Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[xyzzy099]

Let's say I have an I.O.U from a hobo for a million dollars. Does that make me a millionaire? Obviously not. Ok, so let's say I have an I.O.U from someone else who works at Burger King for a million dollars, and this burger flipper has an I.O.U. from a hobo also for a million dollars. Does THAT  make me a millionaire? No. But what if I have an I.O.U. for a million bucks from Mr. Monopoly who has $500,000 in cash, two million in debt outstanding and a bunch of I.O.Us from hobos on his asset ledger. Does THAT make me a millionaire? um, what do you think?

So do you call that half a mil that Mr. Monopoly has "excess reserves"?? 

I'm using hyperbole here to make a point. Ultimately, the health of the economy is not Wall Street or even the nice end of Main Street. It's some schmoes who work at the factories, refineries and offices with zero equity mortgages, 72 month car loans and a stack of credit cards.  When those guys start to miss payments, the dominoes start falling. It's what happened in 2008. It's what's happening now.  The interest the central banks like the FED pay on reserves is It doesn't make them solvent. It doesn't make them profitable. It makes them undead zombies going through the motions.

Not sure if you are addressing me in this post, but if so - ONE MORE TIME: I AM NOT ARGUING THAT THE ECONOMY OR BANKS ARE SOUND.  I just made a statement about banks and reserves, which just happened to involve a correction to something you got wrong.  End of story.

[1714977018]

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[billyjoeallen]

Let's say I have an I.O.U from a hobo for a million dollars. Does that make me a millionaire? Obviously not. Ok, so let's say I have an I.O.U from someone else who works at Burger King for a million dollars, and this burger flipper has an I.O.U. from a hobo also for a million dollars. Does THAT  make me a millionaire? No. But what if I have an I.O.U. for a million bucks from Mr. Monopoly who has $500,000 in cash, two million in debt outstanding and a bunch of I.O.Us from hobos on his asset ledger. Does THAT make me a millionaire? um, what do you think?

So do you call that half a mil that Mr. Monopoly has "excess reserves"?? 

I'm using hyperbole here to make a point. Ultimately, the health of the economy is not Wall Street or even the nice end of Main Street. It's some schmoes who work at the factories, refineries and offices with zero equity mortgages, 72 month car loans and a stack of credit cards.  When those guys start to miss payments, the dominoes start falling. It's what happened in 2008. It's what's happening now.  The interest the central banks like the FED pay on reserves is It doesn't make them solvent. It doesn't make them profitable. It makes them undead zombies going through the motions.

Not sure if you are addressing me in this post, but if so - ONE MORE TIME: I AM NOT ARGUING THAT THE ECONOMY OR BANKS ARE SOUND.  I just made a statement about banks and reserves, which just happened to involve a correction to something you got wrong.  End of story.

One thing seems certain: at least one of us does have a problem admitting he was wrong.

[billyjoeallen]

Let's say I have an I.O.U from a hobo for a million dollars. Does that make me a millionaire? Obviously not. Ok, so let's say I have an I.O.U from someone else who works at Burger King for a million dollars, and this burger flipper has an I.O.U. from a hobo also for a million dollars. Does THAT  make me a millionaire? No. But what if I have an I.O.U. for a million bucks from Mr. Monopoly who has $500,000 in cash, two million in debt outstanding and a bunch of I.O.Us from hobos on his asset ledger. Does THAT make me a millionaire? um, what do you think?

So do you call that half a mil that Mr. Monopoly has "excess reserves"?? 

I'm using hyperbole here to make a point. Ultimately, the health of the economy is not Wall Street or even the nice end of Main Street. It's some schmoes who work at the factories, refineries and offices with zero equity mortgages, 72 month car loans and a stack of credit cards.  When those guys start to miss payments, the dominoes start falling. It's what happened in 2008. It's what's happening now.  The interest the central banks like the FED pay on reserves is It doesn't make them solvent. It doesn't make them profitable. It makes them undead zombies going through the motions.

