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The Printer Gets Another Cartridge
Submitted by Nic Lenoir
Chairman Bernanke was voted back in today. Interestingly the markets reacted very little to it, and if anything equities showed renewed weakness after the official confirmation whereas they had bounced from their lows earlier in the session. I think it was as much due to late stops into the close than anything but after hours will tell us the true story.
The main story of the day anyways was further sell-off of Greek bonds. France and Germany denied rumors of an ECB bail-out, but the IMF stated they would act if needed. We think this puts Europe in a bit of a pickle, because this is the first hard test on the union, and letting the IMF take the helm and step in to support one of their members would be somewhat humiliating. Maybe ripple effects on Spain, Portugal, or Ireland, will also make France's and Germany's position more difficult to hold. The odds in our mind are towards a quick resolution. Bunds have been bought against the PIGS sovereign bonds being sold, and we think a resolution will bring about swift selling of German Treasuries, especially as US Treasuries are barely rallying despite a strong 7Y auction today.
Risk was being unwound generally, but it is interesting to note that AUD and EUR are only marginally lower against the USD, and Gold held it's channel today. Equities despite being weak today, were only 0.5% lower at their worst than the lows of the 26, and we continue seeing bullish divergence of momentum indicators. Unfortunately we did not see our 1,105 sell level this morning which would have been a brilliant opportunity considering what happened next. If we can hold the lows here we should go back towards 1,105/1,108 at least.
Copper however has confirmed its break lower and was sold aggressively today. We feel there ould be more to come there and see only 266 as a major support on the way down. The Chilean peso keeps trading very weak as a result of Copper weakness and overall US strength. I wonder how mining companies feel about paying record bonuses to their miners recently?
All eyes are on Greece tomorrow, and US GDP but it would have to come far off line one way or the other to overshadow European drama at this point.
Good luck trading,
Nic
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Pretty soon, Hasbro and Parker Brothers will be under contract by the US mint.
In other news, The IMF and ECB have stated that they have Bazookas in their pockets, but denied they felt pressured to use them....
I thought they already had that contract. Have you seen those gold-colored $1 presidentials? When I tried to spend one at the grocery store, the cashier took a double take - she thought I might be giving her a batting cage token. lol
When they color the new $100 beige and introduce a yellow-gold $500, our real life Monopoly set of money will be complete. The only difference is that there are no bailouts in Monopoly.
The absolute grip of insanity tightens on the US.
Congratulations Ben.
Now do the right thing and resign in shame over the criminal malfeasance you have committed and overseen.
Umm.. hello. Is this ZeroHedge mic on?
Did you know the scammers snuck in a vote today to raise the US debt ceiling to over $14T. Yup, the USA is now at 100% GDP to Debt ratio! Did CNBS break out th 100% party hats? Hmmm... i thought not.
Yeah, but now that we reelected Uncle Ben, he can just print us up another $14T and pay for it all, right? Isn't that how it works?
Uh, thats NOT "over 100% debt/GDP".
Current debt is $12.5T gross, more like $8T net.
GDP is $14T (2009)... looks like 15T (2010).
If inflation hits 5%, it'll be $20T in no time (course that wont happen).
Yay! I can hardly contain myself.
Awww crap, the little birdie just reminded me that we have over 50 TRILLION nightcrawlers in unfunded liabilities....
I guess we'll have to put the party on hold then.
See www.usdebtclock.org ...
So they just raised the 'basic' ceiling to over $14T as being possible (over 100% GDP) and if you dare to include obligations and...
JJC which just kissed the 100 day hasn't seen this much volume since Aug.
In coordination with other central banks, the European Central Bank (ECB) confirms the expiration of its temporary liquidity swap lines with the Federal Reserve on 1 February 2010. These lines, which were established to counter pressures in global funding markets, are no longer needed given the improvements seen in the functioning of financial markets over the past year. Central banks will continue to cooperate as needed.
In this context, the Governing Council of the ECB has decided, in agreement with the Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, to stop conducting US dollar liquidity-providing operations after 31 January 2010.
