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Liquidity Can Overcome Common Sense For Only So Long
Submitted by Mark J. Grant, author of Out of the Box,
Testifying before the British Parliament yesterday:
"Let's be clear. We've intentionally blown the biggest government bond bubble in history... If I were to single out what for me would be biggest risk to global financial stability right now it would be a disorderly reversion in the yields of government bonds globally," adding there have been "shades of that" in recent weeks.
-Andrew Haldane, Bank of England Director of Financial Stability
Here may be the most open and truthful statement by any central banker since 2009. His comments indicate a number of things besides the first blush read. First and foremost it is an admission of global manipulation by all of the major central banks which is a position that I have expressed for quite some time. Mr. Haldane’s comments here and other remarks he made leave little doubt that the central banks have operated in collusion.
Second he flatly reinforced my long held opinion that the world has been living in the largest bubble in all of history. Every asset class, bonds, equities, commodities have been held up by the tremendous flow of liquidity created by these fellows. The world has been awash in capital and so much so that the liquidity overcame the economic fundamentals of the countries and markets that supported the prices and rationalized the levels. All of this was blown-out by the money that was created and put into the financial system with wild abandon.
So where do we stand today? First I think the “liquidity effect” is wearing off and secondly I believe that the economic fundamentals, far from improving, are rapidly getting worse.
Spain reported out its housing numbers this morning. Down the most since the Spanish agency began calculating the numbers. They dropped 6.6% in the last quarter and 14.3% from a year earlier. It is not just the Spanish bad bank but the securitizations at the ECB, guaranteed by Spain, that are bundled in a sea of red ink.
Then consider the promise of Japan’s central bank. An initial market reaction similar to the Draghi “Save the World” speech which has now deteriorated into a nightmare as the yen is pounded and their stock market gets hammered day after day. The Japanese hoopla has not matched the European hoopla by any stretch of the imagination. Their stock market was down 6.4% overnight which would equate to a 960 point drop for the Dow.
European sovereign yields are beginning to rise once again and you can sense a change of attitude in the marketplace.
Liquidity overcame common sense and economic fundamentals for a time. A lot of money was made and a huge amount of leverage was put on. Everything rose with the tide. Look around you though; look carefully.
I think the tide is beginning to go out. I believe recession in Europe will spread to America as the severity of the European crisis becomes more and more apparent. Upcoming economic data in France is also going to be quite troubling in my opinion and the contagion will become apparent in the United States.
You better watch out,
You better not cry,
Better not pout,
I'm telling you why
Santa Claus is about to head out of Dodge
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We don't need no stinkin' common sense... we have food stamps! And Ben will save the day!
/sarc???
MOAR LIQUIDITY!!!!
A tsunami is the perfect metaphor for what is happening. The foolishly clueless stand there gawking at the receding water, while those in the know are increasing their elevation any way they can.
Moar like it:
http://www.youtube.com/watch?v=Roayx-79cAs
That's a very sad personal icon. But there are days when I feel your pain, especially when my Firefox springs a memory leak ....
Will Ben Canute be naked when the tide goes out ?
Got to have a POMO day failure first.
Maybe todays the day.
agree. And the few remaining, with an inkling of common sense, feel so disinfranchised from our current government/nation that they focus on what they can get/have/protect. A sense of survival in a disfunctional society.
Time for stagecoach silver. "For when you have to get out of Dodge".
http://bullion.nwtmint.com/silver_stagecoach.php
This party is coming to an end... don't be around when the check comes...http://tinyurl.com/lq63ahd
Finally.
I think you mean:
FFffffffffffffffffffffiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiinnnnnnnnnnnnnnnnnnnnaaaaaaaaaaaaaaaaaaalllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllly
because as long as this shit has been going on, it can go on a while longer.
Non-Sequitur Alert: "This has been going on for so long, it can go on for even longer."
Sorry, it does not follow. It's a "critical state" situation. You can keep dropping sand on the pile, or adding straws to the camel's back. At some point, it can't go on any longer and that which has persisted for a very long time SUDDENLY collapses, all at once and without warning.
Yes, it may go on "a while longer", but it may not. And when it ends, there will be no time to make a leisurely stroll to a defensive position. You'd better have your ducks in a row, your metals in a stack and your 'taters in the cellar--BEFORE that moment comes.
