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The Exact Situation I Had Forecast Is Here, and It's Grave 2/26/21


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9 minutes ago, potatohead said:

Jesus, I am going to have to put these on to follow that chart....

Red/Cyan - Paper 3D glasseshttps://cdn.shopify.com/s/files/1/0864/0220/products/WhiteFrame_Red-Cyan3D_937px_large_wide_test_2b292ff0-8e64-4ba3-9d71-66d3ebe03d3d_600x600.jpg?v=1565309433

They just won't color between the lines in this market. Extremely disorderly.  It's symptomatic of the extreme liquidity shortage. 

 

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12 minutes ago, DrStool said:

Seriously trading seems terribly illiquid. All that cash from the Treasury hasn't helped much.  Big settlement coming Monday could be bigly disruptive. 

Yesterdays 2 minute accident in the 10yr is the only solid show of illiquidty I know of

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Noland finally got to write an I told you so article.  It feels like a case can be made that the credit cycle has turned. It's about time as they have been falling for almost 39 years. Well if you believe in economic cycles but many don't because they are always so choppy.  The 60 year credit cycle is a popular credit cycle benchmark among we cycle believers. The idea that rates could trend up for10 or 30 years now is simply outside the imagination of most living people.  

I've been willing to concede that rates may not trend up for a very long time, till that big asteroid hits for instance, on the condition that there is no longer a market in the supply and demand for credit. If borrowers can always borrow more to pay off old loans so default risk disappears then you have a credit system but it isn't a market. Truth be told nobody wants a credit market. However everyone wants more money. Everyone is an inflationist. They want Mars bases, inflating assets and some want to help poor people have some basic needs given to them. I hate Mars bases and am fine with giving the unable and even unwilling some basics but I'm aware that money is created by credit/debt.  Which goes to my comment a few days ago on how Treasury debt held by the Fed isn't really debt if it never has to be paid back. Beyond the lag between the Treasury paying off the principal and then borrowing more which a few days or weeks later ends up in the Feds account. That appears to be a market, it uses market mechanisms, but it's a Potemkin Market. The debt is debt in name only. A polite fiction.

Even if most would willingly concede that the debt market isn't a market they would still insist it's Capitalism. Where capital is unlimited. The money seemingly falling from heaven allowing people to do stuff. A lot of it good stuff like taking care of themselves and their families and work together to build nice things and have a purpose in life, beyond building the throw away wasteful junk.

I guess a world where money is essentially unlimited shouldn't be called capitalism it should be called moneyism. For 100k years since our bipedal cousins got words and became humans shortage and need was the fate of most. Now bankers have convinced everyone the problem for 100K years was simply the mistake of not having enough money. I'm skeptical. For instance at this juncture 1/3 of Americans would like to kill another third of Americans. 

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