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Guest Post: The Biggest Sell The News Event In Stock Market History
Submitted by Mike Krieger of KAM LP
But when you recall that one of the first moves by Lenin, Mussolini and Hitler was to outlaw individual ownership of gold, you begin to sense that there may be some connection between money, redeemable in gold, and the rare prize known as human liberty.
- Howard Buffett (Warren Buffett’s father and former U.S. Congressman)
The Biggest Sell the News Event in Stock Market History
The end game is accelerating toward us at an a frantic pace as we approach the midterm elections, the launch of QE2 and the complete collapse of the global monetary order as we now know it. Time itself seems to be experiencing a quickening as the quantity of major changes becomes increasingly compressed into shorter periods of human experience. The markets are now set up for complete and total chaos unlike anything we have seen since 2008. While I have many times before stated that the next crisis will make 2008 seem like a picnic it has been a waiting game…until now.
The U.S. Federal Reserve, which is in charge of the world’s reserve currency has gone completely and totally insane. Every time the stock market is down 2 points some maniac academic with a printing press delivers a speech about how much money they are going to print, basically daring anyone to short or sell the market. No one is smart enough to know how much QE is priced into the market, is it $500B? $1 trillion? $3 trillion? No one knows, but what we all do know is that the Fed through its non-stop yapping has now set up the ultimate moral hazard in financial markets. It doesn’t matter if all of the economic data miraculously comes in extraordinarily bullish over the next three weeks. The markets have put the Fed into the biggest box they have ever been in. They must do QE2 at this point and they probably have to do it big. The problem is, with the equity market up at the levels it is I don’t think ANY amount of QE2 will cause a rally. In fact, this might be the biggest “sell the news” event in the history of the stock market. If you are smart you will take appropriate actions while you can and sell to someone with less of a clue (believe me there are plenty out there).
QE1 Was a Failure and QE2 Will be a Disaster
The fact that so many people believe that stocks can’t go down because the Fed can print infinite sums of money is a reason in itself to sell them but there is more. Much more. There is this notion that QE1 was successful. Let’s take a step back and look at the facts. Yes, the economy had a phony sugar-high bounce from the lows but think about all of the other “stimulus” that occurred concurrently to QE1. There was the $787 billion stimulus package. There was “cash for clunkers.” There was the first-time homebuyers tax credit, which basically marked the return of 0% down home purchases. Then there was the inventory build associated with all of these artificial demand stimuli. This time the powers that be have one tool and one tool only. The printing press. Why do you think they are talking endlessly about QE2. It is because it is all they have got and I will tell you a little secret. It will not work. Wall Street has now been transformed from merely a chronic user of painkillers to a full-fledged crack head. When QE2 is ultimately announced it cannot possibly be good enough no matter how large it is. Wall Street will then whine to its pusher with a sell-off in an attempt to access more crack. The process that the Fed has started can never end. It is exactly what Rudolf Havenstein, president of the Reichsbank in Weimar Germany experienced. Once you go down this path you can never get off. The big difference here is that it has happened to the country with the reserve currency. It is the currency in which the supposed “wealth” of the world is stored. What do you think people will buy when they realize this? Physical gold or a round lot of Home Depot? QE2 will be more like the Titanic.
Oil is Screaming….STOP!!!
The oil market has come alive and it is signaling to those that will listen that there is a big problem. It is trying to tell the Fed to stop but of course they are much too sophisticated to pay attention to something as barbarous as crude or commodities in general. Wholesale gasoline prices are now up 12% in the last week alone. There is typically a week or two lag between prices at the wholesale level and those at the pump so consumers haven’t even seen what is headed their way yet. Then there is heating oil; take a look at that chart. It had better not be a cold winter. Meanwhile, I am completely convinced that just like in 2008, oil and other commodities will rise until they bust the money printing strategy. Asian Tapis closed at $91.67/b last night by the way. Oil is crying out to the markets to pay attention to it, yet there is only silence.
