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Implications for the dollar and gold are huge.
excerpt: (Can you believe Easy Al said this, this weed?)
"Although the gold standard could hardly be portrayed as having produced a period of price tranquility, it was the case that the price level in 1929 was not much different, on net, from what it had been in 1800. But, in the two decades following the abandonment of the gold standard in 1933, the consumer price index in the United States nearly doubled. And, in the four decades after that, prices quintupled. Monetary policy, unleashed from the constraint of domestic gold convertibility, has allowed a persistent over issuance of money. As recently as a decade ago, central bankers, having witnessed more than a half-century of chronic inflation, appeared to confirm that a fiat currency was inherently subject to excess."
http://www.capitalst...t=ST&f=11&t=351
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You Guys Have Got To Read Sinclair Essay At Stool's Gold
Implications made in Greenspans Speech are HUGE
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MultiQuote#2
- Group: Guests
Posted 21 December 2002 - 07:39 PM
I agree completely. Sinclair is saying after the Fed jams and blows the dollar out of the water, at the 11th hour they will do a partial link to gold.
That is VERY significant. It means less and less Exchange Stabilization Fund propping of the dollar and protection of those banking gold shorts.
It means buy gold on any low volume pullback and expect the FEED to blow out over the top of its channel(sorry Doc). I'll be very surprised if so much as a single billion of expiring FEED does not get rolled over next week. When the FED slammed home a 9 billion 28 day REPO, they declared war on the shorts. To heck with the bond market. If we get another 9 billion 28 repo next week and have the rest rolled over, the stage managers might make a run at popping the shorts at Dow 9000+ by year-end. If the Fed were content to run out the clock they would have done a 7 Billion 28 day Repo last week. The Fed wants the stage managers gun for Dow 9000+ by year-end and will keep FEEDing on any dip. Hell...if we drop to Dow 8200 early next week, I wouldn't be surprised if they did a 12 Billion 28 day Repo. Think they care if they raise interest rates on the long-end? They could care less as the refinance wave is over regardless. We had the biggest post Thanksgiving shopping day ever at the market top and sucky retail sales ever since. It doesn't take a genius to realize retail sales follows every twist and turn of the Dow Jones, so no doubt the Fed knows that and will throw all caution to the wind to get the stage managers to pop Dow 9000.
That is VERY significant. It means less and less Exchange Stabilization Fund propping of the dollar and protection of those banking gold shorts.
It means buy gold on any low volume pullback and expect the FEED to blow out over the top of its channel(sorry Doc). I'll be very surprised if so much as a single billion of expiring FEED does not get rolled over next week. When the FED slammed home a 9 billion 28 day REPO, they declared war on the shorts. To heck with the bond market. If we get another 9 billion 28 repo next week and have the rest rolled over, the stage managers might make a run at popping the shorts at Dow 9000+ by year-end. If the Fed were content to run out the clock they would have done a 7 Billion 28 day Repo last week. The Fed wants the stage managers gun for Dow 9000+ by year-end and will keep FEEDing on any dip. Hell...if we drop to Dow 8200 early next week, I wouldn't be surprised if they did a 12 Billion 28 day Repo. Think they care if they raise interest rates on the long-end? They could care less as the refinance wave is over regardless. We had the biggest post Thanksgiving shopping day ever at the market top and sucky retail sales ever since. It doesn't take a genius to realize retail sales follows every twist and turn of the Dow Jones, so no doubt the Fed knows that and will throw all caution to the wind to get the stage managers to pop Dow 9000.
#3
wndysrf 
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Posted 21 December 2002 - 09:02 PM
Another benchmark to monitor during this madness.
The size x duration of the Repo Feeds.
So last week was $9 billion for 28 days? Thats a FEED FACTOR of 252. Probably good for a 252 point jam on the Dow Jokes.
So if Al Green wants Dow at 9000, then that's another 500 points, which means Al Green needs to squeeze out a $18 billion 28 day steamer, assuming all other daily and weekly expirations are rolled.
The size x duration of the Repo Feeds.
So last week was $9 billion for 28 days? Thats a FEED FACTOR of 252. Probably good for a 252 point jam on the Dow Jokes.
So if Al Green wants Dow at 9000, then that's another 500 points, which means Al Green needs to squeeze out a $18 billion 28 day steamer, assuming all other daily and weekly expirations are rolled.
