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Now... Assume No Fed
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Visualize Total Market Annihilation
We have the Treasury debt that keeps going up and now the Federal Reserve balance sheet is competing with the national Debt.
Why not have IRS just print free money too... they will get off our backs. Let them run another deficit in parallel to the above two.
GIMME MY CRACK MUTHA FUCKA!
And as I always say that chart is wrong for '10 - BB promised QE at Jackson Hole in August that started the ramp, so although there was technically no QE there the sole "promise" moved price off the lows to the November start - adjust the chart please. If anything it will look better.
WE WANT DEER!
I LOVE LAMP!
50% if the fed does intervene.
The "market" without the Fed ? The former cannot survive without the latter's liquidity life support mechanism.
The result of quantitative starvation ? A No Man's Land for those individuals and entities who still have capital committed to equities.
Just like 2007 it isn't what we see that is the problem... it's the cracks in the shadow banking/derivatives/insurance arena that will spark the collapse. Wait on the Bernank or Crack Lew to call O'Bummer on the Bat Phone. That will be the cue.
No TARP this time. Full withdrawl cold turkey.
No Methodone for you.
No bailouts > No banks left standing > No ATM's, checks, physical cash circulation > No sustainable economy activity > No food, electricity, fuel or fancy new entertainment games gadgets or even internet eventually...
>Absolute economic collapse and total fucking CHAOS.
(All before they have had the chance to get the 'i's dotted and the 't's crossed on the modern totalitariian security state?... not going to happen...)
Ergo there will have to be yet more bailouts and obscene cash injections (tens of $T) into the banking system or it's GAME OVER.
It's called can kicking on steriods and it's all they can do now... until they can't.
They don't call it the 'Roach motel of fiscal and monetary policy' for nothing you know...
It would be good to be holding some of those shiny rocks when they announce it.
Really - are we sure that's true? If all the investment banks / hedge funds went to the wall, would main street really get dragged down with them - would your deposit account suddeny disappear?
The deposit insurance would probably be cheaper than another round of bailouts. So one 'investment bank' owes another 'investment bank' a shitload of <Insert Asset/Currency/Share> and can't deliver. People on main street still make stuff. We still get up every morning and go to work, we still pay our bills.
I'm not sure the world would end for us. On Wall St, they would be clearing the corpses with a bulldozer, same as in Canary Wharf. I imagine the Chinese politburo might choke on their cornflakes too, seeing as they own much of the debt.
But we are not going to stop working and living. Thinking that the average Brit or American is going to lie down in the dirt and give up is just defeatist nonsense.
Bank on it.
Nothing moves globally without banks dealing with other banks on trust that LOC's, loans, rehypothecated assets etc will be paid/repaid/redeemed. No banker wants to be left holding a bag full of shit on a Triple-Corzine.
If you don't bailout then you crash asset values/balance sheets of the same institutions that are essential for the global flow of goods.
Once that level of global systemic complexity is lost you have mere weeks to get it up again or you lose it.
Never forget Lehman Fall 2008. The system froze and Paulson vomiting into buckets at the realization of what was about to happen was REAL...
ALL BERNANKE HAS BOUGHT US WAS TIME. (And an even bigger crash at the end of the day)
And literally no changes were made by the global financial markets nor Congress to fix the problem during the interim...
It's all fun & games but I think the muddle through scenario can continue for quite a while to come, remember as Kyle B says it's not the math that is in question it's people's perceptions and they have such a firm grip on that they can continue the magic show for quite a while. Sure it's prestidigitation but no one really wonders where the quarter went since they know the magician can just make it appear again.
Perceptions are key. Each little crack in the illusion (Cyprus bail-in etc) weakens the belief until enough people leaving the system causes a stampede to the doors.
Right now the sheeple are still believers in the "Great Resurection"...
Break up the banks and take away their deritivates trading desks.
Kind of gamy in the summer time around here. OBTW: Happy Solstice! Perhaps some things other than the Sun are at their zenith.
Caint we awl jus get alawng??
This makes it all better. Now get to work:
Now would be a good time for the money bunnies to say that the stock market has nothing to do with the US recovery.
The US what?...
A Recovery, This is what happens when you take the free drugs away from the crack hoe
Just a bit of profit taking today
Share buy-backs tomorrow
I wouldn't bet on that.
Isn't tomorrow some triple/quadruple/infinity witching day?
Is Denial over?
