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SHIBOR: We Have A Liquidity Problem
In our now globally accepted bizarro world, where problems are priced in before they even appear, disclosing swans of assorted colors becomes a moot point. After all, all the bad news in the universe couldn't possibly matter as long as the irrational exuberance persists. That the higher stocks go, the farther they will crash eventually (and for those with their finger on the sell buttong, good luck selling into a bidless market) is a given, but maybe, just maybe the laws of gravity are different this time. On the other hand, maybe they are not. For those who are convinced that no matter the amount of data fudging, accounting fraud, and dollar debasement that the Fed endorses, nature will eventually take its course, may want to take a look at the below chart of 1 week, 1 and 3 month SHIBOR. In a nutshell: there is no marginal liquidity left in the world's fastest growing economy. Eventually this will dawn on the world. Until then, BTFD.
And since it is not visible on the chart above, all three lines are way above the levels hit when Lehman filed for bankruptcy, when there was another liquidity collapse but for different reasons. The latest catalyst, the PBOC's Christmas Day interet rate hike has certainly not helped.
Here is Morgan Stanley's explanation of what is happening in China:
SHIBOR surged: As multiple RRR hikes have started to take effect, market liquidity has become very tight. Compounded with the year-end liquidity shortage and heightened expectation of further rate hikes, large banks have almost stopped lending into the interbank market. In this context, the SHIBOR has surged in the past two weeks, with the 7-day, 1-month and 3-month rates jumping 269bps, 187bps, and 74bps, respectively (Exhibit 2).
As for what is forthcoming, here is Morgan Stanley's expectation:
What’s next: Given the surging interbank rates and heightened expectation of further rate hikes, the liquidity management function of open market operations will likely remain paralyzed unless the reference yields are lifted aggressively to restore the attractiveness of bill issuances. Since the amount of matured bills should rebound significantly in January (Exhibit 5), the risk of an RRR hike (or differential RRR hike) is rising.
And the 64k question: if China, whose economy is far more than even that of America reliant on excess liquidity is shutting down the interbank market, what does that leave for Bernanke's centrally planned fiefdom?
And incidentally, when we discussed this very issue back in June, when we noted that the "China 1 Month Interbank Rate At Multi Year Highs, More Than Doubles In One Month" we summarized the issue perfectly: "Should China go ahead and reval the renminbi, must we expect a complete
lock up of the Chinese lending market? Perhaps with the Shanghai
Composite hitting a fresh 52 week low today, at least someone is paying
attention." Curiously, since then neither has there been much if any progress in the CNY reval, nor has the SHCOMP actually done anything material. So all those who are claiming liquidity conditions in China are irrelevant, would be very much urged to actually read a book or two on monetary policy and momo theory.
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I think that if there were a funding problem in China, the FXI would be charging towards new 52-week lows right now.
But that doesn't seem to be happening at the moment.
I'll keep my eyes on alert for some weakness, the market will always tell us when there is a problem.
unless, of course, the bots pull all bids when W&R enter a sell order of 5+ ES contracts.
i can see it now. harry will be on the shitter....pull out his iPhone and see S&P is down 20...down 25...down 40...and by the time he hits "sell", S&P will be down 120.
Like ZH has said Harry if the economy is so strong why does the FED not turn off the liquidity spigot?
Because Harry if the FED stops printing money to support this illusory economy we are all fucking dead. Do you understand that Harry?
I think Harry actually does get it...he just likes being the negative attention whore around Zerohedge.
+++++
Harry is a psyops program penned by several different "voices".
With machine-like emphasis on the "program" part! :>D
Seems to me that Robo and Harry and just trading, and having fun doing it (swatting the bees nest from time to time for sport). They are "hanging 10" on the wave that I admit I do not have the gahones to surf. They are gambling that they can get to the exits right before the casino in evitably locked-down and fire-bombed. I do wish them the best in all of this. Godspeed to the exits at the right moment gentlemen.