PigMen Proprietary Trading Desk
The Weimar Run: Bullphoria!!!!
The Weimar Run: Bullphoria!!!!
#4
- Group: Guests
Posted 21 December 2002 - 10:22 PM
Another incoming pair of nines on the 28day repo will get your 18 billion. Okay...maybe not quite since they will be rolled over from fives but still it will be a force to be aware of.
If we only get to say Dow 8800-8850, you can bet the hedgies who gun for the shorts' stops will do the rest. The Dow closing above 9000 on December 31 will force every 27 year old fund manager to explain why he was only 80% invested in stocks. So count on some panic buying on the intitutional side too should we get some momentum.
So even one more 9 and a side 7day repo may suffice. Should we get that around christmas, that's a full week to ten days to utulize whatever methods are at the disposal of the powers that be.
Dow 9000. The Fed wants it. The treasury wants it. The fully-invested fund managers want it. The fund managers who aren't will have to chase it. The stops are there. The heavy december secondary offerings(trimtabs) will abate for two weeks before starting up again. The volume will be light. The Exchange Stabilization Fund will no doubt jam the dollar during the thin market. Odds of seeing Dow 9000+ in the next two weeks...not bad.
If we only get to say Dow 8800-8850, you can bet the hedgies who gun for the shorts' stops will do the rest. The Dow closing above 9000 on December 31 will force every 27 year old fund manager to explain why he was only 80% invested in stocks. So count on some panic buying on the intitutional side too should we get some momentum.
So even one more 9 and a side 7day repo may suffice. Should we get that around christmas, that's a full week to ten days to utulize whatever methods are at the disposal of the powers that be.
Dow 9000. The Fed wants it. The treasury wants it. The fully-invested fund managers want it. The fund managers who aren't will have to chase it. The stops are there. The heavy december secondary offerings(trimtabs) will abate for two weeks before starting up again. The volume will be light. The Exchange Stabilization Fund will no doubt jam the dollar during the thin market. Odds of seeing Dow 9000+ in the next two weeks...not bad.
#6
PileDriver
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Posted 21 December 2002 - 11:10 PM
if it gets there it'll last a few nanoseconds, the after effects will then be complete collapse of stocks. Intervention makes matters worse once the effect wears off. Sorta like drugs.
#7
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Posted 21 December 2002 - 11:27 PM
Yes that is true Piledriver, but that hasn't stopped the Fed from trying. This is short-term gratification society. Buy now, pay later. Don't fix the recession, paper over it with another bubble.
Besides, Greenspan is up for reappointment early next year. Before Bush goes to war with Iraq in February, a Dow 9000+ is desired. Sort of like blaring the trumpets before the appearance of the king. If Gman cares about his legacy, he'll appease the Bushies for now, else he won't be around to fix his mess. If it means 20Billion 28day repos, so be it. Else he'll be fired and replace Dole doing Viagra commercials.
I'm just waiting for the FEED to start doing coupon passes again. It's been awhile. For some reason repos are the preferred now.
Besides, Greenspan is up for reappointment early next year. Before Bush goes to war with Iraq in February, a Dow 9000+ is desired. Sort of like blaring the trumpets before the appearance of the king. If Gman cares about his legacy, he'll appease the Bushies for now, else he won't be around to fix his mess. If it means 20Billion 28day repos, so be it. Else he'll be fired and replace Dole doing Viagra commercials.
I'm just waiting for the FEED to start doing coupon passes again. It's been awhile. For some reason repos are the preferred now.
#8
DrStool
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Posted 22 December 2002 - 12:20 AM
Talk is talk. Facts are facts. Growing Fed holdings at 10% a year has left stock prices 40% lower. That's a fact.
Furthermore, massive Feed growth has not had the commensurate multiplier effect in the M's. They can't even get M1 up at all. M2, M3 and MZM have slowed dramatically in the past few weeks while the Feed has bulged at a 29% annual rate.
As long term rates have stabilized at historically low rates, mortgage loan demand has been shrinking. The mortgage bubble is beginning to implode because of weak demand. That's why money growth has stalled. Putting more Feed into the system will stimulate nothing if there is no demand. And the Gang of 22 will not make a massive bet on stocks if they do not know for sure that they will be able to lay it off. They will put it right back into short term paper.