Howard Buffett and his Sad Sell-Out Son Warren
We are constantly programmed to worship leaders by the mainstream media. The methods to achieve this desired end are varied. To address the Wall Street crowd, stations like CNBC parade around idols like Warren Buffett who have at this point merely become government mouthpieces. We are instructed to listen to them because of the billions that they have made. We are supposed to stop thinking for ourselves. After all, isn’t it easier to just be told what to think? So this brings me to the quote at the top of my email from Howard Buffett, Warren Buffett’s father. It is from an article the Nebraskan Congressman wrote in 1948 and can be found here. http://www.fame.org/PDF/buffet3.pdf
So what happened to his son? When I first started in this business the one thing I remembered hearing about gold was Warren Buffett’s famous line that “Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” So as an upstart coming into the financial services business the only thing I had ever heard about gold was a disparaging one from the greatest financial genius ever. So they say. Anyway, think about how this might brainwash someone like me unless I took the time to read into the history of gold and indeed the history of money and political control. Buffett’s father did not say gold was a good investment. Buffett’s father said a gold relationship to money was essential to human FREEDOM. In my extensive study over the past several years I have come to the conclusion that this is unequivocally true. Warren Buffett is a extraordinarily smart man, but he is a disingenuous deceiver. I wouldn’t listen to a word that exists this man’s mouth. If we want to start over in the years ahead and make the world a better place, we will resist all attempts at world government, world currency and world central banking. This is the direction that the powers that be want to take us in and it will without question result in total global feudalism.
In a similar vein, I saw this segment from Max Keiser’s recent show and I thought it was hilarious. Go six minutes in to the segment where Buffett’s right hand man Munger attacks gold. Then listen to Keiser as he calls this gremlin out as the equity pimp that he is. http://www.youtube.com/watch?v=00uCbUWG9aE&feature=player_embedded#!
Recent Market Action
Just a quick final concluding comment on recent market action. Tuesday’s huge gap higher in the U.S. stock markets had the feel of a rally that occurs the day after short selling is banned. People feel as if the Fed has banned short selling through their ability to print money. Just as those rallies materialize into nothing sustainable I believe we are very close to a major top. That is not to say that the market won’t stay here or rally further until the next Fed meeting. It may. However, every single indicator I look at points to a perfect storm for stocks and I have not been this concerned since 2008. As far as the actions in precious metals and the shares today, this looks like classic bull market action. A steep scary sell-off that shakes the weak longs out of their late and impulsive buys. It is days like today where macro funds should be adding to their longs in the metals equities and shorts in the broad market.
All the best,
Mike
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Money Masters = Sugary Garbagy Socialist Junk Food
Austrian Economists (Hayek, Rothbard, Mises) = Fruit & Vegetables
.
Bill Still = Swill Mill
"But it's not counterfeiting when the government does it! You know, for the people!
Can anyone say "Controlled Opposition"?
Run to the hills from the statist monetary shill of Bill Still.
Silver slippers shine
akak stills Bill with shill shrill
Toto knows no go
money is created when an individual receives a loan. that is
the way it currently works.. though, now the "government" has become
that individual. aka printing money at the expense of the taxpayer or
the federal deficit. future taxpayer, political issue concerning who
that might be or become. all so the military can do what it does to
support the associated industrial complex.
like electronic debits or credits. Benniebux to foodstamp credit cards.
Yikes, the amount of debt the US is in ~$53 trillion+ is significantly way more than the ~$4 trillion Bennie has printed. I am sorry to inform folks, the amount of printing to date will not pick up inflation by very much.
Deflation is our future.
If you were to just look at those static numbers, you might have an argument. But as Kyle Bass explained yesterday, nothing happens in a vacuum and the psychological aspect weighs large: people will loss confidence in the system. In addition, the exponential aspect of trying larger and larger QE's after each one fails will have an impact as well.
If they were actually PRINTING this fiat paper, and it was actually IN the system,we would already be up to our ass in Hyper Inflation.
Doing it with a computer, and just adding zero's, allows them to remove it at will.Like it was never there.
I am still waiting to talk to any swinging wiener, that has actually (besides a Bansksta,and they just gpot compuker entries as well), recieved a freaking hand full of FRN's.
Not one..............have I met.
me, i'm still waiting for those new tiny tim signature specials to start spewing out the ATM. haven't seen any ol' skool summers & rubin collectibles lately. hopefully soon though, i wanna get my hands on some more...they might be a dying breed ;~)
"But when you recall that one of the first moves by Lenin, Mussolini and Hitler was to outlaw individual ownership of gold"
He forgot Roosevelt. Your democratically elected President.
Knowing only a little about Warren Sr., I suspect that quote was in response to Roosevelt order. Warren Sr. was a libertarian and I am sure he was against Roosevelt's actions and perhaps the quote was taken from a critical speech against roosevelt.
Hmm yes Buffet seems to have conveniently forgotten Roosevelts gold confiscation, I guess they really do think we're all idiots.
True. FDR was just another progressive . . . scratch the surface and find fascism. What, it can't happen here? Already has . . .
http://en.wikipedia.org/wiki/National_Recovery_Administration
Blue Eagles instead of Iron Crosses, but you get the overall picture.
