zhandax

FOMC Statement: What It Really Says

Statistically we are off the chart in terms of the probability of being in this position. Never in history has every country on the planet employed a fiat monetary system with every one of them running their printing presses as fast as they can unload trucks. As mentioned yesterday in another post, we are in the fat tail of the probability distribution which is analogous to being in a wormhole; you don't know what life will look like on the other side. Gabe may get his Dow rally to 20,000 but if he does, I believe he will find that gold made it there first.

Is Inflation a Clear and Present Danger? No Way

How can you possibly be serious when the Fed itself no longer admits what M3 actually is?

Finding Useful Work for Ron Insana

Useful Work/Ron Insana? Don't let his agent hear you use those two phrases in the same sentence or he will be out of there faster than a carp through a busted dam.

Looking for a Cause for Thursday's Sell-off? Blame Greenspan

Are these comments or paid announcements?

Dollar Wins on Euro, Pound Weakness

LouThomas hit it on the head...if you want clarification, go back and read up on 'fractional reserve banking". The texts will tell you that when loans are repaid, it creates money destruction. What the texts don't mention is that loan default creates the same effect. The Fed was playing makeup on a large portion of its money creation the last 6 months. Now that they have run the presses past the largest estimate of the sub-prime losses, we are back into inflation territory.

Why Congress Blames Index Speculators

I am surprised I am the first to point out that the abbreviation ICE appears no where on this page. I posit that most of the index fund trading in oil is transacted there. Why would an fund want to trade on NYMEX where the government can watch when they can trade on ICE which is totally in the dark?

De-Globalization: Oil, Transport Costs and Inflation

Gee, could it suddenly be cheaper to make all our electronic parts here now?

Oil and Gold Grab the Headlines - But Silver's Another Major Mover

I might point out that gold's selling on Wednesday stalled out where the last group of shorts became bagholders. Most of those guys were granted 'forget the cheese, let me out of the trap'. What will you care to wager that they all become gold bulls on the third bar back over $960?

Bear Stearns Shareholders Sacrificed for the Economy

They seized the 9-month old thrift I was working for in 1985 and made at least $10mm on the deal which we had targeted to add to our net worth. It was merged with some BFE shop and both were later taken over by Glendale Federal which got Glendale into Florida and was eventually absorbed by Citigroup.

The Fed GAVE Bear to JPM. How can you resist this deal...."You can buy it for $236mm; the building alone is worth $280mm, they made almost that much in earnings last year, and we'll throw in the net $11B bond portfolio for free and guarantee you against the worst $30B of crap?"

Requiem for a Departing Economic System

While I agree that too many dollars and too much leverage was the original problem and adding more is just making things worse, I might point out that the Fed is NOT accepting the "toxic subprime sludge" in these swaps. This "fix" is just to keep Fannie and Freddie backed paper from being shunned like the sludge. Following the argument that the government must bail either of them out when they become insolvent, the Fed is indirectly already on the hook for that paper.

That said, the sludge is still out there, buried in 6 point footnotes to balance sheets and the Fed has not yet developed the "fix" for it. There are another couple of rounds of this type of creativity still ahead which is why I won't loose any sleep throwing money at gold and oil at the all-time highs.