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GSE Reform Overtures Whack Dollar, Market Spikes As Race To Currency Bottom Enters Second Lap
The almighty dollar just reminded everyone that it is in the hands of the Geithner/Bernanke puppetmasters. Overtures to reform GSEs announced earlier helped everyone forget that Greek rioting does not fill a budget deficit and instead that we have a hole worth several trillion in the mortgage sector, courtesy of 25-50% artificially higher home prices, that is currently unaccounted for. So as the dollar plunged, the JPYEUR currency pair formerly known as the market, surged. Is regime 2 (weak euro) about to revert to regime 1 (weak dollar) all over again? The race to the bottom is about to enter the second lap.
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Agreed, no question of the cause and effect.
Though, I am not sure why this is a surprise. Fannie and Freddie are going nowhere. Next year? LOL! These won't be reformed for years.
aww, ghostface ...
there's no question that the best 26 second intro is that of Winter Warz ... but the 'cause and effect' of uncle buck's price action is anything but exogenously regulated. if 'puppermasters' are you, I and all other mkt participants, then yeah, the dollar is beholden to 'us.'
one day does not make a trend. The dxy has been in rally mode since dec.
as long as the trendline is intact, the bullish setiment is intact....
Agree. The dollar has already shown that it is the reserve currency still. As long as global growth fades. The DXY will be in a bull market.
Reform in the hands of the Ponzi means more opportunity to loot, rape and pillage. Fannie and Freddie have been neck deep in mortgage fraud for decades and now is the perfect time to clean it up, meaning sweep it under the rug along with all those other "bad" loans.
In fact, I believe this is the main purpose for this contrived and controlled "crisis", to cover up decades of fraud in countless government agencies and their partners in crimes, the to-big-to-fail banks, AIG etc. This is an old script folks. Burn down the house/office to cover up the murder/fraud.
BTW there are no "bad" loans or banks, just terribly mis-understood loans and banks.
On Topic:
I understand that a lower dollar -> higher equity prices, but does it always have to be a direct correlation?
Off Topic:
CD I can't help but look forward to your next piece on the ego whenever I see you posting, any timeline on that?
Regarding your "timeline" question.
When I made the decision to break "Waking Zombie Nations" into two pieces, I essentially rewrote Part 1 from scratch and have yet to write part 2. So I'm talking a few weeks to write part 2. What happens is that once I know the direction I wish to take, I let it ferment for a while and then attempt to begin writing. But what I start with is never what I end with. The last article started at Version 1.0 and ended at 6.2, with whole number changes meaning major revisions and smaller numbers meaning updates. It's a labor of love but very draining and extremely time consuming. I suspect I dumped 80 hours into the last article. I'm not a professional by any stretch of the imagination and it shows.
I'm going to walk a little further in part two, trying to take a big picture view now that I've explored the individual ego a bit. I have a working title, which could be changed. But for now it will be "End of Empire - Waking Zombie Nations / Chaos, Control and Conspiracy"
"End of Empire" is the name for the ZH series of articles. "Waking Zombie Nations" is the subject (now broken into 2 parts) and "Chaos, Control and Conspiracy" will be part 2 of "Waking Zombie Nations". Part one was the recently posted "Psychology, Consciousness and the Egoic Mind".
Obviously this one will be contriversial with some folks but I'm not spending much time on actual specifics and more on concepts. Gotta crawl before we walk. I'm laying the ground work, which takes time. If we don't understand how we are manipulated, we have no chance of ever breaking free. It's that simple.
Bring it on Buddha. I'm already way along the "path", more need to know exactly how their mind is manipulated.
Consciousness is the white light that penetrates and liberates.
"All there is, is Consciousness"
Indeed, that's what my teacher, Ramesh Balsekar, re-minds us, heheh. . .
I too look forward to ALL your posts, CD - understanding how the mind is led into "thoughts" is a most fascinating subject, and your article stands up to repeated readings.
All the best!
You flatter me with what I consider the highest compliment, that my article stands up to repeated readings. Thank you. So often, after a second or third read, glaring logical gaps are revealed that were missed initially because we followed the authors bread crumbs and suspended disbelief to a certain extent.
I run my articles past my toughest critic, my mother, who while very loving (and well into her 80's) is quite brutal with her sharp tongue and "Sharpie" red marker. I can remember as a very young child watching my mother throw a magazine or newspaper across the room in disgust after reading what she would describe as "rubbish". If I can get past her, I feel like I can handle the world.
Any insights on this huge item, buried in the news? (Sounds ominous to me )
Fed To Get $200 Billion Boost
By JON HILSENRATHFROM THE WALL STREET JOURNAL
The Treasury said it will borrow $200 billion and leave the cash proceeds on deposit with the Federal Reserve, reviving a program that will make it easier for the Fed to raise interest rates when the time comes.
Officials sought to dispel the notion that the move marks a step toward tightening credit now.
Fed Chairman Ben Bernanke, testifying before the House Financial Services Committee on Wednesday, is likely to reiterate assurances that the Fed will keep short-term interest rates low for an "extended period," meaning at least several more months, because inflation is low and the economy is burdened by lots of excess capacity.
The Treasury borrowing is part of an unusual dance the Fed has undertaken to manage a balance sheet that has grown large and complex.
