We are seeing a fucking replay of 2008, aren’t we? All of the trillions of dollars spent on stimulus, bailouts and QE down the drain. Due to the bailouts of 2008-2009, sovereign nations took on too much debt, trying to transfer risk from banks to us. They figured if the economy came back and taxes were raised, they could stave off collapse. Let’s be clear, without the bailouts of 2008, for better or for worse, the entire system was going to collapse.
Over the past 3 years, we’ve been sustained on free money and lots of eloquent speeches. The reality, we haven’t grown fast enough to dig out of the massive debt hole. While everyone feared the inflationary side effects of quantitative easing, the real threat was deflation, which is the reason why Bernanke continues to print at a rapid pace. Asset price destruction occurs quickly and it is absolute. The only real threat of inflation, in the eyes of the Fed, is wage inflation. Due to our stupid economy, wage inflation hasn’t been a problem in 30 years.
As we sink into the vortex of asset price destruction, it is clear to me there is only one way out: print more. The problem with printing more is the unfortunate side effects of artificial, manufactured inflation. The alternative is debt restructuring and failure on a monumental scale. That simply isn’t going to happen, especially after seeing how policy makers managed the crisis of 2008.
This is the primary reason why I have been long. It was never based around the idea that the economy was terrific. Sadly, like many other investors, I was long because while the printing presses were running, the prices of equities were gunning. There is no debating that fact.
People are fleeing for the exits now based upon the premise that “it’s all over.” Can the ECB bailout everyone? Is BAC going to bite the dust this time around? Moreover, is there political capital left for future bailouts, if needed?
It’s 2008 all over again and policy makers, once again, seem stupefied to stem the contagion.
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All of QE2 wiped out already.
QE3 will do nothing but drive up gold and groceries.
mmmmm groceries.
Including kibbles and bits!
You can afford kibbles? I can barely afford bits!
I prefer snausages.
If Ben doesn’t say something tomorrow, it’s lights out.
BAC should serve some ads on BrianMoynihanBlows.com . They will make up $10B for the AIG suit in no time at all
Long my stockpiled bunker in the country.
I hate being a bear, I really do. But it’s a freakin’ train wreck out there and has been for a long time.
It’s like watching a horror movie in slow motion. Only far far scarier… Not even worth trying to compute the implications
FIG………BAC WILL BITE THE DUST. after the jp morgue and the goldmann sachs secretly transfer all their bad paper to bac’s books first..and then bac does the “LEHMAN SHUFFLE” ! all the way to buffalo
EXACTLY! Now why can’t these clowns read iBankCoin and be learned [sic]?
ha ha yog’s, you cant fix stupid bro.
No, you can’t. We’re all in the same boat. It’s named S.S. Screwed.
my boats name is sir-ocissis of the river
More smarmy rhetoric from the president. With all the urgency of a Harvard professor he restates the obvious but does not grab the congress by the short ones and cancel all congressional vacations immediately and get their cretinesque asses back to Washington. And not by first-class air travel.
This comment intentionally ignores capital letters for president and congress.
You obviously don’t know how the government works. The Executive Branch is separate from the Congressional branch. It’s Congress’s job to write laws and policy, not the President’s. And we don’t live in a dictatorship – the President doesn’t have the power to “cancel all congressional vacations”. We got used to GW Bush expanding executive power but he was using power the president doesn’t have in the Constitution.
Joe, go back to your plumbing and kissing up to John McCain. But while you’re looking for work, pull out that US Constitution you guys say is being violated and check out the powers of the President. You might be surprised if you read that and the whole thing.
He said……. cretinesque asses.
THIS TIME IT IS DIFFERENT
FROM ONE WE COME AND SHALL RETURN
I’m not a political person but you can’t respect this president at all. He’ll never understand the principals of this country or how the U.S. economy works best (without the government regulating it to death).
doesn’t matter who is prez or what they understand …. we are fighting a depression with an empty six shooter while our congress wants to impose austerity …. What is a prez to do?
For one thing, he could learn how to negotiate. That would have helped a lot.
Negotiating with a tea-partier is a contradiction in terms. Until the Republicans cauterize their “no tax increase” virus, no meaningful negotiation can possibly occur.
He should never have allowed the tax breaks to roll over.
Lower taxes, increase revenues!
Yeah. That’s worked really well.
It did, actually. It’s only when you tighten the gov’t grip on commerce that you slow revenue and increase unemployment.