Not sure if you are addressing me in this post, but if so - ONE MORE TIME: I AM NOT ARGUING THAT THE ECONOMY OR BANKS ARE SOUND.  I just made a statement about banks and reserves, which just happened to involve a correction to something you got wrong.  End of story.

One thing seems certain: at least one of us does have a problem admitting he was wrong.

[billyjoeallen]

Let's say I have an I.O.U from a hobo for a million dollars. Does that make me a millionaire? Obviously not. Ok, so let's say I have an I.O.U from someone else who works at Burger King for a million dollars, and this burger flipper has an I.O.U. from a hobo also for a million dollars. Does THAT  make me a millionaire? No. But what if I have an I.O.U. for a million bucks from Mr. Monopoly who has $500,000 in cash, two million in debt outstanding and a bunch of I.O.Us from hobos on his asset ledger. Does THAT make me a millionaire? um, what do you think?

So do you call that half a mil that Mr. Monopoly has "excess reserves"?? 

I'm using hyperbole here to make a point. Ultimately, the health of the economy is not Wall Street or even the nice end of Main Street. It's some schmoes who work at the factories, refineries and offices with zero equity mortgages, 72 month car loans and a stack of credit cards.  When those guys start to miss payments, the dominoes start falling. It's what happened in 2008. It's what's happening now.  The interest the central banks like the FED pay on reserves is It doesn't make them solvent. It doesn't make them profitable. It makes them undead zombies going through the motions.

Not sure if you are addressing me in this post, but if so - ONE MORE TIME: I AM NOT ARGUING THAT THE ECONOMY OR BANKS ARE SOUND.  I just made a statement about banks and reserves, which just happened to involve a correction to something you got wrong.  End of story.

One thing seems certain: at least one of us does have a problem admitting he was wrong.

[xyzzy099]

One thing seems certain: at least one of us does have a problem admitting he was wrong.

Yeah, and that person is YOU.

You have spent this whole discussion trying to redefine 'bank reserves' as 'bank net worth' just so you don't have to admit you made a mistake.  Reserves != net worth, never was, never will be.  Banks have plenty of reserves at the moment.  Net worth, maybe not so much.

[aztecminer]

So uh...

Bitfinex having to unwind everything would be kinda ugly right?

http://www.cftc.gov/PressRoom/PressReleases/pr7231-15

Coinflip is incorporated in the US; Bitfinex in Hong Kong.  I'm not sure we need to worry too much just yet, unless the HK government (or Beijing, applying pressure on HK SAR) adopt the same line as the CFTC.

I guess it comes down to what % of the swaps market is made up of customers in the US.

everyday is something going on with bitfinex.

[ChartBuddy]

Coin
Explanation

[JorgeStolfi]

I happened to notice a single 12'000 BTC trade on OKCoin.  And the price dropped by 0.10 yuan.  Weird.

[coinableS]

I happened to notice a single 12'000 BTC trade on OKCoin.  And the price dropped by 0.10 yuan.  Weird.

Hey Jorge! Still hanging around I see.
Serious question for you.
Do you trade forex or stocks? I know you don't with btc but what about anything else?

[Cconvert2G36]

I happened to notice a single 12'000 BTC trade on OKCoin.  And the price dropped by 0.10 yuan.  Weird.

For posterity.



Similar thing on Huobi a few hours before, but that's "normal" for them.

[JorgeStolfi]

Serious question for you.
Do you trade forex or stocks? I know you don't with btc but what about anything else?

No, I don't trade.  I did not even know what bids and asks and spreads were, two years ago....

[coinableS]

Serious question for you.
Do you trade forex or stocks? I know you don't with btc but what about anything else?

No, I don't trade.  I did not even know what bids and asks and spreads were, two years ago....

You are one strange cat professor... Watching charts in your free time and you don't trade? I guess you must be writing a book to devote your free time to the bitcoin world.

[ChartBuddy]

Coin
Explanation

[lyth0s]

Banks have more liabilities than just M1 (checking deposits etc). What about M2? CDs? 

