This page has been archived and commenting is disabled.
Ben Bernanke Has Created The Ultimate Bondsy Scheme
Since January 2007, long-only equity funds have seen redemptions of $545 billion. In the same period bond funds have seen inflows of $630 billion. In the last few months, cumulative flows into equity funds have retraced all the way back to 1996. While every day is a QuEasy day for stocks, it seems the 'financial repression' is working as instead of getting everyone else to do the opposite of what the Fed is doing by making yields on other 'riskless' assets meaningless, all that the Fed has succeeded in doing, is getting everyone in the world to frontrun it in buying bonds. Period
Source: BofAML
»
- 20748 reads
- Printer-friendly version
- Send to friend
- advertisements -
Wall Street got their bailout via QE. It's only fair that everyone else gets their own personal bailout too right?
Is this a loaded question?
Of course it is. The pretext of my point is people will tear each other apart before they focus on where their anger should be directed. Thats all I was ever trying to say.
Right on. This is what I've been trying to say for years. The manipulators throw the sheep some scraps and watch as they tear each other apart ... over pabulum ... while the manipulators laugh all the way to the (Swiss) bank.
The peoples anger should be directed towards , the Idiots they put in office. I wish there were more people that enjoyed lively debates fonzannoon . Wishfull thinking I suppose. Spanish SNAP cards for votes , and all?
Ha I feel bad I hijacked this thread but it's great going back and forth. The pansies I deal with on a daily basis get so put off the second you challenge their assumptions. I wonder how fkin dumb the other 50 million sperm were for them to have won the race.
Yen riddle me this. If China is a net seller of UST that means they are a marginal buyer. Which means they may be divesting themselves of UST but at a pretty damn slow pace. The CAD is below parity right now, no? This could have a long way to go if everyone is cutting rates and doing qe right?
Based on your " Green Arrows" , I think you probably enlightened some Friday Night followers. I have to admit though.
Chump666 is one smart cookie!
The markets are one giant fraud. Absolutely no trust in anything. So even if bonds go negative by 5% its at least better than losing it all to outright theft. Sad day when so many honest hardworking people feel completely trapped in within the system.
If you don't learn anything...if days and months and years of scouring this and other websites teach you nothing...learn this one thing:
don't buy bonds.
Learn that and the rest will follow.
True. Now Lockhart (Atlanta Fed) is joining the MORE QE Bandwagon.
With M2 Money Velocity the lowest since WWII, this should be an exercise in extreme futiliity.
http://confoundedinterest.wordpress.com/2012/07/13/lockhart-thinks-more-qe-will-be-needed-as-more-people-go-on-the-dole-disability-and-food-stamps-than-become-employed/
So dumb money is still dumb money afterall. It's chasing the obvious bubble (bonds) and dumping the relatively (compared to bonds) undervalued asset (stocks).
idle hands are the devils handmaidens
Idle Handmaidens are the devil's hand job...
Loose lips... Oh nevermind...
Bondsy Scheme
This term is the intellectual property of Zero Hedge, Inc.
All Rights Reserved, Copyright 2012
David Einhorn nailed this a few months ago.
"For years, people have talked about the 'Greenspan put' or the 'Bernanke put' on the stock market. Some question whether such a put is deliberate, others question its effectiveness, and some even question whether or not it exists at all. The Fed has always explicitly denied using monetary policy to create a floor on the markets, and its inability to do so should have been settled when the NASDAQ fell 78%. As for whether or not the Fed puts are a myth, I think it depends on where you look.
It isn't where you think: The real Fed put is under the bond market"
The real Fed put is under the bond market
Yes. Fed buys bonds not stocks. Fed's bondzy scheme, last huge ponzi scheme in America.
Keeping bonds up with printed currency helps stocks indirectly, trickle down sorta.
I estimate the overall US bond market at 50 trillion thereabouts. That's 50 trillion of borrowed money just here in America.