If the Fed increases the rate of Feed expansion, it will not help, because long term interest rates will begin to move up, completely shutting down the mortgage market, causing the credit bubble to collapse. They know that. They know they can't risk that by appearing to have a reckless attitude toward inflation.
The Fed has to walk a very fine line to simply avoid that collapse. Recent Feed growth is seasonal, not structural or strategic. My guess is that they will stay the course between 8% and 10% growth, and it will not make a damn bit of difference insofar as affecting market trends.
So let's end all the hysterical talk and deal with facts, ok? The market will stay in this trading range until the cycles are in gear for the big dump.
Furthermore, massive Feed growth has not had the commensurate multiplier effect in the M's. They can't even get M1 up at all. M2, M3 and MZM have slowed dramatically in the past few weeks while the Feed has bulged at a 29% annual rate.
As long term rates have stabilized at historically low rates, mortgage loan demand has been shrinking. The mortgage bubble is beginning to implode because of weak demand. That's why money growth has stalled. Putting more Feed into the system will stimulate nothing if there is no demand. And the Gang of 22 will not make a massive bet on stocks if they do not know for sure that they will be able to lay it off. They will put it right back into short term paper.
If the Fed increases the rate of Feed expansion, it will not help, because long term interest rates will begin to move up, completely shutting down the mortgage market, causing the credit bubble to collapse. They know that. They know they can't risk that by appearing to have a reckless attitude toward inflation.
The Fed has to walk a very fine line to simply avoid that collapse. Recent Feed growth is seasonal, not structural or strategic. My guess is that they will stay the course between 8% and 10% growth, and it will not make a damn bit of difference insofar as affecting market trends.
So let's end all the hysterical talk and deal with facts, ok? The market will stay in this trading range until the cycles are in gear for the big dump.
#9 Guest_BEARDRECH_*
Posted 22 December 2002 - 12:40 AM
DrStool, on Dec 21 2002, 11:20 PM, said:
Talk is talk. Facts are facts. Growing Fed holdings at 10% a year has left stock prices 40% lower. That's a fact.
Furthermore, massive Feed growth has not had the commensurate multiplier effect in the M's. They can't even get M1 up at all. M2, M3 and MZM have slowed dramatically in the past few weeks while the Feed has bulged at a 29% annual rate. (quote of dok)
Furthermore, massive Feed growth has not had the commensurate multiplier effect in the M's. They can't even get M1 up at all. M2, M3 and MZM have slowed dramatically in the past few weeks while the Feed has bulged at a 29% annual rate. (quote of dok)
dok i read somewhere that "Debt rises exponentially while income rises arithmetically"--
Also Ludwig von Mises,the great progenitor of austrian economics,was offered the job of CHIEF ECONOMIST ,at the Bank Kredit Anstalt just before the collapse and told them to take their job and shove it;unlike that fartocrat greencrap--shortly thereafter he left for the States--You know the rest of the story--
Beardrech---
why am is o excited ??wouldn/t you be if someone put paperika in your jockstrap??
#10
Hypertiger
- Assistant Professor of Stock Proctology
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Posted 22 December 2002 - 01:03 AM
Listen to Doc he knows the score...
"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...
#11
- Group: Guests
Posted 22 December 2002 - 12:52 PM
The refi market is over. Unlike 2001 and part of 2002, a 6.50% mortgage rate with zero points won't do squat. The Fed has milked all the refi potential out there. If the mortgage market is dead, what good does it do to keep rates here at the expense of the stock market? If low rates don't help anymore, why keep them low?
The fact is last week was the biggest 28 day repo in 2.5 years, maybe longer. http://app.ny.frb.or...storicalmkt.cfm I wouldn't ignore that if I was trading short-term. If you are shorting shares it doesn't matter as much since if you spike briefly above Dow 9000 you will crash afterwards, but if you have or about to buy put options, whether you buy puts in the Dow 8000s or the low 9000s makes a big difference. If the Fed does another 28 day repo of 9 Billion next week, I'm definitely waiting for the low 9000s on the Dow to start buying puts, unless Ebay gets to the low to mid 70s at which case I must buy puts on the pig no matter what. Long-term it doesn't matter but for short-term trading it can make all the difference in the world.
