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IMF to Bernanke: Thanks For Nothing, As Threat To International Monetary System Looms
We suspect the world was placing a little more 'hope' in Bernanke's willingness to print-and-save-us-all as the IMF just announced the activation of its "New Arrangements to Borrow" for a further six months. Obviously, given the quota subscriptions and the nature of the NAB, we suspect the rest-of-the-world will get pound of flesh (or USD bailout) implicitly.
IMF Activates Standing Borrowing Arrangements for Further Six-Month Period
Press Release No. 11/342
September 21, 2011
The International Monetary Fund (IMF) announced today that its Executive Board has formally completed the process of activation of the New Arrangements to Borrow (NAB) for a further six-month period from October 1, 2011 to the end of March 2012. The expanded NAB became effective on March 11, 2011 and was activated on April 1 for the maximum period of six months (see Press Releases No. 11/74 and No. 11/109).
The NAB is a standing set of credit lines under which 36 members or their institutions have committed to provide supplementary resources to the IMF totaling up to SDR 363.6 billion (about US$571 billion1). Activation requires the consent of participants representing 85 percent of total credit arrangements eligible to vote and the approval of the IMF’s Executive Board. Since the April 1 activation, some SDR 27.7 billion have been committed to Fund-supported programs for which NAB resources could be drawn, and actual drawings under the NAB amounted to SDR 6.8 billion (US$11 billion).
The NAB is supplementary to quota resources, which are made up of the quota subscriptions each member pays upon joining the Fund and in the context of quota increases thereafter, broadly based on its relative size in the world economy. The IMF is a quota-based institution, and the Fund’s Board of Governors has emphasized that each member of the Fund commits to use its best efforts to complete the steps required to make the quota increase under the 14th General Review of Quotas effective no later than the Annual Meetings in 2012.
And from Dow Jones (via Global Finance)
WASHINGTON -- The International Monetary Fund Wednesday re-activated a $571 billion resource pool to ensure it has funds to help cover Europe's worsening sovereign-debt crisis.
The IMF extended activation of its so-called New Arrangements to Borrow for a six-month period from October.
The crisis is entering a dangerous new phase. The risk of a Greek default is rising and Italy and Spain's sovereign debt has come under attack.
According to the IMF, the pool of supplementary resources are only to be activated when "needed to forestall or cope with a threat to the international monetary system." The IMF managing director must first make a special request to tap the special kitty.
IMF Managing Director Christine Lagarde has said recently that a heightened readiness is required given the elevated risks in the global economy.
So far, the IMF has already distributed nearly $11 billion from the NAB. Specific financing programs requiring additional board approval are needed to use the resource pool.
In total, the supplementary fund can provide up to about $571 billion in extra resources to the IMF, but only around $331 billion is currently available for use. Without the special resource pool, the IMF would only have around $60 billion on hand.
It is funded through bilateral loans from countries, unlike normal IMF lending resources, and is designed as a temporary measure. It is expected to be largely replaced by an agreement reached late last year by the fund's board of directors to increase quotas, the share of contributions that each member must give to fund IMF lending.
-By Ian Talley, Dow Jones Newswires,
This is not completely unexpected as we have been discussing the rise in borrowing arrangements/facilities at the IMF for a while - what is notable is the timing - given constant chatter out of Europe that all is 'satisfactory'. No reaction whatsoever in ES so far, a small tick up in EUR and Gold...but mostly noise.
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we still have qe2 to get fractionally reservized and velocitized for price spikes in the next 2 years.
this 10-early-11 commodity price running has been from qe1.
patience.
Only a fool would short gold in this enviornment.
IMF Activates Standing Burrowing-Head-Up-Its-Ass Arrangements for Further Six-Month Period
Press Release No. 11/342
September 21, 2011
The International Monetary Fund (IMF) announced today that its Executive Board has formally completed the process of activation of the New Arrangements to Burrow (NAB) its head up its ass for a further six-month period from October 1, 2011 to the end of March 2012.
