Guest Post: Print It And They Will Come

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Sun, 08/21/2011 - 21:53 | 1584684 Newsboy
Newsboy's picture

Banks will get more fiat, but how long will the world accept it?

Sun, 08/21/2011 - 22:01 | 1584727 CosmicBuddha
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I like your picture Newsboy!

Sun, 08/21/2011 - 22:05 | 1584734 Newsboy
Newsboy's picture

Daibutsu of Kamakura.

I used to live there.

Is your Buddha from Thailand?

Mon, 08/22/2011 - 06:42 | 1585273 Optimusprime
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I remember gazing up in awe as a six-year-old.  Many years ago.

Sun, 08/21/2011 - 22:12 | 1584755 oogs66
oogs66's picture

that seems to be the key...china and everyone else is getting sick of paper money

Sun, 08/21/2011 - 22:28 | 1584780 DormRoom
DormRoom's picture

No QE3.

 

The parameters for QE2 were a high USD, and low inflation.  Now we have a very low USD, and above 2% inflation in Europe.  Even worse, for the emerging markets, especially China

 

QE3 would cause more instability (yen spike->yen carry trade unwind->systemic risk)

 

Also, current data indicates stagflation, not deflation.  More monetary stimulus is not the proper course of action. see Volcker case study

 

Bernanke will be like Noda.. He'll try to talk down the markets.

Sun, 08/21/2011 - 22:41 | 1584820 dwdollar
dwdollar's picture

Since when do they follow their own rules?  If the 2% mandate get's in their way, they will change it (either officially or through bastardization of it's meaning) or simply ignore it.

Sun, 08/21/2011 - 22:56 | 1584847 DormRoom
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externalities.  The Fed may weigh in externalities.  QE2 aided the Arab Spring. QE3 aids European Riots? But no quesiton Japan would break. Enter bond wolfpack to tear @ Japan.

 

Now you have 2 failing fronts: Europe & Japan

 

In order for there to be global price stability you need a stable reserve currency.  QE undermines this assumption.

Mon, 08/22/2011 - 10:09 | 1585749 ATM
ATM's picture

I think you are assuming that the rulers at the Fed want global stability where I would argue they certainly do not and prove it daily.

Mon, 08/22/2011 - 16:18 | 1587411 bid the soldier...
bid the soldiers shoot's picture

You're not going to get an argument from me.

What we are seeing is the strengthening of the American Banks by the Fed, before Peak Oil turns the world upside down.

Thu, 08/25/2011 - 07:11 | 1598520 thewhitelion
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And also assuming that the actions of those in power affect us al in a similar way.  Cui bono?

Sun, 08/21/2011 - 22:40 | 1584824 Newsboy
Newsboy's picture

MUST...SAVE...GLOBAL...BANKING...

Sun, 08/21/2011 - 22:44 | 1584836 dwdollar
dwdollar's picture

And that is the Federal Reserve's one and only true mandate.  It always has been.

Mon, 08/22/2011 - 00:08 | 1585006 slaughterer
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It has been clear for the last year to most everybody that the Fed will print into the next Presidential term.

Sun, 08/21/2011 - 21:50 | 1584698 TruthInSunshine
TruthInSunshine's picture

PaaaaaRinttttt and hand out more fiatskis to the Wall Street/Banking elite, Bernanke, just like you really, deeply, urgently want to - do it again, Bernank!!!

Fiatski in the form of a massive Taxpayer Teet, milking that host dry - do it Bernank! Do it!

Wall Street Aristocracy Got $1.2 Trillion in Fed's Secret Loans
Bloomberg

Wall Street Aristocracy Got $1.2T in Secret Loans

Sun, 08/21/2011 - 21:54 | 1584705 Lazlo Toth
Lazlo Toth's picture

I really like your posts so no offense. But you should really re-watch the movie.