That's where you fancy up your flea bitten old couch with nice new polyester and voila, new couch!
Style over substance, works every time in Amerika
This CareerBuilder ad seems remarkably appropriate to me for some reason: https://www.youtube.com/watch?v=M1owcncKCHg
the US what?
Uhm! I meant the economy...
You mean total 'farce' annihilation?
Yeah...It takes us back to SP 1000 which was what Marc Faber said about 2 years ago!
No wars is right. The volunteer military and the Fed have made these illegal wars possible.
Fed money printing makes wars and the police state doable w/o the consent of the governed.
There were wars before the fed, there will be wars after the fed.
The only question to me is what will people be fighting with after the fed completes its mission?
Each other with wooden sticks for scraps of food most likely... if they can get a bank loan to buy the wood that is...
All your forests are belong to Agenda 21...
Either that or merely expropriate them for non-payment of carbon taxes...
....and the proper permits to grow the food
You'll have to fill out form 55-f in order to get the permit application to begin with. Please take your completed permit application form down to window 9q and give it to Patty or Selma.
Malikai, we used to pay for our wars. Our level of debt used to affect our ability to borrow to fund government spending.The Fed has allowed this president and the one before him to spend way beyond our country's ability to survive the burden of debt, and in the process enabled the US to engage in wars we can't afford and shouldn't be fighting.
No, No idiots
“Whoever controls the volume of money in our country is absolute master of all industry and commerce…and when you realize that the entire system is very easily controlled, one way or another, by few powerful men at the top, you will not have to be told how periods of inflation and depression originate.” – President James Garfield, two weeks before the assassination attempt that ultimately took his life.
"Banking was conceived in iniquity and born in sin. Bankers own the Earth. Take it away from them but leave them the power to create money, and, with the flick of a pen, they will create enough money to buy it back again. Take this great power away from them and all great fortunes like mine will disappear and they ought to disappear, for then this would be a better and happier world to live in. But, if you want to continue to be the slave of the bankers and pay the cost of your own slavery, then let the bankers continue to create money and control credit." - Sir Josiah Stamp, President, Bank of England (2nd richest man in England)
"Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves." - Andrew Jackson, 7th US President 1836.
"... You are a den of vipers and thieves."
I am a little bit confused as to whether he is referring to the Bankers or the Members of Congress...
This was a pussified selloff with a side of btfd at the close.
ha i mushed it!
Today's market ending was more likely shorts closing positions. There was no one buying nearly all day. Tomorrow is a new day and the shorts with the ten yr well into danger zone will likely come back in hard if the rates remain elevated.
PHEW!!!! Good thing all us ZHers are smart and are hiding in GOLD and SILVER!!!!!
Oh, wait...... my PM charts were upside down.....
An interesting note in Ed Steer's column today:
The silver eagle sales number that you report is sort of misleading as you are only counting the bullion coins. You have to do a little extra digging to find all of the silver eagle sales. The mint has sold an additional 568,155 2013-W proof silver eagles, 118,841 2013-W uncirculated silver eagles, 281,310 2013-W two-coin eagle sets (562,620 coins/ounces) and 3,207 silver eagles contained in "2013 Congratulations sets" for a total of 1,252,823 silver eagles that you've failed to report. Just because the coins may be a little shinier or sold separately as collectable's doesn't mean that they aren't silver eagles sold to the public. YTD silver eagle sales totals from the mint should be reported as 25,280,823.
Then, if you count the 2013 5-ounce ATB [American the Beautiful] silver coins -- the mint has sold 24,998 of those coins for an additional 124,990 ounces.
They have also sold 103,484 2013 5-quarter silver proof sets (90% silver) equating to 92,488 ounces of silver.
244,812 2013 14-coin silver proof sets have been sold with each set containing five 90% silver quarters, one 90% half and one 90% dime. These sets total 323,825 ounces of silver.
48,853 2013 5-star general silver dollar proof coins (90%) and 20,756 5-star general uncirculated (90%) coins have been sold, totaling 53,807 ounces of silver.
77,838 2013 girl scouts silver dollar proof coins (90%) and 28,976 girl scouts uncirculated (90%) coins have been sold, totaling 82,567 ounces of silver.
And finally American gold eagles are alloyed with 3% silver by weight. YTD gold coin sales contain approximately 34,700 ounces of silver within these coins.
So, all of these non-silver eagle products totaled together equate to 712,377 ounces.
