Dan Walker

U.S. Treasury Cashes In

So who ultimately gets the money? In case you haven't noticed lately, giving it to Treasury is the furthest thing from taxpayers benefit.

What's Left for Foreigners to Do with Dollars, But Spend Them in the U.S.?

Why buy products from GE as things stand now? Why not just BUY GE? This is a more productive deployment of dollar reserves and may, when the numbers are in, explain part of the rally we currently see.

Is This a New Depression? The Lessons of the 1930s

Wrong depression, Jeff. Compare this to 1873 and then come back and give us the warm n fuzzies.

Gold Strikes Record Levels in Most Currencies

Every time I see these type comments, the dow bounces back. No, I do not think this time it is anything more than a retrace, and I most certainly do not disagree with any of the gold fans; in fact, I have a bit more than a troy pound stashed. I simply think you guys are early to the party. This will be a long hard charge down the hill, and we are just coming up the second crest. You will be handsomely rewarded next year. If you do get rewarded before then we are much further up the big muddy than anyone wants to think. The central banks have the supply and the moneyed interests to insure that it does not happen this year. When the moneyed interests run out of cash next year is when you will see the fireworks as well as the attendant rewards.

'Bad Bank' Problem: Solution Devised Must Benefit All Parties

OK, Add JPM to the pile. The bottom line is that ridding the world of a pile of deadwood will open up the market for a raft of newcomers to provide banking services to an underserved (for the last year) country. If we were rid of the megaliths I would be willing to open a community bank and I am sure there are at least 20,000 others who are similarly willing. Too Big to Fail is Too Big to Succeed and we need to replace this model with a raft of smaller banks. There is no reason the Fed cannot perform the clearing services formerly provided by JPM, and, indeed, a great many arguments can be made that this should be their ONLY function but that is another story for later this year.

'Bad Bank' Problem: Solution Devised Must Benefit All Parties

Apparently you were hungover on the first day of finance class. An asset is worth what a buyer is willing to pay in an arm's length transaction. If a buyer thinks an asset is worth twice the price willing buyers are willing to pay today, he must devote capital to buy and hold that asset until such time as the market reflects his valuation assessment. (Or you could just get an MBA and skip this part)

Let's quit dancing around this issue like we just discovered some new anomaly at the equator of Mars. Citi and BOA are inarguably insolvent. No one who understands what these assets really are has drank enough kool-aid to beleive that they have marked them down to your hypothetical 20¢ on the dollar to begin.

Now apply some hard logic. There are many other banks who fit your description. How do you propose to sell you plan to the banks who have a small substandard asset exposure when it completely bails out their "too big to succeed" brethren who have completely bungled the profit-seeking motive and should be liquidated? We have not even addressed trying to sell some such plan to TAXPAYERS.

Fast forward. Say this has sailed past everyone else and ONLY has to be sold to the taxpayers. It may be a tossup whether the biggest collection of zombie debt is owned by Citi or BOA or by an entity which is not a bank at all but by AIG which the taxpayers already own (allegedly). Now you realize why ol' Tim stood naked in front of the world yesterday and admited he had no idea of how to deal with this mess.

To you, to Tim, to "the One"; the only solution is to liquidate these rotting corpses which are stinking up our financial landscape. Until you face this fact, you are just practicing sailing (standing in a suit in the shower flushing $100 bills down the toilet).

The Inflation / Deflation Debate

kelm tangentially hits on a interesting point; gold does not correlate with inflation very well. However, gold correlates with inflation expectations exceptionally well. That is what you see. I expect gold prices (inflation expectations) to retreat in the next week or so and resurge with a vengeance toward mid year.

From Russia With Bitterness

While i feel your pain, "when you run with the big dogs"....

A Nation of Mortgage Slaves

Spot on analysis and since it extends beyond McMansions, absolutely guaranteed to be ignored by this year's crop of village idiots in DC. (Both sides of the aisle).

If, as seems inevitable, the move to drive mortgage rates to ~<4% succeeds, anyone who cannot afford that payment has no business owning a house.

Are Credit Rating Agencies Good for Anything?

Never try to teach a pig to sing. It is a waste of time and it annoys the pig.

Own Gold? Time to Fold

"We are simply replacing private capital with public capital, which isn't in and of itself inflationary."

Repeat that in a yoga position 5 times a day. Just repeat it, try not to step in it. I will continue to hold my gold position. We will meet up in December 2011 and compare notes.

In Search of the Next Reserve Currency

I agree with your fundamental premise that this should happen, but with the dollar out in front of the low rate brigade and the incessant insistence for the euro zone, britian and the yuan to 'drop rates fast to keep up', how to extinguish the carry trade? This is my quandary and with a grudging nod to Phillip Davis, we do "suck less" in the current timeframe. Who could propose to take up the torch?

Glimpsing a Return to Normal

John, exercise your imagination. Give me three scenarios where long bonds will rise in price over the next twelve months. If you cannot live with any of those futures, tell me why bonds can't rise. (I know this is a loaded question, but you live in the world of the 'no BS crowd' and you can provide a valuable insight to your fellow traders in other markets here).

Charts of the Day: Gold, and Baltic Dry Index

Any of you really look at that chart? (Or more importantly, compare it to a ten year chart?) You have a move down to the low from the first surge up, a nice initial push up off that low, and we are now in a protracted basing retracement. Unless you totally believe government statistics (in which case send me your bank account before the government takes it from you), this is the place to load the boat. As the e-wavers would put it, this is basing for the start of 3 of 3 which is the wet dream of futures traders everywhere. 3 of 3 is the rocket ride. I have been trying to buy the shiny yellow stuff and it cannot be had for anywhere near the price of futures. The central banks have shot their wad and can no longer BS delivery of metal; it is in short supply. The central banks have also practically discontinued the habit of lending gold which fed the physical demand when it was just limited to the 'gold bugs'. Now that it is not only the 'tinfoil hat crowd' who wants to hold shiny metal, there is not enough to go around. I wonder why they want to hold it with it dropping like a rock? i am being facetious. I really wonder what it is costing us taxpayers to make the futures LOOK like they are dropping like a rock.

The gold price cycle is quite long and we are maybe close the the first third of this bull market which started in the early part of this century. The only thing that will invalidate this view is if physical metal trades below futures and under the current environment I am more likely to marry the pope than that happening.

What are McDonald's and Wal-Mart Telling Us?

How about hedge funds liquidating to meet CDS payoffs which are looming?