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Charles Biderman On How The Fed Continues To Rig The Market And Why There Will Be A QE 3...And 4

Tyler Durden's picture





 

The last time Charles Biderman appeared on CNBC, he was carted onstage (and promptly off) in the late hours before Christmas Eve, when it was virtually assured nobody would hear the self-evident truths out of his mouth such as this one: "individuals have been selling, companies are net selling, insider
selling and new offerings are swamping any buyback and any cash M&A
activity since QE 2 was announced. Pension funds and hedge funds don't
really have that much cash to invest. So what nobody's asking is what
happens when QE 2 stops: if the only buyer is the Fed, and the Fed stops buying, I don't know what is going to happen...When
I was on your show a year ago I was saying the same thing: we can't
figure out who is doing the buying it has to be the government, and
people said I was nuts. Now the government is admitting it is rigging the market." Now that the great muni scare forced retail to take proceeds from muni liquidations and invest in stocks just as the market topped out, CNBC brought Biderman on again, hoping to get something, anything, bullish out of the flow of funds expert. Wrong. "In December of 2009 received a lot of ridicule for saying that the Fed is rigging the market which as everybody is well aware." As for the "sustainable economic recovery" i.e., what happens to Quantitative Easing: "They probably will end for a while, we think there is going to be a QE3 and 4, or until the market says: "No Mas - we are not going to believe this game the Fed is playing... The Fed is printing over $100 billion a month to buy other assets and pay bills, and economic growth is picking up at a $200 billion annual rate. This is very inefficient method of boosting the economy, and then how do we repay these trillions that have been created out of thing air in the future." At which point the producer "screams get him off my show."

Oddly enough, this form of market manipulation by the Fed is precisely what Zero Hedge has been claiming since day one, prompting our legacy media followers to brand us on occasion as "conspiratorial." Ironically, it is precisely this kind of "conspiracy theorism" that is ultimately proven to be nothing but fact in this bizarro banana republic, now that the wheels of the Ponzi system are finally coming undone (see the recent deranged ramblings of one Bill Gross for more). Yet it hasn't stopped once upon a time blogger, CNBC regular and now Bloomberg columnist, Paul Kedrosky to declare from atop his status quo-worshipping altar that Zero Hedge is "too conspiratorial and too much of an intellectual monoculture." That's ok Paul, we realize that mainstream bashing of Zero Hedge in public, while fervently copying, pasting and/or paraphrasing from it, is all the rage for our less than sophisticated, but admittedly very, very polycultured, imitators. And yes, just like Biderman, we are happy to be called "conspiratorial" if that is the MSM's codeword for being proven right within 3 to 6 months... and actually having an original thought.

 


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Mon, 03/07/2011 - 20:08 | Link to Comment reader2010
reader2010's picture

The Grand Ponzi can't be stopped because debt is money and cash is trash!

Mon, 03/07/2011 - 20:17 | Link to Comment Herd Redirectio...
Herd Redirection Committee's picture

I've been saying it for the last two years, its like a slow motion train crash.   We are already off the rails, but we are currently flying through the air at 100kmp/h, thinking the train is still on the tracks!

Check out the latest from the Capital Research Institute: "The King is Dead. Long Live the (new) King!"

http://www.capitalresearchinstitute.org

What is happening right now in the world of finance can best be understood from the perspective of… succession planning? Thats right. What is underway right now has a lot in common with what used to happen every time a King’s reign was approaching its end, with the King on his death bed. Superficially everyone would still be following the King’s orders and scrambling around, summoning the finest physicians (somehow we got Timothy Geithner and Ben Bernanke), but just below the surface everyone knows the score, and is preparing for the King’s inevitable death. This leads to a tremendous amount of posturing and scheming, as everyone gets behind their preferred candidate to become the new King.

This is exactly what we witness in the world of international finance at the moment.

Mon, 03/07/2011 - 20:46 | Link to Comment Bob
Bob's picture

Every five years or so I revisit Dr. Strangelove and today was the day.  Chairsatan is a fine name for the Bernank, but if he ain't Dr. Strangelove as well nobody ever could be. 

The rest of us, those who are paying attention and in the know, are just like the folks that watched Jack Ripper's breakdown.  I suppose he is a good proxy for Wall Street. 

But watch Dr. Strangelove working to trigger the Doomsday Machine. 

Eerie, that. 

Mon, 03/07/2011 - 21:13 | Link to Comment Dr. Porkchop
Dr. Porkchop's picture

QE2 is really the Chinese communist prevert plot to sap the vital fluids of the American people!

Tue, 03/08/2011 - 00:06 | Link to Comment jedimarkus
jedimarkus's picture

My God, not the precious bodily fluids...

Tue, 03/08/2011 - 11:13 | Link to Comment 66Sexy
66Sexy's picture

I Think they will HOLD OFF on QE3.... just to fuck with the markets and see how loud it sqeals...

Mon, 03/07/2011 - 21:20 | Link to Comment Myshkin
Myshkin's picture

Dr.Strangelove: Or How I Learned to Stop Worrying and Love the QE2

Mon, 03/07/2011 - 23:15 | Link to Comment rocker
rocker's picture

Bloomberg's Pimm Fox blew away analyst from "JPM" today. Pimm talked about how QE2 is making the investors feel "so" good while trashing the rest of America. And he did not stop there. He continued on with how the MBSs from the performing loans on the big CBs are not looking good. And he did stop there. He continued on with how Sally K. from BAC is trying to keep their MER acquisition still alive. Women of the Year, they say, manipulating their portfolio so that the game can continue. Gosh, I hope Tyler and others watched Pimm's best interviews of the year.

Mon, 03/07/2011 - 23:59 | Link to Comment repoman
repoman's picture

"we cannot allow a mineshaft (output) gap!"

Mon, 03/07/2011 - 21:36 | Link to Comment B9K9
B9K9's picture

I seem to recall the good Dr wasn't surprised the Russkies had developed a doomsday bomb - as it turns out, it's trivial - but that they had neglected to inform (warn) the USA.

Dr. Strangelove: Of course, the whole point of a Doomsday Machine is lost, if you *keep* it a *secret*! Why didn't you tell the world, EH?
Ambassador de Sadesky: It was to be announced at the Party Congress on Monday. As you know, the Premier loves surprises.

Of course, Buck Turgidson's warnings about a 'mine shaft gap', and Strangelove's ruminations are the coup de grâce:

[Strangelove's plan for post-nuclear war survival involves living underground with a 10:1 female-to-male ratio]
General "Buck" Turgidson: Doctor, you mentioned the ratio of ten women to each man. Now, wouldn't that necessitate the abandonment of the so-called monogamous sexual relationship, I mean, as far as men were concerned?
Dr. Strangelove: Regrettably, yes. But it is, you know, a sacrifice required for the future of the human race. I hasten to add that since each man will be required to do prodigious... service along these lines, the women will have to be selected for their sexual characteristics which will have to be of a highly stimulating nature.
Ambassador de Sadesky: I must confess, you have an astonishingly good idea there, Doctor.