Sept 5 article: Bloody september after FOMCE. How true was that?
http://capital3x.com/?p=711
The fact that there is no fear is to be feared itself
http://www.marketoracle.co.uk/UserInfo-Capital3X.html
http://capital3x.com/?p=1644
Accurate premium analysis. Their trades hit 1900 pips profit in sept after 2 pre FOMC trades hit 300 pips in profit. Nothing to try them out as 7day trial to members section.
Shrt, been short, refused to be squeezed TZA. Dow puts. Short the Euro. Made $40K TODAY. Come to Papa. come
Bernanke is highly constrained. He has to keep some powder dry for Europe puking. That is going to need some fresh smoke and mirrors, and even the skeptics won't have the wind to gripe too loudly when it goes down. Twist is great, for now, because short dated Treasuries are in demand as money flees Europe. The US govt. gets a break on interest expense yet again, doubly so, and all it has to do is slide the primary dealers a little cut of the action to make it kosher. In the end, we can't keep paying interest and expanding the money supply, while the global real economy is choked by expensive and limited oil and other resources. The monetary supply just has to massively contract. These guys just don't want to lose control while all that happens.
the fact is by putting the screws to The Street the
Bernank's probably doing them the biggest faovr ever. (Are they loving TARP now? REALLY?????!!!) Every politician from the President down to the San Diego dog-catcher is blaming Wall Street for their problems. This provides cover for all of them in the sense that "The Berank's kicking their ass." Would they rather have the Treasury Department? Or Congress? I mean get real Wall Street...who doesn't want all of you exterminated for all time right now? Even you are phucking you. "Get back to Planet Earth when you pull your heads out of your arses" is all The Bernank is saying. Sure "it'll be entertaining as all hell"--but hey, "all communication is two way communication" as they say. this is to be expected...not "excepted" and clearly since The Media is literally your back yard at least you know where it's coming from and who's doing it. Now move along children. Move along....
Biederman and the Brandstifter revisited...
We have let the arsonists into our homes and given them matches. Why do we continue to believe they won't burn it all to the ground?
Bernanke is spreading the fuel as we watch complacently, "as calm as Hindu cows."
The one detail that is being missed is that gold has never lost purchasing power. Gold's purchasing power (and silver's, for that matter) do not depend on those arbitrary spot prices. I don't know where people get the idea that gold and silver "go up and down". It's paper that changes. In the end, gold and silver will be money, and paper will be worthless. That's why the central banks are buying up the above ground supply. It will come down to who has gold and silver, and who doesn't.
Ben Bernanke would never interfere with European nations being swindled out of their gold.
http://georgesblogforum.wordpress.com/2011/07/19/unnatural-law-fiat-currency-vs-real-money/
This Bernanke guy is an interesting fellow. He keeps attempting to hammer the square peg into the round hole. After each successive failure he goes back to his economic work which instructs him that all is required is a simple change of the hammer type. No where in his work can he find an answer to solving the square peg and round hole dilema. 'Trust me people, it says right here - and I wrote this myself, you see; it's all very complicated, arcane stuff that you simply cannot understand - that if I use this really big hammer, let's call it a monetary sledge hammer, this time it ought to work. It certainly will work; for I am the leading expert on the Fed's follies throughout the Great Depression.'
The Fed is out of bullets! Bernanke is shooting blanks!
Shit! AUD broke 1.00 handle, China PMI down. There you go.
The { Benster} should have sent the E.U. a plane load of politically correct [ White Chocolate] Kisses, in the shape of his falice!
The aud parity break is just a shake out... Where else can you earn 4.75% on your money? Trade small, and watch the eur/aud correlation for break downs ( the trade is bouncing off the 200day sma). The 600 pip bounce was retarded... The aud trades off of the spx. ME and Emerging market sovereigns trading the eur against the cad and aud. The usd is their peg!
