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What's More Important - Growth Or Policy?
Following this morning's dismal Empire manufacturing 'growth' data (which generated zero impact in equity futures thanks to QEternity 'policy' having dampened the market's beta to any and every macro data points) we note Morgan Stanley's findings that while monetary policy can provide a temporary boost to valuations (driving investors quickly into higher beta and into value over growth), in fact over medium-term horizons (i.e. more than a week or two), it is in fact growth that dominates the drivers of equity performance. Since growth in our advanced 'new normal' economy means debt (and realistically has meant more debt for over 30 years), and with even the most exuberant of Fed heads seeing only modest growth over the next few years, perhaps the hubris of the last few days in the equity markets will dissolve into reality sooner than everyone hopes (i.e. before November) as the realization of Koo's impotent Fed comes to pass and the fiscal cliff remains unresolved.
QE has been effective at (temporarily) lifting multiples (though it seems QEternity has been well priced in already)...
and also in the way previous QEs have seen rushes into high-beta - we have also seen that 'priced in' also..
but the bottom line is growth - and as is clear - the market is much more correlated to growth than policy...
and that growth doesn't look like its coming anytime soon.
Source: Morgan Stanley
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It's policy dumbass!
Now shutup.....or no $4.00 gas for you!
Policy=Growth or so seems to think The Bernank.
and europe of course.....whose markets will be red for another 10...9...8....minutes until green
Equities do track gorwth in the long run - but price in expected growth.
http://seekingalpha.com/article/864161-deconstructing-market-expectations
So Bendraghi F**k with expectations for the moment, they will get found out though...
While growth is more important than policy in a normal market. In this made up market I'm not so sure. As you have stated it's the flow that's important. The flow is a policy.
Until it crashes and it will, the policy is winning. The last reset was the budget battle. Lord knows a 6,000 DOW would have allowed real market factors to come into play. Now, we are at the mercy of policy and a bad one at that.
Since earnings don't matter, since forecasted growth doesn't matter, it would follow that real growth or lack of it doesn't matter either. The FED can always prop up any company it wishes through the market whether they are making an actual profit or not.
At this rate, the less business you do the more the FED will bail you out. Business is headed the way of the banks. Less lending equals more guaranteed government money.
Employees not necessary.
This isn't about business it's about reserve currency status for the USD and the Euro. Between us we have the most gold and the price of that gold will rise ad control all fiat currencies now and in the future.
Bernak has monitized gold.
That's a good move for US-Europe and for anyone holding gold.
Divide the tons each national has by the population and you kow your nation's wealth and the worth of the currency.
Only two ways to get it now, mine it or work for it.
Opps, forgot war.
This just fucks the Chinese and the Japanese(and the Saudis) and secures my retirement check from social security.
Goody.
Me got gold.
Guns, butter and gold. Bernak is brilliant, our friend.
INFLATE AWAY...I WANT TO PAY OF THE HOUSE!!!!!!!!!
AFTER THE RESET I'LL BE OK, I HAVE USEFUL SKILLS, I'M A NURSE.
GOT GUNS TOO. And Ammo.
Bingos!!!
Kyle is right you know.
bill
"we have the most gold". Where, show me. Ft Knox??? Bwahaaaaaaa!
Since the market doesn't operate on technicals anymore, the analysts must be focusing on the "technicals" of the central bankers policies. Some smart cookies down in the depths of these firms. Smarter than anyone working for the Fed.
should I start holding my breath now?
What the hell.....it's worth a shot.
ES and aapl
WTF - its all ablut the FLOW = POLICY = higher risk assets u big dummy NOW BTFD
Question for you all so I can understand this QE thing better. At this point we won't see any more QE events because... there is now a perpetual QE where they just print every month regardless?
Yes.
In truth it has been this way awhile.
You might see a different type of QE announced though. It's really all BS. The printing will continue until it all falls down.
Correct, that is essentially what ZIRP is. ZERO interest, or NO cost for captial creation. Just wait until NIRP kicks in (many negative rates in TIPS already) and people's 401ks start paying the government(s) to lose their money. That will be the rally that sends PMs and oil to the moon, still have a ways to go.