President Merkin Muffley: You mean people could actually stay down there for a hundred years?
Dr. Strangelove: It would not be difficult, Mein Führer. Nuclear reactors could - heh, I'm sorry, Mr. President - nuclear reactors could provide power almost indefinitely.

Tue, 03/08/2011 - 00:13 | Link to Comment juangrande
juangrande's picture

Long live Peter Sellers!

Tue, 03/08/2011 - 03:30 | Link to Comment StychoKiller
StychoKiller's picture

Chauncey Gardener FTW!!

Tue, 03/08/2011 - 07:42 | Link to Comment LongShortSally
LongShortSally's picture

I like to watch.

Mon, 03/07/2011 - 20:48 | Link to Comment silvertrain
silvertrain's picture

  And bb is the conductor of this train..Reminds me of the wreck of the ole 97 in 1903 {I think} ..Long story short, It was a Fast mail train that was running several hours late to its destination..Against all common sense the conductor was still convinced he could pour more coal to the fire  and get the mail there,meanwhile EVERYONE told him he couldnt make it, he was just to far behind..Full trottle against all critics ,He jumped the tracts at a place called "stillhouse trestle" which was a down grade and also had a sharp turn just before crossing a river..His speed should have been around 30, one witness said the train looked to be going over 50, and legend has it at 70..Said he was found laying over the trottle with the handle turned wide open..Several country and western songs was written about it..

  one man, one word, INSANITY...The only thing the rest of us can do is jump off when we get the chance and let him wreck this train along with the passengers that are alseep....

  Anybody interested in looking at the pictures or reading the story just search,

  "Wreck of the ole 97"

Mon, 03/07/2011 - 21:17 | Link to Comment justtotaketheedgeoff
justtotaketheedgeoff's picture

Vernon Dalhart - "The Wreck of the Old 97" Available at 78 rpm.  Good Lord.  The obscure info that one finds at ZH. Now that song is haunting me....."just shovel in a little more coal..."

Mon, 03/07/2011 - 21:31 | Link to Comment silvertrain
silvertrain's picture

Thanks sir...

Mon, 03/07/2011 - 22:25 | Link to Comment lincolnsteffens
lincolnsteffens's picture

I had no clue there were Old Time Country Music fans on ZH. Astonishing..."Old 97 left from Washington Station as though she'd been shot from a gun"

Since we are on train songs Georgia Mail is appropriate "Stoke the fire and hope the brakes don't fail, fail, fail"

One for the banksters "I'm headed for destruction. I'm on the wrong track. On the Highway of Sorrow there's no turning back."

How can you tell if a bankster is standing on level ground?....The drool runs out of both sides of his mouth.

Mon, 03/07/2011 - 23:42 | Link to Comment Cursive
Cursive's picture

I had no clue there were Old Time Country Music fans on ZH. Astonishing...

ZH is a long ways away from Kedrosky's intellectual monoculture.

Tue, 03/08/2011 - 03:34 | Link to Comment StychoKiller
StychoKiller's picture

"900,000 Tons of Steel" -- Grateful Dead

Mon, 03/07/2011 - 22:59 | Link to Comment Temporalist
Temporalist's picture

It occurs to me that the majority of people in 1903 wouldn't have a clue what 30, 50 or 70 mph looked like.

Tue, 03/08/2011 - 00:07 | Link to Comment Johnny G.
Johnny G.'s picture

Why?  Hadn't they all seen horses gallop?  Dogs run faster than 30 MPH and arrows travel considerably faster than 70.  Plus, the 1876 Colt .45 probably performed admirably at expressing the rapid movement of metal.

Tue, 03/08/2011 - 00:28 | Link to Comment Temporalist
Temporalist's picture

Agreed but how many people had stop watches and knew the average running speed of a dog or horse or arrow?  It just wasn't as common a reference point like people have now with driving cars that have speedometers on it and wikipedia.

It's not impossible I'm just saying the average person's perception back then of mph was not like it is now.  The speed of that train could have been from anywhere between 25 to 125. 

3 questions

http://www.youtube.com/watch?v=cV0tCphFMr8

Tue, 03/08/2011 - 02:30 | Link to Comment Irwin Fletcher
Irwin Fletcher's picture

Because watching something in isn't the same thing as experiencing it or understanding it. Ask anyone but an economics PhD. Doing 30 mph on horseback is more thrilling than doing 79 mph in your swagger wagon, but neither sensation can be fully appreciated by observation alone. Similarly, many people have never seen a photograph of themselves or their family, and the experience can bring them to tears. Seeing yourself in the mirror or seeing your family on a daily basis can't replace a view from a different perspective. We all see the same photons traveling at 3e9 m/s, and we all respond much slower than that. Knowledge that people race at 12000 RPM does not replace knowing how to race a car at 12000 RPM.

Tue, 03/08/2011 - 12:15 | Link to Comment MrSteve
MrSteve's picture

Why wouldn't the GPS tracking device have recorded the highest speed in its memory and so have documented the R = S/T????

Tue, 03/08/2011 - 00:18 | Link to Comment defender
defender's picture

You got me curious so I had to look it up.  Here is a version by Johnny Cash:

http://www.youtube.com/watch?v=et3fVvAbL7k&NR

And another version with Flatt and Scruggs along with the Beverly Hillbillies:

http://www.youtube.com/watch?v=CZsMQK2Z-So

Tue, 03/08/2011 - 03:33 | Link to Comment StychoKiller
StychoKiller's picture

Conductors collect tickets, they DO NOT operate the locomotive!

Mon, 03/07/2011 - 21:37 | Link to Comment Founders Keeper
Founders Keeper's picture

[We are already off the rails, but we are currently flying through the air at 100kmp/h, thinking the train is still on the tracks!]---Herd Redirectio...

Herd, I liked your post. Thanks for posting.

I agree. The cataclysmic global economic meltdown is already underway, but only a few people are aware of this not-yet-obvious fact.

The most curious and perplexing aspect of this historic event is our human reaction to it. Try as I may, my family and friends will not or cannot consider our dire circumstances. Why is that? Even when presented all the facts, the average person I engage is too busy, is not interested, confident things can't be that bad, or considers only my mental stability. A year ago, I finally gave-up trying to "inform" family and friends. 

Perhaps the authors of The Fourth Turning are on to something. Maybe humans are simply unable to hold  memories of historical experiences beyond 4 generations.

 

Mon, 03/07/2011 - 21:54 | Link to Comment Shameful
Shameful's picture

There is nothing magical about 4 generations. The only lesson history teaches us, is that it doesn't teach us anything. People are able to either avoid knowledge of history or able to delude themselves into thinking this time is different. the individual can learn from history, the masses cannot. The masses will not even remember what happened yesterday, much less 80 years ago.