Total silver sales YTD from the mint should correctly be reported as 25,993,200 ounces.
It will never be cheaper until the day there finally isn't any Rocky...
If people can't see the 'On Sale' sign here they have got to be blind...
I just put in an order for 50 1oz Maples. The shiny stuff is on sale!
not much for sale at tulving. looks like new stuff. and even new silver (rounds) is sold out
I'll buy yours.
China is at the front of the line... Project for a New American Century of China, courtesy Rockefeller and Bush. All your Bill of Rights are belong to us!
Boycotts will spread like wildfire. It'll make Reagan's "Buy American" look like a kiddy lemonade stand.
Eventually the consumption void left by 3rd world USA will by filled. Try to imagine a world where no one gives a shit what happens in the U.S.
Assuming no FED we wouldn't be in this mess in the first place http://tinyurl.com/mem7o7x
Mein Vater, mein Vater, und horest du nicht,
was Geldkonig mir leise verspricht?
Ich liebe dich, (sagt der Konig), mich reizt dine schone Gestalt,
und bist du nicht willig, so brauch' ich Papier und Gewalt.
Btfd. Short new all time highs
Not so much "invert," but we assume you mean this:
So the dollar is rallying while bonds get sold. How does that work ? What are bond sellers buying that is proping up the dollar ?
Quit trying to use rationality in this market....
doesn't the sale of assets create demand for dollars?
Buy buy buy ... no wait sell sell sell ... OK now buy buy buy ... aaaaaaaand sell sell sell!!!!
Not when you are selling dollars. (bonds)
In wonderland, the laws of logic, physics and economics do not apply.
“My dear, here we must run as fast as we can, just to stay in place. And if you wish to go anywhere you must run twice as fast as that.”
“The rule is, jam tomorrow and jam yesterday-but never jam today.
It must come sometime to jam today, Alice objected
No it can't said the Queen It's jam every other day. Today isn't any other day, you know”
Lewis Carroll, Alice in Wonderland
Bonds are dollars.
Wrong. Bonds aren't money. Don't you recall the Paul-Bernank smack down? Tradition!
Correct. Now it's time for a lesson in zero velocity. Any Irving Fisher fans in the house? Go long Mini Storage Wars... That's where you'll find the dollars.
Bonds are cash equivelants.
And the meaning of "is" would then be equivalent to a blue dress...no?
Spitzer: Not Correct.
At least not in this so called "market". Paper wealth is being destroyed everywhere around us. It’s a flight to liquidity and the perceived safety of the dollar, and their isn't enough to go around, thus the rising USD.
Bonds are cash futures not cash equivalents. They are very similar, but not equivalent. In this sense, a bond can be in contango or in backwardation depending on when the bond-buyer wants the money. Right now, I would value money in hand more than USD issued 30 years from now by .gov. I dont think .gov will be here 30 years from now. Or even 10. Or even 1. So I would pay a premium to get that cash now (suffer a loss to cash out), placing bonds in contango. However, as long as US bonds are readily tradeable, it doesn't really matter. But when they no longer are... Yipes.
Absolutely right THX. Spitzer is giving the conventional wisdom and saying bonds==cash. USD is a bond with zero duration. 10-year is not. The move is a preference for the very short end of the curve.
It is an ominous sign when S&P500, 10-year, and commodities all move down together with a rising USD.
i think they are holding dollars and in many cases returning the dollars to where they borrowed them from. simplistic way tolook at it, but to me it makes sense.
Leveraged Liquidations, bitchez!
Yup... Pawn Stars
this occured to me also; I have no idea.
I think it is deleveraging, dollars are being destroyed, so there is less of them, making them more valuable, and asset prices drop. Margin debt was at all-time highs, and it isn't just stocks that are margined, take a look at the balance sheets of some of the mortgage REITs, leverage is 8X on highly volatile MBS.
Not if you are trying to meet your margin calls.
suitable for use as collateral?
rehypothecated to infinity?
pigs buy the dips
The fed will be back soon. Let's not get carried away.
As the buyer of last resort of everything paper, Ben managed to make it all cheaper today. Supposedly all he had to do was look confused on tv.
Nothing like a little free fall for a few weeks to shake out the FED dissenters. Call me a conspiracy theorist but I believe that the run on phyz gold has more than a little to do with all of this.
It's a big Chinese fire drill right now.
The markets crying like a petulant child over the HINT of tapering. The Fed will have no choice but to come back.
It worked the last 3 times.