Don't you get it? Bernankster wants us all to be millionaires. Of course a cup of coffee will cost 2 million. Ok yeah, I think we are fighting the wrong Terraists.
Enough with the "growth" meme already. Growth depends on energy, no energy, no eCONomy. If the available energy doesn't grow, the eCONomy doesn't grow. "Mark to fantasy" accounting is still very much in play and so the only thing that has "grown" is paper-pushing bullshit. Real growth would come from people/companies who saved capital and wanted re-invest that in new technology. With numerous years of ZIRP the savings and savers have been getting ass-raped.
What percentage of the American GDP is now paper-pushing bullshit? What is the real value in any of that?
Bloody sheep.
Right. This establishes you as a member of the choir. Now, what does Joe Average (i.e. me) do about this:
a) Buy gold, raise a garden, stop spending on cars, education, vacations, remodels, and other things people with families do?
b) Ignore it, since you can not control it?
c) Become evangelical and find something to do about it?
d) Other?
This is a serioius question. It is one thing to see this for what it is, another to know how to react to it.
You have the right idea. Build wealth in physical assets of real value and in your friends, neighbors, and employees. All eCONomies are really local at the end of the day. Know your local farmers and who the members of your county commision are, start a neighborhood garden etc. Arm yourself and make sure those around you are armed as well. Know how to handle firearms etc. In all situations react like an honest adult, let the emotional idiots expose themselves for who they are. Hope that helps.
There are 3 camps:
1. The whole system will collapse in short time then your point a) is proper reaction,
2. It will take decade or more for the system to disintegrate, slow grind down, then combination of a) and b) is appropriate
3. Don't worry, Ben will fix everything, then forget about everything and enjoy life as it is.
Point c) can be used at any time as you wish, other choices: are convert to Judaism, Islam, Buddhism or whatever you want.
Point d) you can become trapper, privateer miner, pimp or something like that but don't think about carrier in manufacturing. Also there are a lot of vacancies in special plant growing profession.
In an economic depression the only thing that matters is income. Use your savings to acquire assets that produce income in bad times, like rental property or agriculture. During the Great Depression, northern Arkansas (of all places) was largely untouched because of chicken farming. Big poultry producing area to this day. People still had to eat. Forget about capital appreciation and concentrate solely on income.
ALL OF THOSE THINGS!
Listen, it's tough, but things are going to get tough and it really has very little to do with all those pitiful humans that we run around yakking about. This is all controlled by simple physics/math, it's all built-in. One either looks to survive or one just throws one's hands up (usually the form is pointing fingers at others as though anyone can really alter the fundamental equation) give up.
If you really want to know how tough it can be just travel to some place that more closely approximates how the majority of the world's population lives. From my limited first-hand experience I can tell you that income being equal, those out in the countrysides have way more stable lives than those in urban areas. The struggles, however, seem equal.
Yes, you can "voluntarily" stop spending on stuff that's totally unsustainable, or you can throw the earnings of your labor at future "lawn furniture."
I don't own a TV. I've never bought a new car: my vehicles (yes, I'm "wealthy" in that I've got multiple ones- I had to get an old truck for hauling, something that I'd pushed off for nearly 2 years) are over 20 years old each. I stopped spending on education when I realized that there was no longer any payback (EROEI!); opting to spend my money on land instead (and I've learned far more getting my hands dirty than I'd have been able to get out of any classroom).
If you have a "family" then that means you have a basis for work assignments. I'm trying to attract my wife's kids, but they're under the influence of the System (and currently live in another country). So, it's just me and my wife: we're pretty overwhelemed but we just go at things like a couple of troopers- I couldn't have asked for a better partner for facing what's coming...
As far as being evangelical about it, well... no, you needn't run around trying to convert everyone. But, you should speak out for what is right, always. Food, Shelter and Water. We need to drum this into the masses' distorted minds, break through TPTB's failing programming. Talking, however, only goes so far- DOING is the best tool for conveying something, above all practice what you preach. Regardless if you believe you are converting anyone or not keep in mind that YOU still have to DO, and that's what you chose: don't approach all of this as though you were "forced," lest you will always be looking for some "escape" (which really won't be there).