Also you can't force knowledge on people, God knows I've tried. They are in their own little bubble. They have to want information and to break out of that bubble. Most won't until the pain is to great, and the day of preparation much less salvation is long gone. It's the nature of mankind. I just present facts and based on their reactions I go further or stop, most people want to me unaware. Can you blame them? Knowing the Sword of Damocles is hanging above me colors my worldview.

Mon, 03/07/2011 - 23:51 | Link to Comment Clay Hill
Clay Hill's picture

""can't force knowledge on people. God knows I've tried/"

"Knowing the Sword of Damocles is hanging obove me colors my worldview."

 

A constant struggle in my own life between sharing too little with the ones I love, thereby leaving them to be consigned to victomhood without my vigilance, or overloading them with reality.

Better I think, to fight the good fight, and lay out the facts as I percieve them as the duty I have chosen, rather than shirk my responsibility to my Circle.

Perhaps in time, the scoffing disapproval, and looks askance of open disdain I suffer now will bear the dividends in future.

 

\

 

Tue, 03/08/2011 - 03:30 | Link to Comment CH1
CH1's picture

Try as I may, my family and friends will not or cannot consider our dire circumstances. Why is that?

Probably because they know they are unprepared for the consequences. It's easier to blank it out than to face it. I'll guess that the clearer you make the facts, the more irritated they get.

They are trying to NOT see, and you are making it hard for them. Or at least that's the usual pattern. :(

Mon, 03/07/2011 - 20:16 | Link to Comment 66Sexy
66Sexy's picture

The truth is: QE3 may NOT happen.

Stimulus reversal wil precede any rate hike.

 

Mon, 03/07/2011 - 21:19 | Link to Comment Mike2756
Mike2756's picture

Yep, they can't print oil.

Mon, 03/07/2011 - 21:42 | Link to Comment drom
drom's picture

No QE3 will lead to deflation

The Bernank will not accept the deflation, so inflation it will be

Tue, 03/08/2011 - 02:17 | Link to Comment Bob Sponge
Bob Sponge's picture

deleted

Mon, 03/07/2011 - 21:43 | Link to Comment Bob Sponge
Bob Sponge's picture

I have been wondering: How will the Government fund itself without QE3, QE4, etc.? I don't think that the world wants to buy US debt anymore. China certainly doesn't want it. So, in my opinion, they either need to continue QE or implement austerity or both. Since austerity gets politicians booted out of office, I think we will see more QE. Time will tell.

Tue, 03/08/2011 - 00:12 | Link to Comment FEDbuster
FEDbuster's picture

I keep trying to write million dollar checks to deposit into my checking account.  The bank says, "these checks are no good".  I argue they will be as soon as the deposit clears.  It's kinda like that.  Counterfeiting takes many forms, this is just one method.

Mon, 03/07/2011 - 22:13 | Link to Comment chopper read
chopper read's picture

QE2.5 IS happening.  bank on it. ;)

Mon, 03/07/2011 - 23:06 | Link to Comment I think I need ...
I think I need to buy a gun's picture

it amy not first comes gold revaluation then money printing

Mon, 03/07/2011 - 20:21 | Link to Comment Judge Judy Scheinlok
Judge Judy Scheinlok's picture

"The Grand Ponzi can't be stopped because debt is money and cash is trash!"

This milestone will be significant because there will be an illusion that QE has stopped. But keep a close eye on the side door. You may have to do some math and draw conclusions but once you do it will be obvious.

Follow the money.

Mon, 03/07/2011 - 21:12 | Link to Comment metastar
metastar's picture

"Open up my front door, hear my back door slam ... "

What side doors are you watching??

Mon, 03/07/2011 - 21:24 | Link to Comment Judge Judy Scheinlok
Judge Judy Scheinlok's picture

I don't preside over many cases dealing with perversion but since you present such an easy case. Guilty. Don't forget to register: http://www.familywatchdog.us

Mon, 03/07/2011 - 21:46 | Link to Comment Yen Cross
Yen Cross's picture

Mrs. Scheinlok,

 

I appreciate your legal knowledge. I appreciate your wisdom, and your interest in the world of finance. You are a woman of class and dignity! I have one question? What are bond spreads. and how will those spreads e-fect the YUAN? Best wishes.

Mon, 03/07/2011 - 23:55 | Link to Comment Judge Judy Scheinlok
Judge Judy Scheinlok's picture

All I understood was:

http://www.zerohedge.com/article/brent-over-118-crude-passes-107-eurusd-...

and this:

http://www.zerohedge.com/article/egon-von-greyerz-hyperinflationary-delu...

"U get my like button!" LOL. You get my like button? U R a bit of a Dummy aren't you? LoL.

Tue, 03/08/2011 - 02:02 | Link to Comment Yen Cross
Yen Cross's picture

Confused young lady! Bond spreads were the topic. Your input is appreciated.

Tue, 03/08/2011 - 05:58 | Link to Comment falak pema
falak pema's picture

I once knew a gal called 'Scheincock'...maybe a distant relative...

Tue, 03/08/2011 - 00:01 | Link to Comment essence
essence's picture

As JP Morgan (the evil one himself) stated when pressed

"Gold is money... all else is credit"

My oh my how we've gone by the wayside in this country.

Imagine believing in paper notes backed by 'the full faith & credit' of bought off politicians and corrupt bankers.

Folks in the future will look back and reflect ...WTF were they thinking?

 

 

Mon, 03/07/2011 - 20:10 | Link to Comment Quixotic_Not
Quixotic_Not's picture

All hail Ben the Bernank!

Got Ag?

Mon, 03/07/2011 - 20:11 | Link to Comment Rainman
Rainman's picture

Nice P K putdown. Anybody abusing the term monoculture deserves a whippin.

Mon, 03/07/2011 - 20:21 | Link to Comment newworldorder
newworldorder's picture

Maybe if we had a bit more monoculture and a lot less multi culture during the last 30 years our country would not be in this mess.

Mon, 03/07/2011 - 20:40 | Link to Comment Ironmaan
Ironmaan's picture

Right on the money! The productive culture is paying for more than several of the parasite cultures in this country. http://guerillatics.com

Mon, 03/07/2011 - 20:13 | Link to Comment NotApplicable
NotApplicable's picture

Hey, if it weren't for the ZH bashers, I might have never found this place.

After about the 4th time I saw someone quoting info from ZH, but immediately distancing themselves from the blog, I thought it worth checking out.

*adjusts tin-foil hat*

Mon, 03/07/2011 - 20:15 | Link to Comment cougar_w
cougar_w's picture

Ah yes! Tyler's 10 point plan for world domination, seen up close. A thing of beauty.