Fed has about 2 trillion of it on their balance sheet now ...officially anyway ...likely much more "off balance sheet" purchased with printed currency we'll never know about.
With no economic recovery in the cards, out-of-control government spending, collapsing RE market (and MBS market), collapsing muni govts (and muni market), Fed will eventually print and buy 10 -15 trillion of it officially, probably way more unofficially we'll never know about.
It'll collapse the dollar. Dollar loses WRC status, then the bottom really falls out.
Just goes to show you how IGNORANT the average human being is and how CONFORMING and DEPENDENT is the average investor who is unable to THINK FOR THEMSELF.
what a bs chart. how much cash has gone into hedge funds since????? the rich (the people who invest in stocks) dont put money into mf's......
You make a great point. I never see stock or etf inflow charts.
The Fed " Helicopter Ben" , has nothing but "TAPE BOMBS" left in it's arsenal! Bernanke has make it subtly clear, that his game is over, and kicked the can over to the "executive branch"!
"Executive Branch" doesn't appropriate the funds... (well ~ at least not YET I suppose)...
Congress ( Senate & House ) Legislative Branch. francis_sawyer . It's nice to see some tacks in the board.
Interesting (kinda) footnote on that... I ran across this today... (disclaimer: I haven't had a chance to do anything other than 'skim it', so I have no opinion just yet)...
~~~
"In his opinion Chief Justice Roberts stated “It is not our job to
protect the people from the consequences of their political choices.”
Herein rests both the reason for and the solution to Roberts’
unexpected ruling.
While now vilified by conservatives across America, Roberts may be not
a goat but a hero. By siding with and then negotiating the best
possible deal with the Court’s liberals, Roberts has placed both Obama
and ObamaCare in jeopardy – simultaneously.
With Roberts writing the majority opinion, the four liberal judges
automatically agreed with him. They actually ruled that the ObamaCare
mandate, relative to the Commerce Clause, is unconstitutional. This
means Congress can’t compel American citizens to purchase anything. Not
ever. The notion is now officially and forever – unconstitutional. As
it should be.
Next, without the ability to mandate, to fund ObamaCare going forward
Congress must rely on its power to tax. Therefore, any mechanism that
funds any part of ObamaCare must be a tax. This means that the Senate
can overturn any ObamaCare funding, or eventually ObamaCare in total,
with a simple majority of 51 votes.
Recall back during the initial ObamaCare battles, the Democrats and
President Obama repeatedly consistently soft–sold it as a penalty,
insisting it was not a tax. But when the Administration argued in front
of the Supreme Court, they said “hey, a penalty or a tax, either way –
your call”.
So, Roberts responded "well it can't be a penalty under the Commerce
Clause, so it's a tax". And now it's a tax, beyond word–play, denials,
or silly shenanigans. ObamaCare must be funded by tax dollars.
Throughout the 2012 election cycle, Democrats must now defend 21 hidden
tax–hikes, 16,000 new IRS agents, hundreds of new job–killing agencies
and regulations, $500B stolen from Medicare, and the largest tax
increase in US history; all in the face of high unemployment and a $16T
national debt.
Next the Supreme Court struck down as unconstitutional the ObamaCare
idea that the federal government can bully states into complying by
yanking their Medicaid funding. The Administration, through ObamaCare,
were basically telling the states: "comply with ObamaCare or we’ll stop
your Medicaid funding".
Roberts and two liberal judges joined four conservatives in ruling that
a no–no. By a 7 to 2 vote the Court told the Feds that they can't tell
a state how to run their healthcare programs, and if any state refuses
one type of money, the federal government can’t penalize that state by
yanking other funding. Therefore, a state can decline to participate in
ObamaCare, without penalty.
In summary, Roberts and his “team” of liberals ruled that the
government cannot force citizens to purchase products or services under
the Commerce Clause. And Roberts manipulated the liberal judges to come
clean and admit that ObamaCare must be funded by tax increases. Finally
they supported states rights by limiting the federal government’s power
over the states.
