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Bill Gross Issues Another Rhetorical Warning, Asks "What Happens When It Stops?"
In what can only be described as perfect timing, just a few short hours after we recalled Bill Gross' March 2011 note in which the former head of Pimco asked "Who will buy Treasuries when the Fed doesn't", moments ago the current/former (depending on one's ideoloigical persuasion) bond kind has just tweeted another warning, this time asking, again rhetorically, what happens when the music ends.
Gross: (1 of 2) QEs worldwide supporting financial assets: ECB + BOJ each $1 trillion +
— Janus Capital (@JanusCapital) June 10, 2015
Gross: (2 of 2) U.S. Corp buybacks $1 trillion + as well; China too. What happens when it stops?
— Janus Capital (@JanusCapital) June 10, 2015
We all know what happens: as Chuck Prince so accurately pointed out nearly a decade ago, as long as the music is playing, one has to ignore reality, and dance.
And when the music gets quiet enough, and the Fed has no other choice, it will do what it has done every single time when the dance was in danger of ending: do even more QE.
Rinse. Repeat. Until one day the USD is no longer the reserve.
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Been waiting for 6 years. This time anyway.
Big machine. Lots of inertia. Amazing how it takes for confidence to really erode absent something getting thrown in the gears.
Reality is perception....until it isn't.
There is no spoon. There is no dollar. Finance is an illusion. Economics is an illusion.
The only things worth trading are tangible and actual skill sets. Scalpers beware.
In the age of Aquarius the water bearer is king because it is he who gives life.
Be water my friends.
draghi will step in and say something about bazookas like last time.
blow jobs will be 2 for a buck
Silver coins will hold premiums at strip clubs.
Fortunately for us, Bill will be long dead before we find out what happens when it stops.
The system is already dead man. It's like Weekend at Bernie's. It's a fucking ghost. The dollar is not real. FInance is a joke. It stopped years ago.
get long boxes of Tide
Scalpers beware. In the age of Aquarius the water bearer is king because it is he who gives life. Be water my friends.
Scalpers will soon own the whole reservoir. My cistern runneth over.
They own an almost empty resevoir. The dollar has been leaking percieved value since its inception. Now after the quadtrillions of dollars printed to bail out a scalping banking system everyone knows the fix is in, but people are too greedy to do anything about it.
People want to believe everything will be ok. So boomers retire and collect their pensions thinking they took down Nixon and saved the universe. Millenialls will drink their coffee and think they will be the next Ryan Gosling and Jennifer Lawrence. This while finance continues into the black hole.
It will be greed that ends up flipping the boat and people will see their reservoir dry.
You might be waiting for another 6 years. Japan has been at it for how many years? 25 or so.
Japan was doing it alone though. Now everyone is doing it. They have spent every single fucking penny to keep the charade up worldwide.
Japan was a fraction of the world's economy. Now everyone from the Fed to the IMF to China is printing an absurd amount of funny money.
** ALERT **
Watch out ZeroHedge commenters. The DOJ could be coming for you.
http://motherboard.vice.com/read/the-government-wants-names-of-online-co...
Tomorrow, tomorrow, there's always tomorrow.
Then you die.
"What happens when it stops?" It won't stop. It will just keep going until implosion
Might as well ask what happens when the air runs out...It won't.
We'll just go from pump to pump to pump until the whole thing just supernovas, and then we get to stew in regrets.
And by "we" I mean everybody except the people most responsible.
Empty accounts are used as collateral, volume and growth. If i have 1million empty accounts then i can get a loan and use that loan to access even more.
Leverage build apon leverage supported by empty accounts that some accounts say have x liklyhood of not being empty, so loan me money based on that.
You believe this can continue indefinately. It will end, even with all the fraud the piper must be paid. Those pensions who loaned that money want and need x that will not come from an empty account.
Bills are being extended, not paid. Everyone thinks they can run the same accounting as the US Government and have it work as well. Buying time and prayer leads to panic.
Yellen: "Stops? BWAHAHA!"
"Helicopters". Drink.