Should we break Dow 9000, I don't think it will be any trouble for the stage managers to find enough people to distribute to. There is a big enough "higher high confirmation is nirvana" crowd out there to willingly hold the bag.
The fact is last week was the biggest 28 day repo in 2.5 years, maybe longer. http://app.ny.frb.or...storicalmkt.cfm I wouldn't ignore that if I was trading short-term. If you are shorting shares it doesn't matter as much since if you spike briefly above Dow 9000 you will crash afterwards, but if you have or about to buy put options, whether you buy puts in the Dow 8000s or the low 9000s makes a big difference. If the Fed does another 28 day repo of 9 Billion next week, I'm definitely waiting for the low 9000s on the Dow to start buying puts, unless Ebay gets to the low to mid 70s at which case I must buy puts on the pig no matter what. Long-term it doesn't matter but for short-term trading it can make all the difference in the world.
Should we break Dow 9000, I don't think it will be any trouble for the stage managers to find enough people to distribute to. There is a big enough "higher high confirmation is nirvana" crowd out there to willingly hold the bag.
#12
- Group: Guests
Posted 22 December 2002 - 01:08 PM
This is not a debate about any long-term ramifications. The market and economy are toast either way. FEED won't succeed in stimulating the Ms, that is not the intent. They know there will be no trickle-down effect. The intent is to try keep the market as high as possible short-term to bring back some semblance of investor confidence.
What I'm saying is if they're doing this, why not wait at least a week or two to see if they succeed short-term? Take for example the +ZDJXB, the DJX 80 December 2003 put. Should the FEED succeed in getting the Dow to 9200 in a week or two, that option might get 50% cheaper to buy(aided by volatility contraction...guessing the VIX would be back in the mid-high 20s if that happened). Day you see Dow 6000 sometime this year. A 3-4 bucks per contract that becomes a 6-1 shot, up from around 3-1 now.
What I'm saying is if they're doing this, why not wait at least a week or two to see if they succeed short-term? Take for example the +ZDJXB, the DJX 80 December 2003 put. Should the FEED succeed in getting the Dow to 9200 in a week or two, that option might get 50% cheaper to buy(aided by volatility contraction...guessing the VIX would be back in the mid-high 20s if that happened). Day you see Dow 6000 sometime this year. A 3-4 bucks per contract that becomes a 6-1 shot, up from around 3-1 now.
#13
BAREister
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Posted 22 December 2002 - 01:11 PM
absolutely correct, and well "put", Doc.
was tryin' to say the same over on that thread of Ike's.
there must be considerable quiet desperation in Washington, Tokyo, London, Paris and FrankFURt ™
HRFF hASS been arguin' FUR yearz and yearz that deflation hASS the "UP"per hand in the struggle w inflation/reflation
The whole world has been counting on reflating its way out.
But they FURgot about Mr Murphy and that principle of Robert Burns.
was tryin' to say the same over on that thread of Ike's.
there must be considerable quiet desperation in Washington, Tokyo, London, Paris and FrankFURt ™
HRFF hASS been arguin' FUR yearz and yearz that deflation hASS the "UP"per hand in the struggle w inflation/reflation
The whole world has been counting on reflating its way out.
But they FURgot about Mr Murphy and that principle of Robert Burns.
"The sphinx set riddles for people which they could not solve and the sphinx devoured them." Russian poet Ilia Ehrenberg reflecting years later upon the debacle of the Bolshevik Revolution and civil war
"In any case, experience shows people are unlikely to change their ways without a cataclysm of existential proportions" Meinhard Meigel, German economist and demography expert on his prophecy of a Wagnerian abyss of social and economic chaos
"We believe that here is no easy way out of this mess, and that the chance of a benign outcome, while hopefully possible, is quite low." Comstock Partners 3-17-2005
"Not without a shudder may the human hand reach into the mysterious urn of destiny." Junk email promoting the sale of Valium, Viagra, Soma and Cialis. Of course, we AMERICANS need not WORRY about such CLAPTRAP!!!
"The trouble about myths, or lies, is that those who foster them are stuck with them." Edward Crankshaw
"I don't buy the idea that a crash will come without warning. There are always warnings. All crashes have certain common technical preconditions." Doc (snorjt)
"YOU look IMPORTANT. Are you important, or just....WEIRD?"