I've got this running joke with my wife... Before we moved on to our property she'd told me she was worried about getting bored. We SO busy that there is NO time to be bored! Whenever she starts mentioning all the stuff that she needs to do I ask her, in humor, if she's bored yet. Our entertainment is our lives...
"Ignore it, since you can not control it?"
To borrow from the religious community, from "The Serenity Prayer:"
God grant me the serenity
To accept the things I cannot change;
Courage to change the things I can;
And wisdom to know the difference.
Living one day at a time;
Enjoying one moment at a time;
Accepting hardships as the pathway to peace;
---
There's ONLY one thing you cannot get more of: TIME. Don't let the System steal yours.
Historically growth has not only depended on cheap energy, but also upon population growth. Labor is the only thing that creates value and as more units of labor have been added to the economy we have seen growth. Unfortunately supply of labor has greatly exceeded demand for labor and that means that to re-establish balance either supply has to be cut or demand must be increased. With what appears to be an infinite sea of inexpensive labor throughout Asia, cutting labor supply would require a massive population reduction of the non-productive, non-consuming humans... otherwise it is a very slow slog to consume more ... and resources and environmental impact may be stretched to reach the balance point.
"Cheap energy" and "human labor" are the SAME. Both represent potential WORK.
What's missing is RAW MATERIALS. (yes, you mention "resources," but from the perspective of end-consumption rather than production)
If you were to locate a billion people in the desert how much work do you think that they could perform? Without raw materials I'd have to say not much.
Our "business" cycles are really about over-extraction of various raw materials. We build up to the point where we cannot get any more out at the upper price point (EROI). We hit the ceiling and then POP! Up until now we've managed to rearrange the deck chairs, the deck has remained under our feet. Now, however, the deck is disappearing. The deck, that which underlies our infrastructure is, as you note, WORK; but... the BULK of this work has come from (for well over 100 years) OIL.
The is NO question that people will be increasingly re-engaged with labor. As I've been forecasting, that labor will shift toward agriculture; the reason why I believe so is based on simple fundamentals: Food, Shelter and Water. We have plenty of Shelter. And, there's only so much labor one can do with Water. That leaves Food. (keep in mind that it's estimated that 1/3 of today's protein exists because of petroleum products [oil-importing countries can expect ever-increasing strains on their food supplies])
"and resources and environmental impact may be stretched to reach the balance point."
May? We need to stop playing games like this. It's a CERTAINTY; that is, as long as growth continues it's a certainty. There isn't anywhere in nature where we can see some other outcome, it just doesn't exist. The sooner we own up to reality the better off we'll be: and all these idiotic "economists" (talking heads) who incessantly chatter about the need for "growth" ought to be lined up and shot, as they are either practicing deception or are VERY, VERY STUPID (and humans don't need to propagate more STUPID genes).
Bernanke And Draghi Are Not Trying To Save Our Economies
Posted on September 17, 2012 by Ilargi|
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http://maxkeiser.com/2012/09/17/bernanke-and-draghi-are-not-trying-to-sa...
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"Obviously, after a week of big-time announcements, the German Supreme Court, Mario Draghi's bond buying scheme and Ben Bernanke's QE3 (both virtually unlimited - or presented as such), it's tempting to think the western world is well on its way to tackling its financial crises. Looking at the stock markets one might even presume all's fine out there already.
Still, that is - or indeed, seems - only true if you focus solely - blinders and all - on the world of finance. If, on the other hand, you would like to know where the world at large is going, that focus is simply too narrow. As central banks increase their balance sheets ever more, it would already take a huge leap of faith to have real confidence in the idea that what various previous European financial operations, as well as the entire alphabet soup of US bail-outs, could not achieve, now will be accomplished by what is basically more of the same, just more.
You only need to recall where all of those previous schemes ended up after the initial market exhilaration: that's right, they necessitated subsequent bail-outs. The narrow focus also tends to blind everybody to who's supposed to be paying for the bail-outs. Which is everybody. In essence, all that has been achieved, and that to a far lesser degree than ostensibly intended, is that banks haven't yet been toppled by their debts, and stock exchange numbers look - sort of - presentable.
