Sacrifices to Market Gods?

Please read my latest and post your comments here:

http://pensionpulse.blogspot.com/2010/05/sacrifices-to-market-gods.html

Thank you,

Leo Kolivakis

Comments

[Bruce Krasting]

Leo you say:

I find it hard to believe that some very bright people are not able to understand how targeted quantitative easing and government action can help restore confidence in financial markets, allowing credit to flow freely in the real economy.

What real economy are we talking about? The one that F/F/FHA have 96% of the mortgage market? The one where goverments are repoing goverment paper with the banks so that it looks like there are really buyers? The one where the price of gold goes up everyday becasue people don't trust anything anymore? How about the real economy and the capital markets that are run by robots?The one where the invisible hand of government does not influence every economic outcome? One where that same invisible hand controls virtually every one of the markets? The one where there is not a rational economic plan for ANY major country today?

You have read a lot you have written a ton. You show me where in history something as horrible as QE has either been considered or if implemented did not have catastrophic consequences.

QE is the the death of everything you think is important. You just haven't realized it yet.

[scaleindependent]

+

[Rogerwilco]

I don't buy the claim that this ECB/IMF/FRB deal was cooked-up over a single weekend in Brussels. These guys think six moves ahead in their game of chess, and they already have a response to the next crisis.

[JR]

Thanks for the video, Leo.

Sunday, the big banks knew last week’s sell off was more panic than fat fingers.  And now they were facing a black Monday, indeed, with Germans punishing Merkel, ratings for Portugal and others headed south, riots and default talk headed for youtube and the Euro headed for junk.  Maybe collapse of Asian markets and futures headed for the exits would have the Bears talking a Dow 8000.

The Central Bankers stared into the eye of an approaching hurricane and used the Paulson approach…but this time the bazooka had to be loaded with $1 trillion dollars, not those TARP light loads.

[Leo Kolivakis]

JR,

I couldn't have said it better...thanks.

[Blindweb]

"Political leaders have been forced to take decisions of immense historic importance within days, or even hours, to satisfy arbitrary deadlines laid down by supposedly implacable financial markets."

No, they stalled until it was too late.  The deadlines aren't arbitrary, the market is just a prxoy for the physical world with physical laws.

[TruthHunter]

I've been wondering, did Greece's 200 T of Gold

get heisted in this IMF deal?

[MarketTruth]

Wow, the Info Warrier Alex Jones (www.infowars.com) on ZH?

Impressive.

PS: IMHO ZH'ers should watch some of his videos, which are free online.

PPS: Alex Jones also has an audio stream at www.infowars.com/infowars.asx

[Mitchman]

It is ironic that those who attack the creditworthiness of the PIIGS and the UK are labeled "speculators" when the fact is that they are actually trading on the hard fundamentals  - too much debt, too little capability to repay.

The quoted article (not your part Leo) in and of itself is non-sensical.  The dealine regarding the opening of the markets in Asia for the EU "rescue" package was set by the EU itself.  Any package whose foundation is "we have too much debt; therefore let's issue more debt to fix the problem" is doomed to failure.

Finally, the last word has not been written on the BoE's QE program.  But we all know what it's going to be: Nyet!  The new government will have the life expectancy of a firefly.

[Panafrican Funk...]

The bailout part isn't necessarily problematic (all money is relative), it's the austerity measures tagged to the bailout.  Reducing bond risk by devaluing the denomination of those bonds is fair; simultaneously increasing the bond value with austerity measures is frankly bullshit.  Everyone should be rioting in the streets about this, accompanied by a mass tax protest. 

[williambanzai7]

PIIGS ON FIRE:

http://williambanzai7.blogspot.com/2010/05/roast-piigs-on-market-spit.html

[hbjork1]

Levin for President!

[Kreditanstalt]

Leo, not quite sure what your opinion is on whether the bailout should have gone ahead or not...

Kaletsky has always been an implacable, unreconstructed Keynesian.

Enough nonsense.  The bailout should not have gone ahead; it IS robbery.  They should have let the banks go under. Period. 

There is a saying: "Anything stupid enough to find itself balanced on the edge of a cliff deserves to be PUSHED!"

The governments of western nations, in trying to prop up unsustainable social welfare states, have found themselves dependent on the tender mercies of lenders.  Whose fault is THAT?

There can be no mercy in business: we're ALL here to make a buck and, yes, the market is always, if not RIGHT, then...accurate.

[boooyaaaah]

How can the central banks be accused of stealing pensions

When the pensions were based on a promise made with a drunk

In this case the drunk is the Greek government

What is the "value" of US federal pensions as a percent of the US budget

[greenfire]

Let's see - transfer bank debt to public balance sheets via bailouts, then blame public pensions for the resulting soverigtn debt crisis. Bank bondholders kept whole, with the squeeze on the little guy. Rinse & repeat. It must just feel good, somehow, to blame unions and public employees, rather than the real culprits.

[scaleindependent]

+ 1793

Exactly. And the mofos will not stop until the masses start really feeling it and some type of political/emotional/social revolt begins.

It has always been this way.

[DudleyDoRight]

Agreed!  As between bondholders who should never have lent and then get bailed out and raiders on the one hand and federal workers and Social Security/Health Care recipients on the other, bondholders and raiders should take the hit!

Also, Donald deVanter of RiskCenter, citing ZeroHedge and DTC, is calling into question soveriegn CDS spreads, noting that the soveriegn CDS market is basically just an interdealer market, with hardly any "real" customers.  Hmm, this whole thing is starting to look like a raid!

[AnAnonymous]

Considering the scope of the decision, rushed decision is an appropriate expression.

European rulers loitering over the decision: in my mind, more a trick than anything else.

Strong hints at the EU integration process being frozen with nearly epidermial rejection of it.

Advancing the project through popular vote no longer appeared clearly as an option.

Taking advantage of a panic situation to frame the solution was no big deal to guess: the emergency solution.

Reported that I thought one of the prior objectives of the EU would be to seize the  opportunity of the crisis to advance the EU integration project.

Next stage of integration (fiscal) is feared to be more painful than any other stage of integration so far. Here, we are witnessing another step in the attempt of social engineering a European people. As nations will lose their taxation capability to see it derived to the European combinat, the former lines between people are going to disappear.

Big decision. Taken in a rush. Not sure that the various people in Europe will have vote for their obliteration.

[gerriek]

The US and the UK are so glad that there are riots in Greece - it distracts from their own problems that are just as worse. At least the Greeks have started to implement austerity measures which is the first step to recovering from living above your means. Have the US or UK started implementing any measures? Remember, if you point a finger three fingers actually point back at you.