I wonder if they are both "Great White" fans?
just sounds like they are playing around with money they can lose.. or atleast lose a substantial amount of
who knows.. they might have been the early adopters of guns, gold, canned food and now have to do something to piss away the time
'Always someone buying'...lol dream on as everyone is trampling each other for the door as the theater burns.
You wont be able to sell Harry, youre like Barney Fife up against Liberty Valance, youre dreaming and theres no gunslinger off to your right to save you with a miracle shot either. Keep dreaming that you can out sell the HFT bots when Bernanke flips the 'remove liquidity' switch.
I remember on flash crash day, I couldnt log into my broker. I did not have stop in place but wonder if they would have been executed if they were. After a couple of days my broker hinted the issue was with the clearing house and therefore everyone was locked ot who used that MM. If that was the case, stops would not have executed even if in place (i think). Was the flash crash a once in a lifetime event and you cant plan according to that? not so sure.
Harry's somewhere in here...
http://www.liveleak.com/view?i=f70_1260080612
Harry,
"manufacturing is surging, employment is picking up, corporate earnings are strong, etc., etc".
Read between the lines before you use the word surging. Last I checked we had the highest unemployment since the great depression, Corporate earnings are robust due to downsizing, outsourcing, lower wages and free money from the FED, and manufacturing is about back to where it was in the 1930's. You are such a figgy fool you need to move on to Yahoo, Bloomberg or some other MSM site where you can contribute to the discussions instead of being junked all the time. The shill train has hit your station so pack your window decor and jump aboard. This way when the truth plays out you won't have to be a coward and disappear into the night like the rest of them will.
Harry, can you post your company's product catalog link? I'm moving and I need to furnish a new place with a variety of items...
thx.
Ive been asking Harry for his catalog for months, he wont even send it in an email. Apparently his company is so great they dont even need to advertise.
Of course, he had a "record 4Q" - even though all of my friends in home construction, home furnishings, etc. are struggling financially.
Any good - real - salesperson would be happy to post a catalog for his company, especially since it wouldn't be necessary to reveal any personal information.
"Believe me, I'm never a moment away from the sell button."
HAHAHAHAHAHHAHAHAHAHAHAHHAHAAHAHHAHAHAHHAHAAHAHAH
Funny funny stuff. I'm sure you had your sell button ready on flash crash day last May.
Like you can overcome a "server is too busy" message on flash crash day..
Your connection was so slow to your brokerage account that infamous day you probably just logged in as HarryWang to save a millisecond.
A moment away from the sell button my arse. Whatever, Blankfein.
I didn't have to sell. I sold everything the previous trading day. It was obvious then, that something was wrong.
...and with this post you just proved youre full of hot air and horseshyte , Mr Harry Hindsight would be a better handle. Id wager all your trading talk is paper based and you havent a real world position so to speak of.
Attention whore indeed.
You're not that smart, are you ?
Seems like you didn't even see it's wasn't Harry Wanger but some impostor with a slightly different username.
Thank God there are people like you otherwise I'd have to work to earn a living.
i have an ingrained habit of helping these easily fooled people.... is there still time for me to break that habit and get on the easy rich path?
It has hardly something to do with intelligence, more like attention.
LOL
OH right, you sold the previous day, but of course! Well let us know when the next 'previous day' is sensed by the great Harry!
Oil is everything, of course, but for this particular matter of selling when "told to", it's useful to remember that futures drive the open and circuit breakers trigger at -10% with a closed for the day event. Which can repeat the next day. And the next.
You can be down 40% before you can trade.
I have come to the opinion that the futures market is everything. I've also noticed that shorting the dow, s&p, or ndix are bad for your health these days. But it should be a fun ride if we get some double dip to play with.
Do you even know what the word "guarantee" means? You can't guarantee yourself.
Exchanges shut down. They cancel and reverse orders. Banks have "holidays". When the final straw hits, and you are still caught playing around in the burning building that is the US equities market, you are going to be caught under a hundred feet of burning rubble.
