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Jim Myrtle

Jim Myrtle
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  • Is Inflation Next? [View article]
    "Greenspan was clueless any way you look at it. He himself took out and adjustable rate mortgage in 2004 while telling everyone else to do the same"

    That silly Greenspan.
    Why was getting an adjustable bad? Can you spell it out?

    When I had my first house, I had an adjustable based on the 1 year T-note.
    Wish I still had it, I'd be paying about 2.1%.

    "sub-investment grade: A bond with a credit rating of less than BBB by Standard and Poor's."

    What do bond ratings have to do with derivatives?
    It appears you're confused about the difference.

    "Regarding buying treasuries and MBS when rates are rising, are you familiar with the old adage, interest rates up, bonds down? Yes, the Fed doesn't have to sell them to anyone. They can eat the losses"

    $90 billion in annual profits can cover a lot of losses while their sheet runs off.
    Apr 10 10:41 PM | 2 Likes Like |Link to Comment
  • Is Inflation Next? [View article]
    "Like a Central Bank, that didn't see the 2008 crisis coming?"

    They weren't raising rates and freezing money supply for years before then to pop the housing bubble?

    "Like a Central Bank, that threw $6 trillion at the last crisis?"

    Yeah, lots of very short term loans. So what?

    "Sub-investment grade derivatives I have linked to before and written about."

    I know what a derivative is, what's a sub-investment grade derivative?
    How about an example?

    "No one, and I repeat, no one, will buy what's on the Fed's balance sheet in a rising interest rate market"

    No one will buy Treasuries if rates rise?
    No one will buy guaranteed MBS?
    Why not? And why would they need to sell?

    "I did misspeak on the Fed buying derivatives, but didn't connect that to QE at all"

    When you said, "This does NOT mean the derivatives the Fed are buying", that sounded like present tense to me. Which means QE.
    If you're talking about past purchases, already profitably closed out, you need to be more clear.
    Apr 10 08:21 PM | Likes Like |Link to Comment
  • Is Inflation Next? [View article]
    "This does NOT mean the derivatives the Fed are buying from the banks are safe or there won't be any future losses on what they buy from the banks through their QE program"

    Quoted it in my first post to you.

    "Not perfect here, but I do know the sub-investment grade derivatives are an issue"

    What is a "sub-investment grade derivative" ?
    You have any examples?

    "My reply to you stated; "who in their right mind would buy 30 year bonds?" "

    And I replied, "Someone with an extremely low cost of capital?"

    You know, someone like a Central Bank, with the ability to create money out of thin air. Like a Central Bank currently booking annual profits in the very high 11 digits.
    Apr 10 06:38 PM | 1 Like Like |Link to Comment
  • Is Inflation Next? [View article]
    Yes, Doug, MBS are bonds.
    The Fed is buying bonds from the banks.
    The Fed is not buying derivatives from the banks.
    Apr 10 05:09 PM | Likes Like |Link to Comment
  • Is Inflation Next? [View article]
    "This does NOT mean the derivatives the Fed are buying from the banks are safe or there won't be any future losses on what they buy from the banks through their QE program"

    Derivatives? Do you mean bonds, Doug?

    "Who buys 30 year bonds paying so little?"

    Someone with an extremely low cost of capital?
    Apr 10 09:34 AM | 2 Likes Like |Link to Comment
  • Fannie Mae repays Treasury, and more [View news story]
    "You don't see that your point about gold does not logically say anything about dollars?"

    If your dollars are buying less, you scream "Theft!", if your dollars buy more, why can't the holder of gold accuse you of theft?

    "I give up."

    We'll miss you.

    "The bottom line is that our policy is stealing from savers to pump up the housing market and the bond market"

    Don't be a net saver of cash in that case.
    Feb 28 05:00 PM | 2 Likes Like |Link to Comment
  • Fannie Mae repays Treasury, and more [View news story]
    "So if this happens in gold it must be true that dollars go up in down in value, and nobody is stealing the value of dollars. The market is making this decision"

    Welcome to the party, pal.

    "Further, since the interest rate on savings is clearly lower than the inflation rate"

    Savings? Be more specific. If you mean perfectly safe, perfectly liquid, checking account savings, sure.
    I hold several bond funds that have a yield much, much higher than inflation.

    "So let me ask you how the Federal Reserve can increase the inflation rate without taking from savers?"


    You feel the Fed is taking from savers? If you feel the Fed will do this, don't be a net holder of cash savings.
    Feb 28 04:09 AM | 1 Like Like |Link to Comment
  • Fannie Mae repays Treasury, and more [View news story]
    "If a dollar has value over and above the paper and ink, it must be the exchange value"

    Sure and that "exchange value" bought 1/1331st of an ounce of gold today and only 1/1900th of an ounce of gold about 2.5 years ago.

    Did you steal that change in value from gold owners? Why not?
    Feb 27 05:21 PM | 6 Likes Like |Link to Comment
  • Fannie Mae repays Treasury, and more [View news story]
    "Let us say that I buy another currency or hard asset with my dollars, and that asset price falls in the toilet"

    When you make a trade, sometimes you lose.
    People who bought homes in 2007 with mortgages were short dollars. Many thought inflation would make their trade a profitable one. Many of them were wrong.
    Feb 26 09:44 AM | 1 Like Like |Link to Comment
  • Fannie Mae repays Treasury, and more [View news story]
    "Ok, we have pretty much shown that dollars cannot really be shorted by the responses here"

    Your confusion does not prevent me from shorting dollars.

    "One needs to borrow dollars and pay interest on the dollars and then purchase another asset with the dollars"

    Or put on a futures porsition favoring another currency or hard asset.

    "Of course this is what people are now doing but it is not really a dollar short"

    Of course it is.
    Feb 25 08:53 PM | 2 Likes Like |Link to Comment
  • Fannie Mae repays Treasury, and more [View news story]
    "Also borrowing dollars in and of itself, even at 0%, does not make one short dollars"

    Of course it does, just as your deposit of dollars in a bank, earning 0%, makes you long dollars.
    Feb 24 11:04 PM | 1 Like Like |Link to Comment
  • Fannie Mae repays Treasury, and more [View news story]
    "So borrowing dollars for the sake of being short dollars and paying interest makes zero sense"

    I borrow dollars to buy real assets, like housing.
    If inflation rises, I'm locked into a long-term, tax deductible loan.
    Feb 24 11:02 PM | 2 Likes Like |Link to Comment
  • Fannie Mae repays Treasury, and more [View news story]

    "OK clue me in tell me how to be short dollars"

    Seriously? Borrow them, of course.

    Or you could put on an FX trade, short Dollars/long Euros, for instance.

    Are you sure you're on the right site?
    Feb 24 10:08 PM | 2 Likes Like |Link to Comment
  • Inequality: Does It Matter? [View article]
    Rich people don't create jobs, crooked analysts do.

    You're right, it was an excellent read.
    He should write for Letterman. Funny stuff.
    Jan 9 08:09 PM | 1 Like Like |Link to Comment
  • Is The Gold Market Manipulated? Part 1: Introduction And The London Gold Pool [View article]
    He believes in insurance that throws off cash.
    Dec 20 08:11 PM | Likes Like |Link to Comment
COMMENTS STATS
969 Comments
638 Likes