And this has been done without creating a civil war. The Democrats are
happily declaring victory in the Supreme Court battle, not
understanding what really been done.
Because this decision, while not guaranteeing a Romney victory, has
energized America’s conservative base, along with millions of centrists
and independents, to get out and vote Republican in November.
The 2nd American Revolution continues; this struggle a bloodless one,
to be ultimately won at the ballot box. Those who understand this are
the Founding Fathers of this second revolution. And they will now work
even more tirelessly to see Republicans win back the White House, take
back the Senate, increase their advantage in the House, and then repeal
ObamaCare early in 2013.
If ObamaCare had been ruled unconstitutional by 5–4 vote – this would
have plagued our nation for decades; like other 5–4 votes in history;
and like the Founding Fathers' failure to abolish slavery by a single
vote on several occasions.
Justice Roberts has placed the future of ObamaCare is in our hands, in
the hands of "we the people", where it properly belongs. And with the
Supreme Court ruling, the probability of Congressional ObamaCare repeal
has increased – significantly.
Furthermore, the probability has increased for several new conservative
young Supreme Court justices in the next four years – one replacing
Scalia who really wants to leave.
Charles Krauthammer calls the Roberts opinion “one of the great
constitutional finesses of all time”.
Thank you Justice Roberts. Brilliant!
It’s interesting to note that both the majority and dissenting opinions
clearly highlight, for historians, that the unmitigated disastrous 2700
page bill signed into law in 2010 is irrational, contradictory,
unworkable, and dysfunctional. Both opinions point out several places
where the bill says diametrically opposed things. Neither opinion shows
even a shred of respect for the government’s legal acumen in their
briefs, nor do either in any way suggest ObamaCare is anything other
than bad policy.
On balance, the decision is a victory for constitutionally limited
government. And it drags progressives out from behind their pretense of
compassion and virtue, focusing Americans on cost and tax realities
rather than the illusion of “free benefits”.
What is now left for ObamaCare going forward is either total repeal or
a series of unrelenting problems, countless lawsuits, and in fact mass
confusion. We’re going to have a number of states, perhaps half, opting
out of ObamaCare – so any idea of a “national” health–care program is
dead.
Even if the Democrats miraculously prevail in November, they will face
a completely impossible mishmash of constant and hopeless budget and
tax increase battles, with all aspects of ObamaCare funding. In the
dissenting opinion, Justice Kennedy says the remainder of what the
court has redefined as a series of taxes with no mandate, and with
states free to “do their own thing”, is completely unworkable. Kennedy
adds that the ONLY logical thing now would be for Congress to start
over, with a clean sheet of paper. It’s impossible to envision a House
or Senate Committee trying to figure out how to fix and then fund
what’s left. ObamaCare is headed for the trash–bin of history, one way
or the other.
Many are complaining about how preposterous, absurd, illogical and
ludicrous the Roberts opinion is. But in truth it was profoundly clever
and ingenious. While most pundits and politicians were playing
checkers, Roberts engaged in a game of chess. With a few brilliant
moves he has preserved the Commerce Clause, limited the federal
government’s ability to coerce, forced ObamaCare proponents to come
clean and admit the truth about 21 hidden tax increases, defended
States Rights – and has allowed states to refuse to play in ObamaCare.
Finally Roberts has passed the chess board to the American voters, to
make one final move and declare “check–mate” on November 6th.
And as we now ponder our choices for November, Justice Roberts is
saying – "I give you a Republic, if you can preserve it".
I did a screenshot, francis_sawyer The uncle clause in Obamacare is obsurd! I have been slowly dissecting this "hab(a)dashery" myself!
hotfx@ymail.com
most excellent Sir Francis Sawyer! Bravo!!!
Pundits including DK and MHFT flamed out with TBT.
