Recession Imminent

[cypherdoc]

BTC: $150K buy couldn't wait for $5

EDIT: And TH immediately matched with a $3.5K buy. Maybe the PPT are buying BTC!


Cypherdoc: Why should the Fed want to fuck Americans? Ben has a neck and the guillotine is rusty.

BTC:  this is good news.  this price action is what i've been waiting for.  hopefully this means btc can at least match gold in going against this stock plunge.  hopefully one day it replaces gold

the Fed is owned by private banks.  they also own Ben.  he's expendable.

edit:  the banks don't care about Americans. otherwise they'd be lending that 1.6 T of excess reserves.

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[cypherdoc]

did i put this up already?

[cypherdoc]

hmmm, USD's rotating out of the stock mkt into BTC?

[cypherdoc]

i think i may need to start a new thread:  Whose wrong?  Gold or BTC?

[CurbsideProphet]

yeah, no PPT here.  just straight down.  damn, i covered too many shorts too soon.  to me the signal is "let it go down" b/c they have an objective.

Yup looking at the futures and the Asian markets it looks like I may have covered too soon as well.  I'm not going to beat myself up over it though, anyone short over the last week or two made out like bandits.  I'm content with picking the low hanging fruit.

Looks like covering was the right call afterall.  I expect the market to rally further tomorrow maybe a little longer then back down.  This wont' be a V-bottom.

My guess is it won't be the downgrade but Europe that will weigh on the market short-term.  Italy is out of cash by next month unless they have access to the funding markets. 

[cypherdoc]

yeah, no PPT here.  just straight down.  damn, i covered too many shorts too soon.  to me the signal is "let it go down" b/c they have an objective.

Yup looking at the futures and the Asian markets it looks like I may have covered too soon as well.  I'm not going to beat myself up over it though, anyone short over the last week or two made out like bandits.  I'm content with picking the low hanging fruit.

Looks like covering was the right call afterall.  I expect the market to rally further tomorrow maybe a little longer then back down.  This wont' be a V-bottom.

My guess is it won't be the downgrade but Europe that will weigh on the market short-term.  Italy is out of cash by next month unless they have access to the funding markets. 

yeah Curb.  i covered most everything last Th & Fri so i could've gained a little more.  but after todays ramp, i don't feel so bad.

[netrin]

Please help me, my Fedspeak is rusty. Did the Fed just announce it will continue buying treasuries in the third paragraph or admit defeat (continue 0% but otherwise let the market find its own way)?

The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings.  The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.

[cypherdoc]

Please help me, my Fedspeak is rusty. Did the Fed just announce it will continue buying treasuries in the third paragraph or admit defeat (continue 0% but otherwise let the market find its own way)?

The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings.  The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.

no new QE (UST buys) was announced.  just 0% interest rates until mid 2013. 

[cypherdoc]

this is ugly.  this is the "speed" at which money circulates in the US economy.  miserable.

[cypherdoc]

savings rate is going back up again.  no one wants to spend.

[cypherdoc]

consumption peaking.

[hugolp]

this is ugly.  this is the "speed" at which money circulates in the US economy.  miserable.

Just so you know, this is not the speed of money circulation, but the money multiplier. They are different things.

And the Fed is not private and its not owned by the banks. The Fed is a mix of government and private institution, but mainly a government institution. For example, the majority of decissions are taken by the Board of Governors of the Federal REserve system that is a federal government agency. Ben Bernanke is the head of this board.

[cypherdoc]

this is ugly.  this is the "speed" at which money circulates in the US economy.  miserable.

Just so you know, this is not the speed of money circulation, but the money multiplier. They are different things.

And the Fed is not private and its not owned by the banks. The Fed is a mix of government and private institution, but mainly a government institution. For example, the majority of decissions are taken by the Board of Governors of the Federal REserve system that is a federal government agency. Ben Bernanke is the head of this board.

"speed" was used as a metaphor.  perhaps a poor choice.

your statement about the Fed surprised me b/c most economic ppl on this forum have come to the realization that the Fed is "privately" owned.  so i dug out my copy of "Creature From Jekyll Island" pg. 591 bottom paragraph:

"it is not a gov't agency and it is not a private corporation in the normal sense of the word.  it is subject to political control yet, b/c of its tremendous power over politicians and the elective process, it has managed to remain independent of political oversight.  Simply stated, it is a cartel, and its organizational structure is uniquely structured to serve that end."

[hugolp]

your statement about the Fed surprised me b/c most economic ppl on this forum have come to the realization that the Fed is "privately" owned.  so i dug out my copy of "Creature From Jekyll Island" pg. 591 bottom paragraph:

"it is not a gov't agency and it is not a private corporation in the normal sense of the word.  it is subject to political control yet, b/c of its tremendous power over politicians and the elective process, it has managed to remain independent of political oversight.  Simply stated, it is a cartel, and its organizational structure is uniquely structured to serve that end."

The Fed is neither a 100% government government agency neither a private insitution. I guess is a matter of opinion which side goes more, but if you look at its structure you will see that is mostly government controlled. Anyway its a useless debate, whether more government or more private it does what it does and its a problem. And the Fed is indeed a banking cartel. For me the best way to define the Federal Reserve system is: a government created cartel of private banks.