Mon, 03/07/2011 - 21:03 | Link to Comment dark pools of soros
dark pools of soros's picture

I remember seeing TD on seeking alpha and just thinking, 'how does he get away with posting this stuff'

 

and shortly he goes solo with some servers in the pacific and a sat feed..or something..

Mon, 03/07/2011 - 21:19 | Link to Comment Híppos Purrós
Híppos Purrós's picture

Me too.  And as for "intellectual monoculture", if there are any genetically modified organisms lurking/posting here, they're more than likely silicon based.

Thank you, Tyler/Marla, et al....

Mon, 03/07/2011 - 22:27 | Link to Comment Yen Cross
Yen Cross's picture

Good points.

Mon, 03/07/2011 - 20:15 | Link to Comment cougar_w
cougar_w's picture

Why would they even bother putting Biderman on now unless they are playing the end-game? Every move now is either an exit or a puff piece to tempt the historians.

Mon, 03/07/2011 - 21:11 | Link to Comment NotApplicable
NotApplicable's picture

Good question. One answer that comes to mind, is that they eventually have to report what by now is common knowledge, in an effort to retain the tiniest shred of credibility.

All so they are still around to spin the next lie, of course.

Tue, 03/08/2011 - 03:37 | Link to Comment The Navigator
The Navigator's picture

I like your thinking, and have to agree.

Spin Spin Spin to keep us away as we get SO close.

Mon, 03/07/2011 - 20:18 | Link to Comment Michael
Michael's picture

Everything Charles Biderman said went in one ear and out the other. Maria has a one track mind. Pole dancing

Mon, 03/07/2011 - 21:25 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

I don't know about that.  Her acceptance of the "Wall of Worry equity climb" surely draws some reference back to the comment about an 88% percent correlation between the rise in the markets to the balance sheet of the fed.  I will tell you what.  I am a god-damned special needs child (refused the suggested medication) and I can add that equation together.  It would be a cuntastic bloodbath!  She knows it and her growing need for gargantuan amounts of eye makeup tells the tale.  We is going down should QE III not take place and she knows it.  No amount of bullish drivel about stock valuations and mark-to-myth accounting justifications can drown out an ounce of this truth. 

Mon, 03/07/2011 - 20:18 | Link to Comment Id fight Gandhi
Id fight Gandhi's picture

I have to admit, I was surprised by QE2. The hype seemed to have forced it last fall. I seriously believed that they wouldn't engage in more buying unless something major came in such as a surprise negative GDP or a black swan. I believed they would do the right thing and let the markets run their course. Boy was I wrong!

In any case q1 earnings will be interesting to watch with margin compression and consumer rationing and fuel prices.

Mon, 03/07/2011 - 20:25 | Link to Comment Rainman
Rainman's picture

Somehow methinx Q1 will have many snow stories floating around.

Tue, 03/08/2011 - 01:05 | Link to Comment Founders Keeper
Founders Keeper's picture

[I have to admit, I was surprised by QE2.]---Id fight Gandhi

Thanks for your post.

I'm surprised you were surprised, Gandhi.

Remember. Housing was looking like a "double dip" even to the bulls. The technicals were boding very bearish in August. And there was an election to win.

They have to print money. That's all anyone needs to remember. They print. They must print. They always print. (There you go. Now you're ahead of the curve again.)

 

Mon, 03/07/2011 - 20:23 | Link to Comment thepigman
thepigman's picture

Only 52% think QE is responsible for

the rally. LOL.

48% remain total dumb fucks. You gotta

love America.

Mon, 03/07/2011 - 20:25 | Link to Comment virgilcaine
virgilcaine's picture

QE 3 will be delayed.. the 'junkie' isn't due for a fix yet.  He's actually almost od'd.  Harsh yes! but that's what the Mkts have become.

Mon, 03/07/2011 - 20:27 | Link to Comment Anaxagoras
Anaxagoras's picture

Tonight, and every night on the Fed Channel:

Dr. StrangeBen, or: How I Learned to Stop Worrying and Love Inflation

Pop the corn and fill up the punch bowl.

Mon, 03/07/2011 - 20:30 | Link to Comment InconvenientCou...
InconvenientCounterParty's picture

Now that I've learned the power of reverse engineering the resultant "truth vector" from the cloud of "information vectors" there is no going back. I can't take anything at face value from anyone, anymore.

I offer ZH my humble thanks and at least one referral per day.

Mon, 03/07/2011 - 20:54 | Link to Comment Don Birnam
Don Birnam's picture

I second ICP's remarks.

Mon, 03/07/2011 - 20:57 | Link to Comment spekulatn
spekulatn's picture

 

I can't take anything at face value from anyone, anymore.

I offer ZH my humble thanks and at least one referral per day.

 

Same here.

 

 

 

Mon, 03/07/2011 - 20:29 | Link to Comment sockcutter moto...
sockcutter motorforker's picture

i fight inflation by investing all my money in forever stamps.

Mon, 03/07/2011 - 22:40 | Link to Comment lincolnsteffens
lincolnsteffens's picture

Great idea, but I wouldn't load up on too much forevers just in case the PO goes belly up or gets a pardon-my-rule-change OK from Uncle Sam. Remember it is just paper and only uses three times the amount of paper as the old lickum and stickum. Don't you love all those paper wasting notices that come in to save paper and go digital every fucking month. (Sorry my rant got a little off topic)

Mon, 03/07/2011 - 20:30 | Link to Comment disabledvet
disabledvet's picture

Paul who?  Kaiser-coughsky?  "Hold my left ball sack" while i cough-ski?  Yeah, ok.  I don't agree at all that the market is rigged...but if you think "money doesn't buy things" then that makes you Paul the wacko.  I mean..we are talking the United States, right?  This is the nation where the number one cause of death for women in the workplace is....oh, yeah...MURDER.  "Focusing that rage" in a more...productive direction shall we call it..."seems like a good start."  Libya?  Khadaffi?  What did the Bush's Democratic CIA chief call it?  a "slam dunk"?  i mean c'mon.  "the market goes up, the market goes down."  even the Valley understands "we do not comment on our stock price."  why does our CB?  crazy.

Mon, 03/07/2011 - 20:43 | Link to Comment Pladizow
Pladizow's picture

And your point is?????????????

Mon, 03/07/2011 - 22:04 | Link to Comment eddiebe
eddiebe's picture

say what?

Mon, 03/07/2011 - 23:28 | Link to Comment disabledvet
disabledvet's picture

my point is "the market takes care of itself."  the DJIA hit numero 6 during the Great Depression.  Did this stop the US from fighting World War II?  Obviously only idiots see it that way.  Obviously no one is comparing what the US has faced and fought and won over the last 10 years as anything compared to fighting Germany and Japan at the same time during WWII.  That was a fight to the death that included the building and use of nuclear weapons (and we won btw.)  In other words "DC doesn't need NYCity" if it chooses.  It--and he (the President) is "our Sovereign."  Whether you choose to fight or not is your bizness.  If you think Americans wake up everyday to celebrate your cowardice and "bailouts to Wall Street" then you my friend are the truly deluded.  "Obama need only lead now."  The place was called Lockerbie and that's all the authority he needs.  More to the point "add the word oil" and "that equals a ten million man army."

