Economic Commentary

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[quote author="Nude" date=1256960936][quote author="Oxtail" date=1256959310]Did the POMOs ending yesterday give people the signal to exit today?</blockquote>


*puts on his tinfoil hat*



Maybe, but I think this last few days have been more organized that just that. Goldman Sachs revises it's estimate on GDP to 2.7% and the day's trading sessions tanks, and yet the following day the number comes in much higher and the session rockets up, and then today... falls again. Going short, long, and then short again was some good money if you knew it ahead of the moves. But zoom the picture out a bit. The story this whole summer has been the light volumes in the rally. Might there be collusion to pump up the prices with low volume using proxy buyers funded with cheap money from the Fed, so that then-underwater positions could be sold off at a later date (say... just as the Dow returns to 10k) and in the process get some hedge funds, MMF, and pension funds out of the hole they found themselves in back in March? Does that explain the volume disparities between the run up and the sell offs? Would the end of the POMO buys be the end of those proxy buyers funding, resulting in them fading back into the mist and leaving the retail investors holding the bag when everyone runs for the door?</blockquote>


If a tree falls in the forest without some moron detailing the mechanics in an email does the SEC have a snowballs chance in Hell of making it stick?



Of course some email always includes something in an email, so it is hard to imagine sucessful collusion by the Street going undetected.
 
[quote author="CapitalismWorks" date=1256961903][quote author="Nude" date=1256960936][quote author="Oxtail" date=1256959310]Did the POMOs ending yesterday give people the signal to exit today?</blockquote>


*puts on his tinfoil hat*



Maybe, but I think this last few days have been more organized that just that. Goldman Sachs revises it's estimate on GDP to 2.7% and the day's trading sessions tanks, and yet the following day the number comes in much higher and the session rockets up, and then today... falls again. Going short, long, and then short again was some good money if you knew it ahead of the moves. But zoom the picture out a bit. The story this whole summer has been the light volumes in the rally. Might there be collusion to pump up the prices with low volume using proxy buyers funded with cheap money from the Fed, so that then-underwater positions could be sold off at a later date (say... just as the Dow returns to 10k) and in the process get some hedge funds, MMF, and pension funds out of the hole they found themselves in back in March? Does that explain the volume disparities between the run up and the sell offs? Would the end of the POMO buys be the end of those proxy buyers funding, resulting in them fading back into the mist and leaving the retail investors holding the bag when everyone runs for the door?</blockquote>


If a tree falls in the forest without some moron detailing the mechanics in an email does the SEC have a snowballs chance in Hell of making it stick?



Of course some email always includes something in an email, so it is hard to imagine sucessful collusion by the Street going undetected.</blockquote>


See, if you had a tin foil hat like mine, you'd understand :P



Sooooo... anyone here ever invest with <a href="http://www.reuters.com/article/ousivMolt/idUSTRE59T2T720091030">Galleon</a>?
 
Speaking of tin foil hats, ...

I am skeptical the either the treasury sales or the POMOs will end. Maybe for a short bit, but IMO, they are holding up the economy and there is no way B-52 Ben can stop printing money.
 
[quote author="awgee" date=1256967011]Speaking of tin foil hats, ...

I am skeptical the either the treasury sales or the POMOs will end. Maybe for a short bit, but IMO, they are holding up the economy and there is no way B-52 Ben can stop printing money.</blockquote>


Because you don't "trust" him, or because you don't think he has the "guts" do make a tough decision?
 
[quote author="no_vaseline" date=1257032770][quote author="awgee" date=1256967011]Speaking of tin foil hats, ...

I am skeptical the either the treasury sales or the POMOs will end. Maybe for a short bit, but IMO, they are holding up the economy and there is no way B-52 Ben can stop printing money.</blockquote>


Because you don't "trust" him, or because you don't think he has the "guts" do make a tough decision?</blockquote>
If he stops printing money, the economy will do that which he has been trying to avoid.
 
[quote author="awgee" date=1257033734][quote author="no_vaseline" date=1257032770][quote author="awgee" date=1256967011]Speaking of tin foil hats, ...

