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Risk Rally

South of Wall Street's picture




 

I found this entertaining

Rally for now

 

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Wed, 09/19/2012 - 09:06 | 2810541 Lin S
Lin S's picture

double tap, sorry

Wed, 09/19/2012 - 00:14 | 2809814 otto skorzeny
otto skorzeny's picture

The hubris of The Fed is apalling. I think the end will resemble the chaotic final days of Saigon with these pricks loading up all the gold in the NY Fed Res Bank at JFK and jetting off to Aruba- The Gotterdamerung that Wagner wrote about.

Tue, 09/18/2012 - 23:43 | 2809760 One World Mafia
One World Mafia's picture

Safe before elections.  Crash to follow the reelection of the furor with the help of electronic voting.

Tue, 09/18/2012 - 23:15 | 2809678 Fishhawk
Fishhawk's picture

The rally will last until the election.  The Fed has to print at leat $1T per year now, just to cover the monetizing of the budget shortfall, so there is your $80B/mo requirement met.  They will have to print from now on, as there are not enough buyers of Treasuries out there.  In that vein, expect more financial repression in the form of changing Basel rules, accounting rules, etc, which encourage and/or require banks to hold more T-bonds.  The Fed also has to print to support the Treasury market (sic/sarc), to keep interest rates low, so max Print + P from now on.  Not that Mittens would or could change that fact, although he might find another stuffed suit to replace Bernanke, ie a replacement monkey to perform the Counterfeiter in Charge duties.  So the Print function is set to max; now, does it impact 'animal spirits' in the stock market?  With a little help from the PPT, the talking boobs on CNBC can make a case for QEternity to result in a perpetual tail wind for the stock market.  This feature (not a bug) of QE becomes easier as the kleptocracy continues to undermine investor confidence, such that money is leaving the stock market at a $100B annual rate (and going into the bond bubble! that will end well).  So the low volume meltup can continue, now that the big bank algos are stuffed with $80B/mo in fresh cash to pump E-minis at 3:45 every afternoon.  Managed economy, suckers!  

Fishhawk 

Wed, 09/19/2012 - 05:51 | 2810154 twotraps
twotraps's picture

Fish hawk, agree on your 'rule changes' comment. It's another way to keep the game going and has a huge range of possibilities since monetary tools are drying up.
After years on he trading floor watching people try and push the mkt around....it usually ends in tears, exactly what you try to prevent actually happens anyway. So, in this case it may the fed trying to stop the mkt from re-pricing lower via printing. Is the mkt still alive enough to react? Or will rule changes force the desired outcome.
We may not remember a day when stocks traded without an options mkt......and upcoming rule changes may have equal prominence in finance, we just don't know yet.

Wed, 09/19/2012 - 03:40 | 2810036 disabledvet
disabledvet's picture

Mitt's pad in San Diego is getting the upgrades "just in case." None of us here can win this game. No this is not the Game of Kings, nor even State's ala Bismark but the "game of the mind." War Games is your way forward ("the only way to win is not to play") only it's being done with "financial nuclear weapons" and not the..."actual".... thing. talking about global thermonuclear financial war is of course great fun...but the destruction of the bulk of Western Civilization continues apace "in the name of game theory." If you want to know how it looks check out this price: http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/bu...
that's a trillion dollars in REAL wealth being wiped out "in a New York minute." the fact that the Nation is worried about "plunging oil prices" should tell everyone just how massive this transition from an oil based economy to a "post oil economy" is. the irony of course is that we are ramping up a war into the totality of the Middle East if not the entire Islamic world just as oil is becoming irrelevant to the global economy. (though not the local one of course). needless to say the impact on Wall Street once oil ceases to be the financial speculation of a choice will be massive. (China being the Last Great Petro-dollar) of course you can't speculate in gold...which for some reason is considered a good thing. I think of economies based purely on gold with no debt and leverage and well...none come to mind actually.