Sun, 08/21/2011 - 22:09 | 1584748 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

I'm sure you mean Fight Club, not Field of Dreams...  ;)

 Lazlo Toth PO Box 245 Fairfax, California 94930

Sun, 08/21/2011 - 22:10 | 1584751 oogs66
oogs66's picture

c'mon, this movie probably inspired the whole ethanol theory - if corn fields are only good for attracting ghosts, they might as well use food to make expensive gas?  beats outright subsidies, no?

Sun, 08/21/2011 - 21:57 | 1584716 HUGE_Gamma
HUGE_Gamma's picture

id be shorting AU above 1400 tonight

Sun, 08/21/2011 - 22:09 | 1584745 Newsboy
Newsboy's picture

Let us know how that works out.

Sun, 08/21/2011 - 22:17 | 1584769 MsCreant
MsCreant's picture

Why?

Sun, 08/21/2011 - 22:09 | 1584744 Ezra Pound
Ezra Pound's picture

i'm wearing my IG-88 hat

Sun, 08/21/2011 - 22:43 | 1584834 snowball777
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Oblique Star Wars reference...you may not be able to get the Feeb's attention with that one.

Sun, 08/21/2011 - 22:14 | 1584761 Destinapp
Destinapp's picture

Ben Dandy Bernanke is leaking his next move, via the WSJ, that he will buy foreign bonds to "help" Europe.

"according to people familiar with the matter."

"said the people familiar with the matter say"

"said a senior executive at a major European bank who has participated in the talks"

"a senior bank executive said"

http://online.wsj.com/article/SB1000...LEFTTopStories

From the article:

"Until recently, that hasn't been a problem. Thanks partly to the Federal Reserve's so-called quantitative-easing program, huge amounts of dollars have been sloshing around the financial system, and much of it has landed at international banks, according to weekly Fed reports on bank balance sheets.

This spring, foreign banks were able to build up ample cash cushions, thanks largely to quantitative easing

The latest Fed data "could be telltale signs that foreign banks are in need of dollars again"

So the foreign banks just "park" those worthless Italian and Greek bonds with the Fed, and Ben loans them money at face value.

It doesn't need congressional approval since Ben doesn't mark to market.

The stock market will rally and treasuries and gold will fall due to the fear premium diminishing.

But the Dollar will also fall causing food and gas prices to SOAR.

Too bad that it only helps the top 10% since they own 80% of stocks and spend on average 2% of their income on food and energy.

We the bottom 90%, will see our food and energy cost as a percentage of income go from 15% to 25%

I think Bernanke will have to wait for Europe to implode and the stock markets to go down further before we the sheeple allow him to buy Italian bonds "to save the economy" just like we allowed the first bailout.

Sun, 08/21/2011 - 22:20 | 1584779 MsCreant
MsCreant's picture

"Bond"age.

Sun, 08/21/2011 - 23:03 | 1584886 oogs66
oogs66's picture

i am scared you are right :(  but now that wsj is tied to squawk box all is good...full journalistic integrity

Sun, 08/21/2011 - 23:16 | 1584908 topcallingtroll
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It sucks to be bottom 70 percent.
The top third does ok. Not just top ten percent.

Sun, 08/21/2011 - 22:15 | 1584764 Diogenes
Diogenes's picture

They don't print because it is the best solution. They print because it is the easiest solution.

Sun, 08/21/2011 - 22:18 | 1584771 toady
toady's picture

I keep hoping, but it just won't change!

Sun, 08/21/2011 - 22:22 | 1584781 chump666
chump666's picture

actually the Sun Tzu/Taoist saying is: "To know before knowing."

the Ben Bernanke's on the world are stuck in an academic and arrogant minded feedback loop.  They're probably slowly going insane.  And they know nothing.

