geewow

Debt Monetization: He's Heading for That Small Moon

I thought the piece was well thought out. I feel the Fed engaged in near 0% interest to re-liquid the banking thieves that were bailed out and caused this economic collapse. They have incredibly fattened their balance sheets, gambled further on Wall Street again fattening their balance sheets without engaging in any significant amount of credit loosening but to pass out tens of billions in bonus payments. They market has been manipulated at the expense of the real economy.

Consumers are dried up. There will be no real growth. The dollar falls, and wages fall, too. The American worker has been thrown overboard in order for the investment banker thieves to be given the life preservers. If wages become third world, the country will be third world, as well. In-surplus nations are likely to go elsewhere to invest once the US consumer really stays home with their worth-less cash.

Bernanke's strategy seems to be to support and re-enrich his oligarchian pals in the banks, and give his middle finger to main and side street America.

eye-on-washington.blog...

Is It Time to Recognize Reality?

Karl is once again putting forth an argument with solutions. The quote, "The crapper must get filled up before it can be flushed" is so true. All that the CONgressional members are doing is pushing the load down the road hoping they can make it through another election cycle without getting the boot. The president appears to so enjoy the national spotlight that he, too, cannot see the forest through the trees and is playing politics hoping to push the load beyond his second term.

Karl, unfortunately nothing will change as a commenter had stated, "Until the educated classes reach a 40% underemployment rate, nothing will change." I agree.

Instead of looking out for the greater good of our nation, and its economic national security, those that are getting by OK sit back because they feel they still have "theirs" in their pocket. Once they lose "theirs" the nation's pain will be horribly severe.

China will no doubt feel the pain of their unsustainable stimulus program. Unless their own people begin buying their over-supply of stuff, since we have cut back our purchases, they will feel the pain, as well.

Thanks for your honest writing!!!

More Trouble Brewing for Banking Sector?

I agree with miolaman, but judit doesn't get it yet:

"Please, no more negativity toward banks...they are here to say as much as you'll wake up tomorrow. So we better deal with the fact that they will turnaround, and will serve hundreds of millions of customers, like always..."

Pay off debt, and save your precious cash! You may need it! Downsize your lives and live more simply. Give up the consumer desires and buy what you comfortable need. Take a risk with your cash if you can create a widget of some sort that will supplement your earners.

The banks have been recapitalized off the backs of our working people. Monetized Treasury bonds and bills are being converted into debt that has been freely passed out in abundance without careful scrutiny or oversight. Bernanke does not even know the where, who and how his loans to foreign central banks have gone. And if so, won't say. He dishes out threats of market instability if he reveals his loan recipients. This is an economic crime syndicate!

Zero percent interest loans to banks and broker dealers, which then turn around and buy Treasuries for a profit and gamble in the market protecting Bernanke's ass have been jacking up stock and commodities prices (manipulation). This has been Bernanke's backdoor deal. There is plenty of liquidity but it is being used for the banker's personal use.

So, don't complain about the banks because they are here to stay? What a "cop-out". That is like saying don't go to a doctor because eventually you'll die. These banks need controls, supervision, and oversight. Bernanke needs to be audited and this action of the government selling off our nation's wealth to the Fed, turning it into unregulated monetized debt, so we can buy it back with interest is a complete dope-slap.

I say get the hell out of the market and teach these jerks a lesson. Take your cash out of the manipulated game, and place it in your local and regional banks. Pay off your debts! These market manipulators (Bernanke, Geithner and Obama) will then see exactly that the average investor means business when he/she demands reform NOW.

eye-on-washington.blog...

Recent Bank Share Sales Could Lead to Industry-Wide Sell-Off

How anyone can ignore the fact that this market is manipulated is beyond my understanding. The Fed makes available billions and that same amount corresponds to shares purchased. Bernanke is pumping cash into the market through the back door with zero interest loans. He is recapitalizing the financial banks in order to cover his butt as Treasuries get sold, and soften the inevitable blow when the toxic mortgage debts must get exposed.

