Most stock traders and investors have come to take our former Savior, Dr. Bernanke, completely for granted. There have been so many high expectations put on just one man through the “Bernanke Put”. You may think he is Greenspan2 but I assure you that Dr. Bernanke is no Dr. Greenspan! Greeny never went from hero to goat this quickly…
So, if you believed the equity and commodity markets were trading where they were because the market was “cheap” based on earnings estimates or the prospects for growth, you would be wrong. If you believed equities were “telling you something” or you “just followed the market” because it “tells the ultimate truth”, you would be in for a shock today.
We’ve all prided ourselves at being Capitalist but we expect that Central Banks will ply us with free money. But it cannot go on forever. Perhaps its monetary, perhaps its political, but the free money will not be forthcoming today. And because of that fact, the money pouring into “risk assets” will now go to “money heaven”. Poof.
The bad news is that prices are going down. But the good news is that prices are going down. Now is not the time to hurry but to gather your assets and get your shopping list together for there will be a buying opportunity of a tremendous magnitude. But not yet. Let a bank or two in Europe fail. Let’s feel some real panic, which we do not yet have. This “adjustment” is overdue and necessary.
When all of QE2 has been given back, we will be MUCH closer.
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Lol, late-come commodity players must be feeling like crap today.
” And because of that fact, the money pouring into “risk assets” will now go to “money heaven”. Poof.”
I don’t think that money has been pouring into risk assets. I suppose that it depends on your definition of risk.
“Let a bank or two in Europe fail. Let’s feel some real panic, which we do not yet have. This “adjustment” is overdue and necessary.”
It’s strange that people are almost ready for another Lehman. I believe that they will be disappointed.
Another Lehman will now be considerably less of a surprise. I hope to be wrong!
Moi Aussi!
Bah dit donc!
money heaven 🙂
a tbtf needs to fail,then maybe we can be closer to a cleanse
Scott
Where exactly is the free money? No one is giving it away. You seem to be mixing up two different things money and credit. Credit is certainly not cheap in America. So I don’t quite get the idea where free money comes from.
Rates are low, they are down here because there is deflation. If there was inflation rates would be much higher.
Please tell me where there has ever ever been a case of high inflation with rates this low.
indeed, QE and QE2 were both profitable for hte government, and TARP is close, fannie and freddie are losses.
The “stimulus” that was run, the actual cost to the government, must lie at well under a trillion dollars. the mistake they made was (kudos to cronkite for repeatedly pointing this out) not running a targeted stimulus at a time when tax breaks are more likely to go into savings than into the economy.
QE3 would, like QE2, like QE1 save the government money, etc.
LOL @ “Targeted stimulus.”
Imagine those solons finding their ass with two hands, never mind trying to direct a multi-trillion variable economy?
Will such hubristic foolishness never cease?
___________
“Rates are low, they are down here because there is deflation.”
Regular environment: Government sells bonds.(Assuming supply is constant) Yields move higher with less demand. Yields move lower with higher with move demand.
OKAY, that’s pretty straight forward.
Irregular environment:Government sells bonds.(Assume supply constant) Helicopter BEN drops a fucking atomic bomb full of Benjamin’s and buys bonds driving yields lower, because of his artificial explosion of demand. Its impossible to tell how much of the discount in yields are due to real investor demand and how much is due to helicopter BEN.
“Credit is certainly not cheap in America. So I don’t quite get the idea where free money comes from.”
Credit is not cheap? You know how fucking hard it was to get credit in the 70’s? You had to suck someone cock and you’d still have to pay 20% interest. Nowadays, you can walk into the fucking Best buy and get credit with no money down for a year. Credit is as cheap as it has ever been. PLEASE PASS ME WHAT YOU ARE SMOKING BROTHA.
***Regular environment: Government sells bonds.(Assuming supply is constant) Yields move higher with less demand. Yields move lower with more demand.**
Fuck…You’d think I smoked to much weed this morning or something
Well said, Doug Kass: Market Won’t Make Another Swish Down
http://www.cnbc.com/id/44627341
! see the video of Doug krass on fast money..making a case for the bottom to be in….like the markets won’t ever have another fearful moment !he thinks banks are on the brink of something he calls a La Dolce Vita moment, a reference to a 1960’s movie in which Marcello Mastroianni was forced to choose between the allure of high society versus domestic life. “I think domesticity wins,” he says. In other words, Kass expects banks will get it together