That 4.75% doesn't look quite so tasty to the folks who went long Aussie at 1.09 a few weeks ago.
Also, there will be some who remember it falling from .93 to .69 in a few week period in '08. Stuff happens, interest rate differential or not.
The absurdity of an entire f'ing world virtually hiding under their desks, waiting for the words of one man to come spewing forth
-- the reality of such a pathetic arrangement is enough in itself to cry foul, pull the anchor, and declare chaos.
No need to wait, wonder... it is insanity, now.
Hong Kong
down 4 % ..
chop stix and poisonous fish ...
Just because they did not announce it, why do we assume they are not printing? They are not accountable to anyone. They tell the stories they want to in order to get "effects." The things we know they do are incredible. I think what we don't know is the worst you can imagine, they do what they want, when they want. The Mafia can only dream about the kind of racket these folks have going.
http://www.forexpros.com/quotes/us-dollar-index-advanced-chart You're losing your edge MsCreant.
If the chart doesn't open, click the (real time) quote button and then dollar index. Point being, any hint of printing would be ( dollar negative) . Look @ bond yields as well.
Yes, they can call it whatever they want, QE, Operation Twist, or Uncle Ben's Ankle Grabbing Stimulus Package.
In the end, it's all the same shit. Printing money out of thin air.
gap down
like gravity...
Yup. All that hope....poof
Well just about everyone on earth is baffled tonight.
Baffled that Bernank has deviated from the script: how evil, cunning and reckless can he be if he didn't print up anther few trillion?
And how bout that last minute GOP letter to the Fed: could it be that the party of big business is refusing to take the bacon?
And what about the fact that, unlike last summer, the global economy is really in trouble...not kidding this time...and not just in Europe. Could money printing not be the answer to all our troubles?
Oh Ben, Oh Ben..a bewildered world hungry for "the quick answer to all our troubles" looks to you tonight with the confused look of a toddler: Why? Why? Why?
I'm inclined to Believe that another player is to step in and squash the dollar, These people are not 100% stupid. They whine about volatility but if you control volatility via news-feed advantage? You then front run the entire game. HFT gets the rap for now but HFT is a theft goal-ed algo designed to function successfully with in a structured set of parameters.
Without FORE KNOWLEDGE of the parameters, HFT would be a waste of time and money.
This shit has an overpowering stink of corruption.
Every normal person recognizes the odd and senseless behavior of this market lately. All I'm really trying to say is that the manipulation is so blatant anymore as that market reaction to manipulation will become an increasingly large factor in setting price action/discovery.
In SHORT... The free market will as it always has, render a verdict.
Guilty.
Failed.
Fucked up.
Go away.
Potential new QEs EU and RE= QEURE. My only query is: where is it stated in the fed mandates that they can perform such queer acts. I hope there is push back from Barney on this with his new felt desire to query the fed himself.
I'm just waiting to see what happens to the central planner assholes when there's no groceries at the local grocery & no gas at the local station.
That's where we're headed.
They will be fed (get it, Fed) and ported about. No skin off their asses.
Happy Halloween. I get it!
Serious ignoramus question...
The Fed has committed to simultaneously holding down overnight rates for the forseable future (these rates heavily influence short term bond yields) *and* holding down long term rates by buying those bonds with money they get from selling short term paper.
But how does this not turn into an open ended monetization scheme? Or is it easy for the overnight rate to be 0.25% and the 1 year to be 2.5%? Maybe there is no problem here (in this narrow sense).
It's an Keynesian madman play...terrible economic theory. To stimulate the economy holding down 30s actually makes it look more deflationary hence the liquidation trade last session. That is how brain-dead Keynesian market theory is , or as psychologists use the term "self fulling prophecy" - they have made it look more deflationary. They have also killed off banks interest margins on that major Op Twist. A total mess. Point is, stagflation is here, that's the problem. The other problem: The global economy is totally f*cked.