Mon, 03/07/2011 - 20:40 | Link to Comment Yen Cross
Yen Cross's picture

I like Kudlow right now! That guy is good! Titanium straws aside. Good work Larry! CNBS is on my Right nerve.

Mon, 03/07/2011 - 20:41 | Link to Comment gordengeko
gordengeko's picture

Ah the web of deceit is getting ever so harder for them to conceal.  Especially when reality smacks them in the face and the sheep start saying.... WHA HAPPAN?

Mon, 03/07/2011 - 20:44 | Link to Comment The Ponz
The Ponz's picture

I used to read Kedrosky's blog, a long time ago when he was relevant.  Nowadays if he wasn't able to attend TED he'd have nothing to talk about.  His jumping shark moment:

http://www.youtube.com/watch?v=kmjt02LMsLI

Mon, 03/07/2011 - 20:47 | Link to Comment Yen Cross
Yen Cross's picture

Pole Vaulting Timmmayyy squirrels, come to mind.

Mon, 03/07/2011 - 20:44 | Link to Comment DB Cooper
DB Cooper's picture

Besides the obvious effects of QE the other intent, I believe, is to repair the losses that the FED is going to need to take on the GSE's and MBS purchases that we know are worthless.  They are buying Treasuries with money they create out of nothing so that the taxpayers can pay them interest (pure profit to them) so that they can in the end (in 30 years) say that they broke even or made money on the whole fiasco - at our expense.  The banksters + $billions,  the people - $billions.

Mon, 03/07/2011 - 20:48 | Link to Comment Bob
Bob's picture

Yeah, the other reason for QEX.  What a deal: Pretend to save the world monetary system while making your criminal buddies whole. 

Mon, 03/07/2011 - 21:05 | Link to Comment Yen Cross
Yen Cross's picture

That was effin RICH! Good quote!

Mon, 03/07/2011 - 20:47 | Link to Comment Twindrives
Twindrives's picture

That's one homely looking woman.

Mon, 03/07/2011 - 21:05 | Link to Comment cosmictrainwreck
cosmictrainwreck's picture

well, she was a lot hotter before she got fat, true.....but "homely"? not so sure

Mon, 03/07/2011 - 20:54 | Link to Comment williemays
williemays's picture

of course there will be qe 3 4 5 .... can't be done for ever i have a theory how it ends but who cares but when it does watch out 

Mon, 03/07/2011 - 21:54 | Link to Comment Yits and the Yimrum
Yits and the Yimrum's picture

when you hear these theorists say there may not be a QE 3 and so on, you know they are some kind of crack head.  these are know as "talking mules", those that espouse the company line and way of thinking

they will inject liquidity into their system, and destroy the value of the dollar until they can't

if you could print up your own currency every day, why would you stop?

the de-leveraging is only for the unwashed masses and the FED's agents are their waiting with a crowbar

thanks to ZH, the hereticts have a forum for discussion

Mon, 03/07/2011 - 20:58 | Link to Comment SuperRay
SuperRay's picture

DURDEN FOR PRESIDENT, OR TREASURER, OR WHATEVER YOU WANT DUDE! THANK GOD FOR TD!!!

Mon, 03/07/2011 - 20:59 | Link to Comment GottaBKiddn
GottaBKiddn's picture

 

If you don't think the market is rigged, then you go ahead and buy while the insiders are jumping ship. Don't worry they'll save some for you, Mr. Lucky.

The "QE"s are just the latest flavor of dollar devaluation the Fed has been serving up to "Merkan" suckers for the last hundred years. And it can't quit anytime soon because our government needs tons more funny money ad infinitum, and really doesn't care who gets stuck with the tax bill. Full steam ahead.

 

 

 

Mon, 03/07/2011 - 21:17 | Link to Comment whoopsing
whoopsing's picture

Pauly , Pauly , Pauly,if you want a guest column on ZH I'm sure Tyler can hook you up,Ya just gotta ask,just remember where you are....monoculture?.fuck off

Mon, 03/07/2011 - 21:18 | Link to Comment Mr. Majestic
Mr. Majestic's picture

Drivin' that train

high on cocaine

Ben Bernanke better

watch your speed

Trouble ahead

trouble behind

and you know that notion

just crossed my mind

Mon, 03/07/2011 - 21:19 | Link to Comment Buck Johnson
Buck Johnson's picture

It's over and they know it. I don't know about you guys, but I'm getting that 2008/2009 market feeling again. I think that Bill Gross is more than concerened that all the debt he bought won't get paid back and he doesn't like the idea of doing favors for the Fed and then not getting any in return.

http://www.cnbc.com/id/15840232/?video=3000007961&play=1

Mon, 03/07/2011 - 21:20 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

Another shiny maple leaf me thinks.

The Euro will not be able to take this shit from the dollar - epic balance sheet expansion is a coming.

We'll pay direct to the US fucking Navy instead of this fucking absurd merry go round.

We might have to deal with a privatised pirate carrier battle group who wants more but who gives a fuck anymore.

Mon, 03/07/2011 - 21:22 | Link to Comment bullet357
bullet357's picture

I read this article and by the time i finished watching the video my IBS Kick in going full bull rush into my adult diapers giving me a nice warm feeling.  Then i started feeling "CONSPIRATORIAL"..... I ask myself why did Charles Biderman or the PTB want to put this(crap)out now.  Everyone with one brain cell knows that the Markets are rigged. What is the purpose to bring the Dog & Pony show out Now?

Mon, 03/07/2011 - 21:23 | Link to Comment cunningtrader
cunningtrader's picture

Here is a repeat post, which I feel is appropriate:

 

Who gives a crap about these meaningless auctions? At the end of the day, the owners of the USFED /NYFED own America's ass, through indebtedness, they will have their new world order by debt or war, either way, they win.

Here is a link to a tree chart, showing How the Rothschilds and Rockefellers, have majority shareholdings in the USFED/NYFED. Link:  http://www.save-a-patriot.org/files/view/whofed.html  ** Source: Federal Reserve Directors: A Study of Corporate and Banking Influence. Staff Report,Committee on Banking,Currency and Housing, House of Representatives, 94th Congress, 2nd Session, August 1976.The Rothschilds own everybodie's ass, when you have a lazy Quadrillion or two kicking around in the vaults:

Accounting for the Rothschild Wealth and Influence


Morton (1962) noted that the Rothschild wealth was estimated at over $6 billion US in 1850. Not a significant amount in today’s dollars; however, consider the potential future value compounded over 147 years!

