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Guest Post: The Stock Market And The Dollar: There Are Only Three Possibilities

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Mon, 08/08/2011 - 11:18 | 1537262 anynonmous
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Moodys affirms AAA

Obama to speak in 2 hours


Mon, 08/08/2011 - 11:21 | 1537283 TruthInSunshine
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No sane person who is capable of performing basic arithmetic needs S&P, Moody's or Fitch.

Mon, 08/08/2011 - 11:40 | 1537386 gmrpeabody
gmrpeabody's picture

Yes, yes..., but should I buy or should I sell?

And if so..., what?

;- )

Mon, 08/08/2011 - 12:32 | 1537679 Chief KnocAHoma
Chief KnocAHoma's picture

Buy tangibles - silver, gold, water, food and land -


Mon, 08/08/2011 - 11:26 | 1537305 Gert_B_Frobe
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Cliff notes for Comrade Zero's presser: (blather, blather, blather) inherited Bush's mess (blah, blah, blah) Tea Party terrorists (Iba beba prezdent, booyah) Speaking of Tea, I have to run. Tee time at 2:00. Later Suckuhs!

Mon, 08/08/2011 - 12:36 | 1537716 FreedomGuy
FreedomGuy's picture

Precisely right! More importantly after the blame everyone else blather there will be NO solution...at least no solution that does not involve more spending, bigger government and higher taxes. We are lead by a know-nothing who doesn't even really care what happens as long as there's another trip to Rio or Spain or Hawaii in it for his family.

Mon, 08/08/2011 - 11:44 | 1537416 Stares straight...
Stares straight ahead's picture

Affirms AAA?  Did I miss something?

Mon, 08/08/2011 - 12:29 | 1537667 lunar
lunar's picture

Buffett's baby - he would even give AAAA

Mon, 08/08/2011 - 18:51 | 1539799 Stares straight...
Stares straight ahead's picture

I guess Buffett will learn to keep his mouth shut!

Maybe he'd like to say somethun about the tea party next?

Mon, 08/08/2011 - 11:19 | 1537270 SilverDoctors
Mon, 08/08/2011 - 11:20 | 1537275 hedgeless_horseman
hedgeless_horseman's picture

If you liked BAC at $50 you should love it at $7.  It's almost like a 1 for 7 split.  Almost.

Mon, 08/08/2011 - 11:27 | 1537313 schoolsout
schoolsout's picture


Mon, 08/08/2011 - 11:28 | 1537317 hedgeless_horseman
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If you liked BAC at $50 you should love it at $7 6. It's almost like better than a 1 for 7 split. Almost.

Mon, 08/08/2011 - 11:48 | 1537438 Cthonic
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Mon, 08/08/2011 - 11:29 | 1537323 JSD
JSD's picture

That's exactly why we don't "pitch to bitch" here.

Mon, 08/08/2011 - 11:33 | 1537339 JSD
JSD's picture

"Yeah, ummm...I need to talk to my wife about this." "No you don't Harry."

Mon, 08/08/2011 - 11:20 | 1537276 TruthInSunshine
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oBLAHma is going to make a rare (/sarc) press conference appearance at 1 p.m.

Obama will  blah blah for a few minutes and then go raise more of what will be his 1 billion dollar warchest for his 2012 re-electionc campaign by pandering to Wall Street some more.

Mon, 08/08/2011 - 11:20 | 1537278 SilverDoctors
SilverDoctors's picture

Also, have to agree with your theory that Countrywide will be spun off from BAC this time.
Just too much toxic crap on that balance sheet.

Mon, 08/08/2011 - 11:29 | 1537308 Dr. Engali
Dr. Engali's picture

My view is that BAC will be loaded up with bad assets (bad bank) since they were never part of the club. Then they will be allowed to fail in a controlled (or an illusion of controlled)way.

Mon, 08/08/2011 - 11:37 | 1537371 toady
toady's picture


Mon, 08/08/2011 - 11:46 | 1537425 Doyle Hargraves
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They already were loaded up with crap in 2008 (cunt tree wide), just been a ticking time bomb since then add in lawsuits and forced fannie/freddie repurchases they are already dead just do not know it yet...think Keith Richards.