Ya'all better start looking for a chair-the conductor has just motioned the final downstroke?? Looks like maybe the "Cyclone" is off on its next ride. Milestones
There wont be a Q/E2, its all hype only for hypes sake.
Kinda like those idjuts that predicted the end of the World when Jan 1, 2000 was to roll around, huh?
If I were articulate this is what I would sound like. I'll just stick to being me.
This is gonna be the biggest clusterfuck in history.
Well we know the promise of $5 trillion Q/E was priced in months ago, and now its taking $5 billion daily POMO's just to keep this leaky Titanic market afloat daily with the FED's bond sleight of hand money laundering. So its not going to end well at all when props are removed from markets and I believe that will be in the present month of October.
As long as the deck is above the waterline, the cheerleaders say "we are not sinking". When their panties are wet with salt water, the reality of the FED's mistakes will finally set in.
another #uicking asshole..
seesm so smart, smooth and subtle..
BASICALLY HE'S SAYING lets TAKE one's buddy hand and sell everything on pre programed day.. how clever..
HEY MR smartshot did you buy puts on sp500 ,did u sell calls already ???
alx
ps
what #uck anybody give a shit what do you think about mr buffet? and why you dont like him..
That moonshine sure has a kick, eh?!
Mr. West, you are one smooth talking character; and your logic is impeccable.
QE 2.0 of around $30 trillion should do the trick, right?
$30 trillion should stabilize markets for a few hours anyway!
Rhymes with: ODD MILLION
nope.. bout 1/2.. leverage on CDOs in the hey day was north of 60T
I wonder if Howard Buffett knew that FDR also banned private ownership of gold. Perhaps his quote was from before that. Most likely so! Howard and his son had very different philosophies!
Mussolini affectionately referred to FDR as "America's Dictator"! FDR is also the Teleprompter Tyrant's favorite president. Dictators hang together, until they war against each other!
sbenard,
Zactomundo.
The people were so afraid of the NRA, and FDR's fascist tactics, as soon as the Egomanical Dick hit the dirt nap, the people gang raped the Congress, and made it illegal to serve more than Two terms,that's ONE too many. ( the SOB had the Japanese Americans interred, and wanted to inter the German Americans also, there were just too many of them, so he had to forgo that ).
He was a sorry SON OF A BITCH, and we have his adopted son in office, pulling worse shit than he did, under cover IMHO.
Get elected do the job, and go the F* home.
Wilson was worse than he was...........and was a Socialist /Progressive racist pig.
Truman left the Peoples House with a brown paper bag, and refused the pension he was entitled to.
There was a man who knew about Public Service.
Actually, Germans, as well as Italians, were also interred and the Germans, in fact, were the last to be released, well after the end of WWII.
Meanwhile, here in India, the stock market is careening up, now chugging up to levels not seen since the great boom and then Ka-boom in 2006. Affectionately called Sensex-21K (21,000). Everyone get's misty-eyed about it, like it was some magical season.
Well, silly season is back and there seems a need, some sort of signal, to scale that 21,000 peak sometime soon.
After that, strap on the parachutes.
It could be days.
ORI
http://aadivaahan.wordpress.com
Oh Reg,
Yes,and news reports there say your folks are buying Gold on this dip like never SEEN before..........Kilo's at a whack.
They smell the chum on the water.
I have never experienced anything as frightening as this(and I think this is worse), than the JFK/Nikita phallic measuring contest on nukes in COOOBA.( that was some scary shite).
Me, I am not frightened for myself, I fear no man.
But for the younger folks,and the elderly, this is going to be murder.
Unless, this brings us the Man of Perdition.
And, as bad as the entire world is, I can see it........
More like Kali herself, sitting on Humanity and crushing them like bugs.
If Gold tears up at current pace, India will be the mecca of Capital, highly distributed among masses. Is there an outer chance that the stock market is reflecting that ? don't think so, but something to consider. interesting times indeed.
Fiddler, interestingly enough, same banks and what are called NBFC (Non Banking FInance Institutions) are offering loans against gold, doing the vacuum cleaner bit to get it out of people's hands.
But net-net, yes, gold holding in India is wide AND deep.
Interesting.
ORI
The FED has a loaded gun in it's mouth. They aren't doing anything and if they do it truly is game over.
I don't give a shit what the market has "priced in" The market priced in the fact that housing would never decline and we know how ass backwards that was.
Greenspan said something along the lines that the FED just talking shit on something was enough to influence the market the way they wanted. This is obviously the case.
They better hope the boolits not a dud, or they will be eaten alive.