Keynesian, works great for ( A-Bomb) charts... Circa 1946!
Bernanke is not about to let the USD rise too much... The only bright spot in the US is exports...Plus, all those earnings #'s coming out will tarnish the Tech-Darlings the banksters love so much... This whole 'The Fed is out of bullets' mantra is just plain wrong... Bernanke can outright purchase any asset he damn well choses... The USD will rise a bit...The metals will struggle a bit...(running correction more likely)...We can all back-load the metals in the coming weeks, The HUI looks really strong..NEM broke out! This was really the lost story in the metals for the last 2 weeks...SSRI,PAAS,HL,CDE will flat line for a bit...Funny how SSRI with half-a-dozen multi million oz. deposits either in production or coming on line is just getting whacked!!! This will change going forward.
The Fed with this Twist BS needed a 'Data Point'...They've been in left field with policy for so long that a 'return to the mean strategy' was needed and required... They'll compare/contrast Operation Twist 2 (now) with Operation Twist (1) back in the Kennedy days....QE1 & QEII were so of the page stuff that they had to return to normalcy...
Believe me.. the only entity buying a 30 year treasury is the Fed...
Bernank et. al NEED SP BELOW 850. Below that and we will witness last bull(shit)ish rally until it tanks hard for great purge.
It will happen folks. Patience bitches, patience.
I doubt the S&P goes down that much (I could be wrong)....If we see a 3 digit print on the S&P then I would back the truck up on everything except the USD...
precisely. the truck needs to be backed up AND QE4 explodes it back up again and then SP and everything else goes crashing even harder. Get the truck gassed up and ready.
Look at Asia tanking. This is the squeeze play right before our eyes.
I think (1040) , on this blast down would confirm a new massive sell off. eur/jpy 2001 lows. gbp/jpy historic lows/ usd/jpy historic lows/ chf-eur/usd intervention. 10Y @ WWII lows. We are currently living 2008, with { Frozen ice on the Volcano}<
Ya, were going to see some Yen Carry Trade stuff that will blow your mind going forward... Can you imagine your family being even a 1000 square miles around Fukushima with 100 mph winds...Those people in Japan (who I really feel for!!) need to move... Now!!!
Yesterday. And while it is too late, I do think even at this juncture damage can be mitigated.
So much for " Trout" fishing in Yellowstone. It was good while it lasted. ( Pouty face),.,
Every Politician who was publically against any monetization from the Fed will be begging for it if the S&P goes sub 1000 going into the election next year... If you think Obama has problems now (which he most certainly does)... Just wait til the S&P prints 666 during the debates next spring-summer....!!!!!
USD Index - very bullish price action. http://bit.ly/qwB3Ab
And The printathon has cooled off, for now...
They will let it get much worse, and then tell us we asked for it.
Anyone here buy into the "hotelling model" for gold pricing? Just curious...
Why would I walk so far up the beach for ice cream when I can have it delivered?
I'm not sure I understand the concept? Explain!
I can only refer you to this.
http://www-personal.umich.edu/~ssalant/salanthenderson.pdf
I'm no fucking economist, I'm just trying to make some sense (and money) out of this shit.
Happy reading.
The hotelling model is basically the interaction between a market and associated demand and how "forces" can be exerted on said demand and yield a quantifiable result such as increased or optimal market share.
At least thats my take for what its worth.
Someone with a better overall grasp of the Gold market will have to answer how this applies.
What this paper tells me is that the risk of government auctions should cause the price of gold to drop initially and then rocket up. If the holders of PMs don't sell (relatively as much as in 1974) at the first risk of an auction, then that drop should be lower (right?). So, a key question for the model is: what are the odds of a government auction?
Regardless of the answer to that question, a strategy of buy and hold for gold in the face of a risk of government auctions seems to be indicated. Maybe that's a BGO for this crowd....