The Treasury initiated the program -- the Supplemental Financing Program -- during the peak of the financial crisis in 2008 to get cash to the Fed to fund programs that pumped credit into the financial system. The Treasury reduced the program last year as its own borrowing authority approached legal limits. Now that Congress has raised the government debt limit, Treasury was able to revive it.
"The intention always was to resume [the program] when the debt ceiling was increased on a permanent basis, which finally happened earlier this month," said Lou Crandall, a money-market analyst at Wrightson ICAP LLC.
In 2008, as it reduced short-term interest rates nearly to zero, the Fed used the Treasury deposits to fund interventions without printing money. As the economic outlook worsened and the size of Fed interventions grew, the Fed began printing money, or, technically, crediting the electronic accounts of banks with funds when it made loans or bought securities from them.
Revival of the Treasury program makes it possible for the Fed to avoid printing more money, a step that could lead to inflation, as it develops exit strategies from its interventions.
Bennie Bills to the rescue!
Hoocoodanode?
http://anonymousmonetarist.blogspot.com/2009/10/o-carry-me-chairman-ben-uh-where-are-we.html
At this point at the end of the trend - 2009 low besting the 2002 low breaking a line of lower lows from 1897 up- our prosperity is now in the hands of Fleck's battle of unarmed combatants (currencies) where the U.S. is the dealer (reserve), at least for the near term.
When folks are trading based on the knowledge that it is just a confidence game and that the the fundamentals don't matter, any small crack in confidence can start de-risking, i.e., reducing the 'custodes premium' - that they will use the dollar carry trade to jack asset values into the skies. (and arsy versy)
could u explain a little better.....
2002 low was $103 and change
S&P
"the JPYEUR currency pair formerly known as the market"
Bloody well done. A classic! Damn near cost me a keyboard.
[SMB Capital] Read Bella's latest blog post were he shares a story of a trader Breaking his Keyboard: http://bit.ly/cdO8Uq
LOL I'd say that was the best comment ever but there's so many good ones it's rediculous to try to grade them at this point.
Let's just cut to the chase - Geithner and co are destroying the economy, aided and abetted by Bernanke.
The only question in my mind is - is it deliberate?
These folks are like arsonists who push for the bomb-making material and then, after planting the bombs and lighting the fuses, extort the firemen and get a tax on the water.
People can answer that easily if they think about who Geithner and co believe to be their constituency. We've had 2 years of evidence clearly showing who they believe their constituency to be, and it's not main street. They're protecting their constituency, so it's definitely deliberate.
+100
yes, i believe its deliberate!
Explain how so many smart fellas can be so wrong so often!
Besides, looks like it done them good. The rich are richer, the poor are poorer and the middle class dissappeared with the factory jobs
Should the EUR get closed to 1.40 Sarkozy will mobilize his money printing minions and push this pig down, no doubt.
Brazilian sovereign fund is ready to buy dollars (portuguese):
http://economia.uol.com.br/ultimas-noticias/valor/2010/02/24/fundo-sober...
Therefore it will have to compete with the single buy-side player at the moment, the central bank which is buying on a daily basis.
Ok...TD....
Let's cut to the chase....
Where would oil be ....if the US $ pulled an Argentina ?
ie one day it is 1:1....the next day it is 4:1....
But in this case ...compared to what currency(s) ? or would it be just as compared to oil....?
And just how much oil ....is going to be sold at 4X ?
Answer...not much....
................................
So the point it....it is not the idea that you will wake up one day....and be another Argentina.....it is just that you will keep waking up......having a lessor and lessor economy.....mostly becuase of populism politics....
It is as if all the boats just go up and down the ratings tide...and nothing else....
................................
Prices
If prices are controlled by the marketplace....then one can safely say that prices should tank across the board....
Even if securtization and brokering it comes back.....there will be much less of it....A lot less of it....
.......................................
At the moment .....all banks have the same issue of having enough REAL bankable assets on the books....
The only way this can happen ...to the degree that bankable assets can increase and replace what was lost in a sustainable way....
Is proper tax structure change....
Any other move is just smoke and mirrors....and very Japanese....
DXY almost back to unchanged but stock prices are still high. I'm calling BS on this daily time frame dollar link as a reason to pump stocks. The dollar carry is dead. I'm guess I guess I'm not market savy enough to figure out evey swing of this market but the overall trend is going to follow the data and the data is terrible. I'm holding shorts six months plus for the go big or go home trade. Best of luck to all.
Note to the PPT: We're in a depression. The real economy is in free-fall. You look like fools by holding the Dow over 10,000. It should be no higher than 3000. The cognoscenti, including the legendary market analyst, Charles Biderman, me and speculator, know that the only thing propping this market is your illegal and unethical actions. When the dim-witted market players including the mutual fund managers and the momentum traders like Barry Ritholz realize this,the market will plunge. You'll be know as failures.
I think the PPT just needed to get the SEC to pass that short sale limitation rule, before they end up pulling the plug. Isn't it nice to know that Mary Shapiro is doing her part...
Itsh like the congress and the senate WANT to be thrown out on election year.
EUR feeling terribly heavy. Can't get a lift. I'd short any pop to 1.3850-60 area.
So much for that EUR pop. Faded all the way down.
Doelarr treading water, er, drowning, and trying to stay afloat by latching onto the euro and gold. Not going to happen for much longer. Euro is the "stronger" of the two landlubbers, and Gold was only out there due to lifeguarding duties.
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