Last Sunday night I wrote about the coming week:
If next Friday the Buck is lower across the board and the BoJ is a bit bloodied Ben Bernanke will light a cigar.
Okay, so our boy Ben is smoking a big fat cigar tonight. He could not be happier. Everything is going his way.
-On the week the dollar got crushed against the majors.
-The Japanese central bank did get its nose bloodied. As of the
close in NY they are down about $700mm on the 9/15 intervention of $25b.
It’s not just the money (actually it is the money). They lost a battle.
The USD/JPY has to go lower. The BOJ has tipped their hand. They are
playing defense. And that is losing strategy. Their internal effort at
QE just got trumped by Ben’s weak dollar policy. They must be pissed.
-Euro group chairman Junker (ZH article) said the weak dollar will hurt EU growth. Sure it will. That is what Ben wants. He wants to export our deflation to our “friends”. They also must be pissed that Ben is dishing this out to them.
-The gold moves were impressive. If I were at the Fed and watching this
near daily slap in the face I would be unsettled. I wonder if they even
care. At one time they did, but not in the last few years. Ben is
probably pleased with the ratchet up in gold. He not only wants to boost
inflation he wants to increase expectations on inflation. High marks on
that score for the week.
-Stocks keep going up. Why shouldn’t they? A weak dollar makes top line
numbers of a big chunk of the S&P look better. Also, you have to
look at what money is competing with. The five-year closed at 1.1%.
After-tax that comes to 0.7%. Against a very low rate of inflation the
tax adjusted yield guarantees the investor a negative 8% return. Not
hard to beat, one would think. So stock multiples have to widen. Right?
If so, can we do this forever? If not, how long can we continue?
-The commodity numbers are blowouts. Sugar, wheat, corn, copper, every
off the run thing you can think of and of course oil are all on the
rise. This is coming home to shoppers soon. Ben is just delighted at
this. He has been preaching the need for inflation.
-Possibly the most significant achievement by Bernanke this week was in
shaping public opinion. Through the press and direct comments from Board
members the word went out, “The Feds gotta do something about the unemployment thing”.
And sure enough the NFP numbers confirm that the private sector is not
doing enough to cover the job losses by the states. So now the thinking
is, “That guy BB had it right. We have a real problem again. I am glad that our pal Ben is going to do the heavy lifting.” Look for the press to confirm this over the weekend. It's part of the propaganda.
So Ben has every reason to celebrate this evening. Everything on his list has a +
next to it. I’m looking at the same list and I want to puke. Raise the
cost of things that we consume by trashing the dollar is what we need?
Destroying savers so they are forced to cut consumption is a cure? For
whom? Piss off our “friends” and “investors" is good
policy? We shall see. It’s hard to blunt the argument that a good stock
market is synonymous with better times. But this market is bought with
POMO. And everyone knows it.
There is another thing that Ben can celebrate this evening. He is
clearly running the entire show. Treasury has had not one word to say on
the monetization of our financial system. I always look into things and
ask why? Tim Geithner is out, is why. We just have to wait for the
election. Between then and now Tim will be used as cannon fodder in a
face saving effort at avoiding a trade war with China. Summers is gone.
So Ben is holding all of the cards. Exactly how he wants it.
that was funny.
Bruce: what say you of MortgageGate. Here's how I see it:
1. Problem is not foreclosures, problem is that in defending foreclosures the defects in the formation of the private MBSs have been revealed.
2. No one knows the extent to which the MBSs, and their bastard offspring CDOs containing the BBB tranches, are defectively formed. Consider this the 28 day "infection."
3. Not knowing, and not having the ability to know, whether a particular MBS is "infected," without massive due diligence, reduces value of all AAA rated MBSs to zero.
4. MBSs posted as collateral are suddenly questioned. Credit default swaps begin to click and whir. CDOS fall under the spotlight - toxic assets become even more toxic; investors ask, "does my private label MBS have anything in it, or is the MBS box empty once you tear off the lid and look inside?"
5. Transactions in any real estate touched by or involved in a securitized mortgage, any transaction, beginning with that monthly payment of principal and interest, and ending in foreclosures done months ago, instantly fall into question. Title companies cannot close on sales, unable to be certain if the payoff statement comes from the true party in interest, whether the foreclosed title is any good, generating insurability and marketability of title concerns.