For things to actually get better, there have to be fundamental changes. The ZH crowd will turn bullish again once those changes have been made. Until then, we are bearish. YOU are the only one that is perma-anything around here, well, you and a few other moronic trolls.
Harry are you that cheeseball broker in all those Scottrade commercials?
http://www.youtube.com/watch?v=KA2cOnriq10
The metaphor for market processes that frequently gets trotted out here is the "fire in the crowded theater" meme. The idea is that I can trade profitably, and with impunity, because I'm sitting right next to the exit and my finger is never more than "a moment away from the sell button." But remember, it's not enough to be near the exit. You can't leave the burning theater until you have gotten someone else to agree to take your seat. In a bidless market, no one is going to agree to do that at anything close to your hoped-for price.
I'd be EXTREMLY careful using the word "GUARANTEE" around something you have NO control over.
This is year end liquidity dressing.
You've got your finger constantly on the trading button AND you're running an incredibly successful company. Mom must be awful proud of you, Harry, but when do you find the time to do your chores?
Earnings are up because Corporations are not paying their fair share of taxes. Last week article on ZH...public tax receipts = 1.3 trillion vs corporate paying 160 billion. When there was a normal middle class, think My Three Sons or The Flinstones, the payouts were about equal. Welcome to one of the cornerstones of facism. In the ensuing collapse, good luck getting your money out of the banks should your require it. Somewhere along the line here the market ,Dow Jones Industrials, are going to drop 2000 points at the openning.
Believe me, I'm never a moment away from the sell button. If the time comes, I'll sell and I guarantee there will be bids to take my shares. There is always someone "buying the dip" at the wrong time and there will be when the next "wrong time" comes.
Add this to your plan to "always someone""buying the dip"";" what if the FED announces a stop to QE2 adruptly and nobody wants to buy your planned dip selling opportunity, of which you can just push that sell button? Especially, with the weak volume, bot buying, unregulated, and rigged market participants. LOL
Actually the only thing it will tell you is when the market's always myopic perception shifts and admits that the problem is there. At that point it will be too late to trade. On the other hand, with nothing but momentum trading operating right now, who knows how long the irrationality can persist. Those trading the inflection point better have some low theta basis as both bears and bulls will eventually be taken out.
When those with Kool Aid coursing thru their veins as they gaze at the markets thru rose colored glasses finally see theres a problem and need to sell, they wont be able to. BTFD.
Tyler could you repost the US debt and its roll over dates?? It will be instructive just how much monetization will be required for this year. Thanks
Put options. Make money with WOPR/Cramerica and plenty of time to escape the burning theater.
Great plan except for one small glitch. When a stock is halted through an OTM purchased put's expiration, that goes in the money due to the underlying's collapse, you end up with nothing. Experienced most recently by those who bought RINO puts and the stock was halted for 3 weeks.
the greatest trade is a short you never have to cover (e.g. WAMUQ) removing (most) of the initial investment via margin and tolling the cap gain tax until closed.
Yeah, you want to short stocks that will be weak, but no too weak.
And I am not quite sure how one makes that determination.
Where does the Treasury capture to Principal roll of maturing debt? The monthly budget statement has a line item for interest..
ROBO, what did IWM tell you yesterday when you posted that the Russell2000 was crashing (your words)
I remember a conference call with the cash desk of JPMorgan in New York back in early 2008. The question was asked why the spread between Libor and Fed Funds was widening further out the curve. Got a bunch of bullshit as an answer, but of course the truth was banks were becoming very reluctant to lend to each other, as they knew there were banks out there with serious problems.
At this time, the equity markets couldn't have cared less, it was up all the way, but the short term interbank lending market is the oxygen on which the whole global economy turns and tends to flash warning signals before anything else.
and the sheep went 'bah'
"...the market will always tell us when there is a problem."
We have laws in this country about substance abuse, did you know that hallucinogens are banned now in all states except Texas and Arizona? Why don't you consider doing some quality time in rehab with Lindsay Lohan? Maybe you'll get lucky for a change......