I aint buy'n nuttin... I aint short'n nuttin... money is worthless.
http://www.stateline.org/live/details/story?contentId=519366
"That leaves more than $10 billion in other solutions," none of which include tax hikes.
Why didn't they just say..."That leaves more than $10 billion in loans from Wall St....ie Goldman Sachs, JP Morgan...Sell your soul to the devil and continue to kick the can down the road!
Wow, I had the same thought just this morning about how we are a few hundred SPX points into the buy the rumor and no matter what the result is in Nov, the news will be sold sold sold.
Yea AR15 just thinkin the same! Markets have already priced in $5 trillion Q/E which didnt happen last month, Bernanke kicked the can to Nov. I firmly believe the FED has a loaded .45 in its mouth and knows they cant do any QE at all without total implosion of everything. This is all-in hype bluff for the sake of hype while the FED holds a pair of 2's, and the biggest 'sell the news' in history!
I don't understand. Krugman and Bernanke agree that Quantitative Easing is the solution to every problem on Earth, and that printing money will eventually save us, like in Zimbabwe.
So why the f*** don't they immediately print $1000 trillions, instead of printing $500 billion every 6 months ?
According to Krugman, the more you print, the better.
And let's not forget Rep. Pete Stark (D,CA), "the larger the National Debt, the wealthier we are."
http://www.youtube.com/watch?v=UjbPZAMked0
So, I guess if more bullets get placed between his ears, that will make his "thoughts" heavier and more meaningful!! Is this guy really that stupid?
"Economic Deerhunter"!
http://www.youtube.com/watch?v=4sRHd5pngWE
There is a reason they're waiting till after the election to vote on QE2
carb,
Sure, because IF the GOP ,Indies,TP, take control say no, guess who get's the blame for everything forward?.
Obvious as Bidens hair implants.
That only makes sense if the Fed does nothing until January (whatever). When Black Friday comes and no one goes to the malls, think the market will continue to go up on that news? Let's see what the reaction to "Inside Job" is next week.
Well Dos, that may not be the only implants he's carrying...
'We're off to see the Wizard,
The wonderful Wizard of Oz!'
Dont ignore that man behind the curtain, handcuff him!
Just lie down in the poppy field and take a little nappy nap.
lol
Put on the silver slippers and follow the yellow brick (gold) road.
Well,... we can own gold. And what happens if the BLS comes out with good numbers and gives the FED no cover for QE Anything? Does the dollar rally? Does the market rally? The pattern is follow through in October from what the market did in late Sept. That means up on equities and everything else. No flood of cash. No currency war. Not yet. Not in time for the elections where this Administration is out on the line. Did you ever think of that?
I sold the news and uh
The news won
I lost my girl and I lost my fun
I sold the news and uh
The news won
(hint: don't be waitin' for shit to be abatin')
http://www.youtube.com/watch?v=4-1Ihwt48EM
Does not matter anymore, we are long passed that point of practicality and there is no turning back! The higher this crack-pot is going the harder and deeper it will fall, we can be short, stay short and hope we have someone we can unload them shorts to, when the time comes! Anyone going long had it coming!
You really want to get Machiavellian? How about this:
* Current economic conditions would make QE2 politically difficult.
* How do you make politically palatable?
* Have an extreme adverse economic event and if you can engineer it yourself, all the better.
* They send out their minnions to pump QE2: $1.5T, $3T, $7T.
* Nov. 3rd they either announce a puny or no QE2 and Voila, the market tanks.
* Hello QE2 and everybody is on board!
bonuses for wall street are as inevitable as rain in
a rain forest. oh my! why do you think they bought
the entire government of the usa, the supreme court,
the state governments, the local governments, the media...
etc.. of course they must have bonuses in the millions
amounting to billions collectively. whatever it takes.
demolition of churches, neighborhoods, communities;
doesn't matter, bonuses must be paid or... people will
question the "integrity" of their institutional affiliations and
,maybe, become honest. perish/banish the thought. ..
a gambler leaves when he is kicked out. never before.
failure is a blessing at this point. a great blessing.
All this sounds scary and it is but it is all easily reversible if we abandon the market and concentrate on the society like FDR did. Lot's could be done as we have more wealth now. For example enforce the retained earnings tax. Force, Compel, Require MSFT, APPL, CSCO and others to invest their cash in new business or have the capital taxed. This is what they are trying so feverishly to avoid. So if considered in those terms I would wager than most of you should be supporting their efforts not making fun of them. But alas the apple is rotten. Oh and your gold, the political risk is enormous.
Tax, enforce, tax, force, tax, compel, tax, confiscate, tax, tax............ Is that you, FDR?