I could keep going - it gets very ugly, very quickly and begins to spiral out of control. I see this going from spark to a roaring forest fire within a week as what I am saying begins to sink in.
Ned,
I was thinking the same thing about if they are paying off the Mortgages in the Traunches when they are sold or Foreclosed.
If they do not know who Ownes the Mortgages and have not kept records, what is being done with the Money once the House is Sold in a short sale or Forclosed?
I was thinking that the real reason this is all coming out is because the banks have been secretly fighting over the money from the forclosures. They probably had a back room agreement that isn't panning out very well.
I have trouble keeping up with this story. Where will it go is the question. I can't imagine a soft landing. Worse case would be a freeze in new mortgage lending by the Feds. That would be one of those Black Swans we keep hearing about.
Black swan? More like a Nazgul!
or Tezcatlipoca?
http://en.wikipedia.org/wiki/Tezcatlipoca
Thx for that very interesting link, tip e..........gods of the modern culture?
Wikipedia - Karl Taube and Mary Miller, specialists in Mesoamerican Studies, write that, "More than anything Tezcatlipoca appears to be the embodiment of change through conflict."
Tezcatlipoca had many epithets which alluded to different aspects of his deity: Titlacauan ("We are his Slaves"), Ipalnemoani ("He by whom we live"), Necoc Yaotl ("Enemy of Both Sides"), Tloque Nahuaque ("Lord of the Near and the Nigh") and Yohualli Èecatl ("Night, Wind"), Ome acatl ("Two Reed"), Ilhuicahua Tlalticpaque ("Possessor of the Sky and Earth")
And the best part is...the holy soccer games played to the death, and the ripping out of the hearts of the best and brightest in homage to aforesaid diety. halleluiah. be careful peeps.
Why thx whore......... I have nothing to worry about.
Correct. It is even more simple than that. Did the banks own what they sold to the MBS trustee?
I smell a "null and void" coming down the road. I can only imagine the chaos that would ensue if all these mortgages, hence their derivatives, are not even worth the paper they're written on.
Who is in a precarious position with that, I wonder...
My bet, though I have no clue as to how, is the Chinese. Sounds like this economic war plan was put in place many, many moons ago by some very bright boys and girls.
This could get very interesting very quickly.
:D
Road to Roota? I find this particular theory fascinating. Just can't pin it down.
The criminals knew all along, hence the Bonuses, even in face of the heat.
My point was that the original sellers were the ones in the precarious position because they were selling something they did not own.
And my point was that if they can't prove it, or a judge finds that the bulk of the legalese was unacceptable to a court of law, the ~$4 quadrillion worth of derivatives disperses into the ether.
2 points BK;
Terrific summation of the FED's thinking, strategizing and risk of collateral damage.
The other point being related to the publics' perception of the FED's sudden concern over the employment issue.
Just wondering out loud as to why didn't the FED think about general employment before bank bonuses?
The simple answer is that the FED did, but chose the lowest common denominator which is public stupidity.
Not a certainty the public is that stupid this time around......always hope.
See the J Hilsenrath interview where Charles Evans of the Chicago FED works public relations front-running the next gouging of the taxpayer into an artform with the phony clean cut appearance for a photo op and fake look of sincere and intellectual concern.
http://blogs.wsj.com/economics/2010/10/05/qa-chicago-feds-evans-elaborat...
“The Feds gotta do something about the unemployment thing”
Yep, rely on a bunch of intellectually bankrupt morons to fix things. Typical LSM.
Stealing from the blind........ring of truth?
Yes things are totally f****d.Now looking at the short term with Christmas coming up I am currently taking order,s for your Xmas dinner essentials.Remember it is only just over 2 months away and most shops should be bankrupt by then,however please note due to the fact that food and commodity prices are more volatile than anytime in the last 200 years I cannot accept any of the following crap,
Unacceptable
----------------
Fiat currency apart from the reliable and dependable types such as Zimbabwe,Somalia,etc.
Paper Gold and Silver Certificates.
Domestic or Commercial property of any kind.
Pension books or food stamps are another no,no as probably worthless as Xmas arrives.
Acceptable
-------------
Only Physical Gold,Silver,Diamonds (real no cubic zirconia crap)Rubies,Emeralds,Saphires,Opals,coins such as Doubloons,Pieces of Eight,Gold Pistols,Gold Aureus are perfectly acceptable,full oil tankers,agricultural land,Uranium,Paladium,Platinum,etc.