The supposed independence of a central bank is that, supposed. Its undoubted that if the Treasury was in direct control of the printing press it would be even worse (think Zimbawe), and that the structure the government has created has a certain balance of political power, but still the central bank panders to politicians and does what they want (at least in part). Otherwise the politicians would do away with the central bank. As an example, you can go and check the Nixon tapes, where you can hear Nixon preasuring the then chairman of the Fed, Burns, to inflate the money supply to create a bubble that would reduce unemployment temporarely and help him win the election regardless of the consequences (then, surprise surprise, stagflation came). http://www.businessinsider.com/any-theory-of-political-independence-of-the-fed-was-destroyed-by-the-nixon-tapes-2010-11 <- check the pdf with the actual conversations, I read it and its quite entertaining (if you are a bit of a economic-political freak of course ), how the president talks and all that, its curious.

[cypherdoc]

your statement about the Fed surprised me b/c most economic ppl on this forum have come to the realization that the Fed is "privately" owned.  so i dug out my copy of "Creature From Jekyll Island" pg. 591 bottom paragraph:

"it is not a gov't agency and it is not a private corporation in the normal sense of the word.  it is subject to political control yet, b/c of its tremendous power over politicians and the elective process, it has managed to remain independent of political oversight.  Simply stated, it is a cartel, and its organizational structure is uniquely structured to serve that end."

The Fed is neither a 100% government government agency neither a private insitution. I guess is a matter of opinion which side goes more, but if you look at its structure you will see that is mostly government controlled. Anyway its a useless debate, whether more government or more private it does what it does and its a problem. And the Fed is indeed a banking cartel. For me the best way to define the Federal Reserve system is: a government created cartel of private banks.

The supposed independence of a central bank is that, supposed. Its undoubted that if the Treasury was in direct control of the printing press it would be even worse (think Zimbawe), and that the structure the government has created has a certain balance of political power, but still the central bank panders to politicians and does what they want (at least in part). Otherwise the politicians would do away with the central bank. As an example, you can go and check the Nixon tapes, where you can hear Nixon preasuring the then chairman of the Fed, Burns, to inflate the money supply to create a bubble that would reduce unemployment temporarely and help him win the election regardless of the consequences (then, surprise surprise, stagflation came). http://www.businessinsider.com/any-theory-of-political-independence-of-the-fed-was-destroyed-by-the-nixon-tapes-2010-11 <- check the pdf with the actual conversations, I read it and its quite entertaining (if you are a bit of a economic-political freak of course ), how the president talks and all that, its curious.

it seems to me the balance of power has shifted to the Fed.  as far as i can tell, Bernanke does whatever he wants to do to enable the banks to survive at limitless expense to the rest of us.

[hugolp]

it seems to me the balance of power has shifted to the Fed.  as far as i can tell, Bernanke does whatever he wants to do to enable the banks to survive at limitless expense to the rest of us.

Bernanke did buy a lot of the mortgage shit from the banks, but it has also bought a lot of government debt. In fact, while QE1 was both buying from bank and the government, QE2 has bought only government debt and QE3 will be only government debt as well.

They are all in this together, dont get fooled. Most politicians will say a lot of things but at the end of the day they like what Bernanke is doing, its just they can not say so to the people who is being pusnished. But check how Sanders, a self-admited socialist, betrayed R.Paul and A.Greyson and approved a reduced and one time only version of the Audit the Fed bill. They know what its going on and they like it. You can be sure that if the political power does not like what its happening enough the next day the Fed is over. Congress just needs to pass a law and the Fed is history, and the Fed knows it. In reality, they are all one happy club, and you and I are not invited (George Carlin dixit).

[CurbsideProphet]

I'll probably catch some flak for this because I know how much everyone here hates the banks but if they keep selling off, I've got an eye on a few.  WFC being at the top of that list.  The Fed has committed to near zero interest rates until mid-2013.  Buffet also very bullish.  Obviously there are strong headwinds, which is why they are tanking, but I see potential opportunity. 

I may start writing some puts soon, especially if the VIX continues to rise. 

[hugolp]

I'll probably catch some flak for this because I know how much everyone here hates the banks but if they keep selling off, I've got an eye on a few.  WFC being at the top of that list.  The Fed has committed to near zero interest rates until mid-2013.  Buffet also very bullish.  Obviously there are strong headwinds, which is why they are tanking, but I see potential opportunity. 

I may start writing some puts soon, especially if the VIX continues to rise.

Watch out about believing the Fed statements about not raising interest rates. In the speech Bernanke gave previously to being nominated chairman of the Fed, he named three points. One of them was that by making people think that the interest rates would be low for longer than they would be, it represents negative interest rates (and he sees this as positive). So the rates could go up earlier than they say.

Dont get me wrong. Im not saying they will raise them tomorrow or next month. They wont. Im just saying that everybody should be careful when the Fed says that they wont be raised until 2013 because Bernanke thinks that lying to the market in this issue could be positive.

[CurbsideProphet]

No doubt the Fed hasn't exactly earned the reputation of trustworthy.  I hear you loud and clear hugolp.  This is a highly risky/speculative bet on my part but that's what I devote about 10% of my portfolio towards.  This play (if I decide to do it) will fall in that small basket so even if I'm wrong, it's not like it will wipe me out or anything. 

[johnyj]

I think current system is still quite flawed, the money do not flow to the most needed place. The banks sitting at the top. They can get 0 interest loans, but that does not really help the economy, the mass demand typically come from the consumer. If every consumer at the bottom of the society can get 0 interest loans, the economy will be back on track right away.

Of course money also works as a score system to evaluate every one's work, so that "you should not get paid without work", but since the value is decided by demand and supply, this score system seldom works as it should, there are still plenty of people get paid very well without any work. Those banks get 0 interest loan because the economy is getting worse, not because they are working hard, this is quite confusing