Taking $6 billion (and assuming no erosion of the wealth base) and compounding that figure at various returns on investment (a conservative range of 4% to 8%) would suggest the following net worth of the Rothschild family enterprise:

Mon, 03/07/2011 - 21:28 | Link to Comment cunningtrader
cunningtrader's picture

Taking $6 billion (and assuming no erosion of the wealth base) and compounding that figure at various returns on investment (a conservative range of 4% to 8%) would suggest the following net worth of the Rothschild family enterprise:

$1.9 trillion US (@ 4%)
$7.8 trillion US (@ 5%)
$31.5 trillion US (@ 6%)
$125,189.1 trillion US (@ 7%)
$491,409.0 trillion US (@ 8%)

 

That's right...491 QUADRILLION BUCKS, enough to buy america's ass and the rest of the world many times over...so no matter how much hand wringing ZH does,(correctly so i might add).....at the end of the day, whinging walks,Money talks....

Mon, 03/07/2011 - 22:51 | Link to Comment dalkrin
dalkrin's picture

"When it comes to bread I got the keys to the bakery"

And people said the hedge funds had more money than God.  Being shareholders of the Fed is nothing to sneeze at, so consider after 1913 all the opportunities to enhance their penny jars while throwing "chosen people only" parties at the US mint. 

Can you believe that the official biography tries to play down their enormous wealth?  Oh, they made a blunder here and a faux pas there, oops there goes my trillions. 

I wonder where such wealth could even hide though?  What is the total stock market capitalization for the US, the world?

Tue, 03/08/2011 - 02:23 | Link to Comment trav7777
trav7777's picture

these numbers are meaningless.

When you own real means of production, real power plants, real land, real mines, what does the denominator matter?  If you have to take payment in lbs of flesh, that's what the piper is paid

Tue, 03/08/2011 - 06:09 | Link to Comment cunningtrader
cunningtrader's picture

No they're not, you need money to to buy "real things " in the first place, get with the program numbnuts.

Tue, 03/08/2011 - 06:07 | Link to Comment falak pema
falak pema's picture

The catch in this argument is "assuming no erosion of wealth base"...Doesn't exist over 160 years  and two world wars. Compounding is like dog pounding... a mad dog's game played only by englishmen at high noon! Ask Noel Coward!

Mon, 03/07/2011 - 21:23 | Link to Comment El Hosel
El Hosel's picture

    "Climbing a wall of worry?" 

   WTF,

    Market is not "climbing" anything. It is being dragged by its heels behind the Bernakemobile.

Mon, 03/07/2011 - 21:30 | Link to Comment John McCloy
John McCloy's picture

  The hedge funds will be more important in coming years to the efficiency of free markets and price discovery than ever in history. It is they who will learn to place the pressure on unjust attacks of market freedoms relying upon their intelligence, foresight and bravery in challenging the price fixing attempts of our administration and the Federal Reserve. They are the necessary vultures of gluttony and stupidity. 

Of all the financial world believes that prices and stocks will never go down because you have a government mandate to pump than I assure you will have a very brave soul awaiting to take that challenge and profit from your hubris since all central planning throughout all of history has resulted in failure. This is even when you combine it with media fixing and political influence. Nature and the markets always find a way.

Mon, 03/07/2011 - 23:39 | Link to Comment JR
JR's picture

Yes, it’s the arithmetic.

As you say, “All central planning throughout all of history has resulted in failure.”  Stalin knew that under central planning in the USSR a ruthless dictatorship was required, and by 1927 he had established himself firmly in power enough to begin his plans.

Because foreign investors were reluctant to take the risk, he was forced to raise the money at home.  Says Charles Thayer:  “He had to drive workers under fearful conditions into the factories and mines. He prescribed heavy fines for tardiness and jail sentences for absenteeism. Periodically he raised the work quota and lowered the pay scale.”

The key to Stalin’s economic administration—and particularly his way of allocating raw materials—was centralization, i.e., central power.  Bernanke’s is central planning policy, i.e., macromanagement with the effects unknown.  Both results are the same – economics by force... and failure.

By the time Stalin died in 1953, his whole unwieldy structure was losing its momentum; Nikita Khrushchev had to begin some degree of dismantling.

And Bernanke thinks that he’ll be the first one in history to make central planning finally work.

Mon, 03/07/2011 - 21:32 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

All this talk of cutting budgets in America is becoming tiresome - you want to make some poor menopausal teacher work weekends go right ahead - pure fucking horseshit.

You raise the tax on Petrol until it is the equivalent of 1.50 Euro a litre and then come back to me - thats where the waste is not some lower middle class prisoner of Zelda.

Waste waste, you Americans - you really crack me up.

Open your shit eyes.

Mon, 03/07/2011 - 22:23 | Link to Comment Samsonov
Samsonov's picture

Hey dork, I can tell what's troubling you -- it's that you're almost sober at this moment.  Quite a strange feeling, isn't it?  Just have another pint or two and it'll go away, I promise.

Mon, 03/07/2011 - 22:47 | Link to Comment Clockwork Orange
Clockwork Orange's picture

There would be no need for absurd tax hikes if the elite were prevented from relentless fraud and theft cloaked in the deception of legalese and sweetheart side-dealing.  

Raising taxes on those making over $250k simply shuts down the small business engine.  (Too bad it took BHO two and a half years and an a$$whooping to figure out reality differed from his socialist text books.)

What simply needs to be done is to stop the theft of billions and trillions by the banksters.  I look forward to the day when talk is over and they are herded to the gallows.

At least then, the problem will be solved for a generation or so until a new batch of schemers can take over.

Mon, 03/07/2011 - 23:31 | Link to Comment disabledvet
disabledvet's picture

clockwork what again?

Tue, 03/08/2011 - 06:07 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

Will that reduce your fuel intensity ? - give me a break - the elite have been farming the petrodollar through New York and London , but it is now beyond absurd.

I could live with a pre monetarist America that created something worthwhile amongest the decadence but a America of pure consumption has been a epic disaster.

I need more drink.................................

Tue, 03/08/2011 - 08:42 | Link to Comment overmedicatedun...
overmedicatedundersexed's picture

"You raise the tax on Petrol until it is the equivalent of 1.50 Euro a litre and then come back to me - thats where the waste is not some lower middle class prisoner of Zelda."

dork, one is a prisoner of one's environment: Europe still has trrouble with the scale of the USA ..when two or more of your countries fit

easily into one of our states land area.

comparing what type of vehicle is best for Londonderry vs say Omaha and you get the idea..we need large vehicles that can travel long distances safely.  this same problem of scale is why comparing a socialist Norway to the USA is always idiotic, yet you see it done often ..ethnic diversity on and on.

Union tapeworms like the teacher are robbing the people of funds which could be used for more productive business..but unions have no bound in their need to suck such funds from the private economy.

Take a step back, and understand your world view is from a very small island.

