Financial topics

[aedens]

It took some time but they have killed the velocity of money to assert inflation target.
As we read the QE capped savers and investors avenues. Policy entail's all Government 's
target inflation for the winners and losers. They have there road to serfdom firmly in place
again to inflate the debt away. They are eating us alive and it will be typical Party rhetoric to
watch since they both are the same. Financial Repression is immoral to honest workers and savers.
I live in Michigan and the effects are beyond words. Business with Government taxpayer dollars have
deindustrialized the continent to devastating effects that I feel are lost decades. Reminds me of
Operation market garden, a bridge to far to gap for the next Generation. The Senate should stripped
half there wage and all there benefits as countless people have also. The looting must stop. More than
currency is debased.

http://www.imf.org/external/np/seminars ... f/crbs.pdf

[OLD1953]

I worry about another earthquake in the central US, but I live in Memphis and have been part of the USACE earthquake response team. Most people seem to not be concerned.

I suppose one way to look at the generational changes in monetary policy is that it shifts from a policy of "build up your neighbor" as we did after WWII to a policy of "beggar your neighbor" as the world is currently following. Building up your neighbor produces new opportunity in the long run, but not on the short term, beggar your neighbor is a short term gain that kills the longer term possibilities.

[Higgenbotham]

Covered all shorts. Thinking about trying again if the S&P can rally for about 1-2 weeks into the 1310-1340 range.

Went short again today when the S&P went over 1320.

And now units of this vagrom and unstable street throng, which was forever shifting and changing about them, seemed to sense the psychologic error of all this... "

[John]

Covered all shorts. Thinking about trying again if the S&P can rally
for about 1-2 weeks into the 1310-1340 range.

Went short again today when the S&P went over 1320.

And now units of this vagrom and unstable street throng, which was
forever shifting and changing about them, seemed to sense the
psychologic error of all this... "

It's amazing how you do this stuff, Higgie.

This morning on CNBC they were euphoric about the stock market rise,
and yesterday the pundits were predicting that there's nowhere to go
but up. I heard one analyst predict S&P 1700 by the end of the year.

Of course, the only reason that the euro crisis occurred is because
DSK wasn't around to handle it. Now that he's back, the stock market
should go up even faster.

John

[Higgenbotham]

It's amazing how you do this stuff, Higgie.

This morning on CNBC they were euphoric about the stock market rise,
and yesterday the pundits were predicting that there's nowhere to go
but up. I heard one analyst predict S&P 1700 by the end of the year.

Of course, the only reason that the euro crisis occurred is because
DSK wasn't around to handle it. Now that he's back, the stock market
should go up even faster.

John

It seems like the shifts in polarity are getting more frequent, more intense, and more unstable. I really like the Dreiser quote even though it pertains to something entirely different. Funny thing, but I read the quote decades ago and it stuck in my mind as being uniquely descriptive. It conjures up a certain image and the stock market action yesterday all of a sudden reminded me of that quote. Today even more so. It seems possible we are weeks away from the largest stock market crash in history.

[John]

It seems like the shifts in polarity are getting more frequent, more intense, and more unstable. I really like the Dreiser quote even though it pertains to something entirely different. Funny thing, but I read the quote decades ago and it stuck in my mind as being uniquely descriptive. It conjures up a certain image and the stock market action yesterday all of a sudden reminded me of that quote. Today even more so. It seems possible we are weeks away from the largest stock market crash in history.

I found Dreiser's novel online:

http://literaturepdf.files.wordpress.co ... ragedy.pdf

I read through the wikipedia plot summary, and boy is that plot depressing.
But I could certainly see the same kind of thing happening today, over and
over, in many different ways.

The main character, Clyde, is part of the Lost Generation, the same archetype as
today's Gen-Xers.

