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The Argentina Model


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A different commentary from Briefing. Emphasis added:

 

3:43PM Bond Market Summary : Treasuries headed into the session close pushing for new highs, with the ten-years sitting near the 4.084% yield and prices likely to continue higher over the weekend. The Asian banks are not going anywhere and any attempts to run down the dollar will be met with serious resistance. The result of more dollar buying will only cushion the treasury inflows. The economic data is being looked at from many angles, with some questioning its validity. The "pieces of the puzzle have to fit together," offered one pundit, noting that all the data traders rely on are flawed in a number of ways. Others are still stunned and expect that the Federal Reserve will just dismantle, retire, and never touch rates again. Others say that the numbers seem to reflect a recovery of a different dimension, the "image we had of recovery is a whole different thing than what we thought." The week ahead offers additional information that will continue to illuminate and humiliate, including PPI and CPI. Currently the tens are +1 12/32nds yielding 4.082%; twos are +11/32nds yielding 1.648%; threes are +18/32nds yielding 2.089%; fives are +1 00/32nds yielding 3.0404%: thirties are +1 30/32nds yielding 4.958%.
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Matrix Glitch.

 

You know, I expected silver to exceed $7 this year, um, but not in the first two weeks of January.

 

:huh: :blink:

 

:grin: :grin: :grin:

 

Dumbass statist pukes. Condi's doing reconnaissance in Argentina to know how authorities there dealt with the public consequences of a collapsing currency and soaring poverty and unemployment: she doesn't give a rat's dropping about what Argentina is doing now to placate its masters at the IMF.

 

She is, after all, not a staff member of the Treasury, but head of the National Security Council.

 

Condi: "OK. So just so I've got this straight. Right after you closed the banks and forbid anyone from withdrawing their savings, you ringed the presidential palace with 10,000 troops, placed snipers on every building guarding the approaches, put water-cannon firing humvees at every major intersection within a two-mile radius perimeter, and then complemented this defense-in-depth with an offensive display by having 20,000 strong fully-equipped troops march through the streets of the capital. Gotchya."

 

There's eventually going to be a world of hurt for those who inhabit the dollar economy. During the boom times that followed currency reform of the early 1990s, Argenitina was able endlessly to access foreign credit to maintain a standard of living far, far in excess of what its domestic economy was able to furnish. For a while, this made all who participated comfortable and happy. Then it became clear for all to see that the external credit burden was far too excessive to bear, and the house of credit cards collapsed. The Argentine middle class had an alternative in the run up to collapse: shift whatever wealth they possessed out of the peso.

 

Americans have a similar alternative: shift out of the dollar.

 

There's still a bit of time:

 

http://tinyurl.com/34rw6

 

I'm no technician, but my query about what lies beneath 80 on the dollar index confirms my own suspicions: we're within a leugy-distance of a full blown dollar crisis. One can hope this all blows over with a hard bounce off of 80, but hope is not a strategy.

 

Very tricky months ahead, I suspect, as we slice through 80 like a hot knife through butter.

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Well, I got this part right...from Wednesday:

 

Posted on: Jan 7 2004, 04:19 PM

 

If I'm reading today properly, my guess is that the employment report due friday before the open is going to be worse than expected. Ten year yields will collapse, home builders and mortgage lenders will ramp.

 

HOV is at support and NCEN was whip sawed and ramped today (glad I covered yesterday) and waiting at the starting gate for the gap and run on Friday morning.

 

 

Posted on: Jan 7 2004, 07:31 PM

 

Of course the number will be whatever they have predetermined it to be, based on scientific modeling via a software program that predetermines the resulting impacts on the stock and bond markets in the subsequent hours. This program also makes suggestions on which counter-trend headlines need to follow it throughout the trading day (Lifting the terror alert?)

 

 

Posted on: Jan 8 2004, 05:51 PM

 

The unemployement numbers tomorrow necessarily need to come in worse than expected. If they don't, the ten year treasury yields (and mortgage ratges) will go up and the housing stocks will go down and the whole ball of yarn will come unwound.

 

Housing stocks, mortgage lenders and ARM holders must be stick saved at all costs tomorrow morning...therefore they will be.

 

 

 

But the rest of the script didn't play out...because the numbers made no sense. The entire financial universe scratched their collective heads simultaneously and said:

 

"Somebody's been lying! Either these numbers are a lie or all the preceeding numbers are a lie...or perhaps the entire recovery story is a lie."

 

You can't have lower job growth and lower unemployment.

You can't have bonds and stocks both go up.

 

So Doc, repeat after me...

 

"The whole damn thing is manipulated. Nothing is as it appears. None of the numbers mean anything.

 

How could it be that I knew the jobs numbers today would suck?

 

Because they floated out a soft jobs number from Chicago a couple days ago as a trial balloon to see what the reaction would be today. It was so obvious.

 

News is not to be ignored. Today's action was nowhere to be found on a chart.

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Mark once quoted extensively from a book about the LTCM (Long Term Capital Management) debacle in 1998. Easy Al stepped in, because LTCM's vast leveraged bets were moving against them. Liquidating those bad bets overnight could have 'seized up' the markets, because there just weren't enough bids to unload into.

 

Six years later, Al Greenstool is the world's largest hedge fund operator. He's running a $1 trillion 'LTCM custody account' pool. He's put his clients -- Asian central banks, mostly -- into massive leveraged-long bets on T-bones and the dollar.

 

Meanwhile, Al -- like many of your cannier boiler-room operators -- is an insider who's doing constant secondary offerings of dollars himself, while his partner and sidekick Snowman does the same with the T-bones. What a scam! You double-dippers crack me up!

 

Just one little fly in the ointment -- Mike Milken, are you with me here? -- assume a 20% haircut on the dollar's drop, and a potential 10% on the bonds, and you're looking at $300 billion of losses. That's 30% of Japan's annual budget, to highlight one of Al's LTCM hedge fund clients. No client has that kind of capital on hand, in cash.

 

If the nervous clients bolt, Al's hedge fund cannot possibly liquidate without seizing up the markets. But ... who's gonna rescue the rescuers?

 

:o

What do you suppose Al did with the LTCM software program that those wizzards wrote to game the markets?

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I would love to see Jim Grant on Lose Rookuser's show.

Along with Fleck, Tice, Gross, Russell,Templeton

and Buffett. Prechter can fetch drinks and clear

the glassware.

Call it 'Reality's a Bitch'

I'll be Andrew Jackson-sittin' in the corner holding

my moonshine jug on one knee, shotgun on the

other, muttering about 'bankers' 'n 'fiat currency'.

 

Seriously, NYSE A/D flat. Gives a straw for Dumb

'N Dumber to grasp tonight.Must be all the buying

by KurlyMoes' 'entrepreneurs' and 'consultants' in

between staring the basement(er,'office')walls.

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