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Karl Denninger on Kudlow tonight


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#16 DrStool

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Posted 17 July 2009 - 10:25 PM

Crisis Brewing- Professional Edition Fed Report


by Lee Adler, Friday, July 17, 2009, in Money and The Fed, Professional Edition | Permalink |Comments (0) Edit The Fed bought $9 billion worth of Treasuries and $1.5 billion of GSE paper, and it settled on a whopping $64.5 billion of forward MBS purchase contracts. All of this was just in time to help absorb $73 billion in new Treasury supply settling this week.

The FCBs even chipped in. While they dumped some GSE paper, and that’s not a plus, they bought twice as many Treasuries. So it’s no surprise that the stock market rallied with all that cash forced into the system. What’s surprising, and ominous, is that it didn’t help the Treasury market. Click here to download complete report in pdf format (Professional Edition Subscribers). Try the Professional Edition risk free for thirty days. If, within that time, you don’t find the information useful, I will give you a full refund. It’s that simple. Click here for more information.

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#17 DrStool

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Posted 17 July 2009 - 10:27 PM



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#18 DrStool

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Posted 17 July 2009 - 10:47 PM

I can't believe these guys are arguing about that stuff. Completely irrelevant. How can you not hate these bastards (TV talking bulls). Thank god I don't have to watch that crap.

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#19 DrStool

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Posted 17 July 2009 - 10:48 PM

Kudlow, seems not only on drugs, but almost subhuman.

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#20 phatbubble

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Posted 17 July 2009 - 11:21 PM

Keep in mind that whenever they put a big bad bear on, it's usually a bullish sign.

Yeah. Unfortunately Denninger looked like a sitting duck, especially with that asinine haircut.

IMHO TPTB are working overtime to paint things back into shape. Roubini and Whitney both being quoted out of context as rally triggers was an amazing stroke of timing genius.
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Quite right. Interesting. That was quicker than the others.

#21 Jimi

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Posted 17 July 2009 - 11:53 PM

Kudlow, seems not only on drugs, but almost subhuman.

:huh:

"Almost"?

:huh:

WTF do you mean, "almost"? Red Cross won't draw blood from him.

I've had cause to deride a Denniger rant at times in recent years, but I think he did well here and hope he gets on again.
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#22 nymphcaster

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Posted 18 July 2009 - 12:18 AM

Major goof re coal short term (out of market for rise in stock I sold after doing anaylsis). Nonetheless I can't buy again because of concerns. Other goof: selling tanker stock too soon due to concerns about which was what regarding affilitate and subsidiaries and who was issuing what new stock: my thought at the time: too complicated structure of company. One of my themes is that when a company becomes too complicated to understand get out, other than a couple hour day trade based on overhwhelming TA set up. I have never understood complicated set ups in various issuances as being particularly good for regular common holders.

http://www.fool.com/...going-down.aspx Here I think I got it right re avoiding and cautioning about these. Long term, the costs seem high. I presume this relates to the cost of swaps and management. I presume these remain okay when major shift occurs, unless and until they get more regulated or restricted. I doubt any average day trader understands how the actual fund finances itself. I don't. And I consider that an issue: if you don't understand it, how can you truly make decisions?

Re TBT/TLT, I remain out, as I can't judge these at this juncture and uncertain whether they suffer from fees versus, for the long at least, the real thing.

Question for the group: if you have a health insurance provider with a junk rating on its bonds, why is it trading anything over $10? Let alone twice, thrice, or more than that? I have never understood why companies with junk bonds trade above $5, period. Same thing with other companies with junk bonds and high equity prices: why does that happen? Thanks for explaining this in advance.

#23 Jimbo

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Posted 18 July 2009 - 02:26 AM

PIG MAN FORENSICS

UOTE (DrStool @ Jul 17 2009, 05:29 PM) *
Keep in mind that whenever they put a big bad bear on, it's usually a bullish sign.

Couldn't agree more with you. I remember a Canadian network (BNN?) having Roubini, Meredith Whitney and another ultra bear simultaneously on earlier this year. I believe that was very close to the market bottom.


Applying this principle I cant but think that Meredith WHitneys bull call on GS is short term bearish on that stock.

Im sure the pig men would love to take her down a peg or two.
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#24 Jorma

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Posted 18 July 2009 - 07:56 AM

Noland. Doug has been leaning on the reflation with governmen debt, worldwide.

