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Santelli On Capital Flight And Bond Contagion
While it will be no surprise to any ZH reader (with our attention to Swiss 2Y rates) the world is undergoing a massive capital flight to safety. Rick Santelli gave this topic his special treatment today, pointing out that "capital is detouring - to avoid risk", and outlining just how big a 'crash' lower in yields we have seen among many of the supposedly safest sovereigns as money floods to safe-havens (including UK, US, Japan, Germany, and Holland). What is most important is that Rick outlines why we should care - when all around are yawning on about how cheap 'dividend' stocks must be given low interest rates - since it changes the nature of capital (the life-blood of our markets) from risk-taking to absolute safety-seeking - as he points out that "it isn't necessarily about our own economy's numbers, it isn't even about who we export to; it's the fact that if capital continues to get somewhat impaired, you'll have more data points as investors not only rethink about their capital but everybody rethinks everything in the capital structure that makes business go round."
10Y Yields across many majors (and Spain)...
Chart: Bloomberg
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This isn't news, we've been waiting for it since 2008.
Fortunately, I TiVo'd 2008 to 2012 and can now fast forward through all the crap to get to "The End".
Bernanke: "I'll do everything in my power to force people into equties"
The whole freaking world replies: "Fuck you, Bernanke"
“everybody rethinks everything in the capital structure that makes business go round”
It is not at all hard to model capital flow in the new Fed and central bank distorted economy
http://www.youtube.com/watch?v=XoS-MCnTPtQ
in case you ran out of space on the ole tiVo, here ya go:
this is the end
http://www.youtube.com/watch?v=M4WJlLNIsyY
beautiful friend,
janus
Aside from a few big fights, very rarely do I see these CNBC faggot anchors debate Rick Santelli over the economy and the topic he discusses.
It's always, "Good Job Rick" or "very interesting, Rick" or "Nice to hear from you, Rick Santelli from Chicago"
These Pieces of Shit treat Mad Ricky over there like Ron Paul was a few months back, FIRE EM ALL
I'd wouldn't mind getting all the news from him, we can keep Becky Q to suck Buffett's dick every once in a while so we can get a good laugh out of his bullshit recommendations
Peace
Bloomberg's no better.
If Buffett farts, they all line up in hopes of getting a whiff.
I wish folks would calm down. For christ sake, you'd think CNBC has committed the unpardonable sin by not extolling the exact economic philosophy as Tyler. It's an entertainment show that contains (at times) interesting and oertinent data and market sentiment. I like the give and take between hosts (Rick is by far my fave) but you do get different points of view AND it's the only place besides FOX that dares speak ill of POTUS.
SOme folks have some real issues if they get worked up to fever pitch over a damn TV show.
its supposed to be america's premier FINANCIAL NEWS channel not entertainment, but sadly it is
although its not your fault--- with all the stupid advertisments, lame stoner documentaries at night and clowns as anchors, anyone could mistake it for an entertainment source.
@ Tyler-any idea why the Jan 14 TBT leaps just spiked?
Very unusual to see a jump like that.
dividend paying stocks offer safety. as long as you ignore the potential for 50%+ losses on capital just to get the whopping 3% yield. and the inevitable cancellation of that 3% yield when things get bad.
Banks were the highest dividend yielders going into the market collapse of 2008. Hmmmm. What are the highest yieldeds this time? Let me guess: "gold miners."
Poor guess!
Agency real estate investment trusts.
So you're guessing? Why waste your time posting?
why save and accumulate capital if you can't save it anywhere you to beat inflation without the risk of being Corzine'd? Capitalism without capital is dead. Thanks, Ben.
Nothing like picking pennies from the front of a moving steamroller ...
The Fed and US Govt killed capitlism (working) in 2008 with the bailouts
you don't get a recovery if you prop up the old dinosaurs and you don't get green shoots if the dead-rotten wood is still clogging up the forest canopy
Bubble Ben 'studied' the Great Depression, what part did he look at soup kitchens?!!
Capital is avoiding risk???!
I just saw the equities markets have a massive reversal even in the face of abysmal data. That's not avoiding risk. What is Rick smokin?
you have to accumulate capital safely. Try opening a McDonalds by paying them $1500 a month. You can't. You gotta have $250K of CAPITAL.
Santelli is a schill for the banks and he certainly won't discuss exactly who the ECB is bailing out in Europe - the TBTF banks.
Everyone in equity land is waiting for the big Euro bounce (since everything is nearly 100% correlated on FX). Healthy market for sure.
seen on the new arrivals desk in a bookstore- "How to make money in Junk Bonds", right next to discount rack selection "Flip This Condo".
