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Infarction Point (12/11/02)


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#1 DrStool

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Posted 11 December 2002 - 07:56 PM

Infarction Point (12/11/02) These next couple of days are what they call an infarction point. No matter what happens, it's gonna give somebody a heart attack.
AND, it's MoGauge day! Doc looks at the all important future liquidity measure. If you want to know what the market is going to do, you have to know who much Mo(nay) is in the pipa linay. The MoGauge will tell you at a glance. The MoGauge is based on Doug Noland's theory of GSE credit and money creation. Guess aht. It works!

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#2 Jorma

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Posted 11 December 2002 - 08:25 PM

One mega backasswards way of looking at things now is that in order to get the mortgage machine back up to speed they have to let stocks fall, send money fleeing into bonds to get a new low, then wait for the old cycle to play out, one more time.

There doesn't have to be a they. The economy looks stinko. What better reason to make a rush to new record low rates. What better reason for Mr. Market have a little faining spell. There is a lot more money to be made if long rates sink 20% in a few weeks than if stocks go up 10%, and it takes a lot less cash to pull it off and it has almost immediate impact on what they call the 'economy', which is borrowing, ie. creating money.

If the stock market and the bond market is an either/or situation as far as one rising or the other, and you were Al, which one would you pick?

One of the few things in the world that would suprise me is if both markets rallied together, now, or in the near future. If they can then everything I know is wrong. And I am not going to be making any money either.

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#3 mjkst27

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Posted 11 December 2002 - 08:54 PM

Remember "Count Da Money" from History of the World, Part 1?

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Posted 11 December 2002 - 09:03 PM

Remember "Count Da Money" from History of the World, Part 1?

Or, for that matter, Dot Matrix from Spaceballs.

#5 DogBoy

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Posted 11 December 2002 - 09:54 PM

Before this thing is over Uncle Al will flood the world with dollars.

A 10% feed growth rate will seem miniscule.

The obvious message going out is that the economy will be inflated to whatever extent needed to finance the mega-deficits that da gubmint is racking up.

A friend of mine asked me what would happen to the markets is (God forbid) a nuke was set off in a large city.

My instant reaction was that it would definitely NOT be Bearish for stocks.

AG would do what he really wants to do and turn on the spigots full blast.

Maybe 50% monetary growth and .25% rates ? How's that sound for a great little experiment ?

Like Dr Mengela, AG's life's wish is to play out his bizarre experiments on the "real world".

Like a little boy torturing a caged gopher AG would like to see how much pain the gopher can endure until it croaks.

Oh what fun it would be for AG !!!

AG would love to see what would happen if you flooded the economy with money.

He'd bail out every airline, every insurance company, and everything else.

If there is another large terror attack my days of buying PUTz will be at a end.

My opinion is that we'd get a sharp spike down and an even sharper spike up and probably a multi-year BULLz market. It could possibly even be the end of the cyclical Bear.

You'd have to inflation adjust the stock charts to make any sense out of them.

Doc, maybe you can suggest that Metastock gear up their systems for inflation adjusted stock charts ? You'll need 'em to figure the market out.

Regular old charts won't make any sense anymore.

As for Gold though I see nothing but massive fortunes and gleeming golden rays in the future.

Ultimately Gold will be the only currency left aside form barter.

Nothing would make me sell ANY Gold under any circumstances.

PUTz however I'd dump in a hearbeat on another terror attack like 9/11 or greater.

My theory (and I think it's a sound one) is that the ONLY reason AG doesn't do the kind of experimentin' he'd like to do (thatis flood the sucker with dough) is the damage it would do to markets.

If he gets an excuse to DO IT then watch out Bearz.

It'll be like post 9/11 TIMES 10.

A time of real heartache for stock Bears.

#6 Jorma

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Posted 11 December 2002 - 09:57 PM

Remember "Count Da Money" from History of the World, Part 1?

Or, for that matter, Dot Matrix from Spaceballs.

I don't recall them but I do recall Principal Poop, principal of More Science High. Possibly Doc's alma mater.

War is the last great hope of the incompetent to order the unwilling to attempt the impossible.
William Eastlake 'The Bamboo Bed'

Change you can suspend your disbelief in.
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The Treasury

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#7 wienerdog

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Posted 12 December 2002 - 02:36 AM

Why do people believe The Fed is likely to flood the market with currency, EVER? The Fed is owned by member banks, the banks are the CREDITORS in the big debt-crisis looming over the economy. What bank want's its books inflated away to nothing. Just don't make no sense.

#8 Hypertiger

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Posted 12 December 2002 - 02:55 AM

If people could handle wheelbarrow pay days, ya I think it could work for a few months. But the way deflation works is that the more FEED the quicker the collapse. The only way to stop the spiral is to put the whole world into bankrupcy protection, which is not going to happen untill the world economy is reduced to ashes. Then it is too late to save anything.
"We are completely dependant on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money (at the request of the consumer) we are prosperous; if not, we starve. We are absolutely without a permanent money system.... It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon." --Robert H. Hemphill, Atlanta Federal Reserve Bank,1938...

#9 Guest_AssMaster_*

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Posted 12 December 2002 - 02:57 AM

What market makers do in the short term by running stocks up and down, bankers do over the long term by inflating and deflating - except that instead of coughing up your shares at the low just before they run them up to the sky, you have to cough up your house and live on the street and when the economy recovers and inflation comes back they sell it to someone else for a tidy profit.

But of course you are right in one sense, both market makers and banks need buyers and a market.

#10 DrStool

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Posted 12 December 2002 - 08:29 AM

One simple fact, alluded to by Jorma. Interest rates fall because of lack of loan demand. That would be the deflation scenario.

DogBoy, if inflation comes back as you depict, God knows how high interest rates would go. If interest rates have a positive real ROR, stock prices would collapse.

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#11 Hypertiger

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Posted 12 December 2002 - 03:37 PM

Less feed = die slower

More feed = die quicker

Interest rates

When we reach 0.1% people will say this is just like Japan, Psychology goes poof and the market/economy implodes... slow death, but way quicker than Japan.

When the intrest rates rise borrowing decreases and the rate of Debt deflation quickens leading to implosion... Fast death, Blink of the eye.

Employment is what is needed. 300,000 people a week are claiming!!! maybe 70% find jobs for less than what they were making within 3 months. the other 30% are finished which vaporises close to 4 billion dollars of economic activity per week from the US economy. This problem will compound expoenentially if it is not stopped next year. Also only 60% of the "Unemployed" can get benefits, so it is most likely closer to 500,000 people a week "droping out of the economy". Once unemployment runs out the unemployed are not counted... The real unemployment rate of the US is closer to 11%.

How many jobs will be created by proping up Wall Street? Answer: None.

How many jobs will be created by the Federal and state governments next year? Answer: None.

How many jobs will be created by the economy? Answer: Not enough/none.

It's over... Checkmate. At this point military actions to loot countries can't even be conducted "fast" enough to stop debt deflation.

The only thing that will stop debt deflation is "Bank"ruptcy.
"We are completely dependant on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money (at the request of the consumer) we are prosperous; if not, we starve. We are absolutely without a permanent money system.... It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon." --Robert H. Hemphill, Atlanta Federal Reserve Bank,1938...





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