We always had the example, in schlerotic, over-bureaucratized Europe. Some here admired that model.
Now we have its result.
_________
They are corrupt so why on earth would you want to take MORE money from people that actually earned it and give it to these scoundrels? You need to cut them off at the source – repeal the 16th amendment – leave the money in the hands of those that produced.
Raising taxes only adds fuel to the fire; it’s more ammo they will have to promise FREE LUNCHES in exchange for people’s suffrage. We are already at the 50/50 level where 50% of the country is working to support themselves as well as the other 50% that are living parasitic lifestyles. These people literally do have a free lunch and will never be motivated to produce until we take away their monthly GOV Coerced transfer payment(s).
The empire building foreign policy we subscribe to is also a result of too much tax revenue. Do you really think we would have been so quick to invade IRAQ and Afghanistan if Congress didn’t have access to so much free money? Both of these wars have been proven to be nothing but a giant waste of resources and human life.
Congress has no right to the fruits of our labor and the founding fathers never intended them to. It would be much more preferable for us to have a consumption tax instead of an income tax. That would properly align incentives toward producing instead of consuming beyond your means.
Right and the repube-licans do. Who was President when we got into this mess? Who controlled Congress for 6 out of 8 years?
You’re a dolt.
For one I don’t want to defend Bush, but would it be better if for the first 3 years of his Presidency he said “I inherited the tech bubble collapse” or “I inherited 9-11”?
The guy’s track record is 5.5% unemployment over 8 years. Do you want to solely blame him for the CDO and housing market bubbles? I would think you could give a little credit to the 2006 elections, Nancy Pelosi, Chris Dodd and good old Gaylord Barney Frank. Be fair.
How could he understand this country? His mentors hate it. He spent his formative years somewhere else. How could so many people miss those basic facts.
You have to grow up here , you have to work here, you have to absorb through the skin what it means to be American by God!
The citizenship requirement should be enhanced by adding a residency mandate also. These days it is too easy to hold citizenship here and live somewhere else.
OK, so your plan is to print more money.
Once that money is printed, who should we give that printed money to?
This is the same problem I just mentioned on the last thread about irresponsible leverage impacting the asset price of everyone responsible that is not leveraged.
In other words, printing is just theft through inflation and whoever distributes those printed dollars picks the winners and losers. If printing is the only answer, we are in collapse and this is Weimar, and gold looks good.
WHAT FUCKIN’ INFLATION??
Exxxxxxxaaactly
the fed needs to direct the $ themselves rather than leave it to the banks …. Munis or even an Economic Development Bank for real stimulus or as Jake would say the FDR solution.
Bingo
Agree with you that giving the money to the banks hasn’t done shit. But having the Fed direct the money is basically “central planning”, no? Where have we heard that term before?
Fly getting caught with his pants down by DevilDawg in 2012.
http://www.youtube.com/watch?v=x8W4DEMUSeM
End of Days…
VXX calls and TZA calls only thing that is working.
This shit is gonna continue.
Buy more on any rallies in this artificial market.
what about my FAS put thats up 750%? 😉
but yes, everything is going to hell
wrong clip.. here you go:
http://www.youtube.com/watch?v=7GKP_dB3Hmw&feature=related
murderholes all over the road.
That stupid QEing and the clam just made a bad situation even worse imho. One massive “Shanghai Copper Bubble” that is finally popping if Clam is wishy washy tomorrow…we will see.
Shut the fuck up about copper already.
Good fucking Lord. The “Shanghai Copper Bubble” has jack shit to do with this mess.
hey Fly, Appaloosa Capital Hedge fund discloses new stake in WNR as of 6-30
so they got burned last few sessions to huh. jump in the water’s fine
fly, what kind of sandwich today? PB&J? Or perhaps a club with extra bacon… mmmm… bacon…
The same people who bemoan missing the 666 SPX bottom will be complaining about missing this bottom as well. Especially in EEM emerging markets.
This market would have to drop at least another 15% , just to put most permabear gurus at a break even for the past 2 years. And that’s not counting the fact that 90% of them wrongly called for a TLT crash
Umm…do I buy that basket of commodity stocks now for the imminent inflation?? TY
Gold will do, pig, gold will do.
________
Bye bye BAC
Blame the Orange one (Angello Mozilo)
I may not be a Harvard grad, and am guilty of being a bull by nature, but I seriously can’t come up with any reason for optimism in any sector. I am thankful that I got my toe bit off when I dipped it in the market last week, as I have been all cash since.
