tomorrow?
We are so much poorer than we were in 2007-8 and have far less control over our own collective destinies. We decided to go 'all in' with the bubble creation, can do so to some diminishing extent, but are left with the realization that there are no funds left to put into the 'game'. At some point bubbles become a trendy form of (financial) suicide.
Keep in mind deflation is an economic phenomenon but depressions are social in nature, manifestations of the class war. America is not Japan, we are too fractious.
it's no coincidence that wall street is screaming for more QE right when trading revenues have slumped severely.
We just need to pull together and build a remote island community. I say start with a bedrock of silver, then work our way to gold. Paper money can be used for toilet paper and starting small fires for heat.
Mmm Gold Island...
Back to nonlinear dynamics, sure is going to be stormy no matter what the fed does. Time to double-down on my options!
Just stand right up
And work off your tail
And save up all your tips
Don't ever sell the metals short
And bust Bernanke's lip.
So join us here each week my friends
'Cuz that fiat's old and tired
Your FRNs, just cast away
Here on Gold Again Isle.
And now its time for a bit of Musical light entertainment,
"If your go down to the Fed today you better go in disguise,if you down to the Fed today your in for a big surprise,for every printing press that ever there was is printing the cash to rise,because todays the day the economists start their picnic"... (again) - Traditional
DOW and SP500 weekly charts update :
http://stockmarket618.wordpress.com