Fucking socialists!!
Can't beeelieve you got junked for calling that Fascist Bstd what he was, matter of fact,he was FAR worse.
Most here are way too young to know all the back door shit he pulled, and front door.
He was KING.During his reign, we almost lost the Republic.(well he did mange to lay the groundwork, he and Wilson, to get it done).
"Require MSFT, APPL, CSCO and others to invest their cash in new business or have the capital taxed."
Yeah, they'll invest in new business alright...in CHINA/Indonesia/S. Korea/Vietnam/etc.
FAIL.
"... abandon the market and concentrate on the society like FDR did...So if considered in those terms I would wager than most of you should be supporting their efforts not making fun of them."
"Society" is made up of more "entitled" people than there are those that produce. Most sane people don't appreciate the freeloaders stealing from those who work and play by the rules. In case you haven't noticed...the "entitlement" class is what's keeping the gov/banking cabal in power. What's your democraticunderground handle anyway?
UBER FAIL.
I've heard it's wise to never, ever, go full retard!
If the government actually did that you'd be all over the internets decrying the socialist, nay, communist government we were saddled with.
You better hope we don't get any where near what you wish. Unless you are suicidal.
When Greenspan would speak, he spoke in a way purposefully, so that the mkt did'nt understand what he was saying so that they would'nt front run him. When Bernanke got sworn in he stated that he would be clear and everyone would know what he was saying and doing.
Frontrunning is here and now they are boxed. Even when they deliver on QE2 this thing is gonna react.
Solars baby, more solars!
Solars, Bitchez!
Leo, I don't know whether to laugh or cry!
Leo you jack ass.... Lets see a 5 year chart of WFR!!!!!
Go ahead...I dare you you to post that.....
Ouch!
Perspective, bitches!!!!!!
Looks like a guy with pointy eyebrows laying on his back, which will be Leo in about 3 weeks!
Let's do Johnny's favorite exercise!
A 10 year chart of GOLD!
Next ten years going to be the mirror image.
Goled Bitchez!
Only clowns like you drive forward looking in your rear view mirror! Nice chart, me so bullish!!!!
Only fools take the advice of perpetual losers.
Only idiots like Leo cherry pick a couple charts that show .50 cent rises and expect some kind of respect. Douchebag.
When solars go parabolic, I am going to laugh you idiots off ZH!!!
Solars are total losers, will never go anywhere.
Hey!,Sheep Dog,
They are going on the White House!
Yeah, Jimmy Carter did a little of that too... How did that showmanship work out..
I think he meant solars are for total losers, so the point stands. :D
Ok, but be sure to chart them against gold, or we'll be the ones laughing you idiot off of Zero Hedge.
Great, little boy. Until then, shut the fuck up and stop posting misleading charts. Some poor soul might mistake you for someone that knows something, and get hurt. Just like your "clients" did back when you were pumping Hellenic bonds.
Leo, you are nothing but a troll. What a contemptible sack of pro-establishment-shilling shit. All your one-liner permabullish throwaway posts are nothing but you whistling past the graveyard of your parasitical financial elite masters and their statist, Keynesian academic tripe.
Why dress up your oafish assaults with meaningless names? Just scream it out.
Leo, we're still waiting for you to die.
Get on with it!
(But do keep making those "pity me, pity me" posts ---- because you are the ONLY one in this world with personal problems.)
Akak
Try smothering yourself by holding your hands on your nose and mouth as you scream. You will pass out before you die.
When and if are not sound trading strategies...just sayin'
Parabolic? 80 to 10 in 2 years. Close to 90% DOWN. WTF are you looking at Mr. Solar Douche? LMAO.
if & when solar storms go parabolic, there may be no more ZH...or NASDAQ either. hope you got your physical share certificates Leo.
"Those who fail to learn from history are doomed to repeat it" applies to markets, too, Leo.
You think that's nice, you should see the housing market chart that it lags on. Wake me in a couple of decades when demand picks up.
perhaps divorced from personal-private context but...
"he who controls the past controls the future and he who controls
the present controls the past." or there about. g. orwell.
via howard zinn. link available, short time only.
ps.
the world's fiat currencies do have a material, quasi physical, backing; that is the
speculative value of real estate which is a sad condition as it ties foreclosures
to the value of the dollar in a deflationary period of housing prices, barbarous
and uncivilized as the system is, just another example. of fraud.
.
http://www.youtube.com/watch?v=5G2W_F3KVDs&feature=fvw
.
ps.
driving without rear view awareness makes one extremely vulnerable
to collisions of "unforeseen" origin. time for a good defensive driving
refresher?