As for the markets, yeah relief rally coming pre: Bernanke's QE3 announcement on Friday...But, volatility will still rule the game, might be tighter in the spreads, but I can't see HFT's adjusting that well to a investment bank bull run.  Sell on rallies galore

+ the global economy is a c-hair away from a total collpase

Sun, 08/21/2011 - 22:33 | 1584806 mcguire
mcguire's picture

my instinct: no qe3.  i think things have to get worse... the deflationistas need to be getting bloomberg airtime before qe3 can be announced.. but i was wrong last year on this, no where near the pain that i imagined would be necessary. 

Sun, 08/21/2011 - 22:25 | 1584791 mcguire
mcguire's picture

"But is the cure worse than the problem?"  of course it is, but from whose perspective.   "tin foil hat" logic demands that you consider the possibility that the disastrous consequences of quantitative easing are the desired outcome, not the unintended one.  "ordo ab chao".  

aaron russo does a good job here of setting the right perspective: http://video.google.com/videoplay?docid=-1656880303867390173

Mon, 08/22/2011 - 10:19 | 1585779 ATM
ATM's picture

Of course they are the desired outcome. Everyone knows what the outcome of printing money is so there must be a concerted effort to create that outcome.

As I view it the winners are those that take complete power once the system completely collapses and a new system rises from the ashes. They are the same people who are going to print us to oblivion and cause the collapse. 

They're banking on the stupidity and wails fromt he starving masses to herd us into cages but they still have some very large problems to overcome - namely the new conectivity of the masses and of course the prevalence of weapons in private hands.

Sun, 08/21/2011 - 22:29 | 1584792 Drag Racer
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did the BOJ just print as they had warned??? Asian market just jumped and JPY took a straight step down

Sun, 08/21/2011 - 22:32 | 1584803 IMA5U
IMA5U's picture

perpare to feel some pain peter

 

feels like some cooridnated international government magic is in the works to buy more time for the politicans to scramble for solutions

lybia is already falling.  there will be constant chatter of stimulus and currency manipulation to deflect from merkel's pushback of the eurobond.  obama will push a jobs bill and an infrastructure bank.  and if all else fails, The U.S. will kill Satan on 9/11 to show we are winning the war on terror

Mon, 08/22/2011 - 01:21 | 1585076 MsCreant
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They will dump Satan's body at sea because of his religious beliefs.

They will have DNA evidence this time because Michele asked to have the penis so she could stuff and mount it. The NSA likes it because it will keep her occupied.

Yes, that was awful of me to say and I intended all of the puns in there.

Mon, 08/22/2011 - 11:48 | 1586137 tamboo
tamboo's picture

i hope she likes em circumcised.

the Synagogue of Satan

Sun, 08/21/2011 - 22:34 | 1584807 tictawk
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Ben can print money but but he cannot print WEALTH.  Wealth has to be created and earned.  We will have reached a point shortly where I think a declining dollar will not help the stock market and it will hurt the bond market.   The Fed cannot afford to f+*k with the bond market.  It has the potential to destroy all the credibility of the borrower.   Our lenders are acutely aware of this and I hope Bernanke is.

Sun, 08/21/2011 - 22:46 | 1584809 ShouldveLeftHer
ShouldveLeftHer's picture

Fuck it bro. Get a bunch of credit, buy everything you'd ever need or want, including mad gold, make your minimums and wait for debt liquidation and evaporation. If it never happens then what's changed? In the current system you're born with debt and mostly die with debt. I haven't trademarked it yet but I'm the new breed of American born in the 80s. I read some old science books. Some bullshit about turning other elements into gold. So I applied it to the confines of our fucked up American life. I got some plastic and turned it into gold. The life of a Plastic Alchemist

Mon, 08/22/2011 - 10:09 | 1585750 RKDS
RKDS's picture

I can't tell you how many times I've thought about doing just that.

It just makes less and less sense to be an honest player in this economy.

Mon, 08/22/2011 - 10:42 | 1585850 ATM
ATM's picture

There is the answer ofr the little people. Borrow as much as you can and get real things and "pay back" those lenders with worthless scrips of paper. No need to even default and ruin your credit rating! In fact you'll be AAA!

