Financial topics

[John]

At least from my perspective, attacking the United States would be a big mistake for them.

Keep in mind that, from the Chinese point of view, attacking Taiwan
would be a COMPLETELY DEFENSIVE attack on enemies living on
Chinese territory, and not an attack on the United States.

John

[Trevor]

At least from my perspective, attacking the United States would be a big mistake for them.

Keep in mind that, from the Chinese point of view, attacking Taiwan
would be a COMPLETELY DEFENSIVE attack on enemies living on
Chinese territory, and not an attack on the United States.

John

Yeah, but it would end up being one, in addition to dragging Japan, Australia, South Korea, and others in. Maybe not immediately, but sooner or later, they'd have to take sides.

[Higgenbotham]

If the Fed wants to prop up the market it can just loan money cheap enough and long enough that someone thinks they can make a profit borrowing money and buying stocks. For example, if they loaned Goldman Sachs money at 2% for 30 years they could buys some gold stocks and expect to make a profit. So the Fed does not need to buy the equities themselves to prop up the market.

I'm reminded of reading this earlier in the year.

"Saturday, February 12, 2011
The Carnage Continues…..

Goldman was a relentless scale up seller on Friday. They sold 100 cars every handle the market moved higher when the pit was full. When the pit thinned during lunch, they sold 30 lots. They don’t want to jam the locals, they still need them to take their paper. They sold a 200 lot at 1320.00 to make up for the light trade at lunch."

http://tmacktrading.blogspot.com/

I saw something similar in early December. "Somebody" was selling hundreds of lots and relentlessly fed the orders in as fast as the market would take them. I've also noticed at times that "somebody" will jam the market higher with large orders at certain places that, in my opinion, nobody is their right mind would buy. Of course, if nobody in their right mind would buy there the shorts get surprised and cover, which sends the market higher.

[Trevor]

I know it's a little premature, but reports indicate that economic growth will be a little higher this quarter, although still slow and primarily because of the holiday season and seasonal hiring.

[aedens]

http://www.zerohedge.com/news/central-p ... u-are-here

The fatal deceit runs deeper on policy to actual paradigm shifts unannounced of models to intellectual bulldozing “demagoguery” we have discussed here in markets.

[Higgenbotham]

I will leave off this comment from the conveyance:
“But mathematical advances in modeling along with a growing commitment to steady inflation allowed the Fed to really believe it could stave off deflation.”
“So the cost of using leveraged ETF’s as insurance against the failure of soft central planning necessarily rises, but that just may mean their ultimate usefulness is closer to being realized.”

In theory, the market turns could decay from 1 month down to days and then hours, etc., with a theoretical end point in early February, but I don't believe that will happen. At some point, perhaps early January, this cycle is going to break. In other words, something big is going to happen in the next few weeks...the fact that these market turns have become orderly in time, but disorderly in direction is, I think, problematic.

Or another way to put it would be: An exponential increase in the frequency and amplitude of vibration is a certain sign of impending structural collapse (a bridge being one example).

[Trevor]

Speaking of which, I think we should add Belgium to the list of troubled countries.

[Higgenbotham]

Flutter is a self-feeding and potentially destructive vibration where aerodynamic forces on an object couple with a structure's natural mode of vibration to produce rapid periodic motion. Flutter can occur in any object within a strong fluid flow, under the conditions that a positive feedback occurs between the structure's natural vibration and the aerodynamic forces. That is, the vibrational movement of the object increases an aerodynamic load, which in turn drives the object to move further. If the energy input by the aerodynamic excitation in a cycle is larger than that dissipated by the damping in the system, the amplitude of vibration will increase, resulting in self-exciting oscillation. The amplitude can thus build up and is only limited when the energy dissipated by aerodynamic and mechanical damping matches the energy input, which can result in large amplitude vibration and potentially lead to rapid failure. Because of this, structures exposed to aerodynamic forces — including wings and aerofoils, but also chimneys and bridges — are designed carefully within known parameters to avoid flutter. In complex structures where both the aerodynamics and the mechanical properties of the structure are not fully understood, flutter can only be discounted through detailed testing. Even changing the mass distribution of an aircraft or the stiffness of one component can induce flutter in an apparently unrelated aerodynamic component. At its mildest this can appear as a "buzz" in the aircraft structure, but at its most violent it can develop uncontrollably with great speed and cause serious damage to or lead to the destruction of the aircraft,[1] as in Braniff Flight 542.

In some cases, automatic control systems have been demonstrated to help prevent or limit flutter-related structural vibration.[citation needed]

Flutter can also occur on structures other than aircraft. One famous example of flutter phenomena is the collapse of the original Tacoma Narrows Bridge. Another is a particular playground swing in Firmat which "swings itself" with such force that it leads many to believe it is haunted.

http://en.wikipedia.org/wiki/Aeroelasticity#Flutter

a growing commitment to steady inflation = aerodynamic forces on an object

failure of soft central planning = result in large amplitude vibration and potentially lead to rapid failure

how do you like being a guinea pig = in complex structures where both the aerodynamics and the mechanical properties of the structure are not fully understood, flutter can only be discounted through detailed testing

[Trevor]

We've actually had considerably less inflation than I expected, especially compared to the 1970's. It's only been about three percent or something like that.

[Higgenbotham]

We've actually had considerably less inflation than I expected, especially compared to the 1970's. It's only been about three percent or something like that.

debt = mass
a growing commitment to steady inflation = an exponentially increasing force required to keep an exponentially increasing mass suspended in mid air