Prices are as follows,
Turkey Small - 20 Gold Eagles.
Potatoes - 25lb Bag - 15 Gold Eagles.
Cabbage (no Obama or Bernanke varieties) -10 Gold Eagles.
Sprouts - Small bag - 5 Gold Eagles.
Xmas Pudding - Small - 12 Gold Eagles.
Bottle of 20 year old Scotch Single Malt Whiskey - Unobtainable
Due to Continual and Severe upward movement of product prices the management reserve the right to increase prices at 2 seconds notice and delivery is not guaranteed.
All the best for Xmas.
Bottle of 20 year old Scotch Single Malt Whiskey - Unobtainable
Geez, learn how to make your own, and wait 20 yrs to sample it.
Moonshine will rule! Got Copper (tubing)?
Just put 3 cups of sugar into 4 1/2 gallons of fresh apple cider in a plastic bottle and let it ferment in a cool basement. Use a winemaker's airlock to keep it from spoiling. Leave the fermented cider outside and when the February cold freezes out all the water, drain the heavy apple jack out of the center of the frozen water. Strain out the solids including the yeast and age the brandy for extra smoothness. Let Jack Frost distill the alcohol for free. You could use a wooden barrel also, just leave room inside the container for the expansion of the frozen water.
nice post (i was about to put up a less sophisticated version). related topic: on the frontier, as it moved from the alleghenies to the rockies, cider (wasn't even called hard, there wasn't any other kind) was the most common drink, often safer than the water, even for children. it was about half the proof of wine. that's why johnny appleseed (john chapman) was made into a myth: apples grown from seed are unpalatable; the tasty ones are all grafted. but they made cider just fine.
"Moonshine will rule! Got Copper (tubing)?"
Yep...and a cooker. It's been a while...but it's pretty basic...just mind your heads & tails lessen ya get a headache ;-)
Take me home Bocephus.
http://www.youtube.com/watch?v=I4s0nzsU1Wg
that song puts a lump in my throat.
'I'd love to spit some Beechnut in that dude's eye and shoot him with my ole forty-five.'
And everyone knows it.
but don't get it. Yet. Soon, in the neck.
I'd like this to be BB's last smoke, before twisting in the wind from hemp.
"So Ben is holding all of the cards. Exactly how he wants it."
For now. There's an old Italian proverb: The furrier catches more skins of foxes than asses.
i'm enjoying the extra time to load up on more guns and gold. this is going to end in tears.
Well everything is going Bens way, but likely he's being kept up at nite by the specter of armed pissed off americans or even the military itself sieging the whole clownshow. Then what, offer the troops a bailout? Military coup is a bitch, and its not only possible but highly likely.
I've been praying for the military to uphold their oaths.
Military coup is worriesome with todays "pampered princes" to borrow a phrase from David Hackworth. If it was the "Hack" or "The Gunfighter" behind it I would be a little more optomistic. Alas, there time is gone.
Amerikan military? Spare me. More like Chavez military.
It appears that Bernankie wants to Destroy the little People and the Eldery. Beat them into submission of losing everything they have to the Banks. Bernankie as a student of the Depression seems to think that the only way out is to put People in Soup lines. He refuses to do anything to create Jobs that is in his Manate.
All of the Monitization that has been done only raise the cost of Oil, Copper, Gold, Wheat, Oats, Sugar, Pork Bellies, and the devaluation of the Dollar.
Bernankie wants to get rid of Social Security and Medicare to pay down the Debt that he continues to create to give to the Bankers. It appears to me that the Bankers an Bernankie will not be happy until they destroy the Middle Class and the United States. As then they will own it all and we as Citizens will have nothing. It will go back to the literal Land Lords where you could farm the land for a large percentage of your goods going to the Lords.
They used to have a name for it SLAVES.
if not bernake it would be someone else. who is behind the fed?
Exactly right. Ben is just the water boy for the true masters. Remember who owns FRBNY.
And all this talk of people taking to the streets and hanging banksters from lamp posts is some kind of demented fantasy. The feds way outgun the people, and the storm troopers are salivating as we speak at the prospect of getting out to play. There will be no revolution. The best we can hope for is devolution, people.