BTW, the market does NOT always "know" and tell us when there is a problem. Free markets, maybe, but ours haven't been "free" of late. Take the ban on short selling financial equities from '08 situation.
Politicians/governments can hogtie markets as a force. Could make CDS trading illegal, or invalidate contracts created under their jurisdiction.
Could impose K controls and limit the movement of funds. If China started to sell US Treasuries . . . remember Iranian assets frozen by the US?
The markets are currently so medicated and manipulated that you can trade them, but invest?
You mean like it did in 2008?
Would you agree that by the time the market started telling us, it was already too late, like telling someone who was already shot that it might be a good idea to duck?
Maybe all of us all over the world are withdrawing support from Ponzi.
Precious metals back to where they were before this mornings route. Seems we have a bttom. Think Blythe can do that again tomorrow? Equities were hurting from gold's beatdown today, and equities have to be kept moving higher. Gold will most likely escape this round and move to a higher range in the coming week.
Too many vicious assholes breaking the funhouse mirrors in the castle of illusions.
So now they gotta pack up the magic mirror and send it around to europe and ask
"Mirror mirror on the wall. Who's the brokest of them all."
Here's to hoping.....got some 1410 gold calls bought today
thats a nice call. any ideas/recommendations as to options trading brokerages?
Interesting. It's like insulting Mike Tyson with those hockey goaley ear covers on. LOL
Odd mix of safe and risky. Kind of like making fun of Mike Tysons lisp while wearing those wrestling ear covers. LOL
Great idea!
What expiration do you guys take?
They started the year with a major paint job -- but paint won't stay on a rotten house.
Painting? I knew Tom Sawyer was around here somewhere...
If she does I'll buy some more Ag rounds -- just like today. BTFD and FUBM.
I sure hope so. I can't buy any more until Friday. I'm hoping we maintain these levels, or go lower between now and then.
Platinum is having trouble breaking long term resistence. Once it moves past $1800 it is straight to $2200 and possibly lights out across the board.
i could only buy 1 this week =(
(even with the recent paper collapse)
My friend, thank you for your concern but my time is not yet come.
But understand that when it does, it is Ponzi's support that will be withdrawn from the world, not the world's support for Ponzi.
I trust you, probably because you have a thick and well-waxed moustache. Take my money, please.
I may stand corrected. You look complicated (which is how you can do what you do) but you are quite simple. When you withdraw your support from the world, it is only then that the world is quite sure what happened. But some know it before you withdraw your support, and the larger numbers knowing it, force your hand. Will you wait so long that you cannot get away with your ill-gotten gains? That story remains to be told. Good day Mr. Ponzi.
I've been having a feeling that this is already a done deal.
Think about this: They can ramp the stock market and treasuries all they like, selling to each other. But if nobody else is actually buying, then that market has evaporated. It's just theater.
We've been trading stocks for so long that we cannot imagine the market going away. But does the world actually need a stock market at all? What if all companies of any size simply went private (lots of reasons for doing that) leaving just penny stocks and Chinese "skimmers" playing the field? Would we then even pay any attention to this market? Of course not, no more than we care about Afgani goat traders in the streets of Kabul.
I think the door is closing on the era begun about 100 years ago, of investing in corporations on expectation of returns, mostly on dividends. Maybe we go back to investing in commodities like was done in past ages all the way back to the origins of agriculture and trade routes.
Nothing lasts forever. This is not going to last either.
True, as in many things technological saturation has reached it's climax particularly in trading/investing, perhaps much of the current index leverage is related to the "boon" of computerized trading?
However once your average investor has grasped the idea of placing their wealth into hard assets could a bridge yet remain as in ETF's or some other instrument?
It's an interesting thought experiment.
On the other hand, I think the diffuse nature of public stock/company ownership has encouraged and allowed company executives to increase their pay, retirement, and option packages significantly. It's essentially other people's money and allows the executives to steal from the shareholders. If the companies were private, the shareholders would actually care, and have some influence in the matter.