When the market begins to drop, it will be quick. Investors will be taking a big hit. Unless you are very vigilant in monitoring your portfolio, I would be very nervous.

eye-on-washington.blog...

Spain Crumbles

Reaganomics, and Alan Greenspan's laissez-faire neo-liberal capitalism has poisoned the economies of many countries. World industrial production, consumer spending, and wages of average workers will continue to suffer dragging down these economies as those at the top continue take what they don't deserve. That appears to be the design plan.

eye-on-washington.blog...

S&P / Case-Shiller Home Price Numbers

Unfortunately, what we are witnessing is a thin, fragile thread of good news immediately spun into a whole spool of good news. Such behavior is why they call it "Spin".

eye-on-washington.blog...

Prime Mortgages Are Also Going Sour

Banks don't act swiftly on mortgagees that stop paying because once the bank takes possession, that foreclosed or short selling home is a liability and sits on their books as a foreclosed home. The banks don't want that showing. They wait as long as they can.

Beranke's latest crow that the economy is improving is so weak I cannot believe that the stock market rallied on such crap. There is no proof!

Americans are saving hundreds of billions of their incomes. When Americans save, they spend less. By spending less, commercial real estate begins to collapse. When that occurs more people lose their jobs and homes go into foreclosure.

We should have Bernanke say next that summer will last 3 more months. The market will rally again.

eye-on-washington.blog...

Canadian Dollar Rattled by Shanghai Meltdown, Interventionist Talk

Mr. Dorsch, great article! Very thorough with your views on what is going on with the Canadian markets. One commentor stated correctly that the Canadians can work to create a functioning country since they are NOT so stupid as to start wars and waste precious resources maintaining them; and, they control health care costs by nationalizing their system, as well as control leveraging and "creative securitization"; and finally, hold on to their manufacturing base.

What is wrong with the US government is that that don't want to take a lesson from the Canadians. Canada is like the youngest sibling in a family of three. They tend to watch what the other two did wrong, and how they related to their parents, ie. other nations, and then, do it better, and with more sense.

Mr. Dorsch, are you REALLY George Clooney in disguise? :)

eye-on-washington.blog...

GDP Management, Chinese Style

Yes, China is betting on the US continuing to buy $1T in their cheap goods. This is the juggling act Obama/Bernanke/Geithner is having with the Chinese. If the US cannot buy $1T in goods, then they will not continue to buy $1T in Treasuries and other assets. They will begin to dump. Obama is having Bernanke inflate the stock market so consumers believe they can begin spending again. This is a head-fake. Obama is trying to convince China the US is recovering enough for their satisfaction.

China is over produced and over stocked. They don't really care. They hope then that they could sell the stuff domestically. They could sustain such a policy for several years before their economy falters and slows with unemployment and more.

eye-on-washington.blog...

Global Markets in Review: Emerging Markets Showing First Signs of Retrenchment?

I appreciate the article. Much work went into it. Thanks. But I must say the analysts forget the basics: we are in a jobless and wage stagnant recovery. These jobs are very likely never coming back. More people are underemployed than anytime in history of most of our lives. (under-unemployed=20% and growing.)

If you have a boat with 600,000 holes sprouting leaks every month, but then, only 247,000 leaks begin to occur, the boat is still taking on water. Unless there are more plugs to patch the holes, water will eventually drown the boat. All the stock market bets you make, will not fix it.

Foreclosures are continuing. And, the toxic debt the investment banks, all tied to a 33% decline in the housing market, have not been exposed on the balance sheets of these actually dead banks gambling with Bernanke GreenBacks as a way to remain in the lifeboat while a tsunami wave sits idle in their wake. Remember, Bernanke took on this debt, and now it is really worth-less.

Working Americans are living on the edge of collapse. Their retirement savings are lost forever because they have no expendable cash to buy back in, therefore, the market cannot sustain with the Bernanke Smoke and Mirrors Free Money for Investment Banking Crowd.

Consumer spenders are living on debt plastic. That will not sustain. The US economy is substantially shrinking, constricting, unable to buy a $1T in Chinese goods per year. As was said in the above piece: You take the foundation bricks out of the building and move them up toward the new construction, look out everywhere!