Leo is a good sentiment index....
Just like this one:
http://www.naaim.org/newsroom.aspx
Sheep are going to get slaughtered... and that includes those short the dollar.
All three companies are way off their all-time highs... nowadays, that alone raises the big red "stay away" flag.
LOL, ok genius, stay away! The big hedgies will make a killing off solars!
Leo,
Ultimately I agree that the solars will be picked up and rotated into by the various players. When they do, I shall ride them all the way to nirvana.
Leo, this thread is going to read mighty strangely once all your comments are junked into oblivion, as they typically and justifiably are.
poor akak, still can't figure out how to make money...go suck on your mommy's nipples!
Exactly the refined and insightful level of discourse that I have come to expect from you, Leo.
How. If we stay away it won't ponzi. And it won't make earnings soooo. How.
uh so what....it went up for a couple days...wheee...
oh ffs Leo. you really are like Rain man.
So who here didn't know the "DINKERS," dollar print to infinity Keynesian have no other choice but paper pulp fiction it's fraud of being a LT monetary store of value! 'Should government refrain from regulation (taxation), the worthlessness of the moneybecomes apparent and the fraud can no longer be concealed".
John Maynard Keynes
If we know that the fed can defend the 1040 line and buy 100 + points with a mere $30 billion in POMO, why does anyone think that this line in the sand will fail? Who are the sellers at that level ? There are none; they sold to the fed in August.
Coming soon to a comedy club near you...
"John Maynard Keynes: Horror at (UK) Government's economic illiteracy" - http://www.telegraph.co.uk/finance/financevideo/8048614/John-Maynard-Keynes-Horror-at-Governments-economic-illiteracy.htmlHoward Buffett was definitely talking about FDR in context, the full article is a must read;
http://www.fame.org/pdf/buffet3.pdf
Why should QE increase equity prices? The only impact I see is a modest reduction in the risk free rate. OK, fine. Let's say it reduced the risk free rate by 25 bps. With an ERP of 4.0 and and a base Rf of 3.5 that 25 bps would increase the "fair" P/E by 0.5x or so. With forward earnings of say $90, that's a lift of 45 points on the S&P 500. Looks like we got that in the first 2 days of September. Everything else after that is bull shit vapor. All else equal, of course.
Is QE going to "heal" the economy and increase future cash flow generating power of the constituent companies in the market?
forward earnings eh?
must be awesome to know the future
Earnings from where? Consumer consumption?
It's all just hot air and pump n dump and sell the QE2 news, whatever the actual decision.
Goldman pumping their own speculation as hard as they can. Must get the market really bullish to sell massive positions (at least 100 ES) into strength.
have to be near a top..
Ex-baseball star and bankrupt financial 'guru' Dykstra envisions a comeback
The Federal Reserve is doing the best they can. Remember the politicians share most of the blame. They were the ones crying for the Fed to same us. Funny how they love free market as long as it's going up. Then when the bear arrives they all squeal like little girls.
It's real easy to sit back and play Monday morning quarter back. Just think of the pressure on Bernanke, most of you simple could not handle it. Having to make decisions on that level take guts.
Yeah...real guts. I'm sure the decisions of helping out his Goldman Sachs buddies or not helping out his Goldman Sachs buddies is a real quandry for him.
+1000 tentacles!
Lloyd Blankfein putting "ideas" in Double B's head:
http://www.youtube.com/watch?v=HY-03vYYAjA
sycophant
LOL! Whiskeyrunner, send it to The Onion!
you have got to be kidding me
You are kidding?.
The Fed Reserve is the second worst thing that ever happened to Americans.
The Federal Reserve is doing the best they can. Remember the politicians share most of the blame. They were the ones crying for the Fed to same us. Funny how they love free market as long as it's going up. Then when the bear arrives they all squeal like little girls.
It's real easy to sit back and play Monday morning quarter back. Just think of the pressure on Bernanke, most of you simple could not handle it. Having to make decisions on that level take guts.
Maybe they are doing the best that they can. Maybe they really think they are doing the right thing. But the point is, no one should run the economy, it should run itself. The Federal Reserve System is doomed to failure for the simple reason that no one is capable of managing the entire global economy.
IF that were true, why is it that the only people who benefit from the FED's decisions are a fraction of a fraction and ALL well-connected to Lord Blankfein, Jamie Dimon, and a few extra special Tribal members?
Why is that?
You are stooping too low. Hands above the covers.
...
Very clever. Was that deliberate, or accidental? ;)
This is the most entertaining post I have read on this site in quite some time. Thank God for good whiskey.