"Bob I am" at a political gathering, to HRFF, 9-29-04
"Are YOU C.I.A.???"
"No, I'm not "CIA"."
"Well, you sure LOOK LIKE you're C.I.A.!!!"
Lead singer of the rock band KISS to HRFF at a luggage carousel at SeaTac airport circa 1996
"Unlike you, I use words people can understand." Doc
"America at the moment, with its faith-based currency, faith-based economy and faith-based government, might be a heaven for those who love faith, but it's a hell for those of us that respect evidence." The Daily (W?)Reckoning, circa 9-17-04
"What should be clear at this point is that even huge fiscal stimulus and unprecedented financial excess are incapable of fostering a sound and self-sustaining economic expansion. The paramount issue, today and going forward, is the deeply maladjusted U.S. economy and its increasing unresponsiveness to even enormous yet misdirected financial stimulus. Both the Financial Sphere and Economic Sphere are severely maladjusted." Doug Noland's Credit Bubble Bulletin, Aug 24 '04
"U.S. dollar purchasing power relies almost entirely on the difference between interest rates in Japan and the higher rates in the United States." Warren Pollock, Prudent Bear essay circa 9-04
"What about your replacements? the Children. What do we tell them when the whole thing caves in?" HyperTiger
"In any case, experience shows people are unlikely to change their ways without a cataclysm of existential proportions" Meinhard Meigel, German economist and demography expert on his prophecy of a Wagnerian abyss of social and economic chaos
"We believe that here is no easy way out of this mess, and that the chance of a benign outcome, while hopefully possible, is quite low." Comstock Partners 3-17-2005
"Not without a shudder may the human hand reach into the mysterious urn of destiny." Junk email promoting the sale of Valium, Viagra, Soma and Cialis. Of course, we AMERICANS need not WORRY about such CLAPTRAP!!!
"The trouble about myths, or lies, is that those who foster them are stuck with them." Edward Crankshaw
"I don't buy the idea that a crash will come without warning. There are always warnings. All crashes have certain common technical preconditions." Doc (snorjt)
"YOU look IMPORTANT. Are you important, or just....WEIRD?"
"Bob I am" at a political gathering, to HRFF, 9-29-04
"Are YOU C.I.A.???"
"No, I'm not "CIA"."
"Well, you sure LOOK LIKE you're C.I.A.!!!"
Lead singer of the rock band KISS to HRFF at a luggage carousel at SeaTac airport circa 1996
"Unlike you, I use words people can understand." Doc
"America at the moment, with its faith-based currency, faith-based economy and faith-based government, might be a heaven for those who love faith, but it's a hell for those of us that respect evidence." The Daily (W?)Reckoning, circa 9-17-04
"What should be clear at this point is that even huge fiscal stimulus and unprecedented financial excess are incapable of fostering a sound and self-sustaining economic expansion. The paramount issue, today and going forward, is the deeply maladjusted U.S. economy and its increasing unresponsiveness to even enormous yet misdirected financial stimulus. Both the Financial Sphere and Economic Sphere are severely maladjusted." Doug Noland's Credit Bubble Bulletin, Aug 24 '04
"U.S. dollar purchasing power relies almost entirely on the difference between interest rates in Japan and the higher rates in the United States." Warren Pollock, Prudent Bear essay circa 9-04
"What about your replacements? the Children. What do we tell them when the whole thing caves in?" HyperTiger
#14
DrStool
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Posted 22 December 2002 - 01:36 PM
They could bounce, sure, and wait and see is certainly a good idea here, but I don't see a technical rationale for 9000, at least not yet.
Massive pumping the week before Christmas may be related to the seasonal needs of the banking system over the holidays rather than something more diabolical. The other point is that the Gang has shown no inclination whatsover to use these Feed jams to jam stocks for a long time. The best solution is to follow the chart signals rather than anticipate the reaction of the Rube Goldberg contraption that is the Fed's control levers over the markets.
Massive pumping the week before Christmas may be related to the seasonal needs of the banking system over the holidays rather than something more diabolical. The other point is that the Gang has shown no inclination whatsover to use these Feed jams to jam stocks for a long time. The best solution is to follow the chart signals rather than anticipate the reaction of the Rube Goldberg contraption that is the Fed's control levers over the markets.
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