John

[aedens]

The lesson from the Great Depression was the gold standard created DEFLATION because you could not increase the amount of gold in proportion to economic and population growth.
Food Supply interruption are not going to help. Thousands of Acres and Homes are destroyed from nature and policy as we speak. Food stamps will
again rise and is not a effective number to the real food distribution we are seeing locally. I mentioned cash contractors are at a peak at the moment
since people are waking up to a larger extent that .gov is the problem maintaining a Small Business. Over the decades I closed two myself when it was evident
the net working capital was at a level it was not worth it anymore as they took more than they were entilted to. I used the liquidation capital to start the other venture until interference from regulation again the decision to pursue other avenues was done.
On a larger scale those who ignore the international capital flows will be wiped out in a few years. International Capital Flows are the real issue.
We hear of the IRS tracking off shore acounts but I would Posit that was the Dumb money.
http://stats.oecd.org/Index.aspx?DatasetCode=MEI_FIN
This is the greatest TRANSFER of wealth that has ever existed making the class warfare topic irrelevant.
It’s debt payments to come since thousands are not buying debt since as we note the vanilla investors are cashing in.
Higgy is painfully correct on the aspect of Mutual Fund Money Market outflows. Cycles are real...
http://latimesblogs.latimes.com/money_c ... fault.html
Effectively the large Banks are loading up with cash and are headed overseas "Capital" as they know the end is near in a few more years
in a so called free market for portable capital flight.

http://www.bbc.co.uk/news/business-13999509 Debt implosions are political gain.

This again policy here, and upcoming mandates will strip more capital from small business.
http://www.imf.org/external/np/seminars ... f/crbs.pdf
Conceptual framework for calculating the “financial repression tax,” or more specifically, the annual “liquidation rate” of
government debt. The repression tax will enable winners and losers and guess were small business will be.

[Higgenbotham]

http://www.google.com/search?q=%22daily ... 79&bih=426

See Figure 17.1 on page 116 which charts the September, 1720 crash of the South Sea Bubble.

I've been paying closer attention to this e-book on the South Sea Bubble in the past week. The chart and the fundamentals are showing similar behavior to that seen in our markets the past two months. On the chart, the peak of the South Sea Bubble was followed by an approximately 6 week slide and 2 week sharp rebound, then the crash. Our market recently completed an approximately 6 week slide and 2 week sharp rebound. In addition, the author notes that

When the Bubble Act was enforced against some of the
company’s competitors on August 18, 1720, immediate
downward pressure was placed on the price of shares of
the affected companies. Because the shares were mostly
held on margin, general selling hit the shares of all
companies, including South Sea shares, in a scramble
for liquidity. Simultaneously, there was an international
scramble for liquidity with the final collapse of Law’s
Compagnie des Indes in September 1720 and of a Dutch
speculation. Liquidity may have been drained from
English markets by these international events. Neal and
Schubert (1985) provide evidence on large-scale capital
movements during this period.

I note this because there was a scramble for liquidity prior to month end August 1720 before the bubble burst as well as month end June 2011. As noted in the chart, the South Sea Bubble peaked at the beginning of July 1720 and our market peaked at the beginning of May 2011, both approximately 6 weeks before liquidity began to dry up.

International Capital Flows are the real issue.

Yes, it was the issue even back in 1720.

[aedens]

Bondage to Spiritual Faith;
Spiritual Faith to Courage;
Courage to Freedom;
Freedom to Abundance;
Abundance to Selfishness;
Selfishness to Complacency;
Complacency to Apathy; <----------------------- We are here
Apathy to Fear; <-------------------------------- Going here
Fear to Dependency;
Dependency to Bondage

I give it 3 or 4 years since the ending of the 4th wave soon. Amplification waves peak to peak.
So many headwinds but food costs will be the tipping point IMO
I had a conversation with a Congressional Aid June 18th
They know, but She did not how to convey to Washington as a report which
was typical given the topical discussion.

[vincecate]

Bondage to Spiritual Faith;
Spiritual Faith to Courage;
Courage to Freedom;
Freedom to Abundance;
Abundance to Selfishness;
Selfishness to Complacency;
Complacency to Apathy; <----------------------- We are here
Apathy to Fear; <-------------------------------- Going here
Fear to Dependency;
Dependency to Bondage

Since 9/11 I think Fear, Dependency, and Bondage have been underway.