The most dangerous act one can do is to box-in the Burnmonkey. Being a student of the depression the Burnmonkey can unleash terrible acts upon the denizon when cornered. So buy stock Bitchez to keep the Burnmonkey happy. Shalom.
Is gold leading stocks?
Or are stocks leading gold?
Looks as if it is all one trade: "Risk On or Risk Off"
Gold is so over. Dropped like 8 bucks today, the end is nigh...
I read a piece a few days ago about the high corelation between AAPL, S&P500, gold, and the Australian Dollar. Plot all four on a chart together. They move in the same direction.
Robo is right. It's either risk on or risk off.
as long as rocks continue to be smothered by paper, that is correct sir. that is until scissors come and cut the paper. ever wonder what those scissors are made of?
Notwithstanding the content of the post - this dude needs to learn how to write. It's painful to read material that seems as if it was published by an 8th grader...
Here's one for all of you who link Gold to politics :
The RMB is defacto pegged to the USD. As the USD weakens, so does the RMB, especially versus the EUR. Even moreso if the Chinese sell dollars and buy more EUR. The Europeans don't appreciate this but for Germany the exporter China is a bit like cocaine. We all know how that story ends.
So, RMB pegged to USD, the PBoC does not have monetary independance in effect but is linked at the hip to the FED since they do not set rates, the FED does. Oh, they can impose reserve requirements and other admin measures, but they are not independant.
The Chinese have ammassed 50% of GDP or $2.5Tn in foreign reserves. This is a ludicrous amount. The Chinese economy is grossly unbalanced with investment and exports driving and consumption having fallen from the mid 40s to mid 30s of GDP over the last ten years. See Michael Pettis and Martin Wolf for the details. Under this view, China is going to have a heck of a time rebalancing because they are on their own cocaine binge.
Now, as the FED embarks on its quest, it is in fact conceivable that they buy all treasuries. Everything. If they do, the USD is utterly debased. If that is utterly inflationary for the US, just think what it does in China which is already feeling inflation.
The Treasury wants the RMB to revalue up and float. So does Congress, etc. As the USD debases, the Chinese are hit will the tripple whammy that if they sell USTs they must buy something else of print more RMBs and create inflation, along with the FED, or they buy EUR etc. but driving up the EUR with an undervalued currency is the sure way to really get a trade war going with Europe. Ditto around the world. As Wen Jiabao makes the rounds in Europe and warns the world that a revaluation of the RMB would be a disaster, where else can the RMB go?
It seems to me that the Chinese are trapped, despite all of their wisdom. They are going to either suffer slimmer margins on exports and take the leap to initiate policy in their home markets to encourage consumption, i.e. give the people a greater share of wealth, or they are going to lose jobs in exporting due to trade tariffs and will have to turn inward but the climate may be a bit difficult if unemployment expands radically. The developed world can simply not affort to import their excess capacity anymore in the face of lowered aggregate demand and deleveraging. China is simply too big to play the game that the rest of Asia used to develop.
Now, what is interesting from this view is a picece on ZH yesterday from the Hinde report. Apparently, the Chinese government is advocating that the people own silver and gold. The long and short of it appears that the Chinese are going guerilla monetary policy. Not the central bank mind you, but individuals should own gold and silver. Maybe Hu and Wen are ZH readers ...
The Chinese are SO intelligent they plan on 50yr cycles.
If they wanted to really JAM it to us,if I were them, I would send a rather large delegation over, and do a lil shoppin.
With 2.5 T, they could own some states.( at least a few major cities.)
Buy up prime RE,Farmland, etc,etc.
And leave us with their Treasuries...........
They do not need US, we need them.
The market of the future for them is Europe, and Africa, the Pac Rim,the Eastern blocs..........
We are chattel to them.We have served their PURPOSE for this period of history.
Page turning.
Wish they would go on a buying binge in the US. We get out money back, stabilize our currency and prolong the game. The Chinese own buildings and land in the US. How does that hurt us? We'll just spend all the money again, devaluing their RE holdings, which they will sell at a loss and the whole thing repeats.
The CCP leadership is locked in a dilemma and they are sitting on a powderkeg if unemployment takes off. 1 Billion unhappy peasants? We are not their main concern, it's their own populace that has been growing poorer relative to the newly created middle class along the coast and has been promised new wealth. The export model has done a marvelous job on certain levels but is clearly running out of steam at this point.
On the recent visit to Europe by Wen, he pledged to support Greek bonds and was beaming about the $5bn in trade between Greece and China. What was omitted is that the Greeks imported $4.9bn and the Chinese imported from Greece $95MM or thereabouts. Maybe the Chinese bought some yoghurt. Somehow I find it unconvincing that Europe is going to remain a large buyer of Chinese goods and start running a large trade deficit given deflationary forces at work in the periphery.