I am skeptical the either the treasury sales or the POMOs will end. Maybe for a short bit, but IMO, they are holding up the economy and there is no way B-52 Ben can stop printing money.</blockquote>


Because you don't "trust" him, or because you don't think he has the "guts" do make a tough decision?</blockquote>
If he stops printing money, the economy will do that which he has been trying to avoid.</blockquote>


Last week Friday, it seemed like the DOW would do a free fall from here, but I just read somewhere that we are only 30% into using up all the stimulus money, which means B-52 Ben is not afraid of printing trillions more to keep this fake economy on life support. In the months ahead, either we fall straight now from here, or we see another huge rally up to 10,500 - 11,000 DOW. For all of you are madly shorting the market right now, I would be still be cautious.



What does everybody else think? Going straight down from here or a another rally up to 10,500 - 11,000 DOW?



"Even a real cat will make a major bounce if you drop it from the top of a 73 story U.S. Bank Tower."
 
[quote author="awgee" date=1257033734][quote author="no_vaseline" date=1257032770][quote author="awgee" date=1256967011]Speaking of tin foil hats, ...

I am skeptical the either the treasury sales or the POMOs will end. Maybe for a short bit, but IMO, they are holding up the economy and there is no way B-52 Ben can stop printing money.</blockquote>


Because you don't "trust" him, or because you don't think he has the "guts" do make a tough decision?</blockquote>
If he stops printing money, the economy will do that which he has been trying to avoid.</blockquote>
You mean fall flat on its face?
 
[quote author="PANDA" date=1257112338][quote author="awgee" date=1257033734][quote author="no_vaseline" date=1257032770][quote author="awgee" date=1256967011]Speaking of tin foil hats, ...

I am skeptical the either the treasury sales or the POMOs will end. Maybe for a short bit, but IMO, they are holding up the economy and there is no way B-52 Ben can stop printing money.</blockquote>


Because you don't "trust" him, or because you don't think he has the "guts" do make a tough decision?</blockquote>
If he stops printing money, the economy will do that which he has been trying to avoid.</blockquote>


Last week Friday, it seemed like the DOW would do a free fall from here, but I just read somewhere that we are only 30% into using up all the stimulus money, which means B-52 Ben is not afraid of printing trillions more to keep this fake economy on life support. In the months ahead, either we fall straight now from here, or we see another huge rally up to 10,500 - 11,000 DOW. For all of you are madly shorting the market right now, I would be still be cautious.



What does everybody else think? Going straight down from here or a another rally up to 10,500 - 11,000 DOW?



"Even a real cat will make a major bounce if you drop it from the top of a 73 story U.S. Bank Tower."</blockquote>
Pretty much all the technicals have broken down on the indexes, including the bank sector. I think the pull back continues for a little bit and we probably bounce before year-end back to about Dow 10k and S&P 1,100.
 
[quote author="USCTrojanCPA" date=1257120698][quote author="awgee" date=1257033734][quote author="no_vaseline" date=1257032770][quote author="awgee" date=1256967011]Speaking of tin foil hats, ...

I am skeptical the either the treasury sales or the POMOs will end. Maybe for a short bit, but IMO, they are holding up the economy and there is no way B-52 Ben can stop printing money.</blockquote>


Because you don't "trust" him, or because you don't think he has the "guts" do make a tough decision?</blockquote>
If he stops printing money, the economy will do that which he has been trying to avoid.</blockquote>
You mean fall flat on its face?</blockquote>
I mean sink into a deflationary spiral.
 
[quote author="awgee" date=1257123093][quote author="USCTrojanCPA" date=1257120698][quote author="awgee" date=1257033734][quote author="no_vaseline" date=1257032770][quote author="awgee" date=1256967011]Speaking of tin foil hats, ...

I am skeptical the either the treasury sales or the POMOs will end. Maybe for a short bit, but IMO, they are holding up the economy and there is no way B-52 Ben can stop printing money.</blockquote>


Because you don't "trust" him, or because you don't think he has the "guts" do make a tough decision?</blockquote>
If he stops printing money, the economy will do that which he has been trying to avoid.</blockquote>
You mean fall flat on its face?</blockquote>
I mean sink into a deflationary spiral.</blockquote>
Same difference. The more they keep propping up those big banks (BofA, Citi, Wells) the more we'll end up with a Japanese Lost Decade 2.0. If that's the case, expect that Fed Funds rate will stay under 1.00% for the next 5+ years. If the stock market takes a big tumble from these levels and we get a double dip recession, you can expect the 10-year to trade down to 2.50%.
 