What do we think?:
http://richcash8tradeblog.blogspot.com/2012/07/tnx-targeting-05.html
If she were alive today she would say "I told you so" ...Ayn Rand
The biggest worry of all is the Truman Show, off the charts perversity of these central bank infected markets.
"It seems there now is huge bullish demand for less than nothing." - James Grant
Black boxes China, JPM, WFC and Univ. of Michigan put out bullish "reports" on Friday. Besides the black box plays, the other market leaders were so called defensive stocks, toilet paper and cereal makers. The XLP, which represents non-discretionary consumers, trades at a mere 9 implied volatility on the puts, absolutely zero fear there.
There is also a huge bull market and demand for bonds that pay nothing or incredibly even "less than nothing" (to quote Grant). Here you pay some increasingly insolvent sovereign (called by the now meaningless Ministry of Truth term "core" and "risk off") to hold your money, and receive an actual negative yield. James Grant discusses this and when asked about picking up income suggests with a straight face utilizing the asset class of "walnut trees" feeling it is far preferable to "risk-off bonds". That's the problem with price discovery nowadays, you can't make this up. Grant's descriptive of a Jim Carrey "Truman Show" faux-like market state is apt.
James Grant on CNBC:
http://bit.ly/NzX0V9
Corzine spotted .......http://www.nypost.com/p/news/local/corzine_is_having_no_fun_in_the_j3V0C...
How convenient that he posed for a snap holding his $5 cup of joe.
"I might have lost $1.2 billion bucks, but I look sad, so cut me some slack."
End the fed period
Oh no, don't tell me that the bitch is back, sewer rats and all.
I'm finally starting to get dinged for holding my eur/chf longs in the spot market. These are stale ass longs from January.
I plan on passing them along to my unborn Grand Children!
Isn't this what they want? So the "Bank Holiday" is near... when the markets open again, the currency is devalued by 50%... China will just LOVE getting it RUDE.
I wish I understood the significance of this article. I'll go and stand in the "stupid corner".
Hey Y'all sorry to bust in...breaking news.. http://www.theatlanticwire.com/politics/2012/07/29-year-old-obama-campaign-aide-dies-after-collapsing-chicago-headquarters/54585/
http://www.youtube.com/watch?v=7O1Qd_FNgfM
Benny Bernanke and the Fed banksters are promoters of thievery/fraud/criminal behavior.
If your Too big to fail, just divert your capital overseas and cook your books. Dump the debt and losses on the government. If it gets too bad Bernanke and the Fed will throw printed money at you. Rinse and reuse.
Bond bubble. I'm all for it. I dont own a dime of the stuff, and wont buy any.
As for the folks getting "screwed" by this CB created bubble. IT IS ONLY RIGHT AND FAIR.
This is a hugely important moral and ethical point to remember.
The people who are getting supposedly screwed are NOT getting screwed. They are only being forced to BEGIN to pay the bill on what they voted for all those years and never paid for - via-a-vie by re-electing corrupt politicians who didnt pay for the promises made.
DO NOT feel bad for the older generation. They KNEW. They were WARNED FOR YEARS about the trajectory of the economic situation.
But you know what they said? "Ahhh, dude, it will be cool. Stop worrying man."
They bought into the debt game WHEN THEY KNEW THE DEMOGRAPHICS COULD NOT SUPPORT THE SITUATION THEY CREATED.
Those TD Ameritrade commercials where Dennis Hopper is gloating like some old guy who rolled in the mud of Woodstock and yet "beat the world' is really nothing more than the disgusting, arrogant, self-centered persona that lies at the heart of that generation who said "my kids and grand-kids will pay for it, and me".
So now that they are being forced to begining to pay for it causes me zero heart ache.
Personally, I think it is wrong to print to save the banks and bond holders from losing their captial.
What's really laughable is how the kids stuck with the bill are too stupid to realize that if they had gotten behind Ron Paul, and voted for what was economically right, as opposed to voting for Obama to assuage a false guilt of racism - created in them by liberal educators, then they would be the winners in the long run.