DEFINITION of 'M2'
A measure of money supply that includes cash and checking deposits (M1) as well as near money. “Near money" in M2 includes savings deposits, money market mutual funds and other time deposits, which are less liquid and not as suitable as exchange mediums but can be quickly converted into cash or checking deposits.

Yes, money market funds. Ask the people with money market funds at Lehman Bros what happens when they break the buck. 

Also, why do you think they suspended mark-to-market accounting?  I think you know damn well almost every investment bank has a prop trading desk where they gamble in the markets.  And it's the bonds that may prove most problematic. Puerto Rico may end up being worse that Greece.

M1, M2, etc., in no way represent 'liabilities of banks'.  They are measures of how much money (in US dollars) exists.  M1 is all the money that exists in the form of cash and demand accounts, i.e., all the dollars in the world that are immediately spendable.  The other Ms add other money that exists but is not immediately liquid. like bank reserves, savings accounts, CDs, etc.

Your initial claim was basically that banks have 'underperforming loans' that exceed the actual amount of money that even exists.  While I guess this is theoretically possible, it seems to me to be highly unlikely.

In any case, the intent of my initial post was not to defend the solvency of the banks, but rather to bring attention to the unnaturally huge amount of excess reserves held by banks now - especially considering that the level of excess reserves has (naturally) been vanishingly close to zero throughout the history of banking - and maybe get someone to wonder why this has changed, and maybe even wonder what the implications of this change might be.

You really are frustrating.  Every dollar in existence was LENT into existence either by the Fed expanding it's balance sheet to buy bonds or by fractional reserve lending. You know this.  Of course there is more debt than money, because ALL that money has to be paid back at interest.

M2 is almost all liabilities of the  bank, just as M1 is.  I can't even think of an exception to this except M0
which as you know is a tiny fraction of M1.  And who gives a rip what your intentions were? You were responding to MY post and after arguing against a point I never made, you want to change the subject. 

ALL banks have more liabilities than they can meet if they all come due at the same time. That's been known for ages, since I was a kid watching It's a Wonderful Life. What is new is that the loans are massively undercollateralized by markets being propped up artificially. This ranges from mortgages being propped up by the FED buying MBSs to government bonds bought by the Fed from primary dealers days after auction. 

Now you could say "who cares if the loans are undercollaterized as long as the payments are being made?" but that's what I'm getting at. The loans AREN'T being repaid in a growing number of cases ranging from sovereigns (Greece, PR) to payday loans.  You can't see this immediately because of the churn. It's perfectly normal and healthy to refinance at a lower rate, but some are borrowing at HIGHER rates just to make payments on earlier loans at LOWER rates. This is clearly unsustainable.  Honest accounting would show all of those loans as worthless.  The PRIMARY reason for ZIRP is to hide this state of affairs and it's why it can't ever end. 

I could not have said it better myself.

[Wolf Rainer]

Someone is making a good staking.

[billyjoeallen]

cui bono? Who benefits from small blocks?  Some one or group of people is stalling the scaling upgrade for reasons other than decentralization, security, etc.  From the videos of the conference, i get the idea that some is pulling strings behind the scenes to manipulate the hold outs. The technical objections seem contrived, like the arguments of a mob lawyer.

Why do the haterz hate so much? Luddites? I don't think so.  I think it's something more cynical than that. I don't think the power behind the small blockers is ideological or technical. It's political.The big blockers didn't seem to grasp that we're up against someone or group that plays dirty.  So who is it? Not the pawns on the chessboard, but the power that's moving the pieces. Who is it? Cui bono?

and that MC was painfully terrible.

[ChartBuddy]

Coin
Explanation

[Ejected]

What is this for?

[ChartBuddy]

Coin
Explanation

[LMGTFY]

What is this for?

The posts from chartbuddy (a bot) show the bids and asks various exchanges. Some traders believe that the position and size of the "walls" (large bids/asks) give insight into how the BTC/USD (the dollar price of BTC) will change in the immediate future.

This thread is for discussing these walls. In theory. In practice, discussions tend to be much wider-ranging than that!