Wow. OK, what with Greece, Italy, Ireland, Portugal, and Spain in the situation they're in, this is a very interesting time to be turning off the swap lines.
one of those cheap, imitation, low quality, recycled cartridges
are we really now 100% debt to GDP? Don't worry the presidents plan to cap non military spending should raise a trillion dollars in ... a few decades assuming the population does not age or get larger, none of the roads need fixing, and we find a bunch of oil under a rock.
dupl
Good stuff. Get ready for gold 1500+ this year.
S0r0s says gold be a bubble,
http://www.telegraph.co.uk/finance/financetopics/davos/7085504/Davos-201...
No position (yet)
What are the odds that he's talking it down so he can buy low?
+1
;>
And Soros would announce ahead of time a position he could exploit to the max on the hush. Right!
Soros is another of our newish conspirators, hoping to deprive the great unwashed of their hard earned money by subtlety and market knowledge.
Soros is a sore!
Buying gold ahead of QE 2... what about you
What!! The Senate gave him a sound tounge lashing and then voted him in??
Im shocked!!
Boy oh boy come mid term those wall st crooks are gonna get theirs when the people revolt and elect Republicans!!!
Thatll show em! (No,cheating captcha question aside, Im not THAT dumb, but millions of voters are)
My 3rd favorite philosopher (after Tyler and Marla, of course) puts it thus: "The road to easy-street goes through the dump" -John Madden
"The Printer Gets Another Cartridge"
LOL!!! That's the funniest headline I've read in ages! Well done.
Gold snitches! It held support all day ($1080) even though the market was getting worked like Obama works 'merica!!!! I am like a proud parent.
On that note, the state of the "union" makes me sick! It used to be Magog preaching his 5th discipline "New World Order" and now it is Obama soft shoeing on America's face! Buy gold and silver! it will be your last chance....
I didn't think they could drag it to 1050 by month end. But they MIGHT do it.
Buying gold now?!?! My guess: out of the gate the USD is gonna be rockin and rollin. PM's will be down big. Market will be screaming higher. Bennie will be hitting the morphine button at least a hundred times tomorrow (alone). We are all subprime now and the NY/DC corridor will be partying like its 1999!!! Party, party, party!!! That's the beauty of broken/captured markets, no fundamentals or technicals needed. Bennie is at the helm...full speed ahead!
Okay...I just put my Dow 10,000 hat back in storage. Dusting off 11,000 hat.....been gathering dust over a year.
Indeed. We is all subprime now.
yes and where will this lead us?
is anyone paying attention in this country?
The Euro has not fallen further for the simple reason that a bailout, will take the current stress out of the system, and allow the ECB to raise rates should it wish. Those that are NOW selling the Euro on the back of bailout rumours are slighty mistaken in their belief.
Kucinich has a plan to create 1 million jobs by allowing older workers to collect an expanded Social Security benefit at age 60-62. Sounds like a great plan, but where is the $ coming from?
This is the same guy who had an encounter with a UFO.
Just two words:
And you know what they are:
Here they come:
I ain't gonna keep you waiting:
Not to be confused with the imitators:
Get ready:
GOLD BITCHES!!!
I am Chumbawamba.
With Greece as a distraction I see tomorrow as a prime opportunity for the airing of dirty laundry.
Snatched up 3 more gold eagles with spot price of 1080, what a STEAL!!
Locking in 100 more 2010 SE's at 16.00 even spot was the sale of the day in my opinion.
Although the 1.99 over spot premium always hurts.
C'est la vie.
Sooner or later the US mint is going to halt production on these again, and then never resume. That's when the real fun starts.
Let me see..Democracy works how?? Hmmm...So we vote against the status quo,(Repubs) except the new status quo(Dems) turned out to be the old status quo, so we get mad again and elect the old status quo to replace the new status quo come mid term?
Jeezus, now the GOP is ripping a page from the Dems playbook; "The party in charge sucks therefore we are better!"
Well the Dems are copycatting the lucrative scare tactic play perfected by Bush; instead of "Mushroom clouds over New York!!" Its now "Catostrophic financial metltdown!!"
When untold millions in Iraq came up missing , It was "Fog of war!!"
When Billions were wasted under the DEMS watch the excuse was " Unprecedented time of imminent collaspe" (Kinda like fog of war)
Folks wanna look behind the curtain; You guessed it, "National security"!!