Mon, 08/08/2011 - 11:20 | 1537280 Stuart
Stuart's picture

ya, ok..  there's only two possibilities.  You live, or you die.  ..     

Mon, 08/08/2011 - 19:36 | 1539956 Diogenes
Diogenes's picture

Unless you do neither....... or something else happens.

Look at me I are a prognosticator.

Mon, 08/08/2011 - 11:22 | 1537281 channel_zero
channel_zero's picture

I pick door #1 Bob...

Why?  the top 20% are looking at the topline valuation of whatever's left in their savings and judge their fiscal health that way.  Nevermind the cost of living has increased such that the bottom 80% are poorer than ever.  Doesn't matter.  They can afford to fill the BMW and pay the kid's private school.  Everything is good!


It's like boiling frogs at this point.  Just don't turn the heat up too high.


Dow 13000 next month!

Mon, 08/08/2011 - 11:22 | 1537286 unky
unky's picture

Gold costs almost more than Platinum, how long is this sustainable? Since Platinum is much rarer... I was just wondering

Mon, 08/08/2011 - 11:27 | 1537315 Hearst
Hearst's picture

Similar argument with Silver.  Above ground stocks of Silver are dwarfed by above ground stocks of Gold and yet the Gold to Silver ratio is 43 to 1 !!


Economic law will play out and adjust these imbalances.  Until then enjoy the HFT show!

Mon, 08/08/2011 - 11:28 | 1537319 Sophist Economicus
Sophist Economicus's picture

Gold will eclipse Platinum since the demand/supply factors for each metal are different -- i.e., rarity is in the eyes of the beholder...

Mon, 08/08/2011 - 11:35 | 1537355 dark pools of soros
dark pools of soros's picture

Rarity???  no no..  it's all about Tradition!!!

Mon, 08/08/2011 - 12:39 | 1537737 FreedomGuy
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Platinum is an industrial metal which is where more of it is used. Rarity is only half the equation. Remember it is a SUPPLY and DEMAND chart. The supply may be low but the demand due to crashing economy and Japanese auto factories idled drive the demand lower. So, it actually makes sense along with palladium and even silver. Silver has a larger money component so it will waffle in between.

Mon, 08/08/2011 - 11:23 | 1537292 Irish66
Irish66's picture

When do all are banks get halted?

Mon, 08/08/2011 - 11:26 | 1537302 John McCloy
John McCloy's picture

  Wow BAC is about to cross over into the 6's.

Mon, 08/08/2011 - 11:26 | 1537307 Spitzer
Spitzer's picture

There will be deflation in the US priced in Euro's, not dollars. Look at the problems in Europe yet the Euro is still above parity.

Mon, 08/08/2011 - 11:44 | 1537410 DaBernank
DaBernank's picture

Our problems are just getting started over here in Europe and the people on the street know it. Current trading/speculative Momo *price* of € is 1.42. True *value* of € is trash because of lack of mechanisms to deal with the massive debt levels of all nations (even Germany is at 83.2% GDP), ECB has only 550 tons gold, there's wide disunity of cultures/identities. Nationalist parties have already gained momentum in many nations. Breakup is inevitable.

Mon, 08/08/2011 - 12:41 | 1537752 FreedomGuy
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The Euro! It was fun while it lasted, right, lol? It has the same problem as the welfare state. Countries like Greece and Portugal ride the higher ratings and bailouts like a national welfare case, just like welfare recipients live off the higher productivity of others.

Mon, 08/08/2011 - 11:27 | 1537309 OnTheWaterfront
OnTheWaterfront's picture

Kudlow Save us!!!

Mon, 08/08/2011 - 11:26 | 1537311 anynonmous
anynonmous's picture

just saw a clip with Zandi

his trousers were on backwards

Mon, 08/08/2011 - 11:27 | 1537312 tekhneek
tekhneek's picture

D) Stocks crash, dollar crashes, precious metals sky rocket.