Everyone is broke now. After? Everyone will still be broke, but without debt since that all gets handed right back to the idiots that offered the credit to everyone to begin with. Then rebuild.
Now what happens to the people that offered all the hollow promises of credit and helped it happen? Like every other time in history they are probably murdered in their sleep by the people that guard them for turning their livelihood of security into a penny trade.
" Like every other time in history they are probably murdered in their sleep by the people that guard them..."
Is that what happens when TPTB can no longer pay their minions?
That's what always happens when TPTB through out recorded history fails to pay their minions. A little poison in the soup. A knife in the back. A fall out a window. If they were lucky they were sold as slaves if they were young and healthy enough in the turn over trade of empires.
We all know. Read Galbraith's book on 1929, said the run up in the late 1920's saw a scarcity of share supply, and some folks were worried that shares for certain companies would "disappear" altogether. Thus, the frenetic scramble to get said shares. Then the sheep were sheared.
We all know how it ends when the artificial bid goes away...if it ever does.
History is very clear on the only way it "stops". Once the actual producers can no longer deliver those essential commodities, the "civilized" people of the world will start killing each other in earnest (again).
same as it ever was...
When it stops, we find out what the howlitzers being transported all across the USA are for.
Shame the military won't be pointing them at the west creek operations center.
It's not the fall that kills you. It's the sudden stop.
review if you will, how fragile the internet is. It can be fragmented into many parts quite easily, and hard to track who caused the disruption. Putting it back together after a fragmentation will be quite a job. Really, structurally, the internet was constructed assuming no bad players, and assuming a more robust system would come into play, but it was patched together by guys trying to sell routers, and they were not concerned with a secure system, leaving that part to the next guys, who NEVER got to play that role. Other than certain parts, it is all vulnerable to an attack.
Not attack, just bad code. Its far worse for any structure to have bad workmenship then it is just to hit it with a hammer.
The entire internet as it is known is ripe full of broken code, built on even worse patches. It will become so bloated that it will take ever higher bandwiths to keep it running. Thats just not going to happen. Fiber or no, this puppy is coming to an end as well.
it is not the code I refer to, it is the method of routing itself. BGP is the problem. Example, china telecom sent out a BGP message claming to provide the best routes to thousands of networks, and routers worldwide, having no system to check the veracity of the BGP message, began sending internet traffic to china telecom including sites from the us govt, navy, army, airforce and marines. There is no way to know when an attack is made and a war with iran could cause iran to make a vast BGP attack , or rather, send out BGP messages that are false, and then we are in the position of having to endure internet fragmentation, which is a real problem that is not covered or looked at by the financial media despite its vast ramifications and realities.
But it doesn't stop, Bill!
Its money printing and debt forever!
Hey Tylers.
Can you do a post on Canada Pension Plan Investment Board's $12 billion acquisition of GE Capital's private equity lending arm?
Stumped up $3.85 billion of their own cash, rest from a consortium of international banks.
I'm financing this scandal and wanna spew some bile.
Thanks in advance.
"The feeling is that even the present portfolio risk is too conservative for where the fund is in its life cycle," said the person, noting that CPPIB is projected to have more fund inflows than pension payouts for a number of years to come allowing it to seek higher risk and higher reward investments at this time. "The GE deal in a sense is part of a larger move to take on more risk, but very prudently."
LOL...
http://www.reuters.com/article/2015/06/10/deals-privateequity-ge-canadap...
It has to do with a huge bad bet done concerning a company called BreX in the 1990's. CPP and other Canadian pension funds went whole hog then were kebabed when it turned out it was a big scam. The bunch of them have been trying to cover it up and double down on other market bets since then (like Nortel...Mitel...etc). Consider the GE slider just another one of those effects.
CPP lost a ton of money on Bre-X and the papers tried to blow it up. But on an AUM basis it wasn't that big a deal. They made moneybthe year Bre-x crapped out, they just would have made 1% or 2% more.
Checked and not sure if CPP even held Bre-x. Ontario teachers lost $100 Million which sounds like money but on a $48 Billion portfolio its a rounding error.
Sort of. Pension funds and governments should never operate like a retail investor with their subscribers captial. Right? But they did. Let's do a run through on this.