That, and all of the 'money-changers', the brokers, accountants, IRS, etc. all skim a little off the top for playing the game - the vig if you will.
This post needs a nice wooden frame around it.
I agree. But not your average wooden frame. The post needs to be housed in it's own digs where it can breath and expand.
The Potemkin Market.
Remember Rock Ridge from Blazing Saddles? Set up to trick the bad guys into an ambush?Heh!
So I'm guessing some of those bonds didn't age well and they'll just have to keep doing do-overs till it works.
A nice treasurie is like a fine wine. Smell that ink, and look at that paper. Ah, nothing like paper assets!
I am sure Daley will know how to fix the liquidity problem. Give cash to banks? I am sure it will work this time....
not just any banks...political operative banks that will work for him and his leader...
hell I"ll lend them money and convert my US$ to RMB at 5% interest.
In true Rudolf Havenstein policy fashion, hyperinflation in US$ coming soon.
keep looking over your shoulder; that 2 x4 to the head may be coming sooner than you think.
Liquidity problem? With psycho ben at the controls? Ben will buy anything, he'll eat a bug on a dare. Ben is the freaking intergalactic rain maker dudez. I am not trolling when I say that I sincerely believe that we will make new all time highs in the stock market, earnings be damned.
.....BTFD- 4- EVA !!
China shmina. ;l
HSBC seems to be shucking off the SHIBOR difficulties....
As well as AIG, which has a huge operation in China.
By far, one of the most prominent banks in Asia.
From everyone at the Ministry of Truth, thank you.
About where its been for 2 years? Wow thanks for the great chart Robo, another classic.
The market doesn't always know ahead of time, and the market isn't always right. I think the market as a leading indicator is bunch of crap personally.
Shibor is an indicator. I don't know if it matters. Based on the chart, it seems to actually follow S&P selloffs instead of leading them.
nm
Holy SHITBOR!
We have to stop the madness, but how? It's like an out of control freight train. Who wants to step in front of it and try?
The partnership between banks and government has to end, though. Everyone should be able to see that one.
http://strikelawyer.wordpress.com
Stopping this madness (as you call it) is no more difficult than avoiding an actual out-of-control train:
You just walk away.
So long as you are not on the tracks or in the way or in any fashion involved, it's simply not your problem.
Now, one can be not on the tracks but rather on the train itself. Yes that is ... difficult. If the problem is that one does not have a productive line of work or produce anything of value to society and just day-trades oneself into bullion, then one might have less a market problem and more of a personal problem. Being in the wrong place at the wrong time, so to speak. We have Community Colleges and trades schools for people with problems like that.
True, avoiding getting hit by an out of control train is very easy. Step off of the tracks. Dont buy stocks, dont play their game at all, as they now desperately try to get retail to come buy their crap and become bagholders, just walk away and make sure youve got stores of things you need. Dont play their game.
looks like it "corrected" a bit today ...
http://www.bloomberg.com/apps/quote?ticker=SHIF1W:IND
Red Swan a swimming....One thing the FED wizard has no control over and the one thing that will pull the curtain all the way back.
The Fed can control that. Concerted action can control that.
There is only one thing the Fed can't print and that is civilization's alpha asset: Oil.
Nothing else matters in the end. Not gold. Not silver. Not GDP. Not unemployment.
Everyone's life derives from oil.
Who bothers these days, people just looking for the fucking dips to buy BTW pretty one on Au, Ag and AUD
...And Dr. Copper, that industrial, red-headed stepchild of the PM family, has rebounded as well ( with the caveat, "as of this writing," of course ).
btw, BDI dropped to 1621 today, down another 4.3%.
That chart looks painfully familiar. Got that Dec 08 - Jan 09 chill running down my spine.
The ECB revalued Euro Gold at to 364,402 billion up 33,018 billion at 1055.41 Euro a ounce and also reduced their cash liabilties a bit after the Christmas shopping period.
Just saying.......