The question then becomes: is it worth it? The answer to that is a resounding YES if you're a banker or a stock investor or an incumbent politician (Bernanke announced QE3 a comfortable 7 weeks before the US presidential elections). The answer is an equally resounding, if not outright debilitating, NO if you're not part of that small world where politics and money meet and live in relative splendor. Those who are not invited to that party will be called upon to foot the bill, without having anything to show for it.
It becomes clearer all the time that the financial world is not the world, the whole world and nothing but the world; it's merely a vanishingly small part of it. Yet is is the only part that most of those who follow finance and the economy seem to be watching, under the stubborn illusion that if markets go up, everyone goes up; all boats rise with the tide. Which is a big boatload of delusional nonsense.
The markets have so far only been able to keep up their look-good appearance because they have had, and continue to have - through the world's central banks - access to everyone else's cash, even the cash that everyone, no-one, hasn't even made yet. And all that is going to run off the tracks in spectacular fashion, be it tomorrow or the day after, because you can't run an economy forever on money that no-one has worked for.
Bernanke is willing to throw in another trillion or so - or two- dollars in taxpayer money, allegedly to create jobs, whereas he's already thrown far more at that same slippery wall (and for that same slippery purpose), and nothing much stuck before; so why would it this time around? Because he labeled it "unlimited"? There's no such thing, of course. Just because he can throw in $3 trillion doesn't mean he could just as easily do the same with $30 trillion (the bond markets would have him for breakfast).
Draghi wants to purchase sovereign bonds, that are not worth anything near their face value, at that same face value. But are we still clear on why he claims he wants to do that? Here's why: simply so Spain and Italy can continue to borrow more and more on the international markets. Which they can't and they won't, as Draghi knows as well as those same markets do.
That's not some unfortunate turn of events, it's all part of the plan; it will drive the countries into the very demanding hands of the IMF and ECB, who will hand out more bail-outs, but this time under the same conditions that Greece is facing: fire hundreds of thousands of civil servants, cut pensions, cut benefits, cut wages, longer working days, longer working weeks, and sell anything not bolted down to foreign investors at fire-sale prices.
Bernanke facilitates for international banks to dump their mortgage backed securities stateside and get paid far more than they're worth, with the only "condition" that he "hopes" this will create US jobs. Draghi facilitates for those same banks to get rid of their EU periphery sovereign bonds, so they'll allow for the periphery to stay inside the eurozone. There is nothing in either plan that puts the people first. There is always only that one focus: banks. But banks are not the economy, or rather: not your economy.
In the end, the economy is all people. But Bernanke and Draghi's schemes do not target all people, other than perhaps in very vague allusions: Bernanke pays far too much for worthless mortgage backed securities so the banks whose hands he takes them off have room to lend money into the economy (create more debt), which could hypothetically create jobs.
Well, that would, for one thing, depend on how much more banks have in their vaults in worthless and/or questionable "assets", obviously. But even as Ben spends - future - American tax revenues to buy the paper, that last bit is not revealed: how much more is there left where that last batch came from? Yeah, we‘ve been playing this game for five years now. And we still don't have an answer to that question.
It's sort of become the new normal: there's some unelected guy in a suit who speaks in language that's supposed to make us think he knows what he's talking about, who pledges trillions in additional debt, in whatever currency he deals in, to ostensibly make life better for the very people who are on the hook for those pledges, whether they're successful or not, and they haven't so far; unless someone would like to defend the success of US QE1 and QE2 - viewed from the man in the street's perspective -.
It's funny, I know, that they have been successful, in a sense (just not the one we're consistently and falsely told they're aimed at): they have saved banks from bankruptcy, and the S&P from sinking into triple or double digits. But the man in the street who's losing his home, his job or a large part of his paycheck, benefits, pension, doesn't care about whether the S&P is at 15 or 15000.
It's time to get this through our heads once and for all: Bernanke And Draghi Are Not Trying To Save Our Economies. Perhaps they would if they could, but the question is moot: they know they can't. Instead, they're trying to save the financial system by stealing our remaining wealth while making us believe that the economy and the financial system - a.k.a. the banking industry - are one and the same thing. They are not, and that's why we see our jobs and benefits and homes go up in thin air and smoke while the S&P looks rosy.
