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I But nothing has led to an intuitive flash that we will have a hyperinflation. Seems to me we already had it.

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Thanks for your thoughts.

WRT inflation, if we have already had it, this commod cycle would be way out of the ordinary because of the brevity of the upside. I think that with all of this cash floating around that the Fed will blow another bubble. Loose money at cheap rates usually squirts out somewhere....commodes, carry trade the other way (like Japan in reverse), you name it.

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Doc, weren't you the one who turned like 9K into something like 750K trading options for a firm?  I remember the entire story but can't remember if it was, indeed, you.

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It wasn't him. Doc hates options and can't trade his own account worth a lick. :) Great cycle guy though.

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It wasn't him. Doc hates options and can't trade his own account worth a lick.? :) Great cycle guy though.

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I think you might be wrong. I think that may be why he hates options! He had worked at an options house. I think after he made that run, things didn't go so well. Sooner or later, options will bite you. I don't trade them much any more.

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You're absolutely right.  In fact, one state already tried this (NJ, I think?) by placing a moratorium on foreclosures, and it played out exactly as you envision.  New loans vanished.

 

I suspect this may just be one of the steps that ultimately leads to mortgages issued directly from the government, though.  :ph34r:

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Welcome to the USSA

 

 

img.27370_t.jpg

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not genetic... it is a choice..people often chose not to see what they do not want to see... my father told stories about liberating camps in ww2... he said all the towns people claimed to the point of tears that they did not know what was happening just down the road, he said by any commen sense standard they would have had to know, but they turned a blind eye... sad but true.

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Here's an interesting explanation. I've seen this referenced to explain religious beliefs, but it works just as well with any mistaken belief set:

 

Why Bad Beliefs Don't Die

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For those who are unaware, I was a commercial RE appraiser and RE market anal cyst for 15 years. But before that I worked as a stock broker for 5 years, including 4 in the institutional end, briefly as a trader with an options house, but mostly in institutional sales. Before that, I had an intense interest in the markets since I was a kid. I have followed the markets closely pretty much every day since the late 1960s.

 

We need to disabuse ourselves of this silly notion that pigmen benefit from bear markets. The vast majority do not. Pigmen firms generally only fail in bear markets. As I have said many times, they are the ones now on the floor bleeding out. And believe me, they ain't that bright. They are bigger herd runners than the public at large. Hubris tends to blind people to reality and Wall Streeters have more than enough hubris to go around. Remember, the bigger they come, the harder they fall. This market has been an unmitigated disaster of the highest order for the Wall Street dealer community. It will take a generation or more for a complete recovery.

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buffet comes to mind for some reason

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FIRST DEFLATION THEN INFLATION

 

The credit collapse leads to deflation which leads to more credit collapse.

 

The only way out is for the government to inflate.

 

But they will only do this as a last resort.

 

We are not there yet.

 

But we will get there eventually.

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The thing that terrifies me more is that all this worthless debt is now being replaced and/or backstopped with US Government paper. So we now have close to a trillion in Treasuries backed by... NOTHING,, no highways, no tanks and warships, no educated babies who will grow up to become taxpayers, and little chance of recovery upon maturity or sale of the asset. It will have to be paid off by future government revenue streams that will be inadequate to meet debt service. We cannot pay this bill, and it will only get worse as the economy weakens. Every rescue package, every stimulus plan, every government program that adds to the Federal Government's debt load will only make the situation worse and worse and worse.

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just for the fun of it, do greenbacks become worthless in a default with all of that bad debt going to money heaven? :unsure:

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Thanks for your thoughts.

WRT inflation, if we have already had it, this commod cycle would be way out of the ordinary because of the brevity of the upside. I think that with all of this cash floating around that the Fed will blow another bubble. Loose money at cheap rates usually squirts out somewhere....commodes, carry trade the other way (like Japan in reverse), you name it.

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interesting point. Would seem that with the financial sector downsizing the bubble would appear outside the financial sector and also be more compressed. Oh well if you make a sighting please let us know!!

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Doc, weren't you the one who turned like 9K into something like 750K trading options for a firm?  I remember the entire story but can't remember if it was, indeed, you.

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My partner, using a system I developed. They ran 10k to over 900k in a couple months in the US trading championship in the SP futures. Lost it all when they ignored a whipsaw signal. Every penny.

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More in the UFB category :angry:

 

18 October 2008

Six Wall Street Banks to Distribute 10% of the $700 Bn Rescue as Pay and Bonuses for This Year's Performance

 

 

Shameless greed seems to be a virtue and a way of life on Wall Street

 

The Guardian

Wall Street banks in $70bn staff payout

Pay and bonus deals equivalent to 10% of US government bail-out package

By Simon Bowers

Saturday October 18 2008

 

Financial workers at Wall Street's top banks are to receive pay deals worth more than $70bn (?40bn), a substantial proportion of which is expected to be paid in discretionary bonuses, for their work so far this year - despite plunging the global financial system into its worst crisis since the 1929 stock market crash, the Guardian has learned.

 

http://jessescrossroadscafe.blogspot.com/2...-10-of-700.html

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Well, in many cases the salary on the Wall Street is nominal, like $100-$150k. The rest is bonus. It's part of the pay. You can't live for $150k in New York, that is simply impossible.

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