Also we should be thankful for Halliburton helping us with the war on terror (which we are always just about to win if we just give the Generals more time and troops and torture a few more Muslims)
And Bernake deserves our nations gratitude for saving us from the brink of disaster too. (we are only a few routine trillion dollar loans from winning this battle too)
Anyone besides myself see just a hint of a pattern here?
+1000
+ 10,000. Right on it.
+100,000
Now, whatcha goin' do about it... let me guess... nothing...
huuu-rahhh
+100,000, due to hyper-inflationary awards-scoring.
Giant Douche or Turd Sandwich
The choice is yours.
"Meet the new boss... same as the old boss."
Won't get fooled again???
+Boom!
Excellent.
If you want to break free from the Private Banking Scam, just follow the lead from a candidate from Florida...the real solution, just apply to ech state and to the Federal Goverment. Time to break the shackles of the private banking system...
The era of the commercial banking system is over because of:
In contrast, the Khavari Economic Plan, proposes a state run bank that will:
We will put the power of modern banking to work for the people of Florida, not for Wall Street.
Over the years, interest has been the biggest cost most families have had. Interest paid to the bank means less money for your family. Reducing interest costs can save a family hundreds of thousands of dollars.
Scenario 1 Let’s take a $100,000 mortgage, for example. With a 30-year fixed rate 5.5% mortgage, your monthly payment is $567.79 and you will pay $104,404.40 in interest on that loan.
Scenario 2 With a 2% fixed rate 15-year mortgage, your payment would be $643.51, the total interest would be only $15,831.80 – and the mortgage would be paid 15 years sooner! You would save 88,572.60 in interest. After you’ve paid off your mortgage, if you continue to make monthly payments of $643.51 to a BSF savings account earning 5% interest, at the end of 15 years you will have more than $160,000 after taxes in your account—just by having your mortgage from the Bank of the State of Florida.
In scenario 1, after 30 years of payments, you would own your house. Given scenario 2, after 30 years of payments, you would not only own your house, but also have more than $160,000 in savings.
How could the BSF do this? It’s called “fractional reserve banking,” the same principle all banks use to operate. If you have $100 in reserves, you can loan out $900 or more. That means you collect interest on $900 but you pay interest on only $100 at most. If the bank pays you 2% for your CD and lends it at 5% on 9 times as much money, you can see this is a really good deal – for the bank.
Now our Bank of the State of Florida does not need to be greedy. It is not going to get involved in shenanigans like bundling and selling mortgages, taking out weird insurance policies and general practices that have caused the mess we are in today. When we make a mortgage, that asset remains right on our books and the paperwork is right there on file. We are going to pay good dividends and the highest rates in the market for long term deposits. We are going to loan out 9 times our reserves. And we are going to make billions of dollars for the State Treasury while we save Floridians a trillion dollars—and that trillion dollars becomes many trillions in Florida’s economy.
Let’s say we pay 5% for our $100 and loan out our $900 at 2%. We pay out $5 in interest, and we take in $18 in interest. Can we make money at that? You bet we can.
We could make the $3.6 billion we are short this year on just a couple of million 2% mortgages. We can do even better on 3 – 4% commercial financing and vehicle loans.
And all the money the bank earns goes directly into the State Treasury, to work for Floridians, not to Wall Street.
Where do we get the reserves? The State of Florida has billions invested with Wall Street. 5 or 6% guaranteed looks pretty good these days compared to a 50% decline in the stock market. Look at what long-term bonds are paying, look at CD’s—we will have no problem attracting all the long-term deposits we need to get started, simply by paying good rates.
Now look what happens. With a 2% fixed rate 15-year loan, the buyer has paid off over 11% of the principal within 2 years. That means we have more than enough reserves to make a new mortgage for someone else, without having to pay interest for the reserves! (In comparison, a 5.5% 30-year loan takes 7 years to pay 11% of the principal).
Now some people might think that low interest rates will just raise the price of homes. That would be true if the 2% loan was for 30 years. But the payment on the 2% loan for 15 years is a little bit higher than the payment for 5.5% 30 years, so this tends to hold prices down. It also tends to eliminate speculation that messes up the market every time. As long as prices are stable, we can offer mortgages with low down payments, so homeownership can be as easy as paying rent.