The Fed has no power at all, except that which the people give it, by participating in its corrupt credit system.
I'm continually amazed at the defeatist, inside-the-bankster-box thinking that traps people in a false, outmoded paradigm needlessly.
If you don't want to be a field slave on the Federal Reserve plantation, don't. Don't use credit. Debt is their first tool of entrapment. Remove all intermediaries between you and your wealth and the essentials of life, as much as you can. Structure your financial affairs to avoid tax liabilities. There are countless, perfectly legal ways to do this.
I have no mortgage. I built my house with my own hands, cash. I pay cash for my cars. I owe no federal income taxes because I don't do any work that results in taxable wages. I develop properties, live in them for the required two years or more, and then sell them for a tax-exempt capital gain.
All this talk of revolution is getting ahead of the game. Why rave about revolution if you're going to send the same losers and grafters back to Congress every two years?
The answer is simple enough. Fire every congressman and senator after one term. No more building empires of influence, no more holding down committee chairmanships for 22 years running, no more revolving doors with K street and the government vendor complex.
When there is no longer any opportunity to build a career in politics because EVERYONE gets sent home after one term, then most of this crap will stop.
Firing all incumbents in November is the first step. The masses are slowly awakening to the realization that the Fed is a product of the transnational banking syndicates, and does nothing except serve their corporate masters. The Fed won't go without a fight, that's a given. Bring it on.
How about a peaceful sit-in? EVERYBODY quits paying bills, going to work, sending kids to school. Only barter and trade and burn every dollar?
The internet would be shut down immediately. Remember MIRC? I wonder if something like that would still work.
Assets will deflate due to lack of consumption (houses, boats, cars, stuff) (except stocks due to POMO) and necessities of life will inflate. The sheeple (me included) get it from both ends. Ouch! Not that 60 ring gauge Cohiba!
What about home prices - If the price of equities went up less than corn,wheat ,oil , gold etc aren't people still losing money because purchasing power is declining?
He just made things a lot harder for those who are barely getting by with benefits or on the U6 or off benefits people otherwise known as the poor . Bravo dickhead
He also just made things harder for a struggling middleclass . Bravo dickhead .
He also just made the costs for small businesses rise therefore creating more unemployment . Bravo dickhead .
Ben Bernanke = FAIL or the head of Infinitehedge Gate where on a long enough timeline everything was supposed to go to infinity but didn't(except those things which people need to live)
Ben's ideological ways are also contributing to starvation in 3rd world countries:
http://www.pri.org/business/global-development/did-wall-street-get-rich-...
Ben doesn't understand, he's been Princeton-brain washed his whole life, he really can't see/feel the impact of his policies. Regardless, his Karma is ripening, it won't end well for Ben when it's all said and done.
...any 'speculators' who drive prices too high too fast, and out of line with underlying fundamentals, will get clobbered by other speculators, as they have in the past.
that said, i'm personally long corn, oats, soy beans, orange juice, paper and physical gold, physical silver, and canadian dollars because Benny cannot stop printing.
the fact is, he's got a balance sheet with toxic mortgage-backed-securities that he needs to re-inflate to unrealistic valuations. the elderly and poor can 'eat cake'.
Ben Burn-a-karma
All grains maxed out today and locked up, gold up $13 again, so the equities pop is an actual big loss and assets are in the crapper.
This idea that Ben is running the show and does what he wants day after day comes to a screeching halt in a natural disaster or some type of coup, where people take to the streets and declare their own martial law or an outright military coup. Its not out of the realm of possibility, and actually highly likely. This is what 'financial only' people never take into consideration and never see coming, ever. Yet happens all the time.
I sees these as bad signs. When was the last time the grains locked like that?
1988
I was in the Grains today. What you didn't see was Corn trading 30-40 higher in the "synthetics" and beans 30 higher than limit up. At one point the Soybeans were 10 cents wide...option boys clean up on a day like today...there is really no such thing as a "limit" if you can call the floor or know how to trade options. Corn will most likely be limit up Sunday night. Grain floor open Monday. Sorry for the disrespect Tony and Pauly.
CORN ETV up 14.61% on Friday. Sunday most likely is right Johnny. have any thoughts on who/what might have been driving the price action yesterday?
No question that Tim is gone after the election.