Trying to do a cash out refi right now. They say I have equity. LOL

Sun, 08/21/2011 - 22:36 | 1584816 I am Jobe
I am Jobe's picture

Is Germany's Commerzbank in Need of Another Bailout?

http://globaleconomicanalysis.blogspot.com/

Sun, 08/21/2011 - 22:53 | 1584867 TzaristBondHolder
TzaristBondHolder's picture

It seems that Commerzbank bailout is a good laugh  http://fiveup.com.au/request/arrange-bailout-funding-for-commerzbank

Sun, 08/21/2011 - 22:39 | 1584822 Drag Racer
Drag Racer's picture

good for Korea.

 

Deutsche Bank Says Four Employees, Securities Unit Indicted in South Korea

The six-month ban was the first business suspension of any foreign brokerage in South Korea since the Financial Supervisory Service was set up in 1999, according to FSS data. The supervisory service is a privately funded agency that enforces policies set by government regulator FSC.

Korea Exchange Inc., the nation’s bourse operator, on Feb. 25 fined Deutsche Bank’s local brokerage a record 1 billion won for violating exchange rules.

http://www.bloomberg.com/news/2011-08-21/deutsche-bank-says-four-employe...

Sun, 08/21/2011 - 22:41 | 1584827 IMA5U
IMA5U's picture

thanks but shhh....

 

over the weekend i was out with some friends that don't follow the financial markets and i told them how fooked up europe was

they were shocked.  and said "but aren't europeans so much smarter than us?  they will be fine"

the general populace does not really want to believe there's a problem because its not on u.s. soil.  they think the sell off is because of the u.s. downgrade

Sun, 08/21/2011 - 22:43 | 1584831 Boston
Boston's picture

So, we will get money printing.

Nope.

Ben Bernanke's bitch at the Fed---Jon Hilsenrath---has just pretty much guaranteed that Ben will NOT announce more QE:

At Jackson Hole last August, Mr. Bernanke heralded a second round of bond-buying aimed at propelling the economy known as quantitative easing, or QE2. The Fed's recent declaration that it's prepared to take other measures to promote the recovery clearly opened the door to QE3. But don't expect the Fed chairman to rush through that door on Friday.

Hilsenrath has been spot on, for years now, with respect to Bernanke's intentions.  THIS is a tell.

I wouldn't be surprised if the markets are disappointed on Friday at Jackson Hole....

http://online.wsj.com/article/SB10001424053111904070604576518861203898904.html?mod=WSJ_hps_RIGHTTopCarousel_1

Sun, 08/21/2011 - 22:52 | 1584859 IMA5U
IMA5U's picture

joking aside peter, good post

 

structurers are bankers.  

bankers create the world's problems.  and traders have to deal with them.

Sun, 08/21/2011 - 23:06 | 1584889 TzaristBondHolder
TzaristBondHolder's picture

Peter Tchir is short.    He is not the only one.  I find it difficult to cut through the noise as one day we are down 5% another we are up 5%.  Looking at the Israeli Stock Exchange that is open on Saturdays  http://www.tase.co.il/TASEEng/  they were down 4-5% over the weekend.

Marcus Rose created an interesting software that suggests the market turn dates, continuing the research by Donald Bradley: www.rosecast.com

He feels the stock market (S&P 500) will make a closing price low on August 25, 2011. See the chart attached and visit Marcus' website for explanations:  http://inkom.com.au/sites/default/files/market%20turns.jpg

Three days to go?

Mon, 08/22/2011 - 08:33 | 1585429 fajensen
fajensen's picture

Yup - The volativity created by the insane amounts of "stimulus" sloshing around in the markets must already have caused a lot of financial alchemy to blow up - imagine f.ex. writing a LEAP option in January and hedging it, assuming that volativity would be 2% based on historic data + fudge. OUCH.

Deutche Bank lining up again?? I am not suprised about Dexia, btw. Snot-rollers and navel-defluffers the lot of them!!!

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