Bronze pencil

Oil Jumps as Stocks Drawn Down

My read on the jump is that we're witnessing super-inflation kicking in. ..with all the lack of cash being earned, accompanied by crazy 'nobody-is-out-of-pocket' debt, the debt ramp up has to be funnelled from somewhere: price of Oil is as good a place to start as any.
It figures it would be over the quiet period for the move to be made. Far too many hopeful, forward looking statements and piss-poor fiscal decisions. $76 Oil in the middle of a consumer recession, you have to ask..is that a recovery tactic? Bollocks, financial system has run out of productive assets and has turned to inflation-led demand.
Dollar increasing, on technicals yes..but.. fundamentals are diametrically opposed. Bernake's theory that the Stock Market leads the way out of recession is hardly bullet-proof. Rising valuations can encourage investment and loosen credit conditions. Averted collapse, by which metric..? No trust in government, no trust in accounts, no trust in political system, rising unemployment/ decreasing output, very little investment, rising foreclosures..used a lot of money and achieved very little- it's a complete collapse.

Put it this way..which Government could presently go to the people and raise an army? In my opinion, the consumers have nothing left to give. A position that's somewhat borne out by the credit and retail data.

i) nationalise some gold mines and restock treasuries - transparently. The Household sector is usually responsible for some 3% of GNP debt holding, that figure is unlikely to reach 18%. If the Merchant Banks are low on liquidity options, then so are governments. That's a Crisis, it's a fiscal crisis, not a financial one. The first order is to get the fundamentals in order, that means faith, employment, means of xchange and production.
Gold reserves are now required to prove means of exchange, even Oil is presently heavily discounted as wealth reserve. Does anyone feel this to be not the case?

ii) Market expansion, protectionism isn't going away, so use it. Banks aren't interested in middle-term growth, that's why we have a massive derivatives economy. You get this sort of migrational economic development through planning and protectionism. We should be fully supporting these policies.

iii) The tbtfs' are innovative, there is little question that they are sucking the asset classes dry only because the option is there. The economy and the financial markets have been revealed to be their playgrounds. Their categorical mistake has been to reveal the extent of 'regulatory capture'. In that respect, the population sees enough only to be terrified of them,. Perceptions must change, more than that, the pyramid needs to righted. There are no currently returning assets, just lots and lots of inflation.
How does one right the pyramid, you change the structural organization of the BHC, and you quiet things down.

Who can actually see the current movements in the world and believe that the government agencies, the superpowerful, are worth wasting time, let alone money on? People are clearly aware that Theft is legalised, 'Get it any way you can' - that's not me, that's from various news-streams. People making decisions in ivory offices have never seen the street feeling early on. Which is why if you wish to rule, you do not surround yourself with luxury, you live a hard life.

Watching the Yen Carry Trade

Japan exports to the rest of the world, has done for fifty years. Has strong links to semi-industrialised nations plus its own technological transfer capabilities - makes sense that the Japanese spread their economic assets across multiple currency areas as the diversity would be risk-management.

Fed Fuming over Audit the Fed Bill

Apparently the Fed's mandate was to be the strongarm of the financial world- the BIS by contrast is the central bank accounting mechanism, an administrative arm of Global Finance, a necessary and necessarily impartial organization. The Fed is private for security reasons, as a line of defense against unwanted scrutiny -because everyone would prefer their banking details to be kept secret. ..yet this is nothing to do with prying.. this has to with determining competence and corruption. We have no idea how Bernake intends to ride out the storm, all we know is at the moment he's displayed a propensity to corner every pricing mechanism there is..plus, that's a massive recapitalization just to save a few brand names.

Fed Fuming over Audit the Fed Bill

Fine...it's generally agreed that the printing of money has been excessive. And of course, some companies have done rather too well by putting this proverbial gun to their heads. But just to be the Devil's advocate, let's presume for the moment -that by keeping the stock market up Bernake has -by a massively disproportionate injection- kept an inevitable stock market crash from wiping out say, about, eighty percent of all employment in the US. ...sure, reducing the consumers tax receipt in progression by a total similar amount would have been a hell of a lot more equitable. And it would have allowed the markets to clear, inappropriate financial risks would have efficiently cleared the monetary pyramid, and remaining institutional investors would have made a significant profit on the aftermath. So, all-in-all, Bernake has almost definitely gone about this totally the wrong way..however, if the effect has been to prevent a massive collapse in employment, well then, we are sort of stuck, aren't we? Because pulling the plug on policies which - more likely than not - is some sort of State-owned means of production -may leave a vacuum while heading right into the heart of the CRE fiasco. Remember farmland being sold at 30c an acre during the 1930's?
What we need, we the people stuck with the dollar, is to know what the %&@! this man is planning. At the moment all there is between us and a collapse in the monetary system is the full faith and credit of the US government- and that particular faith is being tested on every front imaginable.
I laud Bernake for having the guts to persevere with a maniacal plan, an idiotic plan, but a plan to keep people in work. But that sort of vision is still only a part of the job description..the Fed is still responsible for money supply and that part of the job he has failed at, unequivocally. Nor does he seem capable of addressing it. Yes, the banks may be able to lose all that money in an orderly wind-down of CRE loans, in which case we return to business as before for the banks but not for those who originated the loans...!? Therefore we have a real question-mark against Democratic capitalism, don't we? Because then this episode is either feudal, or crony, capitalism writ large...whichever the case, neither form is particularly efficient.

Warning: The Coming Credit Dislocation

Hell will freeze over before the credit-markets will.

If this was a matter of national security and it was dependant only on US asset leverage, then yes, the rulebook would have to be rewritten. But this is a Too Big to See Their Feet problem- they'll tap Quantitative Supplies from other currency blocks for Trading purposes.
What you're observing is the not lack of liquidity- instead it's a trend which has finally matured: there is little interest in Consumer-side Banking amongst the Ugly Sisters.
As for insolvency fears at the Fed, that remains the Golden Goose.

Commercial Bank Derivatives: A Disaster Waiting to Happen

It's pleasing to find that the Interest Rate derivatives are amongst the least volatile of the hedging tools. Regarding the farming-out of the 'credit support' obligation, I would have to question whether that would be considered a good banking practice, no. At these volumes it may be systemically unsound.
I expect that the activity brings profits unencumbered by asset provision.
The matter of policy functions to be valued at these systemically important banks might well be raised at some later date.

How About Gold Backed IOUs for Ireland?

Is it still the case that Central Banks have an inter-bank gold price lower than market?

Pandit's Loaded Gun

This article makes a good point, especially in the current environment, for a Banking company to be making sensible plans is rare enough.
Also it may not be a terribly bad thing to have a Govt. official upset with the institution.

Is a Case of Quant Trading Sabotage About to Destroy Goldman Sachs?

Is this one of those myths where knowledge has been squirrelled out from underneath the encroaching grasp of an ambitious aristocracy? Will the banks definitively tussle with the state in refusing to bankroll California? Will national Petcos' grab monopoly over the Energy infrastructure? Will the nations wall their citizens in and hunt down the old capitalists in a new inquistion?
Certainly the energy is present for a move to a new quanta in the state of political economy, can't imagine it'll be pretty. Prepare for the worst- sod the financial markets, we need an applicable, global, humanistic charter of legal protection for all citizenry -to let the extremely valuable entities battle this out without trampling on the rest's 20% (will settle for 3M, meek like that).