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There are two dynamics going on in this market. Call it force versus force. It is the overbought, over bullish and over valued market that should rollover versus the buyer of last resort, the Federal Reserve. And there can only be one winner.
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Do the world a favour buy a silver coin and take down the banks.Have a good day y,all .....
No shit - Front end, back end, the PD's now have by far the easiest cash flow in the game. That's also where the equities reside - also where the Bonds are concentrated. I know this is basic, but it's that debt plus the global dependancy on a dollar regime - that is a de facto obligation for the PD's to be on top of the financial architecture. Those holdings are what allows them to get away with anything. Coupled with HFT algos, this is unstoppable and almost certainly untradeable - we're only looking at two issues, sov. defaults, the PM complex, and Natural gas...which, yes, is three. But of the first two, since both are paper markets...hmm, and the third is essentially a highly regulated, oversupplied, algo-infested, switchblade quick moving board..so,. and is really only on the radar because oil-burning is xpensive and natural disasters are coming in fairly thick. But we wouldn't buy related equities. Rare earths.. there doesn't seem to be much downside.
The geopolitical situation- is QE2, what will it do Scooby? ..maintain the supply of Soma to the public: grains, energy in managed bands, we see a 'feel-good dip' in equities because that would seem like justice. Silver should have to visit $19, but that depends on a lot of other costs for the PD's being lower than forecast..for example, the entire fiat currency complex is riddled with insecurity, governments should be unwilling to spend and consumer demand, outside of gov.statistics, is low. So there is a choice, to lever the market for Gold and Silver, the alternatives, or to lever the fiats...or of course, both, see untradeable.
The aim has to be to stabilise the sov. bond market - this constitutes Tier one capital of most big finance houses- since 'sovereign' means 'can't go out of business'...and yet, here we are. That implies a rising dollar but in turn, that also implies a functioning US consumer.
Should the Consumer not spend money on imported gadgets over Christmas... save silver coins..that should scare the living daylights out of 'the management'. Then the ball is China's court, on the trade figures it chooses to release, for which it can charge a hefty premium. Bear in mind, this might be.. withdrawal of US presence from either South Korea, Japan, Pakistan/Indian ocean.
To play the Euro-China trades, we think that you would need access to a great deal of in-depth knowledge. That said, the whole interdependance between regulatory regimes is front and center...since Asia as a whole is looking to expand industrial production to displace US influence, one way or another, it seems possible that the US economy is set to shift to an entirely new production model. Which is not good; food is grown by few people (~5%) but in staggering amounts, manufactures are produced by less than 19% of the population, leaving the remainder to work in Services..a situation where, mathematically, you have to pay a lot of money, relative pr unit to the system, for an actual good and where there is always a considerable pressure to increase the cost of any particular service.
IF we could run the world for a day, firstl the bankng conglomerates would be hived off into like bands of 'capital accumlation divisions', with strong disincentives on transferring money to lower band divisions, and incentives to transfer money up. Non-performing crisis instruments, those ones, would long-termed ring-fenced, and would be paid back out of bank employee compensation - no argument- however, this would be a special case under income tax because in general, tax on income over $65k would be at 100%, $55k- 80%, $45k- 10%, $35k- nil. A little Draconian, but it changes the price structure of everything across the world to a level where governments and corporation and individuals can afford to spend. It makes the rich, rich, again and the poor, rich for a while. ..mortgages, dealt with under land grant, absorbed by State Banks, and of course, a revocation of the voting power of FRBNY.
We, is me and my dog..who is currently on heat and has actually been a litttle less than useless these past few days.
Well, the FED can keep buying, and all that will do is delay the inevitable; just like the bailouts.
So, the question is not will the markets go higher - they probably will - but when does the FED bubble pop and the markets hit the Winter cylce of 1932? (i.e. - DOW 2,000 or below)?
Hmmmm????
This was sort of a waste - fluff filler?
Where's the beef?
Right Here, Rocky!
Cheers,
Beef
QE otherwise known as "Quality Elimination" has probably been going on for years.Sure it may be a Bull market in the making,when your shares jump from $3.00 to $3,000 and still won,t buy you a loaf of bread that,ll be a great paper profit as in Berlin circa 1924.If the banks and insurance companies didn,t have so much captive money from people who don,t know the score there may not be a market.Bull market try Bullshit market.
Such an extensive analysis from one day of QE2. Why didn't he come out out with his analysis before the correction started last week? Same bat shit...same bat channel
Iggy....actually this was written before Friday; and overall I have not buying the hype that this is a new bull market; more importantly, if you cannot tolerate last week's mini mini sell off or even Friday's down day, then I am not sure you should be investing!!
Is that the bond market you are talking about ?
Some might reckon its a great time to get out of the market knowing there are 20 POMO days to come. One last chance to sell to the Fed at premium prices.
After 20 POMOs then what. Got to the top of the sky-ladder, now don't look down.
Shanghai dove 5% Friday on a bit of CPI, rate and capital ratio changes. Tells you these guys are pretty sensitive about Chinese fundamentals. And today so far Shanghai is down 1%
and we have this interesting news ...
http://www.bloomberg.com/news/2010-11-14/china-s-4-largest-banks-to-halt...
Someone is trying to tell us something.
Yeah....we know all of this. Sounds like you are in the same quandry of not knowing which force will prevail. China's raising rates was their muscle flex in response to our QE...look for the other big players not to go down without a fight. Which means increased volatility = good trading ahead so long as you are hedged and nimble.