Wed, 09/19/2012 - 00:28 | 2809860 Lin S
Lin S's picture

Managed economy, bitchez!

 

(fixed it for ya')

Tue, 09/18/2012 - 23:09 | 2809657 LawsofPhysics
LawsofPhysics's picture

Fuck the paper pushers, burn it all down, the sooner the better.

Tue, 09/18/2012 - 22:07 | 2809490 Savyindallas
Savyindallas's picture

Good chance the DOW will be 20,000 in a couple years- problem is a loaf of bread will be $10 and a gallon of gas will be $20 - we're screwed.

Tue, 09/18/2012 - 21:48 | 2809424 Ned Zeppelin
Ned Zeppelin's picture

I guarantee Fannie and Freddie will be renewed, and will be around for a long time to come. Why? There are no other mortgages.  If you kill mortgages, well, I think we will see some big problems.

Tue, 09/18/2012 - 21:32 | 2809362 andrewp111
andrewp111's picture

No. They can't stop it. QE-i is being done because unlimited Congressional support for Fannie Freddie runs ont on Jan 1 and is not likely to be renewed. Without QE-i, F/F won't stay operating for very long. It was advanced to Sep 14 because of the election. Bernanke wants to be reappointed, and he needs Obama in office to do that.

Wed, 09/19/2012 - 00:06 | 2809808 AurorusBorealus
AurorusBorealus's picture

This is what I have been saying.  QE-MBS was inevitable (Bill Gross knew it).  It is necessary to mitigate the lawsuits against the big Wall Street players.  It is necessary to help the government unwind Fannie and Freddie.  It is necessary to help bail-out underfunded pension plans.  It is also necessary, I would suspect, to keep many insurance companies solvent (who are locked into agreements with millions of people, made many years ago, that provide a guaranteed rate of return on policies and annuities).

Wed, 09/19/2012 - 03:42 | 2810038 disabledvet
disabledvet's picture

yep

Tue, 09/18/2012 - 23:00 | 2809644 Unbezahlbar
Unbezahlbar's picture

When QE stops house prices will sink deeper and faster....and even worse, Banker Bonuses might be in jeopardy.

Wed, 09/19/2012 - 00:30 | 2809862 Sabibaby
Sabibaby's picture

Surely you jest

Wed, 09/19/2012 - 00:31 | 2809861 Lin S
Lin S's picture

I don't understand.  Won't hyperinflation send home prices higher, along with gasoline, cereal, et al..?

Wed, 09/19/2012 - 03:56 | 2810062 disabledvet
disabledvet's picture

you're putting debt upon top of debt. there are no assets anymore to "borrow" against. (read "oil price collapse" above.") you can't do it with gold or silver (who in their right mind would pledge either of those two things as collateral for anything? hell even outright purchases using gold or silver seems crazy to me. not that it stops people from selling of course!) now that this Fed has successfully convinced the bulk of Western Civilization that there are no more assets worth borrowing against (Bill Gross says nein to Treasury's...spot on in my view) then prices must correct in a DOWNWARD fashion accordingly (as if the Banksters don't already have enough wealth...yes?) In my opinion it's all still trying to "reanimate the dead." These Banks are not zombies...they are in fact DEAD. They cannot role over their existing debt in order to produce "new debt" and hence power the economy forward. this has obviously been devastating to the American middle class...indeed ALL classes...but we still haven't felt the "gales of creative destruction" yet amazingly enough. and i don't think it can be held off before the election either. My tell is the massive teachers strike in the City of Chicago. The folks have their backs to the wall (or is it to the Wall Street?) and these one's at least fought back. http://www.cnn.com/2012/09/19/us/illinois-chicago-teachers-strike/ this was a very well timed labor action and will go down as exceedingly well played by the Union troops. Looks like a good deal all around...but they had to fight to win...and they did...and they did.

Wed, 09/19/2012 - 09:07 | 2810549 Lin S
Lin S's picture

Thanks for the explanation, I sure appreciate it!  = )

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