[quote author="awgee" date=1257123093][quote author="USCTrojanCPA" date=1257120698][quote author="awgee" date=1257033734][quote author="no_vaseline" date=1257032770][quote author="awgee" date=1256967011]Speaking of tin foil hats, ...

I am skeptical the either the treasury sales or the POMOs will end. Maybe for a short bit, but IMO, they are holding up the economy and there is no way B-52 Ben can stop printing money.</blockquote>


Because you don't "trust" him, or because you don't think he has the "guts" do make a tough decision?</blockquote>
If he stops printing money, the economy will do that which he has been trying to avoid.</blockquote>
You mean fall flat on its face?</blockquote>
I mean sink into a deflationary spiral.</blockquote>


Awgee, so what would happen to Gold prices if the U.S. sinks into a deflationary spiral?
 
[quote author="PANDA" date=1257140917][quote author="awgee" date=1257123093][quote author="USCTrojanCPA" date=1257120698][quote author="awgee" date=1257033734][quote author="no_vaseline" date=1257032770][quote author="awgee" date=1256967011]Speaking of tin foil hats, ...

I am skeptical the either the treasury sales or the POMOs will end. Maybe for a short bit, but IMO, they are holding up the economy and there is no way B-52 Ben can stop printing money.</blockquote>


Because you don't "trust" him, or because you don't think he has the "guts" do make a tough decision?</blockquote>
If he stops printing money, the economy will do that which he has been trying to avoid.</blockquote>
You mean fall flat on its face?</blockquote>
I mean sink into a deflationary spiral.</blockquote>


Awgee, so what would happen to Gold prices if the U.S. sinks into a deflationary spiral?</blockquote>
It would get whacked.

Big time.
 
[quote author="awgee" date=1257149099][quote author="PANDA" date=1257140917][quote author="awgee" date=1257123093][quote author="USCTrojanCPA" date=1257120698][quote author="awgee" date=1257033734][quote author="no_vaseline" date=1257032770][quote author="awgee" date=1256967011]Speaking of tin foil hats, ...

I am skeptical the either the treasury sales or the POMOs will end. Maybe for a short bit, but IMO, they are holding up the economy and there is no way B-52 Ben can stop printing money.</blockquote>


Because you don't "trust" him, or because you don't think he has the "guts" do make a tough decision?</blockquote>
If he stops printing money, the economy will do that which he has been trying to avoid.</blockquote>
You mean fall flat on its face?</blockquote>
I mean sink into a deflationary spiral.</blockquote>


Awgee, so what would happen to Gold prices if the U.S. sinks into a deflationary spiral?</blockquote>
It would get whacked.

Big time.</blockquote>


and when the U.S. sinks into a deflationary spiral, the dollar would rally in this scenario while everything falls, including gold? Am I correct?
 
[quote author="PANDA" date=1257155986][quote author="awgee" date=1257149099][quote author="PANDA" date=1257140917][quote author="awgee" date=1257123093][quote author="USCTrojanCPA" date=1257120698][quote author="awgee" date=1257033734][quote author="no_vaseline" date=1257032770][quote author="awgee" date=1256967011]Speaking of tin foil hats, ...

I am skeptical the either the treasury sales or the POMOs will end. Maybe for a short bit, but IMO, they are holding up the economy and there is no way B-52 Ben can stop printing money.</blockquote>


Because you don't "trust" him, or because you don't think he has the "guts" do make a tough decision?</blockquote>
If he stops printing money, the economy will do that which he has been trying to avoid.</blockquote>
You mean fall flat on its face?</blockquote>
I mean sink into a deflationary spiral.</blockquote>


Awgee, so what would happen to Gold prices if the U.S. sinks into a deflationary spiral?</blockquote>
It would get whacked.

Big time.</blockquote>


and when the U.S. sinks into a deflationary spiral, the dollar would rally in this scenario while everything falls, including gold? Am I correct?</blockquote>
Yeah, <strong>IF</strong> the U.S. sinks into a deflationary spiral, which it will not, because B-52 Ben is committed to using the printing press to avoid it.
 