How interesting that behavior resembling a 3 year old is moving the all powerful and criminal Fed!
Wait, who Fed the pigs?
Stop feeding the pigs!
Assuming no FED, that timeline would officially be long enough.
HONESTY. Honest prices. Honest interest rates. Honest "values"....that's what we'd have...
You really want to see a shit-storm?
Bring in that 'honesty' BS and mark to market allthe bank holdings and fed buybacks.
The mkt, or lack there of, can't handle the truth!
only thing i can figure is that ben was really mad at barry's interview with charlie rose and figured: i can hit back at that a******!
give it a few days and a minor meltdown, barry will cry uncle and the bernank will be on TV to clarify his position on the taper.
You nailed it!!
Without the FED we might be left with the market.
What, an environment where buyers and sellers can conduct transactions and make investments based on supply and demand, unhindered by manipulating factors? That's crazy talk!
Think of the children!
Then you would be left with HFT because there are no humans left in the market.
every trader become Rich
Show us a 10 year chart!
A balloon can only be inflated so far.
Who's ready to start catching knives in stocks, bonds, or gold/silver???
Everything looks bearish...
New lows in bonds and silver/gold... 50dma breach in all US markets...
What the hell am I supposed to buy???
And dont say FAZ or TZA :-)
At this point, freeze-dried food hidden well is probably the better move.
Is the paper fiat Ponzi failing, or are monetary metals failing? If you have strong hands, and extra $usd, you know what to buy...
I'm going long beer.
I'm going long whiskey.
I'm going long absinthe.
I'm going long lines of coke and Elmer's glue.
Bath salts and liquid Tide.
Sisa and XLarge black hookers
I'm going long on Deadwood
Gold and silver. But I would stay in cash for now. I bet we test the 2008 lows if China or Euro melts down.
$10 silver, $800 gold Bitches!
Most miners would be dead at those prices...BK, all done.
Dead, or dormant? I think it may be a stage we will pass through. Still long SIL.
when the shitstorm is over, all mines will be nationalized anyway.
I think you may be right about the silver and gold lows and staying in cash till then.
As far as buying silver is concerned, Im wearing wire mesh gloves. Ill catch all the knives and stick em in bernankes back.
Sigh... No baffle with bullshit, no laughable propaganda or statements, no Pomos, no money for the government to blow on entitlements and wars, no Arab Spring and...
Now that is a scary thought. Yikes.
It's Syria time!
You think they're going to give up that easily? Another crook would step in.
Y' know, with a little facial hair Zero could play the role of........but Zero isn't with us anymore.
if there is no FED so this website doesnt exist ?
there will always be gold, banksters and tax shelters!
Bonds catching a bjd...ben is doing this to get rates lower....may not work but it's all he has left
What people that are unaware of Austrian or Free Market economics do not know is that without a central bank you could put money in a mattress and have it GAIN value over the years.
That is because price inflation is only the visible symptom of money printing/fraud. The printing/fraud first steals any and all productivity gains out of the system and then begins to eat away at savings/cash via prices.
steady on..are you saying that central banks guarantee a real return on cash with an interest rate?
Maybe you're kidding, but without a central bank artificially setting rates, the interest you'd earn on savings would be determined by supply and demand as it should be.
i have tried to come up with a reason why central banks are not just another government department and failed.
i believe that government departments, politicians and any form of government (barring my benevolent dictatorship of couse) has failed in every endavour, and exist only to prevent the anarchy of the the free flow of ideas, investment and rising living standards
now..wars, invasions, genocides are not the answer, but when someone points a gun at you, you tend to get poor.
"when someone points a gun at you, you tend to get poor"
Unfortunately, whether done by large government bureaucracies or small tribes at war, whenever more than a few apes with car keys get together, someone is going to get screwed. There is no anarchic utopia. Human nature is what it is.
Assuming the economy grows faster than the gold/silver supply, yes... which it most certainly would.
The cleaning and rebuilding can begin.
dont't worry, be happy, this is such a predictable chart pattern/money flow chart that the NSA's PriSm algo has made brazillions on the up and, so far, on the way down.
anybody who has the submarine/sniffer/ice berg algo should make sure it still correlates
Marketwatch has a nice sub-headline today; "Stock futures slide, as Fed. triggers global rout"; is he going to get fired, or what?
correct me if i'm wrong, but you can only get bitch slapped by a POTUS once right? the next time is because you like it?
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