The SH of SHIBOR really stands for s**t...
God dam Mongoweans tearin down my shittibor!
+1
China never should have raised rates. Their money velocity was already rolling over and they had their loan quotas maxed out for the year. They screwed up.
Spain and Italy have to refinance 400 billion Euros this spring. How is the ECB going to pull THAT much money out of its arse?
PS Or is Ben going to bail out those Bozos too?
The Chinese just said if the debt is for sale they will buy it. They say that now and they know there is a large need for Spanish refinance this spring.
That adds stability here and time for fiscal changes.
When did I get beamed into the bizarro world? We gave the Chinese most of our manufacturing, are their biggest debtor and now they will bail out Europe. It's all so freakin insane it's killing me.
The Chinese seem to be trading all those FRN's for Euros. How this is an improvement to their situation is anyone's guess. Maybe they think like a loan shark -- more "customers" owing them money makes them richer (until legs and other limbs have to be broken to teach the deadbeats a lesson...).
The euro is in a death spiral.. stocks are a useful distraction to the rot within the system, easy to entertain a monkey,
China is just the Communist Mother of bubbles. The Mother land.
TD I believe the BDI is expressing that tight credit.. as Reggie would say credit is tight as frogs ass..lol
China's banking system is 99% owned by China's developmental state. China's corporations are 40% owned by the state, and the remainder have all kinds of buy-ins from local and regional governments. If a company needs liquidity, it will get that liquidity.
All China is doing is choking off excess, speculative liquidity, before it blows economy-wrecking housing/real estate/stock bubbles.
A much bigger story: China is getting tired of funding America's debt addiction.
Yup. We've stopped buying their trinkets, they no longer need us. The pull out has already started. Give it 6 more months, by then everyone will have noticed. The talk then will be "well we really don't need Chinese investment in our debt ha ha the dollar is the reserve currency we'll just print money and buy our debt internally ha ha screw them." At which point you'll know the insanity has hit the core and the end is nigh.
Santelli just mentioned the SHIBOR and referenced Zerohedge.
Rick Santelli just referenced this post @ ZH.....
I saw that, an unabashed shoutout to ZH on tv, Santelli's on a few more watchlists now.
He probably found ZH by Googling himself, and finding all the wonderful things people here say about him. That brings a smile to my face.
Liquidity problem? Just talk to the indiginous WoW gold farmers...sheesh! It's all digital fiat anyway...
The precursor to a 'HL'.. Hard Landing in China.
on 'red alert' for market crash..gonna be good.
Wasn't sure if it would be China or the Euro that would crash first.. they're neck and neck.
... and when the bough breaks... IT ALL comes crashing down. Everything. Big sales are coming soon! Hold on to your FRNs.......
Oh hell ya. Nothing wrong with buying the house that corruption built. Slapping some new siding on it and flipping it.
Blink. Blink.
This may demonstrate at least how inimical current market conditions are to CB rate increases
Shibor followed S&P drops in every case in that chart. However, the move in the last few weeks doesn't compute. I would guess it is not a good sign.
Tyler, can you post a longer term Shibor chart please?
It appears that the Shibor has come down from its peak since the new year began.
http://www.reuters.com/article/idUSTOE70302D20110104
"China's money market rates and debt yields fell on Tuesday, with the seven-day SHIBOR losing a record 208 basis points, as an unprecedented liquidity squeeze in the market last month eased with the start of the new year."
As of yesterday, 1 week Shibor 4.31, previous close 6.38. It is still elevated but did drop dramatically.
You can be sure that when the kabuki economics charade starts to mess with stability in China, they will pull out all the stops to defend their economy. Even if that means severe consequences outside their borders, this bears a close eye...
Second Santelli hat tip just now, think he appreciated ZH crediting him with the "win" in yesterday's Bernstein match...
I am pleased to report that my father, a 66 year old retiree, just BTFD in gold. He actually said BTFD and giggled like a schoolboy. It gave me a warm and fuzzy feeling inside. He also thinks that Blythe Masters is a very scary looking woman - it would be hard to disagree with him.