The government issues bonds based on growth. At that time phenomenal effort was being done to manufacture a platform to avoid future inflation by the introduction of the RRSP, which are little time locks to stash money to keep it out of the system (which is pure fiction). They even went as far to create a best selling book on the effort, The Wealthy Barber. (it's actually pretty good as reads go in terms of instruction on how to manage personal finances). The BoC created the situation to pull people into the 'game' by offering crazy interest rates (7-12%) on basic savings deposits with a tax break (which really isn't). The interest rate offering is hardly the case today obviously. Mainly this was in prep to allow the ECB to prop up the EU to leverage Canada as the pinion/lynch-pin in a bread basket currency mechanism that's currently ripping the market to pieces. All of this background was going in the direction of a 20 year growth cycle to slide it into the 7 year shitshow you see today. While all this stuff was going on BreX happened.
At the time BreX was the cat's ass. Simply everyone was funding this venture by any means necessary, even though the geography and rock formation of a place like Borneo is only conducive to making orangutans and coconuts. But the dumbass/president of BreX that was running the gold samples was an iron ring engineer with some serious capital that washed in after. As far as both Enginering and Business were concerned this guy was good as his word because...well he's got an Iron Ring. They don't give those out to just anyone, so he must know what he's talking about.
From his analysis of the core samples taken by the numbers that BreX had found, out of all gold ever found in all of history, they had 3% of share of a very limited commodity. That would be like someone jumping up and proclaiming that they have the a notarized copy of the patent for the wheel. That's how 'amazing' BreX was. Of course 25 years after the fact everyone knows it's bullshit. At the time, we are talking a lot of money. When you see millions and billions just the tip of the iceberg, the frosting on the cake. Companies like Microsoft, Apple, GM were just tiny retailers worth what would be considered a medium sized business today.
Now here's where it gets weird with BreX. Not weird like "oh that's weird', more like Salvadore Dali weird.
Because everyone was bankrolling this POS in every and anyway possible, the stock was considered capital against other purchases like real cash. The OTPP, while 100 million doesn't sound like much, a pension fund uses that equity in order to bankroll other projects and investments without waiting. Pension funds somewhere in the late 80s went from mega savings accounts, to credit lenders and project managers because they had to readjust how they could keep growing for the pensions that they managed. In turn the Canadian government issues bonds against the subsidies and loans to mine for imaginary gold, pension funds buys them. Pension funds loan credit and capital against capital that never existed...for ten years to pay out pensions that go bust decades later.
9.6 Billion short fall in 2012
http://www.huffingtonpost.ca/2012/04/03/ontario-teachers-pension-plan-sh...
32 Billion short fall in 2014
http://www.financialpost.com/story.html?id=9c5da805-9ade-4ca5-8038-0f74b...
Gets even weirder. The Gold market, jews inc, counted the imaginary gold as 'found' and you want to know a secret?
They never took it off the books. It's why no one is shipping any of those stockpiles anywhere, they are starting to understand they were robbed decades before hand being given markers for gold, but not actually receiving any.
In addition to that fact, not a single person that bought as part of a portfolio ever got their money back on the mutual fund side. Nor did anyone go to jail. Or pay a fine. In fact for something to the effect that was a 2 billion dollar scam in the 90's. Nothing ever came of it.
What should be more worrying is the OTPP is the benchmark of what a successful pension system should look like. Literally everyone emulates it. And if the OTPP is horribly underwater, just imagine how underwater the rest of the are.
precisely why "it" (manipulation/rigging) will never stop...
Oh it stops on a dime, doesn't matter what tools are used to paint over poor planning on a ponzi scheme. The math and law of averages always wins. See it's not one big thing that shuts down a large system. It's lots and lots of little things that get over looked and missed. Doesn't matter if it's financial, technical, engineering, building, chemistry, psychology, business they all obey the same fundemental rules when developing a solution.
Pick two from the three options.
Then count how many cooks are in the kitchen taking different approaches using the given three options, all of them stepping on one another, literally going in circles and dogmatically repeating the exact same mistakes in the labyrinth of their own creation. It would be funny if it weren't so sad watching the same replay of history looping over and over and over again.