China has now over-bought commodities, so those prices will fall. The Baltic Dry Index is a non-manipulative indicator. That index says shrinkage and stagnation.

The stock market is manipulated, therefore, to be able to evaluate it is impossible. One can lose big time. Bernanke cannot keep printing paper based upon nothing.

China can continue to print currency because they have lots of stuff to back it up!! Wake up folks. They are not the US. They have more gold, more commodities and more industrial production than any country on the globe.

Watch out! We may just see another war to inflate the economy. Be prepared for such a terrible solution.

eye-on-washington.blog...

Joblessness Drops? Hold the Applause

The boat has 6 million holes as it sails into the future, but now, this month, it appears to only have 200,000 new holes. I guess it won't be sinking as fast as when 600,000 new holes appeared, yet, nevertheless, the holes continue to occur. Unless those holes get plugged up, the boat will sink. Remember, the boat is taking on water even if some of the holes get plugged up. The engine of this nation is consumer spending, but those people are drowning in debt and holding on to their stagnant expendable incomes. Most of these jobs will not be coming back. They are gone forever. The real economy is NOT being supported enough. Only the credit tight investment banking industry is being showered with zero interest, bail out gifts, and equity swaps to support their lavish lifestyles.

Be prepared for a very different America.

eye-on-washington.blog...

Is a Jobless Recovery Really Your Best Friend?

The government intervention is not enough to pull the country out of a massive collapse. The economy cannot be sustained with growing numbers of un-underemployed. The college graduates today are underemployed with massive personal debt.

We have a personal debt bubble growing and will break. The economy is unsustainable. Exports-ie. ISM data is due to a low dollar value making products affordable overseas, yet domestic earnings are weak forcing workers to save, pay down debt, and limit purchases.

Corporate earnings will continue to shrink. And, the Chinese bubble will eventually explode increasing the number of their unemployed and destroying the ever expanding home price values in China (1-3% per week!).

eye-on-washington.blog...

Rail Traffic Data Tell a Different Economic Story

Zacks is so right. The data explained in the piece indicates what is actually going on in the real economy. This data cannot be manipulated. A continued erosion in the economy is in our future.

eye-on-washington.blog...

Five Reasons the Market Could Crash This Fall

"fear-mongering", "remarkably wrong headed", "Whole Foods making a profit...".

What we have here are many people walking a field of time bombs only seeing how pretty the flowers are!

People have to eat! Food is the last personal gift people are able to give themselves. Aldi's Foods is doing very well, too. Both ends of the food spectrum can exist profitably in this economic downturn based upon one's income bracket.

Smith and Hawken has closed its doors completely after 30 years serving the middle and upper class garden crowd. Remember, gardening is the nation's number one hobby, and this quality business is completely finished!

There is a dramatic shrinkage in this economy that will NOT be coming back. It is over, folks. Many of these jobs are NOT coming back.

The data in this article is in-your-face data, but there appears to be several who don't want to face it. The recovery is an illusion. Credit card debt, which is fueling summer spending continues to balloon.

The derivative debt continues to be the elephant in the room. It cannot be ignored. It has to be written down eventually. Huge losses are in sight.

eye-on-washington.blog...

Why This Is No Time for Buy and Hold

Fritz, it sounds like both camps are reading and commenting on your piece. I, from the camp of agreement, also believe the logic from which you write your piece. For anyone to believe that the US engages in a capitalistic system must have been injecting the Kool-aid! What capitalism? What exists is is a system to benefit the largest of the large corporations with their government rules allowing outsourcing, bailouts when hard-up for cash, and with the private Federal Reserve holding their hands. This is NOT a free market, but a Nanny State for the large and financial corporations.

China will eventually have to stop buying Treasurys when their stimulus bubble breaks and millions are unemployed and their own housing bubble explodes. The world is in a contraction and the bottom has not yet occurred. The global GDP has been carried by China. The American consumer will continue to contract their spending. The DOW will drop below 8000, and likely below 7000. There are no binders to hold the recipe together. It is an illusion.