Back in Sept 2008 there were an awful lot of smart people who got crushed. Uncle Ben & Tiny Tim are very smart people too ya know. They did zilch to prevent the disaster that was Wall Street. I will not pretend to say I am a smart person, just very very wary of what is happening.
Even a blind sow finds an acorn once in awhile. Keeping your tail out of the fire is getting harder and harder...
The SHIBOR Chart looks very scary, I understand China is a high risk area but what isnt? Reading this blog I thought I would have a look at my China fund, Its a managed fund and I live in the UK I looked last week it was just in the red about where its been for ages today its up just over 2%
Buy low sell high its not as easy as it looks I foul up regularly so my view on China It may blow up and if it does buy buy buy as it will come back probably and if it holds together it should produce good returns,
This blow up in rates is possibly a good thing longterm as it will flush out a lot of crap sooner rather than later when the problem is worse, Because my timing skills are to be desired I will just hold on for a very long time as my original plan because if China as I suspect is buckling underinflation imput costs food etc It can put those to bed easy by revaluing the Yuan hence exporting it to us and if I sell tomorrow this will probably happen before weeks end.
For me if China has a severe breakdown I will add to my position as I am looking at a decade or two away before I intend to take profits and if it goes all wrong I wont lose any sleep as its not big my position.
When the so called shtf I won't waste a second
on the computer trying to sell something wich
has no more value.I will try to exchange my
last fiat money for goods(esp food,tabbacco and liquir)
to save myself some gold later on.
Created my own little central bank years ago
by buying PM and yes it's extremly solvable
because it has only assets on it's sheet.
During the crisis of 2008 I created my own
supermarket inside my home and it hasen't
been without stock since with lower prices
on the labels and stocking up on the cheap.
Save a lot of money this way and use these
saving to buy more PM also on the cheap,
like today from JP discount window.I am
a simple man but doing all right.Most goldbugs
are no doomsday believers but just prepare
according to the lessons learned from history.
Economy will go on because commerce won't
stop but this fiat system will not survive this
extreme abuse and corruption.
The first chart unfortunately doesn't tell the whole story when comparing.
Here is a relative chart which includes Lehman:
http://static.businessinsider.com/image/4d24ba30cadcbb95030e0000/shibor.jpg
Thanks, that helps put things into perspective....
Yes I can pick the tops, I know when to sell, when a dip is not a dip but a crash...I will be able to sell and get out the door first. I will push the sell button because I will know and others will not. So no fear here, I can hold and sell when the time comes.
hahahaha
The great thing about this game is that if you win big you get to enjoy a lifetime of gloating and bragging, and if you lose big you can jump out a 20th floor window.
We call that no down side.
Well, there was that employment report which was pretty astounding today...but I'd like to see someone drill down in to those numbers and tell us who and what was being hired. But, for the sake of argument, let's say that all the new debt and fake money has worked just like Bernanke, et al, said it would...now, what? When is the plug to be pulled on stimulus? And will the rising price of things like gasoline tip us back in to crisis just as they did in 2007?
I think there is some misunderstanding of Shibor. Frankly speaking, the local banks do not use the interbank level for funding. They are sitting on deposits that is able to fund what they need. Shibor is more a reference rate for FOREIGN BANK branches who need to fund from the local banks.
The shortage in the interbank will hurt these branches but work the advantage of the local banks who can squeeze for higher rates. Shibor is a very very bad guide for the real liquidity in the market.
The real guage of liquidity is more difficult to come by. My best indicator would the loan to deposit(less reserves) ratio of the big 4 banks. Unfortunately, the data is not readily available. Or this data from the PBOC (http://www.pbc.gov.cn/publish/html/2010s01.htm).
As for a real time guage, well, government bond levels might give a better indication. If there was a real shortage, that yields should be heading higher. That is not happening.
Friendly Reminder:
DO NOT FEED THE HARRY TROLL.