Tue, 03/08/2011 - 10:58 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

Sorry I just don't buy it - a little modern Fiat can get across a American state just fine , I am afraid your culture is not familiar with the concept of austerity.

Witness the near starvation of Britian during the height of the U- boat war or the real starvation of Germany by the Allied Fleet during the Great War.

Yee guys just don't get it.

Mon, 03/07/2011 - 21:33 | Link to Comment f16hoser
f16hoser's picture

Can I use GAAP to do my taxes? Perhaps Geithner can help me......

Mon, 03/07/2011 - 21:35 | Link to Comment buzzsaw99
buzzsaw99's picture

Overt QE1, QE2, etc., is meant to instill CONfidence. The rest of the time the monetization is done behind the curtain. Whether they admit to continued QEing or not it will be done.

Mon, 03/07/2011 - 22:29 | Link to Comment DonutBoy
DonutBoy's picture

+1.  Makes sense to me.  The strong recovery charade requires they stop QE2.  The reality of the debt, oil and the housing market means they cannot stop without tanking everything.  They need a non-public way to continue. I expect a strong attack on gold, it is screaming "liars" to them every day.

Mon, 03/07/2011 - 23:11 | Link to Comment Thomas Jefferson
Thomas Jefferson's picture

+1 Agreed.

Mon, 03/07/2011 - 21:35 | Link to Comment bhakta
bhakta's picture

Great article. Got me laughing. The entire charade is like a game inside the house of madness.

Mon, 03/07/2011 - 21:51 | Link to Comment tom
tom's picture

Have y'all already noticed here that QE2 is actually running faster than announced?

It was announced as $600b in a bit less than 8 months (started Nov 12, announced to run through end June). That's an announced pace of about $78b a month.

But the Fed actually bought $383 billion so far, in less than 4 months. According to H.4.1, the Fed had $853b of Treasuries on Nov 10, and $1236b on March 2. That's an actual pace of more like $105b a month.

At this pace the Fed will finish buying the announced $600b already in early May.

The flip side of this is that the Fed has actually been selling fewer non-monetized Treasuries to the public than expected. Public debt grew by $426 billion between Nov 10 and March 2, which means only $43 billion of real net issuance of Treasuries to the market, or a pace of about $12 billion a month.

So just imagine what the Treasuries market would do if QE2 suddenly stopped and that real net issuance to the market suddenly popped from $12b a month to some $125b a month. Looks like big big big decision time is coming faster than a lot of people realize.

Mon, 03/07/2011 - 22:11 | Link to Comment buzzsaw99
buzzsaw99's picture

Not. Gonna. Happen. The bond market is every bit as rigged as the stock market.

Mon, 03/07/2011 - 23:34 | Link to Comment disabledvet
disabledvet's picture

really?  perhaps for the uncertain.

Mon, 03/07/2011 - 21:53 | Link to Comment Samsonov
Samsonov's picture

The only disagreement I have is that, when talking of the inevitable crash, words like imminent are constantly used.  The situation has been building a very long time, starting anywhere from the abandonment of the gold standard in 1971 to as far back as the founding of the Fed (1911?).  Therefore, it logically could go on a lot longer, timeframes that may be too long to plan for.  Indeed, the end will likely be so traumatic and unpredictable that no planning is possible anyway.

Mon, 03/07/2011 - 22:04 | Link to Comment Threeggg
Threeggg's picture

As someone said this morning, lying and fraud till the end or a Black Swan event !!!!!

I am thinking the B.S. event because they know the pitchforks are rusty and the torch fuel is spoiled but still burns !!!!!!!!!!!

Mon, 03/07/2011 - 22:07 | Link to Comment Rusty Shorts
Rusty Shorts's picture

O/T, but WTF ... JPM taking physical delivery of 100 million tons of sugar ... what?

http://www.youtube.com/watch?v=b0nZGcq55GY

Mon, 03/07/2011 - 22:12 | Link to Comment buzzsaw99
buzzsaw99's picture

coffee is for closers.

Mon, 03/07/2011 - 22:30 | Link to Comment ebworthen
ebworthen's picture

 

Beaver dam Folgers is $10.11 (0.11? - go figure but yes, not $9.99 or $10.19) for 33 oz. now.

First they move the container from 39-33 oz.

Then, they raise the price by $2.00

Stagflation sucks.

And...the quality is not as good.

Before long I'll be drinking chicory and smoking dandelions...

Mon, 03/07/2011 - 22:41 | Link to Comment buzzsaw99
buzzsaw99's picture

I drink half as much as before and will be healthier for it.

Mon, 03/07/2011 - 22:09 | Link to Comment bullet357
bullet357's picture

JpM= sweet tooth

Mon, 03/07/2011 - 22:18 | Link to Comment gwar5
gwar5's picture

The MSM economic pundits talk about Zero Hedge because it is relevant and is making them all look foolish

Mon, 03/07/2011 - 22:54 | Link to Comment dexter_morgan
dexter_morgan's picture

they seem to do a pretty good job of that themselves - ass clowns in nice suits

Mon, 03/07/2011 - 22:24 | Link to Comment tom
tom's picture

Actually I wouldn't agree that this "logically" can go on very much longer. I'll give you this, if Libya amazingly resolves its civil war very quickly, and worries about the whole Middle East amazingly go away, and gasoline prices stay below $3.50 a gallon, and the pressure on Obama/Bernanke to do something about inflation subsides, then they can probably get away with keeping up the QE2 game for another, say, year.

But we really are in the endgame here, folks. We've got the Rs and Ds threatening to shut down the federal government over a squabble over about $50 billion of budget cuts (the difference between the $60b the Rs want and the $10b the Ds are offering). Even if the Rs win every dollar, that isn't even half enough to counteract the growth of the deficit from inflation, nevermind compensate for the tax cut they just passed. The deficit is completely out of control. Congress can't even get a grip on the steering wheel. The fact is this has nothing to do with trying to prevent the crash, they've already moved on to trying to pin the blame on each other.

Meanwhile Bennie has been valiantly fighting his little academic corner, still trying to prove that the theory he commtted his life to isn't a load of bunkum. He's monetizing almost the entire deficit. Actually, since the inflationary effects of QE are slow acting and can be largely diverted abroad by carry trades, Bennie might have been able to pull this off for longer without all that much inflation, Japan style. But oh so cruel fate gave him drought and fires and floods and oil war, and so stagflation is already raging. Pushing through QE3 is not going to be easy, if possible at all. There will have to be some serious panic first, at least.

Mon, 03/07/2011 - 22:45 | Link to Comment razorthin
razorthin's picture

"There will have to be some serious panic first, at least."

That's what I am chomping at the bit waiting for.  I hope these ultraeducated dumbasses are smart enough to ignite a panicy 25% haircut to keep this ponzi going.  Happiness is backing up the truck at sub-$20 Ag.