Wake us when it stops then. As you admit, it never stops, just keeps "looping over and over and over again"...
humans do evolve, humanity, not so much...
You can take a nap for sure, not much is going on. The pole movement chart has been cleared three times already since 2012. Each chart roughly represents 15-20,000 years of pole movement if calculating 7-9 meters per year, we are about 50-60 thousand years in already until the next interglacial period.
http://hpiers.obspm.fr/eop-pc/images/pole.png
And we're missing most of the satellites and sensors now. Stereo B got clobbered by debris, Stereo A is flaky and I think the other ones just wore out so most of the data is just being looped from 2008 to give them all something to do.
http://solarimg.org/artis/
Green Day - Wake Me Up When September Endshttps://www.youtube.com/watch?v=ci5D5r6ZjXA
Otherwise if you are interested. The more interesting NASA mission photos to pick over if you are bored.
http://pdsimage.wr.usgs.gov/Missions/
That is why it won't stop! And when something breaks as a result of all of it, there will be MOAR! In the end, when the debt starts defaulting (explicitly or via inflation) the real economy and production get completely devastated. Then, more regulation and rules. See Venezuela or read Atlas Shrugged.
We are witnessing the endgame.
The bond market is already experiencing indigestion. The assumption that dollar will lose is reserve status initially is incorrect. I think the bond market will implode even as the Fed is buying bonds. So the spread between short rates and long rates will widen. I think Bill Bonner is correct i.e. credit will freeze and we will end up with a cash are carry market regardless of what the Fed does. Loss of confidence in US Debt has greater ramifications and has the potential to freeze this credit based economy.
bonds have never imploded in any country ever.
the currency implodes as they print more of it to pay back 'unpayable' bonds.
there is never a shortage of printed money (bonds) that cannot be printed to roll over the old money (on the run bonds)
the 'markets' are a myth. what would a 'market' for food look like if a person, or an institution hadan unlimited ability to produce more food at 0 cost. it would look like an illusion.
THE ONLY BONDS THAT CANNOT EVER BE PAID ARE THOSE OWED BY INSTITTUIONS THAT CANNOT PRINT THE CURRENCY IN WHCIH THE BOND PAYMENT IS DENOMINATED.
hence the fed is not worried about treasuries and NEVER will be unless there is a coup or war which could take away the fed's existence to print more money.
the roman empire debased their coins for hundreds of years. the florentines kept printing and so does every empire until they are displaced by violence from without or by natural disaster.
and natural disaster simply is unlikely to displace the power structure of our currency empires.
in fact, natural disasters are now used to consolidate centralized power and reinforce the internal structure of the empire.
That is what many believe, the printing press will save their ass-ets. Politically that is not going to happen better to have deflation then lose control of prices.
Political moves are for control over less control, paying yourself means allowing that payment to retain value.
Deflation will be a political move, forceing many States to print their own currency or issue credit: constitution be damned.
Texas is moving in that direction by opening a gold vault. That way they can print and still say its back with gold even if it is not.
Just printing helps some but causes more problems with your staff, officials and others who aid and force control on the population. Deflation, muddle through, menipulation and gates help with keeping your bases of power.
Printing is the vary last point of a game that is already lost.
Yes, you are historically correct! However, in this case exponential equations are a real motherfucker and the disaster (a world of 7+ billion, largely ignorant, people) is of our own making. So yes, what you say is true, but the conditions under which it will happen this time are very different and truly unique, exponentially...
This is basically my view.
"What if there is a sudden rush to cash?"
Folks "long everything" I think will be buying treasuries in a panic. There are simply very few dollars right now because of the huge energy boom inside the USA going on five years now.
Certainly isn't any consumption boom going on inside the USA...nor any tax cuts or spending restraint.
LOL!!!! There doesn't have to be a "boom" when your consumption is already over 18 million barrels per day.
You call that "no consumption"? what an asshat!!!!
The world really is like the Game Monopoly.
It's luck not skill that keeps you out of Jail.
To win, you can never stop buying.
