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Jim Myrtle

Jim Myrtle
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  • Inflation Fears: Real or Hysteria? [View article]
    "compounding interest charges can be eliminated by financing state and federal deficits through state- and federally-owned banks. Since the government would own the bank, the debt would effectively be interest-free"

    Since the government owns the Federal Reserve, debt held by the Fed is effectively interest-free. Something Ellen still doesn't understand.
    May 11 09:42 AM | 2 Likes Like |Link to Comment
  • The S&P warning on U.S. debt was silent on the real danger to the economy and the federal budget: Growth could be derailed by letting too-big-to-fail banks become irresponsible again or by allowing continually rising healthcare costs, Simon Johnson writes. He fears S&P's "broad-brush" warning could whip up debt hysteria and push policies that quickly undermine growth.  [View news story]
    "Banks paid back TARP as the FED bought worthless debt from the banks for full-value and stuck the poison loans in the Treasury instead of in the banks own books"

    The Fed only buys government guaranteed debt. Their purchases are on the Fed's book, not "in the Treasury".
    Apr 23 09:42 PM | Likes Like |Link to Comment
  • The S&P warning on U.S. debt was silent on the real danger to the economy and the federal budget: Growth could be derailed by letting too-big-to-fail banks become irresponsible again or by allowing continually rising healthcare costs, Simon Johnson writes. He fears S&P's "broad-brush" warning could whip up debt hysteria and push policies that quickly undermine growth.  [View news story]
    You think borrowing overnight at 0.75% (Discount Rate) to buy US Treasuries is a risk free trade? What happens when inflation spikes, the Discount Rate rises to 3% (or 5%) and your Treasury Bonds crash? Still risk free?
    Apr 23 09:05 PM | 1 Like Like |Link to Comment
  • Signs of Another Short-Lived Deflationary Spiral Continue to Emerge [View article]
    "the Fed has been adding debt and adding more debt in the hope of defeating deflation"

    Mike, the Fed doesn't add debt, that's the Treasury.
    Mar 18 03:41 PM | Likes Like |Link to Comment
  • Today’s boost in bank stocks may have less to do with Bank of America's (BAC) rosy remarks than with what Wall Street thinks about the proposed mortgage settlement (.pdf) pushed by state attorneys general. The bank rally "could reflect the belief that it is a giveaway/bailout, and lets the banks get off scott-free from their criminality," Barry Ritholtz writes.  [View news story]
    "Banks are making money buying from the Treasury and selling to the Fed, with a fat guaranteed markup"

    Really? Do you have some examples of these buys and sales?
    What happens when the Fed doesn't buy all the issues the banks hold? Do the banks lose on that auction?

    "Because they own the Fed"

    If they own the Fed why did they only get $1.6 billion in dividends last year? How much did the Treasury get from the Fed last year?
    Mar 17 05:40 PM | 1 Like Like |Link to Comment
  • Today’s boost in bank stocks may have less to do with Bank of America's (BAC) rosy remarks than with what Wall Street thinks about the proposed mortgage settlement (.pdf) pushed by state attorneys general. The bank rally "could reflect the belief that it is a giveaway/bailout, and lets the banks get off scott-free from their criminality," Barry Ritholtz writes.  [View news story]
    Mike, you never did explain how banks make money by borrowing Treasuries at low rates. Did you forget?
    Mar 17 10:05 AM | Likes Like |Link to Comment
  • Bernanke and King Defending Their Policies [View article]
    "prices would tend to fall by the difference, i.e., slightly over 2% per annum. Needless to say, our living standards would still rise strongly, and more importantly, economic development would be smooth"

    It's obvious that many firms would be eager to borrow to expand their production when they know that their prices would have to drop 2% every year. I wonder if their workers will appreciate their salaries dropping 2% each year?
    I guess housing would do well with prices dropping 2% a year, forever.
    Yes, economic development would be smooth, maybe not in the way you imagine.
    Mar 12 09:33 AM | Likes Like |Link to Comment
  • Bernanke and King Defending Their Policies [View article]
    "The "Oil Prices Create Inflation" Myth"

    I agree, that's almost as silly as the myth that the early receivers of new money from the Fed benefit at the expense of later receivers.
    Mar 12 09:26 AM | Likes Like |Link to Comment
  • Today’s boost in bank stocks may have less to do with Bank of America's (BAC) rosy remarks than with what Wall Street thinks about the proposed mortgage settlement (.pdf) pushed by state attorneys general. The bank rally "could reflect the belief that it is a giveaway/bailout, and lets the banks get off scott-free from their criminality," Barry Ritholtz writes.  [View news story]
    "Jim. I know you don't want to learn; you are just baiting me"

    If pointing out a few of your errors is baiting you, then I'm guilty!

    "Banks are able to borrow money from the FED at .1% interest"

    Banks cannot borrow from the Fed at .1%.

    "and loan it to Brazil at 11% keeping the spread"

    Sounds risky, what about currency risk?

    "What makes this deal even sweeter for the banks is that this massive inflow of capitol is also pushing inflation in these countries"

    Hmmmmmm......currency risk and high inflation.
    Sounds like a great trade, you should go all in. LOL!

    "So bottom line is, not only are you paying interest on the debt the government is running up to support banking profits"

    Ummmm....the TARP program is going to turn a profit on the banking portion. And those evil banks still pay taxes on their evil profits.