I love the "Safe is a Relative Term" in the video still.
How exactly do you define "safe" in a world of risk assets run amuck........starting with the so-called lowest risk asset, USA sovereign debt?
Jim Willie gives an excellent explanation of why there IS NO FLIGHT TO SAFETY < http://traffic.libsyn.com/tfmetals/Willie2.mp3 > I would love to listen to Rick and Jim debate this issue.
When all this money starts flying out of this bond bubble it's going to shock the world. It will make the equity bubble look like a pimple.
"cue: Espana."
If 10% more went into gold it would rock the world.
Time for everyone to get Proactiv and buy phys.
But I dont have zits?
The black hole begins....more and more 'investors' move closer to the event horizon to avoid the outer risk chaos....or more and more sheeple head to the big opium den in the city to avoid the outlying gang wars in the burbs....the only way is down, either way
When you get to the fork in the road, take it. - Yogi Berra
I grabbed the fork and ate. It was a simple solution and I was hungry.
I hope Rick sealed off the hot tub in his back yard. He's way to truthful for CNBC. He was dissing the fed this morning and I swear LIESman had tears in his eyes.
BTW- Mandy is flashing the Druries again today, I'm guessing ratings really suck. Next week they are installing a pole for her to broadcast from
That was Bernanke cum in Liesman's eyes.
I'm randy for Mandy.
Liesman has the advantage of hogging all the time and STILL can't hold a candle to Rick. I love Santelli when he gets going!
There isn't anything that is truly safe - just perhaps "safer".
i have a gold tooth that says 'bite me' :-)
don't smile around the wrong people.
Or, just start chowin' on their facez!
just buy all the van Goghs you can people !
The basement is on fire....quick....run into the attic!!
dude, you have truely summed it up!
I recall that Rogoff/Reinhart study saying that about 3 years after a banking crisis you have the sovereign debt crisis....hmmm....are we there yet? You can hear the supports creaking as the stress overwhelms the duct tape holding this together.
If this rigged market does fall apart it will be wild. All the pension funds, government services, everything will be destroyed. That is why it can't happen!!! Bernanke et al won't let it!!
True.
Print Ben print....print the economy back.
This is like a real game of Alan Wake - 'If I believe hard enough, I can write my dead wife back'....and if it works - its pet cemetery time for the dollar
Lemmings led by sheep who are owned by wolves.
The blind leading the nekkid.
No way Santelli gets a bonus from CNBC this year. He tells the truth way too much.
I have cash. I want to invest it. I've looked at my local real estate and can't find anything that is priced at what I consider its economic vale. I'm not in the market. I'm not going to buy bonds for any duration and short term stuff is irrelvant. Seriously ... I'm thinking that I'll lose less money sitting out by my pool this summer than anything else I can do.
Want to make some money this summer? Invest in a pop corn machine ...
If the market deflates, you make money just by sitting in cash. Your cash will be worth more on the other side.
Bonds are pricey, I would just sit tight for a year.
You just gotta love North Central Arkansas, I think there is 1 bank for every 75 people. Come look me up on Bull Shoals, we can compare wads.
Wheeeee !
Arkansas, Is your pool above ground or ? Just kidding ;). Sitting by the pool may be the way to go as long as your money is in sight. A little popcorn will help idle away the dog days of money.
This flight to safety makes me wonder why the passengers of the Titanic didn't all move over to the iceberg?
By the time they finally accepted that the ship was going down, the iceberg was too far away to get to.
Sorry, Arkansas Angie, google "Weimar Germany" or "Argentina" or "currency collapse" to see what happens to those who hold cash too long. Perhaps shelf-stable food, gold coins or diesel fuel?
Good luck whatever you choose, we're all going to need some good luck to get by.
edit - Argentina
Rick for POTUS
Fuck Santelli. He's just another shill for one of the factions. If someone can't put personal politics aside long enough to give unbiased assessemnts, they're not worth listening to. Santelli is one of those. Too bad as he's obviously bright.
Santilli is the only host on the show that's not afraid to tell the truth. I like when he is off the chain.
-JP
Santelli is the ONLY reason worth watching ComedyNBC:)
What a waste of time watching CNBC (unless you want to see what P&G is selling).
I love Santelli, but only if Europe improves will we see OUR Treasury yields rise. Its almost like The Fed is rooting for The Med countries to flounder. But once they get better, he will use QE or Twist3 to push down rates.
http://confoundedinterest.wordpress.com/2012/05/31/ism-drops-to-52-7-10-year-treasury-yield-falls-to-1-56-will-they-or-wont-they-fed-policy-shift/