World Stock Markets Trading Discussion - Weekend wrap

[aussiebear]

http://www.engrish.com/2010/01/soylent-dumplings/

 

Found at restaurant in Hanoi, Vietnam.

[aussiebear]

Survey results show one in five members of Generation Y – aged between 25 and 34 – expect to be left enough money to afford their own home or retire. After all, it is the boomer household, those born between 1946 and 1964, that has a net worth more than four times that of the average Gen Y household – about $1 million.

 

Social demographer Mark McCrindle confirms that despite being on the cusp of the biggest intergenerational wealth transfer in history, many Gen Xs and Gen Ys (aged between 25 and 34) will be disappointed.

 

Where previous generations may have lived shorter and more frugal lives, which enabled them to leave their wealth to the next generation, those heading into retirement today are much more likely to spend money on themselves, give to their favourite causes and leave a fraction of their wealth to their children, McCrindle says.

 

“Baby boomers tend to fund their children early in life, with help towards their kids’ education or a deposit on a house, and then spend the kids’ inheritance enjoying their own lives. It is not about what you leave the kids, it is giving them a better start in life,” he says.

 

http://afr.com/p/per...RrAjUUu1HtJiIwM

[Jorma]

Lee, did your Mainstream Economists Do Not understand How Monetary Policy article get any traction?

 

http://wallstreetexa...is-transmitted/

 

Conincidently Doug Noland was there this week as well.

 

"That non-traditional monetary policy tools today work similarly to how traditional measures functioned historically is one of the great policy myths of this period. There remains this notion, again furthered by chairman Bernanke, that some quantity of quantitative easing (additional debt purchases/liquidity creation/Fed balance sheet growth) today would equate to, say, a 25 bps point cut in the Fed funds rate 25 years ago. Yet the entire monetary policy transfer mechanism has been radically altered, foremost by the transformation of system Credit expansion from primarily bank-loan driven to one dominated by marketable debt and myriad risk intermediation channels.

 

Traditionally, central bank stimulus would entail adding reserves into the banking system to effectively reduce the cost of funds, thereby incentivizing additional bank lending. Today, Federal Reserve monetary stimulus is transmitted primarily through incentivizing risk-taking and leveraging in the securities, derivatives and other risk asset markets. We now have about 20 years experience in support of the thesis that there exists a powerful interplay between activist central banking, marketable debt and financial speculation. Yet the Fed somehow seems to ensure that its analysis avoids addressing the associated risks of an ever-increasing Federal Reserve role in the pricing and trading dynamics of an ever-expanding quantity of securities, derivatives and market speculation.

 

The media continue with this focus on the timing of the Fed’s QE3 announcement. This now seems archaic."

 

http://www.prudentbe...ew?art_id=10702

 

Like clockwork in the 'liberal' Salon we get this mismash of conventional wisdom with extra points for not even understanding what losses Ben was talking about.

 

"–If interest rates should spike, the Fed—which like any bank holds liabilities to match its assets—could incur losses.

Re that last point, so far, the Fed’s asset holdings have earned them $200 billion which they’ve remitted to general revenue, as is the rule."

 

Apparantly he had no clue Ben was talking about balance sheet losses and so oddly thinks somehow their earned interest would fall if rates rise. Go figure.

 

I should add my personal opinion is that most people have no clue the Fed has a balance sheet and most of those who do believe it does not or should not matter. If nobody thinks it matters, does it?

[DrStool]

The Fed does not mark to market. It has never recorded "profits" from the massive 30 year bull market in bonds. Indeed it has purchased securities recently at above par. As these mature or get paid down it will suffer "losses" in the range of 5% of its portfolio of MBS and some of the longer term Treasuries. It will take about 8-10 years for the MBS to be paid down and 5-30 years for the longer term paper to mature. So you're looking at a 5% loss spread over 10-20 years. Assuming that the ENTIRE portfolio would suffer those losses that averages out to 25 to 50 bp a year.

 

Gee. I'm really scared. It's the end of the world. The sky is gonna fall and the Fed will go bankrupt.

 

People need to get real about this stuff.

[DrStool]

There are some who have exaggerated fears that the Fed might need to actually sell securities from its portfolio at a loss. I don't see that as a realistic possibility. Under what scenario would it need to do that. None that I can reasonably imagine. Maybe you can. Help me out here.

[K Wave Rider]

First play of the season and its taken to da house. Should be first of many. Haven't been this excited for the start of a season since the days of Thunder & Lightning.

 

[howard in nyc]

it's hawaii, dude. but they are stacked. my spaghetti charts say so.

[Trader Joe]

Starting to get that "left behind feeling"

 

Always the sign of a top

 

Hoping for a nice leg down -- thought we'd get it during the late summer

 

Missed that by a mile

 

I will be buying the F**k out of any significant dip between now and election

 

The bigger the dip

 

The more I'll go long

 

___________________

 

Just looking at some charts

 

WTF?

 

Market manipulation on the grandest of all scales

 

Happening right in front our faces everyday

 

As usual, a picture tells the story

 

 

 

 

[Jimi]

First play of the season and its taken to da house. Should be first of many. Haven't been this excited for the start of a season since the days of Thunder & Lightning.

 

[DrStool]