Mon, 08/08/2011 - 13:40 | 1538138 YHC-FTSE
YHC-FTSE's picture

That's what is happening now. Gold and Equities are diverging, when traditionally they ran parallel during uncertain times. What happens when stocks pick up? And please don't tell me we won't see QEiii. I hate to say it, but it doesn't look good for gold especially after JPM announced $2500/oz. I'm still buying, but volatility is not what I want in gold, and a collapse is not what I want for my country (UK). 

Mon, 08/08/2011 - 11:28 | 1537316 chartcruzer
chartcruzer's picture

if any would like to monitor this in real time has the great debt bubble burst unfolds.


the more interesting releationship is that of gold and the SPX

here's the relative peformance of the SPX to gold


Mon, 08/08/2011 - 11:29 | 1537320 DaBernank
DaBernank's picture

I will buy BAC at Family Dollar, for $0.99... ahhh who am I kidding, I'd rather watch a $1 bill burn.

Mon, 08/08/2011 - 11:29 | 1537322 THE DORK OF CORK
THE DORK OF CORK's picture

This is a really tough one for the average sacred shitless Euro Dork who holds Gold & Euros earning decent interest & possibly Francs

Physical dollars may be a option as a European collapse hedge but they look like friggen toilet paper.

Mon, 08/08/2011 - 11:29 | 1537324 Escapeclaws
Escapeclaws's picture

This just goes to show that anyone can read charts and interpret them. This is as good as other chart interpretations out there. Distinctly better than that offered by the Smartknowlegeu.

Mon, 08/08/2011 - 11:30 | 1537325 Flakmeister
Flakmeister's picture

CNBC just singalled a sell signal for gold....

Tuesday will be "Gold Rush" day....

Sell your calls or buy some cheap puts....

And No, I am not a troll

Mon, 08/08/2011 - 11:30 | 1537327 chistletoe
chistletoe's picture



There is a fourth possibility, which I believe is a whole lot more likely

than any of those three.


To quote a wise sage,,

"On a long enough timeline the survival rate of everything goes to zero ...."

Mon, 08/08/2011 - 12:19 | 1537563 narnia
narnia's picture

Promises made by governments or those dependent on them are worth ZERO.  Assets that are neutral or counter-productive to the quality of life of humans have only salvage value.  Assets that improve the quality of life of humans have REAL value.

The settlement of worthless promises and liquidation of the neutral or counter-productive assets are both going to happen.   

Mon, 08/08/2011 - 11:30 | 1537329 treemagnet
treemagnet's picture

Euro's gonna go humpdy dumpdy, and all the kings horses and all the kings men couldn't put 'er together again.  Dollar up hard temporarily and stocks take a header.  Theres my call.

Mon, 08/08/2011 - 11:33 | 1537337 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The dollar is not going to rise concidering that not only does the Fed burn dollars for leverage, now the ECB is throwing Eurodollars into the fire.  The dollar is doomed.

Now that gold has hit resistance, Bernanke will sell (make his loans) and use the cash and leverage to issue QE 3.  Gold will go to support, and then the PPT will pump cash into equities, and monetize the debt.  Then next winter, the financial system spins it wheels once again.  Wash, rinse, repeat, until there is no more fiat from the taxpayers, and gold is at $10k.

Gold Chart from 99er's Blog:


Mon, 08/08/2011 - 11:33 | 1537342 Mugatu
Mugatu's picture

This quote is so stupid:

"Dollar Bears are assuming the USD will crash through support to new lows. That is certainly one possibility--but it can only happen if stocks rise (choice #1) or the see-saw breaks (#3)."


So he is saying that equity prices drive currency movements?  I know currency traders who never even look at equity prices all week - gee this guy must know some secret everyone else who trades currencies doesn't.    It is more the other way around - currencies move equities.  The tail does not wag the dog!

Mon, 08/08/2011 - 11:34 | 1537343 MrSteed
MrSteed's picture

An entire article without "cargo cult" or "simulcrum".  Sweet!

Mon, 08/08/2011 - 11:35 | 1537348 oogs66
oogs66's picture

wasn't the 3rd possibility really 2 possibilities?

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