Monday Market Musings - More Monetary Madness

ilene's picture

Monday Market Musings - More Monetary Madness

By Phil of Phil's Stock World 

More Free Money - OR ELSE!

That's the rally cry from the new IMF chief (appointed under mysterious circumstances). Lagarde gives the cry in Berlin this morning as she warns that the world will descent into the 1930s without - among other things - greater resources being devoted to various bailout mechanisms - the EFSF, the ESM, and of course, the IMF.

As we turn the page on a turbulent year, a year in which so much of what could go wrong did go wrong, many look to the future with trepidation and foreboding. They worry about uncertain economic prospects, dwindling job opportunities, and rising inequality. About what kind of future awaits their children.


Indeed, in the economic outlook that the IMF will release tomorrow, we will lower growth forecasts for most parts of the world. Even these lower forecasts assume a constructive policy path that is by no means assured.


In too many places, uncertainty is holding back demand and the willingness to lend. A legacy of high public and private debt is hurting economic prospects. The global financial system remains fragile.


In an interconnected world like ours, these forces are feeding each other across borders. Capital flows to emerging markets have already dropped off, and growth is expected to slow even in the most vibrant parts of the world economy. Low-income countries are especially vulnerable.

This speech was, of course, delivered in German.  I believe the translators at CNBC quoted Ms. Lagarde as saying "BUYBUYBUY!"  I know, you were too busy focusing on the warning that the IFM will lower growth forecasts for most of the World.  I believe CNBC translates that part of her speech as "record oil demand projected."  It seems that if I want to get behind this market rally, I will have to give up both reading AND thinking for the New Year. 

I understand the pain felt in those European countries that need to adjust, and the difficulty of sharing the burden in a way that is socially fair. But I also understand the feelings in countries that have been thrifty, asked to help those who could have managed their economies more prudently.


But what we must all understand is that this is a defining moment. It is not about saving any one country or region. It is about saving the world from a downward economic spiral. It is about avoiding a 1930s moment, in which inaction, insularity, and rigid ideology combine to cause a collapse in global demand.


The longer we wait, the worse it will get. The only solution is to move forward together. Our collective economic future depends on it.

I believe, was translated by CNBC as Lagarde saying Netflix was a bargain at $100 a share and CMG would hit $400 after earnings.  Well, I guess if you want to participate in this Wonderland Market, you should get used to believing 6 impossible things before breakfast every day. 

Speaking of impossible things - Iran said this morning that they will "definitely" close the Strait of Hormuz if the EU Embargo (now officially scheduled for July) disrupts exports. That sent oil flying from the lows of $97.50 last night all the way back to $99.50 (and we caught part of that ride in Member Chat this morning!) but now back to $99 as people remember they might have heard this threat 20 or 30 times before in the past month. 

Indicator snapshot 012012

If you are going to threaten to disrupt global fuel supplies, you have to carry out your threats sometimes - like CHK, who run the US Natural Gas Cartel and have cut of 500,0000 cubic feet a day (8%) of their production and are threatening to cut off 500,000 more - sending natural gas prices flying up from $2.25 to $2.50 (/NG) - now THAT's how you run a ruthless cartel and put the squeeze on American Consumers! 

Speaking of market manipulation - Goldman Sachs put out a note today telling it's clients to get short 10-year Treasuries as yields below 2% will be difficult to sustain (currently 2.05%) - gee ya think?  It's not the fact of the note I find odd but the timing as they are VERY late to the party (we've been short TLT from the low $120s) and I'm pretty sure the Fed is going to support $117 (now $116.55) into the auctions so this is really about GS chasing more money out of TBills and into their market top so they can make that exit most expeditiously. 

Like any good magician, the Wizards of Wall Street are happy to show you what's in one hand - as it distracts you from seeing what they are doing with the other. Goldman needs a big payday as they have reportedly invested $3.5Bn of their client's money in SHLD 4 years ago at about $100 per share according to the WSJ. The Amazing Bernanke

It's going to be another exciting week and tomorrow we get Obama's State of the Union Address and an FOMC Rate Decision on Wednesday along with their more "open" language - what a time for this experiment!

I'm still thinking that without MORE FREE MONEY, we're doomed. Hopefully I'm wrong this time but, until then, just imagine we're all walking around in the dark and I just said "I THINK there's a cliff just ahead." You don't have to believe me and, if I'm right - you'll be doing the rest of us a favor by confirming it.

Good luck!

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resurger's picture


"Too much money, Aint enuff know the FED's listning..."

Bitch What money?

Augustus's picture

Her only hope for remaining relevant is to have money to give away.  Buy her debt so she will have funds to compete in the Kiss My Ring contest.  Gimlets and Lobster for all of the Finance Ministers.

gookempucky's picture

The chinese have surrounded the wagons as the puppetmasters just stare into the sun. The Chinese are buying everything.

rocker's picture

Everything except our debt. They did stop that.  They prefer Gold and PMs now.  Hello America.  Do the same.

HungrySeagull's picture

They sure did.

Thank god for the Holiday over there... they would have ripped us Metal Bulls a new one making the market much more expensive than we can keep up.

With that said, I have positioned for a falling silver tonight. We will see.

Mike Cowan's picture

Shhh. . . There must be more money. . . .

ebworthen's picture

Glad I'm mostly in cash, what with all the manure being flung about and the cotton candy indexes.

I know, I "could have made a fortune", but I'm at better than break even at least after 2008 and I do not want to participate in stoning the widows and children or giving the Neros of the modern age any more pork and wine than they already have.

The trend is your friend's picture

The desparation is really starting to show.  Positive twists on everything and all negative news seems to be priced in.  At 1300+ who in their right mind thinks the fed is gonna start an easing program...REALLY? These hedge funds and portfolio managers get paid anywhere from 300k to 3m to put together a portfolio which can't even beat their indexes.  How long will can this last

non_anon's picture

insanity rues the day

Everyman's picture

With volume in the shitter the geniuses at CNBS are calling BUY BUY BUY?????????

Kudlow, Cramer and the rest of the lunatic losers at CNBS will have to pay the piper sooner or later, and the lies will come out, and people will have their asses handed to them.

Can't wait for redemption day!  Kudlow and Cramer need to be drug behind a pickup.

HowardBeale's picture

The most inspirational event that could happen would be for someone to suicide bomb CNBC, killing everyone. If that were to happen, there would be hope for the average American.

HungrySeagull's picture

Buy! Hay-ul, NO!

They must shit marbles over there in the hallowed temple of the US dollar.

TradingJoe's picture

Ain't no freeride tomorrow or Wednesday folks, not just yet! Oh, o
It will eventually come, no doubt about it but not just yet! It's politically not "favorable" right now, eh!

eddiebe's picture

Same old: More money for the rich and more austerity for the rest.