Those last two things are connected. The first are not, no matter that so far most people fall for the sleight of hand. Which is sad today, and will turn to tragedy tomorrow."
In the end, the central banks and their "masters" care nothing about money. Why should they? They can create as much money as they want any time they want. They need no one's approval as they have shown many times over the past few years.
So, what has "value" to those who run the world?
1. Power over the people
2. Control of the world's resources
3. Their own security
That's pretty much it.
The wars in the Middle East have all been about the top two. The banks have found it very effective to gains power over the people by making them slaves to money. So, they have quickly installed BIS tied central banks in each country they overthrow. And, the Middle East is full of resources to be taken and hoarded.
Similarly the financial crises have been all about Power over People and Resources. People who are enslaved by debt and the enforcement of unjust laws have no power. Any resources the people had becomes subject to confiscation as a result of the debt and the unjust laws.
It is that simple. Their only danger is pushing it too fast or so far that a large number of people lose so much that they do not mind sacrificing themselves to help the rest of humanity.
... and how exactly did the bankers and politicians lose that humanity anyway?
pretty much that is it. how they lost their humanity?
they are in search of a very important life lesson
that is imminent, imo.
Spot on!
We shouldn't, however, be surprised by all of this. The platform in which we are all operating under is based on a false premise, in which case formations from this will only become more and more twisted, until... it breaks (which it will).
Funny, in a sick way, the "tech" phase was promising a paperless society; now look at us, it seems that in order to keep afloat we have to cover everything with paper (fiat)! This always reminds me of the end scene in the movie Brazil...
"Bernanke And Draghi Are Not Trying To Save Our Economies"
So, if it's OUR economies then that means that WE are responsible for this big pile of shit?
This is another of those cheesy, and off-target (read "distractive"), sayings. It's like "take back our country."
Again, if we wrestle the economies away from THEM then what? There will still be resource shortages. We'll still be living on a finite planet. And, by nearly all accounts, we'll STILL be preaching the religion of "growth," which only returns us to the cycle that leads us to eventual catastrophic collapse.
Within the cozy confines of the wealthier nations we may be one of the 99%-ers when put up against Them, but in the context of the entire human race WE ARE part of the 1%!
ecology (n.) 1873, "branch of science dealing with the relationship of living things to their environments, coined by German zoologist Ernst Haeckel (1834-1919) as Okologie, from Gk. oikos "house, dwelling place, habitation" (see villa) + -logia "study of" (see -logy). In use with reference to anti-pollution activities from 1960s.eco- word-forming element referring to the environment and man's relation to it, abstracted from ecology, ecological; attested from 1969.
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economy (adj.) as a term in advertising, at first meant simply "cheaper" (1821), then "bigger and thus cheaper per unit or amount" (1950). See economy (n.).economy (n.) 1530s, "household management," from L. oeconomia, from Gk. oikonomia "household management, thrift," from oikonomos "manager, steward," from oikos "house" (cognate with L. vicus "district," vicinus "near;" O.E. wic "dwelling, village;" see villa) + nomos "managing," from nemein "manage" (see numismatics). The sense of "wealth and resources of a country" (short for political economy) is from 1650s.economist (n.) 1580s, "household manager," from M.Fr. économiste; meaning "student of political economy" is from 1804; see economy + -ist.economic (adj.) 1590s, "pertaining to management of a household," perhaps shortened from economical or from Fr. économique or directly from L. oeconomicus "of domestic economy," from Gk. oikonomikos "practiced in the management of a household or family," hence, "frugal, thrifty," from oikonomia (see economy (n.)). Meaning "relating to the science of economics" is from 1835 and now is the main sense, economical retaining the older one of "characterized by thrift."banana republic "small Central American state with an economy dependent on banana production," 1901, Amer.Eng.producer 1510s, "one who produces;" agent noun from produce (v.). Of entertainments, from 1891; in political economy, opposed to consumer, from 1784 (Adam Smith).econometric (adj.) 1933, from comb. form of economy + -metric.economical (adj.) 1570s, "pertaining to household management; from economic + -al (1). Meaning "pertaining to political economy" is from 1781; that of "thrifty" is from 1780. Related: Economically.demand (n.) late 13c., "a question," from O.Fr. demande (see demand (v.)). Meaning "a request, claim" is from c.1300. In the political economy sense (correlating to supply) it is attested from 1776 in Adam Smith.protectionist in the economics sense, 1844, from Fr. protectionniste (in political economy sense, protection is attested from 1789). Related: Protectionism (1852).bedbug also bed-bug, 1772, from bed + bug.