    So you never did clue me in on how a bank can make money by borrowing Treasury Securities at very low rates? Did you forget your claim or are you running away from it?
    Did you ever find out how much banks are borrowing from the Fed for your guaranteed profit trading idea, or are you running away from that claim as well?
    Mar 11 05:18 PM | 2 Likes Like |Link to Comment
  • Today’s boost in bank stocks may have less to do with Bank of America's (BAC) rosy remarks than with what Wall Street thinks about the proposed mortgage settlement (.pdf) pushed by state attorneys general. The bank rally "could reflect the belief that it is a giveaway/bailout, and lets the banks get off scott-free from their criminality," Barry Ritholtz writes.  [View news story]
    "In the current environment, banks can borrow money from the Fed at near-zero interest rates"

    Near zero? How near? Can you be more precise?
    Are you backing away from your previous claim about borrowing Treasuries? That was quick.

    "and many are earning profits by churning borrowed funds into treasuries"

    How much are these banks borrowing from the Fed?
    Are you claiming this is some sort of risk free trade?

    "Do you think I'm lying about this, Jim"

    I think you're confused.
    Mar 11 02:39 PM | 1 Like Like |Link to Comment
  • Today’s boost in bank stocks may have less to do with Bank of America's (BAC) rosy remarks than with what Wall Street thinks about the proposed mortgage settlement (.pdf) pushed by state attorneys general. The bank rally "could reflect the belief that it is a giveaway/bailout, and lets the banks get off scott-free from their criminality," Barry Ritholtz writes.  [View news story]
    "Jim: You have to view this in two parts: (1) you borrow billions for .00778% and then (2) you invest that money in the TBond market "

    Mike, they didn't borrow cash at .00778%, they borrowed Treasuries. You can't buy Treasuries with Treasuries, unless you'rre claiming they sold the Treasuries they borrowed and used the cash. Is that your new claim?
    Mar 11 11:18 AM | 1 Like Like |Link to Comment
  • Today’s boost in bank stocks may have less to do with Bank of America's (BAC) rosy remarks than with what Wall Street thinks about the proposed mortgage settlement (.pdf) pushed by state attorneys general. The bank rally "could reflect the belief that it is a giveaway/bailout, and lets the banks get off scott-free from their criminality," Barry Ritholtz writes.  [View news story]
    "Nine firms -- five of them foreign -- were able to borrow between $5.2 billion and $6.2 billion in U.S. government securities, which effectively act like cash on Wall Street, for four-week intervals while paying one-time fees that amounted to the minuscule rate of 0.0078 percent"

    Mike, if you get the chance, explain how borrowing Treasury securities at these low rates guarantees these firms a profit.
    Maybe run thru step by step how you see it playing out.
    Mar 11 10:11 AM | Likes Like |Link to Comment
  • Today’s boost in bank stocks may have less to do with Bank of America's (BAC) rosy remarks than with what Wall Street thinks about the proposed mortgage settlement (.pdf) pushed by state attorneys general. The bank rally "could reflect the belief that it is a giveaway/bailout, and lets the banks get off scott-free from their criminality," Barry Ritholtz writes.  [View news story]
    "I don't. But the banks do, and have been for 3 years now"

    Banks don't get 0% loans. Not now, not ever, never.

    "What do you think TARP was?"

    You think TARP gave banks 0% loans? LOL!
    TARP charged 5%, rising to 9%, IIRC.
    It also required warrants. If you think that was 0% money, why did Goldman end up paying about $1 billion in interest?
    The Treasury ended up making $12 billion from the loan to Citi.

    "What do you think QE is?"

    The Fed exchanges cash (yields 0%) for bonds, which paid more. Quite a bit more.

    "What is QE1 and QE2?
    Buying every bond no one else wants IS fixing the markets"

    So the markets are fixed because the Fed buys government guaranteed bonds and the PDs are guaranteed a profit if they take the cash and buy more bonds?

    "Getting banks to reinvest their QE bond profits in stocks so that the stock markets inflate"

    Buying stocks is now a guaranteed profit? You might want to look at the ticker.
    Mar 10 10:21 AM | 2 Likes Like |Link to Comment
  • Today’s boost in bank stocks may have less to do with Bank of America's (BAC) rosy remarks than with what Wall Street thinks about the proposed mortgage settlement (.pdf) pushed by state attorneys general. The bank rally "could reflect the belief that it is a giveaway/bailout, and lets the banks get off scott-free from their criminality," Barry Ritholtz writes.  [View news story]
    "It's pretty easy to make money with 0-interest loans"
    Who do you imagine gets 0% loans?
    "and fixed bond and stock markets"
    PPT under your bed again?
    Mar 9 05:25 PM | 1 Like Like |Link to Comment
  • The Bears Are Really Starting to Growl [View article]
    "The reserves are being loaned out by the banking system ... as described here"

    And yet, banks are less leveraged not "leverage(d) like never before"

    "and hides these defaults ... as the Fed buys 'bad loans' from the banks"

    The Fed doesn't buy 'bad loans' from the banks.

    " I don't see any nat gas or electric cars at my local dealership )"

    Customers don't want them.

    "And so to leave you with a statement you should focus on ... the reserves are being lended ( which is a direct rebuttal to your prior post )"

    Ummm...by definition, reserves are NOT BEING LENT!

    If you want to prove banks are "leveraged like never before", you should show how leveraged banks are compared to previous levels of leverage. Or you can keep trying to change the subject.
    Feb 24 04:58 PM | 1 Like Like |Link to Comment
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