Mon, 03/07/2011 - 22:48 | Link to Comment JR
JR's picture

Yes. Sooner than later, Americans are going to have to ground Bernanke’s Fed helicopter by establishing a no fly zone over this nation.

Tue, 03/08/2011 - 02:15 | Link to Comment Yen Cross
Yen Cross's picture

Sweet. Good comment!

Tue, 03/08/2011 - 03:56 | Link to Comment StychoKiller
StychoKiller's picture

And yet, delusional jokers have the gall to claim that Silver will drop back to $20 -- WTF??

Mon, 03/07/2011 - 22:24 | Link to Comment MountainLotus
MountainLotus's picture

Become a fan of Zero-Hedge, check it everyday now.

Mon, 03/07/2011 - 22:25 | Link to Comment ebworthen
ebworthen's picture

Classic.

QE3, QE 4 until the markets don't buy it.

Exactly.

Another bubble that will punish the individual and the family.

Of course, the end run is nooses and famine and death, but we are chained to the cycle.

Sysiphus on a societal (species?) scale.

Mon, 03/07/2011 - 22:28 | Link to Comment LudwigVon
LudwigVon's picture

TD & Biderman both PWNED demedia.

Mon, 03/07/2011 - 22:31 | Link to Comment razorthin
razorthin's picture

Mario Fartaroma is such a fukking annoying shill with that squeaky voice.  Since the 90's, I can't even appreciate her physical cuteness.

Mon, 03/07/2011 - 22:40 | Link to Comment PulauHantu29
PulauHantu29's picture

Good article. I have already loaded up on GLD, USO, SLV and PALL.

BTFD and brace for QE3.

Mon, 03/07/2011 - 23:23 | Link to Comment Clockwork Orange
Clockwork Orange's picture

GLD and SLV are ponzis unto themselves.  For Chrissakes their custodian is JPM, the Silver manipulator.  Do your homework for your own sake, man.

If you don't want to hold the actual physical, at least check out Sprott's ETFs:  PHYS & PSLV ... you can convert for physical instead of cashing out for worthless dollares. 

Cheers.

Mon, 03/07/2011 - 23:49 | Link to Comment cosmictrainwreck
cosmictrainwreck's picture

well, I don't know about the man's trading patterns, but too many people here I see just ppppfffttt SLV, etc. when in point of fact they are useful for cap gains if you know how. hopefully nobody visiting ZH is dumb enough to hold SLV, GLD, etc forever, thinkng they "own" something

Tue, 03/08/2011 - 04:07 | Link to Comment LudwigVon
LudwigVon's picture

GLD, SLV both are meant to absorb demand for phys PM's so thanks for not investing and assisting in perpetuating the ponzi. Do disembark from your error in assisting TBTF banks, immediately close both positions and summarily aquire PHYS and PSLV as advised by others. Yes, at that point you would actually have a physical claim. 

Wow, that has to be close to the worst collection of ETFs in print. Common to most ETFs based on paper contracts, rolling futures into a contango market, into more expensive contracts, has a deleterious effect on performance correlation to the actual asset values.

If you are going to go long and hold, go real long like a man, overcome roll loss via 2x leverage. UCO is 2xlong WTI. Greenspan was the most recent to remind us that WTI has technical problems and that brent is the real crude price.

Mon, 03/07/2011 - 22:46 | Link to Comment Ckashan
Ckashan's picture

I haven't seen a good game theory analysis done for the end of the dollar reserve status.  If I cared anymore than I already don't I would do it myself.  Simply put the dominant strategy for the private cartel is to create some kind of event.  An event coming in the form of a war would be the most obvious.  A credible threat coming from our government has been maintained over the past years for this very reason (Iran).   A fortunate event for them would be some kind of natural disaster that strains the entire system in which case would provide the opportunity to control the outcome.  Anything not similar to thee above mentioned events results in the private cartel losing control over the outcome.  Controlling the outcome of course is always their prerogative.   Losing control over the outcome comes in the form of deflation or inflation (mass inertia would build to direct the outcome in a less controllable order).  As we saw in the Middle East.  And why our government makes a statement, credible, to the markets about releasing oil from the 'strategic reserve'.  Just part of the game.  In the theater of war it is easy to misinform and stage 'actors'.      According to game theory this is the dominant strategy and according to the rules, the outcome.  In the past extend and pretend has always been their dominant strategy except when the scale and scope of the public and private system passed the point when normal refinance, new public/private borrowing, and/or other debt growth incentive methods no longer work and the monetization of debt necessary, where we are.  Where we are going?  Time will surely tell but my guess a sort of orderly-anarchy in the break-down of the scale and scope of the system.  In fact this is what is happening and can continue for a long time.  Wild cards?

Mon, 03/07/2011 - 23:07 | Link to Comment 10kby2k
10kby2k's picture

Maria is still the money honey!

Mon, 03/07/2011 - 23:16 | Link to Comment Quixotic_Not
Quixotic_Not's picture

Did you have a good time watching that video?

I betcha get excited just watching TV, don't ya buckeroo...

So, has Obama made all your dreams come true yet?

Mon, 03/07/2011 - 23:07 | Link to Comment reader2010
reader2010's picture

Bernanke along with other central bankers will have to inflate or die. However, do the math, please. What they have printed so far is far too little to choke the full force of debt deflation. How much was on the tier-three? Fuck! It ain't gonna work. In the end, they will have to rely on a perpetual world war that can last 100 years or more. Bucky Fuller was right in his prediction that the current system is doomed from day one. 

Mon, 03/07/2011 - 23:14 | Link to Comment MountainLotus
MountainLotus's picture

The current system is certainly doomed, but when?

In my humble opinion, since the amount of dollar reserve in the world is so vast, it can last long for at least 5 more years.

Tue, 03/08/2011 - 00:19 | Link to Comment reader2010
reader2010's picture

It could and it might even last ten. But, the deal is that you've got half of the world's population, BRIC+OPEC, just got hooked on oil addiction at the right moment of the Peak Oil. Shit. It's gonna end in blood, a lot of blood. 

Mon, 03/07/2011 - 23:25 | Link to Comment Pumpkin
Pumpkin's picture

It is rather pathetic that we spend most of our days and most of our lives chasing the skillfully crafted illusion of fiat money.  QE1 or QE10, eventually the truth will return and by then everyone will know it when they see it.

Mon, 03/07/2011 - 23:33 | Link to Comment Cursive
Cursive's picture

Intellectual monoculture = honest analysis

Mon, 03/07/2011 - 23:57 | Link to Comment repoman
repoman's picture

.

Mon, 03/07/2011 - 23:57 | Link to Comment tony bonn
tony bonn's picture

Paul Kedrosky - "too much of an intellectual monoculture"

and cnbc / bloomberg are not monoculture??? bitch, please.

Do NOT follow this link or you will be banned from the site!