"Where I live, I AM 911".
Every month more and more "investors" drop out of the casino....they go to the sidelines...and I do not think the youth are taking up the slack as they are not the big cash generators of the past anymore.......so the actual players in the "market" get fewer and fewer.....but the swings will get bigger and bigger as the players new toys...HFT´s...will eventually overtake any remaining "market" that is left...and their will be crashes and fat fingers a plenty....the stock market will no longer be a show of a countries wealth in 5 years I think.....wealth will be counted differently...maybe having a job might be the thing....
I don't think you're accounting for the wonderful camel prosthesis that they've come up with in the last few years.
Camel prosthesis? Where can I get one? Is it tax-deductible?
The Intended Consequences of the last few men standing.
What??? Futures are up.....buy buy buy!!!
Oh I'm sure theyre desperately seeking suckers to dump the trash onto.
"A lot of money was made and a huge amount of leverage was put on..."
~~~
See... I hate reading horseshit like this... It gives the impression of a functioning market... It should read...
"A lot of money was PRINTED OUT OF THIN AIR and lent out at zero interest to 'cronies'... So much so that it amounted to double & triple digit leverage which was used to manipulate assest prices upwards... At the end of the ponzi, those who were first in line to get the free money did the best they could to dump the assets onto a market & skim any profits... If they weren't fast enough, all they had to do was to 'book' a paper loss & heave that loss on taxpayers"...
Big fucking homeschooled hereoes...
+1, your medal is in the post.
I mean, for fucks sake... Even if you didn't want to lift a finger, you could park printed money that you got FOR FREE back at the Fed & draw interest on it...
~~~
Given the homeschooling needed to learn how to do that versus perfecting a jump shot... I'll take the skill & imagination of NBA players over glorified 'Pedro's' at South of the Border...
Would have been better to give every single human on the planet $12 a month.
francis_sawyer..........thanks for ''keeping it real''
http://www.comedycentral.com/video-clips/67hgjb/chappelle-s-show-when-ke...
I don like people playin' on my fone... LOL
Long term treasuries have the room to rally 100 basis points here if the emerging market bloodbatch continues. Hedge funds, wake up.
I apologize for repeating myself about Haldane's comment yesterday, however let me reiterate that they blew this bubble on purpose knowing full well it would pop. And when it did they could roll out the new world currency to " fix" the crisis they started to begin with.
All we need is the right major crisis and the nations will accept the New World Order.
David Rockefeller
That's the plan. The IMF will manage the SDR - the new world currency - to 'keep us safe'. One day closer to Armageddon.
Oh and it keeps getting 'better' (not!)... They'll use gold (maybe silver too) to back the SDR, with SDR used for Balance of Trade adjustments between CBs of nations. They won't use gold like in the old days to back the currency. So they (CBs) don't want the commoners messing with their fractional reserve gold. Nor do they want Libertarians or 'Profiteers' to benefit from a gold windfall, since they're not in The Club.
And with all the personal and financial data they got on you, and you loving your Plastic and Smart-phones so much, they'll just turn it into their version of Bitcoin. If they don't get an RFID into you first -- in which case, HSBC's airport posters will be correct: "In the future, your DNA will be your data". Welcome to the Matrix/NWO.
Only Russia and China stand in their way from total domination. How many countries left that are not part of the global CB Club? 3? (after they took down Afghanistan, Iraq, Libya).
One Coin To Rule Them All.
Yeah, agreed- they saw their golden opportunity in 2008 and wasted no time. Thank goodness we have a community organizer in the White House. He'll stop those evil people and protect us. I feel so much better knowing we have a President and, in fact, our entire government FINALLY ON THE SIDE OF REGULAR PEOPLE. They'll never let that happen to us. And if they do I'm sure it's only because it's the best thing for us. And, of course, for the sake of the children.
You forgot to add.....
Fuckin SARC!!!!
Even an orderly reversion to appropriate yields on sovereign debt will be cataclysmic. Anyway, Haldane prolly notched himself up to jack of spades status on the Illumati's terrorist list.
You've got to wonder, when you get behind the artificial liquidity, the bullshit and the recovery propaganda, how bad things actually are. I expect we'll now see.
What parallel universe are we living in? The Nikkei closes down 850 points and now it's CFDs are trading up 300 points. Those traders over at the 'Tokyo Stock Exchange' must look like prisoners of war about now.