GOOG smashed earnings. 550K new Android activations per day. There’s one for you.
But WTF good is that going to do when no one can pay their monthly cell phone/smart device subscription. All they’ve done is activate 550K accounts that will not be performing inside of 2 months.
I’m just sayin….there is a lot more to sort through yet..
Precious metals
Everyone, do the Hugh! (also do “the Gint”).
Very strange.
Looks like about 15-20% of stocks on my screen now have short selling restrictions.
This is making 1987 look like a picnic. At least then it was over in a couple of days. This is a disaster. Great Depression 2.0.
GOLD… just another day in the trenches
Get in the funnel
when everyone is negative, that is the time to buy….when everyone is scared to buy, it turns out to be the best time to buy, it happens time after time.
shoulda woulda coulda, normally follows days like today
just saying, carry on
Lol…And last Thursday and Friday too?
But no, if this market corrects, screaming profits no doubt.
In 2008 that’s what I thought. I caught a falling chainsaw in some stocks. A wait and see approach is warranted.
CNN headline is “Sell first, ask questions later” LOL
The questions you will be asking is — why did I sell down here? and why am I such a tool?
You sell because Mr. Margin clerk is on your tail…
Just nibbled at some XIV.
VIX disconnecting from this latest plunge, let’s see if she holds.
are
get your margin call covering (or butter if you prefer) popcorn ready
“Had we just printed money and NOT borrowed this would have eliminated 68.2% of the entire national debt. There would have been NO competition with the private sector to borrow reducing economic growth, raising unemployment, and causing taxes to rise. We would NOT need a credit rating and inflation would have been at least half the rate over the last two decades. It costs MORE to borrow than it does to print and there is NO empirical evidence that borrowing is less inflationary than printing. Oh well! That’s just another of those stupid myths. To make matters worse, 46% of these interest expenditures are exported and have just ABSOLUTELY NO domestic stimulus affect whatsoever. So ya! Get those rich bastards. Tax all their money to export it and stimulate the world. Keep that theory going and you should succeed in accomplishing the socialist goal of the perfect world. Nobody will have any money and we should be a third world country by then. But what the hell; we got those rich bastards! As Herbert Hoover wrote in his memoirs; Sometimes government burns down the barn to get the rat.”
I admire your fortitude despite the past few days
You can’t keep taking from productive people and giving to non-economic uses and unproductive purposes. We need that stuff to some extent, but really the absurd stuff just needs to stop.
Are trust fund babies productive?
Their trust funds are.
_______
Timothy Leary was a Harvard professor.
the epa came out with a new study on pcb’s , is that like angle dust?
GE – crack.
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Blogging on PG again – http://www.ibankcoin.com/peanut_gallery/index.php/2011/08/08/a-cat-has-nine-lives/
FLY,
Im a fan and all, love the blog, respect the honesty and openness but JESUS H MONKEYBALLS, this market is BANANAS, B-A-N-A-N-A-BALLS….. By my maths (which are prob WAYYY OFF), you’re down about 25-30% over the past week? Im not invested, and I do not have access to the funds, nor adamantium gonads that you have built up over the years- but this is insanity…. The Bernank speaks tomorrow right? WILL QE3 RESTORE THE MARKETS AND QUELL FEAR? IS THE ECB GONNA RUN OUTTA MONEY? WILL BAC GO UNDER??? Am I just being a moron??? Honestly, I thought the Dow would be down at open, rip upwards around noonish, maybe sink a little lower, and finally end maybe 55 pts up. What bothers me the most is…. maybe Im dead wrong, but there seems to be a level of…. complacency, a LACK of fear (among the taking heads that is). Its like everyone is thinking the same thing- “We’ve been here before, we KNOW we’re headed upwards.” It’s…. creepy, it’s actually bothering me. If people were freaking out, I’d feel BETTER, but this complacency is…. bothersome. Someone PLEASE tell me I’m just being an idiot…
Nice panic post!
When the white dude down the street who drives a BMW and works out at the gym three times a week loses his plasma TV, his job, his wife, his savings, his home… then panic. Until then, it’s all theatrics to get you to buy into UN Agenda 21 as the solution.