Hedge fund analyst Jon Harooni and macro analyst Ravi Tanuku, in their article "<a href="http://www.absolutereturn-alpha.com/Article/2319666/Who-is-really-lending-the-US-all-this-money.html">Who Is Really Lending The U.S. All This Money?</a>"











<em>Out of nearly $2.1 Trillion of net issuance across the Treasury, Agencies and MBS markets from June 2008-9, the Federal Reserve has accounted for nearly 40% of the total demand, buying more than every foreign government combined. It is also not a stretch to say the Fed has become the entire mortgage market; it has purchased nearly $500B of MBS securities during a period where there was only $350B issued. Looking at the first seven calendar months of 2009 yields similarly startling results: <strong>of the total $1.1 Trillion of net issuance across these markets, the Fed has purchased $861B or almost 80%</strong>.</em>













I am unsure if the folks who think that the recent uptick in real estate prices, low interest rates, and a supposed recovery in the economy are aware of the above and exactly what it portends.
 
[quote author="awgee" date=1257498466]Hedge fund analyst Jon Harooni and macro analyst Ravi Tanuku, in their article "<a href="http://www.absolutereturn-alpha.com/Article/2319666/Who-is-really-lending-the-US-all-this-money.html">Who Is Really Lending The U.S. All This Money?</a>"











<em>Out of nearly $2.1 Trillion of net issuance across the Treasury, Agencies and MBS markets from June 2008-9, the Federal Reserve has accounted for nearly 40% of the total demand, buying more than every foreign government combined. It is also not a stretch to say the Fed has become the entire mortgage market; it has purchased nearly $500B of MBS securities during a period where there was only $350B issued. Looking at the first seven calendar months of 2009 yields similarly startling results: <strong>of the total $1.1 Trillion of net issuance across these markets, the Fed has purchased $861B or almost 80%</strong>.</em>













I am unsure if the folks who think that the recent uptick in real estate prices, low interest rates, and a supposed recovery in the economy are aware of the above and exactly what it portends.</blockquote>
I thought it was the banks that got all of that TARP and cheap Fed money were the big buyers of treasuries, but I guess the Fed was also a big buyer.
 
[quote author="USCTrojanCPA" date=1257499659][quote author="awgee" date=1257498466]Hedge fund analyst Jon Harooni and macro analyst Ravi Tanuku, in their article "<a href="http://www.absolutereturn-alpha.com/Article/2319666/Who-is-really-lending-the-US-all-this-money.html">Who Is Really Lending The U.S. All This Money?</a>"











<em>Out of nearly $2.1 Trillion of net issuance across the Treasury, Agencies and MBS markets from June 2008-9, the Federal Reserve has accounted for nearly 40% of the total demand, buying more than every foreign government combined. It is also not a stretch to say the Fed has become the entire mortgage market; it has purchased nearly $500B of MBS securities during a period where there was only $350B issued. Looking at the first seven calendar months of 2009 yields similarly startling results: <strong>of the total $1.1 Trillion of net issuance across these markets, the Fed has purchased $861B or almost 80%</strong>.</em>













I am unsure if the folks who think that the recent uptick in real estate prices, low interest rates, and a supposed recovery in the economy are aware of the above and exactly what it portends.</blockquote>
I thought it was the banks that got all of that TARP and cheap Fed money were the big buyers of treasuries, but I guess the Fed was also a big buyer.</blockquote>
The dealer banks are required to buy the treasuries that do not sell, but the Fed has been buying all of dealer owned through the POMO. And the MSM says nothing.
 
Shoulda bought the gun. I can't figure how to short it though



<a href="http://www.marketwatch.com/story/story/print?guid=F23556EC-9156-402A-95FF-26D446FC8EF4">The gun that beat inflation</a>
 
Let me start off with something outrageous



HE SAID WHAT??????



http://www.marketwatch.com/story/goldman-ceo-defends-bonuses-as-sign-of-recovery-report-2009-11-08



"Goldman Sachs Group Inc.'s chief executive defended the U.S. bank's bonus policies in an interview with U.K.'s Sunday Times, saying banks serve a "social purpose," and the return of high pay should be seen a sign of economic recovery."



My jaw dropped when I read that. Thats beyond spin. Thats spitting in our faces and telling us to "let them eat cake". The theft is out in the open.



How about the next wave down lets see if GS survives without a handout from the very people (taxpayers) they are spitting on?



GS = pure evil.



Market will challenge the resistance once again. Hey, if you can't do it during the regular section, lets manipulate the future's market to help you get there. Gold hits above 1100, and Dow probably will make new high today, while S&P and NASDAQ lagging. Remember, not all indexes will hit the top at the same time. I do see Dow and Gold topping out before S&P. I believe the best S&P can do is banging its head against 1100 once again before the next big down leg.
 
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