Democracy fails for the same fundamental reason Socialism and Communism fails...because man is selfish - in Christian terms, it's called "fallen".
You want to know the second reason I love this "slow motion" crash?
It gives me more time to buy a lot more gold, silver, bullets and beans baby.
Spot on. I like you.
Think about it...
Regardless of where the "fiat" ends, the bottom line...No solving high unemployment, vacant homes, more people and rising prices!
So...Be patient and do whatever you do, to prepare for the worse!... We all know it's coming...Right?
"gold, silver, bullets and beans". Yeah baby. And everywhere we read not housing is in a recovery. The bottom is in. No, I am not making this up. Absurd.
"gold, silver, bullets and beans". Yeah baby. And everywhere we read not housing is in a recovery. The bottom is in. No, I am not making this up. Absurd.
It used to be that the debate was inflation versus deflation.
That seems to have settled down in a standoff where most now recognize there's this sorta unprecedented bi-flation or something thereabouts occurring.
Now it seems the debate is about what is the best safe haven.
Roughly, the options are stocks,bonds,PMs,real estate,various hard assets (i.e commodities to art)
Sorry, I don't have the answer. I do have this observation.
In 1913, then again in 1933 and yet again in 1971, at times of systemic stress, the public got blindsided by actions from the Powers That Be.
Currently we have an administration & Congress that has gone to extraordinary lengths to accrue executive powers and pass assorted laws such as ..... to put it bluntly ... the federal gov can ram pretty much wherever it wishes down the throats of the American & world public with a host of (well funded & extraordinarily well armed) federal agencies to carry out this out using the jackboot.
All the executive acts essentially give the Fed gov near unlimited power. If you're like me, then you believe the Feds are merely puppets for the real powers (and no, I don't mean apparatchiks such as BO, Jamie, Lloyd, Ben). I'm talking the OWNERS. The .00001%
If the current system is coming apart at the seams and it can't be patched, don't you think the owners see this? And you expect them to what? .... throw up their hands and retreat to underground silos or Paraguay ranches?
Perhaps, but the U.S. fed gov going to such extreme lengths to gather the fig leaf of justification for draconian measures has me on edge. I submit one addition angle to view prospective asset classes is --- what will survive a system reset that favors TPTB. Note, I'm not advocating investing in such, just advising to have your spider senses atuned to this coming down.
How much of the 'flow out' of LO's was due to 'flow in' to ETF's?
not sure what they expect now that everyobdy and their mother realizes the market is fixed. that they manipulate diring the off hours like crazy, no over night holdings, or even if they have overnight holdings, since they can trade futures 24 hours a day we get stuck in these nasty down gaps as the algo ramp up for the day.
if they want people in equities, they have to fix the structure of the capitial markets
it appears that the fed's efforts to lower rates, and push people into stocks has misfired. the lower rates has made the bond prices go up, attracting more people, who, as usual like to pay higher and higher prices.
i think the irony in the future will be as rates start to tick higher (not hyperinflation or any of that bs) but simply go from 1.5% to 2.75%, the gutting of the retired adn those who thought they sought safety will be horrendus. these people wont, at that time, move money into stocks...most will be stuck, refusing to sell at such a loss and/or giving up the 2% yeild, or moving into thier mattresses.
might that time of amove up in rates be due to stagflation or weak dollar ....thus falling stocks and bond prices (which the sheeple have been told and are seeing in real time should move counter to each other). that will be the true irony, when both fall (and gold) and there is literally no wherer to turn, THAT will mark the final stages of this era.
The bonds are moving because they function as collateral. When the Shadow banking system siezes, the bonds lose all value. It's all about rehypothecation.
Close,but no banana.
Its about collateral for the REPO market where the shadow banking
sysem lurks.They no longer want anything but UST's having been
double screwed by the RMBS fraud scheme.
One more notch down in the US credit rating, and 'poof' it will be gone,
and a redux of 2008 will follow.