What happens when the Bank runs out money, you start writing numbers on pieces of Paper to keep the Bank going and the Game Going.
The Game is over when everybody is Bankrupt and one person owns everyting.
It doesn't matter how many times you play it, it always ends exactly the same way.
Once in a while, the whole table gets turned over when the winning player starts acting like a pompous asshole. Then there is a shallow victory and whines by the winner that everyone is a bunch of sore losers.
There is too much political tension building for this 'everyone lie to everyone else' game to continue much longer. The fact it has lasted this long creates opportunities for the first player who plans, then pulls the rug out from the QE Ponzi. It's coming. Gather your rosebuds while you may . . .
and Unplugged asks: Why does it have to stop ?
What happens?
Simple - Massive perversity.
Trading the end result of all of this won't be easy for anyone.
who says it's going to stop? QETOINFINITY and beyond!!
Diminishing returns will create a vacuum that will suck all fiat out of the system and levy assets against it proving gold and silver is money and nothing else is worth anything.
This is EITHER a replay of 1937 - the Fed raises rates without fully understanding that the economy is not as healthy as it seems and stocks crash 50%+ OR its a corrective wave in equities as the fed says they 'learned' from the 1930s and will ease more if necessary (more QE) and stocks take off in 2016...will be a fun ride either way...
Fed isn't THAT stupid. They know the economy is fucked and are just using useless indicators like Unemployment as a cover to see what happens if they raise rates once...just to see if they are really trapped or not. But they are trapped. One hike and risk markets will puke all over them and they will run back and cut again or hint QE4 or both. One and Done.
A virtual Warren Buffet and a virtual Bill Gross are being designed right now. There is no end game. Even the mouth pieces will live on.
We all know what happens when it stops:
<img src="http://www.mansharamani.com/wp-content/uploads/wile-e-coyote-falling-off-cliff.jpg">
Rinse. Repeat. Until one day the USD is no longer the reserve.
“How did you go bankrupt?"Two ways. Gradually, then suddenly.”
? Ernest Hemingway, The Sun Also Rises
The other side of the coin is Russia and China along with many other Central Banks accumulating huge stockpiles of gold.Why?No counterparty risk in a dangerous environment.U.S. foreign policy being the killer of trust.The FED can thank the nazis in the State Department like Victoria Nuland and their type of scum ideology.Jebb,I see you joined the nazi chorus line!
When the music ends, Bill Gross will start over from square one.
Way I see it, stocks, commodities,,,most all assets, do not crash nominally, at least not for any length of time. This ends with a 50-75% devaluation of world currencies, then a reining in of turbo charged money velocity created by the devaluation process. Kinda like a Neo-Volcker save the day event.
Prices will have risen, along with the Misery Index, to such a degree John Q. will demand he be thrown down a manhole and the cover slammed on it, for a feeling of security, mind you, and a belief that it will somehow punish the perceived "Fat Cats" TPTB will have appointed as scapegoats at that time.
Think the 70's on steroids.
It's much more PC to simply tax and redistribute using the tool of stealth devaluation (inflation) than it will ever be to, dare I say it???, allow the expletive "Austerity" to dominate media word clouds.
Machiavelli had it all figured out years ago.
good luck with that.
Guess one can believe holding constantly depreciating cash is a prudent thing to do, in the belief this time is somehow different. Personally, I prefer real things.
https://m.youtube.com/watch?v=d04WwRSI6G4
I believe that once the banks and bankers own everything then they will stop QE.
dup
Global leveraged buyout of everything buyable (and then some). All the central banks acting as one. (You don't think they are competing with each other do you?)
Ben the treasonous cunt face cockbreath Bernanke retorts- Why does it have to stop?
Who is buying US Treasuries? Well, when US FED is not formally active, it bypasses formality with currency swaps and then CBs of those countries engaged in such fraudulent activities buy US Treasuries. So from June 2011 to January 2015, the US FED has bought $825bn in US gov bonds, while the CBs of Belgium, Luxembourg, Ireland, Cayman Islands, Japan and Switzerland have quietly bought $818bn in US gov bonds during the same timespan.
You see how the fraud works?