It feels like complacency to you, because you have no skin in the game.
good point….. But i dunno, usually the cnbs losers go apeballs when things like this happen, but today… they were just…. almost yawning (not that they matter but i use their emotions as a metric for where reality is since they lie so much). I been watching the markets for a few years everyday just for fun, and to get a feel before going in, but again- im a noob so ur prob right….
Perhaps it’s not fear…We already had that. Maybe it’s not panic, as we already had some of that. It’s possible we’re likely in full blown depression. Fortunately, hope usually comes after that. Although, those phases of emotion do not normally move this fast…
yeah btw im a complete noob, and NOT a trader, I have no skin in the game (that may change soon though) I just wanna learn….
blackdude is that really you? get back to the stool
i use this username on a lotta blogs…. i dont know what u mean by “get back to the stool” though?
barstool sports, yes?
naw that aint me lol….. or…..is it????
It’s over, someone call the police. No more money left.
” Can the ECB bailout everyone? Is BAC going to bite the dust this time around? Moreover, is there political capital left for future bailouts, if needed?”
Yes (in their minds they can)….No (it must not or the system collapses)….Yes (there always more political capital, via scare tactics, e.g. ” an asteroid will hit the planet if we don’t help out the ECB and bailout our banking system” —- Barack Hussein Obama, September 2011).
QE3….QE4 coing….(what’s German for QE?)
Buy stocks, buy gold…sell the rest.
Why buy stocks? I thought you said we were going to 5000?
But puts in social media stocks.
Dow to 5,000…then yes, buy stocks. In the meantime hold on to gold.
Gold to 5,000, Dow to 5,000.
Justice.
I believe people are stupified becuase the Fed told us the recovery was on track. Yet here we are again in crisis mode. And please don’t blame it on Europe, If the Fed couldn’t see that train wreck coming then why are those fuckin idtiots still running the show..
A chinch will rise, powered by alfalfa sprouts, plus that fucking romaine lettuce crap my capitalist pig (no specist) “owner” keeps feeding me.
VIVA LA REVOLUCION!!!!
we r trimming the hedges, bernanki to fertilize tomarrow?
People just need to riot and burn down 5 million houses. Soon the economy will recover strongly on the back of rising house prices and employment in the real estate business.
In the meanwhile, folks should load up on a few glocks and a plentiful supply of canned food.
Non-event – move along folks, nothing to see here….
A wise man once said:
“I have seen the future and it has lower stock prices in it”
The future is now. I stopped out of my beloved GOOG for a profit. I plan to buy back around 400, which is where I think it…and the S&P….are headed.
I have been short the S&P for two painful years. I am still in the RED, but making up ground quickly. Now, do I have the balls to double down on my short like the Fly would? I am not sure I do. I hope you join us on the short side soon, I think we have room to fall.
Nothing Bernanke can do. Everyone knows we are in deep trouble, they just pretended to ignore it. Now that we’ve reached the tipping point everyone is running for the doors knowing the house finally caught fire.
What a headfake/close! The market is saying to those who bottom fished today (including me) ” Surprise Cockfags!!”
Here’s your pat on the head devil dog: pat pat pat.
“Good boy”
Don’t be a dip – buyer until at least 11:15 EST tomorrow for the FOMC meeting.
Clearly this is designed to put pressure on action for the Fed, so we must go with that narrative.
The narrative is the market/sky is falling so we must act and we now have the political will to do so.
I think the market could still drop leading up to the meeting.
I am all in gold/silver/cash but will look to go long based on comments tomorrow and/or the week before the labor day 3 day weekend.
It’s gonna be the end of the world Bill, see…
http://www.youtube.com/watch?v=X2qbUZCryLU
Hey fuckers. I just learned from CNBC this has been an orderly selloff. 9 or 10 more orderly days like today and we will be back to 2008 levels.
OK, time for Mr. Devildog to come in here and gloat …..and bottom this market. Seriously, can you say double dip? This may be deja vu 1930s all over again.
While our best brains are drawn to the financial markets our economy is drained of our best minds, therefore our economy does not innovate like it used to.
The most innovation has been on Wall st, we have a financialization of our economy and now look where that has taken us..Banks with fancy debt products, CDS to counteract them and central banks now bailing all that so called innovation out.
Even stocks sites like this, this is the bubble right here and it will deflate.
Did this apply to the shorts burned these past few years?
“If you managed to call this tape correctly, this is not the time to brag or drag people through the mud. Most people are invested in stocks and are enduring massive losses. Some people take losses badly and it can affect their health.”