China is central to my macro global reflation thesis. And I believe the “Core to Periphery” (i.e. dollar outflows to China, Asia and emerging markets) flow of funds dynamic will fundamentally shape unfolding reflationary dynamics. I view the enormous increase in China’s reserves as confirmation both that global speculative flows have been largely rejuvenated and that China and the emerging markets retain the most robust inflationary bias. On the margin, speculative flows will prefer Asia to the U.S. – providing reflationary crosscurrents/headwinds here at home. Meanwhile, things that Asia needs and wants will demonstrate upward price pressures over time.

---------------------
The emerging markets and commodities rallied strongly this week. The EMBI+ emerging market bond index traded this week to a record high. The Goldman Sachs Commodities Index surged 6.3%, increasing 2009 gains to 23.3%. Brazilian dollar bond yields dropped to 5.80%. Copper jumped 9.6% this week, silver was up 5.7%, and gold rallied 2.7%. It is also worth nothing that the Indonesian rupiah declined only two-thirds of one percent following today’s terrorist attacks.
-------------------------

So far, I don’t really see many surprising developments pertaining to reflation dynamics. Thing seem largely on track in Asia, while the struggling U.S. Credit system is regaining some fire power. At this point I see little justification for revising my expectation for lagging U.S. asset markets and economic performance.

---------------------------------

At the same time, one can see the makings of future bouts of acute fragility. I see great risk in the system’s increasing reliance on capital markets as the primary source for Credit expansion and liquidity creation. It is unfortunate – but not unexpected – that reflation requires a further concentration of financial power. Moreover, it is dangerous that Washington policymakers now completely hold sway over the Credit markets. “Federal” Credit – Treasury, agency, and GSE MBS – remains the vast majority of system Credit creation. It is worth noting that May and June GSE MBS issuance totaled almost $450 billion (from Bloomberg). There is an enormous amount of mortgage Credit and interest-rate risk being bundled and transferred to Washington – to a government that already has too much of it.

The problem only seems to get clearer. The maladjusted US Bubble economy is sustained by $2.0 to $2.5 Trillion of new Credit – Credit that must largely be issued or guaranteed in Washington. This reflation (a.k.a. Credit inflation/currency devaluation) drives massive flows to China, Asia and the emerging markets that have few takers other than the central banks. And as economies recover and inflationary distortions reemerge, these enormous dollar flows can be expected to foment increasing policymaker angst. Asian reflation is poised to take on a wild life of its own, forcing policymakers at some point to confront today’s reality that dollar flows are destabilizing and unmanageable. China, in particular, faces tough choices when it comes both to managing its Bubble and the massive accumulation of IOUs of deteriorating quality.

http://www.prudentbe...ew?art_id=10250

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#25 DrStool

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Posted 18 July 2009 - 08:35 AM

Now, that's encouraging.

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#26 Jorma

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Posted 18 July 2009 - 10:03 AM

I still keep seeing stories that the final 09 fiscal year deficit is going to be $2 trillion. The offiial CBO estimate I think is $1.8 trillion. Assuming the SS surplus is still over $100 billion that still leaves $700 billion plus in 10 weeks or $540 after the gigantic last week of July.

Well hell, that's only $87 billion a week for Aug and Sept. No problem.

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#27 Jorma

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Posted 18 July 2009 - 11:14 AM

Now, that's encouraging.


More bad news.

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#28 Jorma

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Posted 18 July 2009 - 11:22 AM

Cronkite

Gone at 92. another legend of the news media.

Wait a minute, he was the news media!

There will be a lot of breast beating over this.

Think about the way things are reported today.

Times have surely changed.



http://www.newseum.o...nh_CRON090714_2

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#29 Charmin

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Posted 18 July 2009 - 11:24 AM

July historical patterns:

"After July option expirys, the S&P has been positive only 27% of the time on Monday. Market has been ignoring anything bearish so far - The last 9 times S&P was up every day of opex week, it was negative the next week, avg. -1.0%. http://esecfutures.com/

and after the biggest up-week in four months

"the next weekly pattern is that the week after options expirations tend to be down." http://syhardingblog.com/new/
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#30 Charmin

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Posted 18 July 2009 - 11:32 AM

Kudlow, seems not only on drugs, but almost subhuman.


In Orwellian 1984 Mr. Kudlow works at the ministry of truth. Day after day he retrieves news items. His job is to rewrite each one of them to say the opposite and return it to the tube.
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