What the Bank of the State of Florida does is transfer hundreds of billions of dollars away from Wall Street directly into the pockets of Floridians by reducing interest costs… and it puts hundreds of billions into the State Treasury, too. We will have stable, fair prices for homes and take 15 years of slavery out of the process of owning a home.
Consumer financing is another area where Wall Street and the big banks are costing us way too much. Banks charge huge interest on credit cards, for example, where the cost of money to the bank is really zero. If a family has $10,000 in credit card debt at 25% interest, that’s over $200 per month in interest alone. At 6%, the monthly interest is only $50. This family could reduce monthly payments by $50 and pay off the debt years sooner. The State earns billions of dollars per year while saving Floridians billions and billions more.
The Bank of the State of Florida will earn billions of dollars per year for the taxpayers of Florida, not Wall Street fat cats. At the same time it will reduce interest costs and save Florida families hundreds of thousands of dollars per family. Who needs that money more? You or Citibank?
The Bank of the State of Florida can handle checking accounts and ATM’s too. The other banks will have to become competitive, and there is no reason why they cannot.
Couldn’t the federal government do the same thing? Actually, the federal government could do even better and they could do it immediately at huge benefit to the U.S. Treasury. Do you think we should wait around for them to do it? We can have this program in effect in Florida within a year, at no cost to the State
Yo.
I actually bothered to respond to one of your posts on another thread, and... I see you're spamming.
Are you a master of cutpastejutsu?
Cut it out. Some people are trying to read here.
+1
it's a shame because it's actually an interesting idea.
that's what hyperlinks for Dr. M.
not contributing to the conversation only hurts your cause.
Does anyone know which Senators voted for Bernanke? I want to make sure I don't support them if they are from my state of Georgia.
Thanks
A most interesting market response to the vote indeed.. I hardly saw the bounce up before selling commenced again.
4 more years of..... oh dear, oh dear, oh dear.....
the politicians didn't have the guts to do the right thing, the printer presser didn't have the guts to do the right thing and go, the economy doesn't need the 'asleep on watch until the ship started capsizing' man to be put back at the helm..... he is prone to fits of falling asleep for goodness sake..
This market's collective yawn told me that the reconfirmation was already baked in. Only at ZH does hope of justice spring eternal.
I keep reminding myself that the right trade in March 2009 was to buy, baby, buy. Keeps things in perspective, as you ponder the nature of the correlation if any between between right and wrong, real and ideal, principle and practical, and profit and loss.
I have put together a list of the 30 Senators up for re-election in November paired with how they voted today.
First I have the 12 Democrats and the 6 Republicans who voted in favor (YEA) of reconfirmation.
This "HIT LIST" should be circulated.
These 18 people who voted to keep Bernanke have no basis to be reelected in November.
I've also included the 4 Democrat and 8 Republican "NAY" votes who have perhaps some basis for re-election.
DEMOCRAT YEA VOTES
*Dodd is not seeking re-election.
REPUBLICAN YEA VOTES
DEMOCRAT NAY VOTES
REPUBLICAN NAY VOTES
Contact info source: http://www.senate.gov/general/contact_information/senators_cfm.cfm
Bernanke Confirmation Vote source: http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=111&session=2&vote=00016
Burris isn't running either
Nice avatar man, is that Stewarts old plate from his Kawi days, or Villopoto?
Good Work. +10
you missed one-
LeMieux (R-FL), Nay
he's class III too....
Well, I see both idiots from NC voted yes, I guess they don't want to be re-elected next year. Richard Burr is nothing but a "you can buy my vote anytime" guy. Vote all Incumbents out next elections. Put new faces, with new ideas, that care about the public not the bankers in office.
Here's a question. What the heck are you going to do with gold coins. It makes no damn sense. If the economy collapse and the dollar is worthless, your going to what, buy goods with gold coins? Your going to what, move to a different country to exchange your gold coins into paper money?
I don't know if people have really thought this through, buying gold is buying an illiquid asset, which, when a market collapse happens, will be extremely hard to judge as to its purchasing power. Do you really think America will go the way of Zimbabwe? I don't think so...