The Chinese are smart and they do have a longer term view but then again I would say two things. 1) They are not smarter than the market unless they are manipulating it and that only lasts so long
2) I don't think that Mao Tse Tung was planning this back in the 60s ...
As far as Nostradamus goes, we should mark the date in a year and touch base on this one again ...
We control the shipping lanes. We control the money. We have the military muscle. We have the biggest economy and most wealth. We have adequate temperate land and proportionate population, educated and entrepreneurial. We have high ground in tech and a world of allies.
The Chinese have a stack of IOUs, out of control pollution and desertification. The Chinese are one bad harvest away from famine. The Chinese have a totalitarian government and are feared by all their neighbors.
My money's on the US.
who's we?
who's US?
says who?
"We control the shipping lanes." ... problem easily solved in many ways.
"We control the money." ... No, you don't.
"We have the military muscle." ... Ha! Can't even find a few turbanned tribesmen hiding in a cave (or a few peasants in a Vietnamese jungle). Nine years and counting in stone age Afghanistan ... with at least 5 more years planned ... for what muscular success? A few hundred kilotonnes of opium for the oligarchs' supply chain! LOL
"adequate temperate land" ... currently being destroyed by deliberate de-fertilisation from the sky, the seeds, the water and the GOM.
"educated and entrepreneurial" ... used to be a plus but now is a minus. The college educated (mainly in social sciences) can't actually work at anything productive and won't work for minimum wage, while the entrepreneurial are being starved of capital, strangled with regulation and taxed to death. No way forward there!
"high ground in tech" ... War tech, yes. Manufacturing tech, not so much.
"a world of allies" ... errr, a world of timid children afraid of the schoolyard bully is not a social club with a happy future.
I can't even be bothered debunking your tired anti-Chinese disinformation.
Your move, Einstein.
I would add that along w/ America's overt sense of optimism which has driven the Europeans crazy for years, America also possesses a deep and abject sense of self critique which is essntial when confronted with change.
As far as manufacturing and tech, the Chinese are dependant on what they can borrow from the West or others. The fascistic side of governance by the Chinese Communist Party does make the trains run on time so to speak but I think the CCP also has a limited shelf life.
China has hosts of problems for the forseeable future but I do hear that the nightlife in Bejing is quite interesting now.
Look inward for the future.
Actually, they still need a little more of our technology, which is about all we can export. And, of course, each little bit we sell them just tightens the noose around our necks a little tighter.
I wish the ZH bench was deep enough and there was interest enough to fill us in on who really has the high ground in manufacturing.
My understanding is that China cannot build a decent jet engine and hence airplane. We built the generators for their Yellow River dam. Where do they stand vis a vis the latest computer technology.
Also technology continues to advance. Are the Chinese true innovators or merely copiers/thieves of the technology of others?
Who cares? (Hint: The Chinese don't).
What they don't have or create, they can buy (ie. trade goods/labour for). (Hint: The Germans sold out their technology to lift America off the ground [to coin a phrase]. They would not only be willing to sell original technology to the Chinese, but have been doing so in China since long before Nixon tried to get America's foot in the door.)
Ever since Marco Polo (in fact, long before even then), the Chinese have been prepared to trade with anyone who knocks at their door.
Mmm... how about just buy a market short ETF? Reverse index ETF? ETF in overbought industry sector?
Just take the escalator down to the bank and don't worry about missing a specific pick?
Good luck
BREAKING NEWS......!
It's official, Japan to be the first recipient of a juicy Fed corn holing....
Mike - great essay. However, you state that people are buying stocks (presumably buying more than they are selling), because they think the fed stands ready to make sure they keep rising. PEOPLE ARE NOT BUYING STOCKS. This market is not rising because people are buying. IT IS RISING BECAUSE THE BANKSTERS' PROGRAM IS FORCING THE MARKETS TO PREDETERMINED TARGETS.
There is one account out there pushing everything. One day, probably soon, this same account (hello brian sack of shit) WILL CRASH the markets. Why? Because a market crash for those who know about it beforehand is the most profitable thing there is. And they'll know about it all right, BECAUSE THEY WILL ORCHESTRATE IT.
What they pump, they must dump. Well unless people still believe 'real estate never goes down' and all that. In which case theyll be severely burned soon.
was that Gold or God?
recently written on a scaffolding surrounding a church in the big AAPL:
NO GOD WE TRUST
or was that GOLD?