This year I think will see that downgrade,and then its game over.
Er - mission accomplished?
(ish? asset prices pumped up, just not the ones they thought would help real eConomy most...)
The USA is a sad place to live. Quasi Communist Acting Like Garbage Pile. The middle class are all equally screwed garbage slave workers. The rich and poor (The State / Government Workers Included) do not work for a damn thing yet reap all the benefits by exploiting the middle class workers and exercising all loopholes. Racism against white males is the norm, with Affirmative action being the most important ideology. Laziness is the national pastime at work and at play, giving rise to the consumer as the true American. A true crime infested drug terminal. With Politicians who sell out to the highest bidder. Corruption runs rampant in this nation disgraced by greed. The constitution has been ripped to shreds by a bunch of communists disguised as politcians who couldn't get themselves out of a wet paper bag, who play to the tune of above the law bankers and lobbyists or whoever has campaign money. Meet DC, giving new meanings to the word Democrazy.
What cost $1 in 2010 would cost $0.05 in 1913.
How soon before the nickel turns into a penny? 1 year maybe 2?
The USA is one massive ponzi scheme since 1913.
Communist USA Check List (Peak Communism):
Central banking system - Check
Government controlled education - Half Check
Government controlled labor - Half Check
Government ownership of transportation and communication vehicles - Half Check
Government ownership of agricultural means and factories - Half Check
Total abolition of private property - Half Check
Property rights confiscation - Half Check
Heavy income tax on everyone - check
Elimination of rights of inheritance - Half Check
Regional planning - Uncheck
http://dealbook.nytimes.com/2012/07/13/barclays-informed-new-york-fed-of...
We don't need no QE3, market looks to have got the taste of blood and wants to front run....Bears had good reasons to be excited "as reported in popular media", Europe is imploding, emerging markets are slowing down, equity is looking least bit exciting or trustworthy by any and all standards to common man.
Yields are dropping like stone in developed markets... negative 50bps yield on Swiss bond, negative yields on German bunds (where is all the contingent liabilities...question will come but later:) )...record low on US and Japanese treasuries ...personally i would park there if I m in a hurry and pay the fee but will get out as soon as i find better investment, yield wise or capital appreciation wise........yes sir this is the power of money-flowing to park itself temporarily at any storage cost before it readies to move to its preferred investment.
All this sound like worlds imploding, there is really something that has imploded. Its the trust banking system had in Sovereign bonds as collateral for shadow banking. Private capital in next one year "Will" (yes this constitutes a forecast and we will revisit this theme in upcoming posts) shun low yielding high tail risk Sovereign Bonds and move to private assets.
This is going to be the genesis of the upcoming "One of Greatest BULL market of our lifetime" ...we will revisit this topic in pieces in upcoming posts ....
Equities..YES THIS MEANS THAT INDIAN MARKET HAS IN HIGH "PROBABILITY" BOTTOMED.....we will keep a close watch on which sectors could be the leaders in follow-up posts...... Asian Equities including Nikkie..infact Nikkie and Shanghai appears to be making long term bottom,and thus looks really good to speculate......
Commodities...Gold and Silver (I would prefer silver between both if I have to speculate), Agri-Commodities, Natural Gas..follow up posts we will post trading set-ups
Currencies: Yen appears to be making a significant top against lot of currencies...we will keep a close eye on this theme as Indian markets allows speculation in Yen. Dollar also looks overbought and Euro looks over sold, both have enough fuel of trend traders to make a good opposite move
www.bubbleshort.blogspot.in
No one is buying bonds except the feds so this article is all nonsense!
Real power from fake money?
http://shutupnsing.wordpress.com/2012/07/14/the-centralization-of-real-power-using-fake-wealth-self-interest/
Hello .. I have never seen a smart articles that you created. It really helped me to get back my ideas for writing. I will save this post, for I learn more
two piece swimsuits
women's one piece swimwear
fashion swimwear