When you have an activist Fed, set to protect their crony-elites at any cost...For the sake of us all (as they would put it), is it any surprise we are up today - and gold is down, while we talk of "waves of liquidity" and a plunging dollar?? If anyone thinks at this point that the Fed IS NOT micro-managing every jot and tittle in every asset class on a minute by minute basis - You are clueless and should be getting your news from USA TODAY!
Asinine....my Yen shorts are bleeding red.....fuckers.....dammit man
They bought themselves a bit of time, but overall things aren't looking good for the NWO Overlords.
They thought with all of their money injections that everyone would have a job by now....its the opposite...people are losing jobs and that is a scary thought for the NWO....because people riot when they get hungry or bored....and they usually attack the overseers.....them....
See, this is what happens when people don't join the motherfucking SUKI (tm) RELIGION (The New World Religion (tm)). The Japanese market takes a dump. So get with the program already. Membership is cheap compared to the alternatives.
They can SUKI my dick on any religion.
FYBB! FYBO! Didn't want offend anyone but...
I admit it i'm just an average punter,but even my simple mind tells me that all this liquidity pumped into recapitalising zombie banks leveraged at god knows what and a world economy still pretty much stuck in stall speed coupled with all these bullshit off the counter financial products floating around[unproductive capital]is an iminent fucking disaster waiting to happen.
What fascinates me the most though is the fact that so many people are still not aware of the shitstorm coming down the line.Totally brainwashed / conditioned by MSM.
Their government benefits haven't been threatened yet. EBTs still clicking away, SS checks still showing up right on schedule and in full amount, Medicare and Medicaid still paying every claim.
If that was your world, why would ever want to talk to people like us? We're saying disturbing things. We're loonies. You gonna believe our crazy rantings or that government check that shows up on time, every time?
Hear you ND.The fair dinkum middle class is getting fucked every which way.
To me, it is a way of thinning the herd....sheep led to slaughter.....the freeloaders will be the first to be cut down (DHS bullets, FEMA camps), and the ignorant and stupid will just hear OCuntus's words and follow his orders....
Population control - the likes of which the Nazis would be proud.....that's what's coming.....
there are plenty of those tha are aware, just don't want to think about the consequences, so they pretend it's not as bad as it is.
So you are saying that the Fed will now withdraw liquidity and force the US government to reduce it's expenditures (including Social Security, Medicare, and Defense) by 40-50%?
Or are they just pausing their bubble blowing to allow time for a little air to escape so that they can refill their lungs for more bubble blowing in a few weeks or months?
STAND WITH EDWARD SNOWDEN - SIGN THIS PETITION
To President Barack Obama:https://secure.avaaz.org/en/stop_prism_global/?bQEUUbb&v=25834
<--- Done. Signed petition. Got civic courage.
<--- Chicken. They might be tracking me.
Hey, Obummer's welfare state is booming. The IRS is hiring like mad. The NSA is going to need bodies to fill that great big spanking new building in Utah. And, with the boom in assets, more seniors are going to retire and create job openings for younger adults (from Bloomberg expert) which of course makes no sense as the greatest number of new jobs in the last year has been for those over 55. Confusion and confliction is the name of the game as the FED leds us to prosperity.
But the hiring is all with contractors, consultants, and former public officials who've cashed in by entering the private sector to make maximal use of their political connections. That's where the real money is these days, and the real corruption ....
Myth: QE props up bond prices. Reality: ZIRP props up bond prices. QE drives down bond prices, eventually, to the extent and duration of the QE.
QE operates against ZIRP. The point of QE is to get people *out* of bonds (especially "safe haven" ones) and in to riskier assets. While bond traders do chase up bond prices in anticipation of QE, during QE, the bond selling pressure is stronger than the buying pressure. Bond prices are under downward pressure because QE is going on and is clearly going to continue, at least til next year. If the Fed actually reduced or ended QE, bond prices would rise again, as they did in late 2008/early 2009, in 2010, and in 2011 (and to some extent, 2012). ZIRP is the master policy in control here.
Notice how the current bond fretting affects mainly Treasuries and MBS. Corporates and municipals, for example, haven't been as affected.
Sorry brothers. F'n tired of signing petitions.
I'll get up when I hear gunfire.