[The bed bug] is supposed to have been first introduced to this country in the fir timber that was brought over to rebuild London after it had suffered by the great fire; for it is generally said that Bugs were not known in England before that time, and many of them were found almost immediately afterwards in the new-built houses. [the Rev. W. Bingley, "Animal Biography; or Anecdotes of the Lives, Manners, and Economy of the Animal Creation," London, 1803]
austerity (n.) mid-14c., "sternness, harshness," from O.Fr. austerite "harshness, cruelty" (14c.) and directly from L.L. austeritatem (nom. austeritas), from austerus (see austere). Of severe self-discipline, from 1580s; hence "severe simplicity" (1875); applied during World War II to national policies limiting non-essentials as a wartime economy.
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etc...
http://www.etymonline.com/index.php?allowed_in_frame=0&search=economy&se...
Pop goes the weasel, and bernanke is the last professor standing. what do you expect, from experts on History, the great lie. the world is what you make of it and the vast majority choose to avoid responsibility, blaming the likes of bernanke. what's new?
Are you really going to vote to bring volcker back? And at this point, what could he do?
I understand what you're saying. It's like asking to bring back the person who refueled the Hindenburg before it's last successful docking. We're failing to recognize that the entire underlying structure/premise is faulty, that no matter who is brought in to "refuel" the system it, the system, will still head on its ultimate trajectory of exploding. And, if I should say so myself, how apropos to compare the Hindenburg to our world-wide economy- both held up by nothing but highly flammable hot air.
Obama knows if the markets tank, he is out of a job. So QE-Nov 6 will continue.
Problem is that it's earnings season is in a few weeks - could be an ugly October for Barry.
Does anyone here get the feeling that some of the top brass at the likes of goldman sachs and citi group wouldnt have a clue as how to boil water?
Seriously, if you asked one of the big wigs at anyone of the big banks would they even know where boiled water came from? Do they even know what a pan to boil said water looks like? Therin lies some of the problems we face. They are so out of touch with reality they believe the bullshit they spout.
Heaven forbid you ask one of them how to change a plug. Would they even know what a fucking plug does? Makes you think though..............?????
I don't plan on hiring any of them in the future. The point is pointless...
Let's see. The planet is now polluted (dieing oceans, poisened underground aquifers, growing CO2 levels, ...) . We are drowning in our own excrement.
Tell me again why growth is the Smart option. Oh yeah, Greed is Good. I almost forgot.
The Central Planners share your concern.
The easy answer to these problems is a massive reduction in polluters and energy consumers. A 90% reduction in population would provide immediate benefits to the pollution and CO2 issues.
As we speak, researchers are looking for humane ways to put down targeted populations with Chemical and Bio Agents.
Oh ok. Good to know. I thought they had decided to use the US Healthcare system to bring down the population -- killing people with bad medical care. And it has the added benefit of bankrupting the survivors making them financial slaves to TPTB.
Well... you're on the right path, but you still haven't hit the target.
Kissinger spelled it out when he mentioned that when you control food you control the people.
Food, Shelter and Water. FOCUS! "Healthcare" is not in there!
"Healthcare" is a byproduct of the System's food system. I don't think that anyone can argue against the notion of taking advantage of market opportunities: trying to curb this would be anti-capitalist.
'As long as the Policy results in Growth of bank profits, it's all good,' said Chairsatan Bernanke.
Ya think that we could help them along the path by setting them in front of screens that displayed exponentially increasing positive balance sheets for them? Maybe, like all those who are severe drug addicts, they'll overdose and keel over?
In Aikido you allow your opponent/confronter to use their energy against themselves. You just kind of help them by not giving resistance (in the form of avoiding the absorption their destructive energy).