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  • The Most Likely Debt Ceiling Outcome [View article]
    Well, at least if Scenario 2/3 went into effect the charade of "The Fed is not monetizing the debt" would end and the whole world could finally admit and adjust to the fact that the US has been (and will continue to be) a financial banana republic where the central bank prints money to buy the debt, so that all the high cost social programs can continue (keep voters happy).

    I think Argentina and Venezuela did this recently, and I don't think it has worked out too well for them. I guess Japan is doing it too now, and the price they pay for oil has gone up by 40% since it started less than a year ago.
    Oct 9 04:27 PM | Likes Like |Link to Comment
  • Yellen Can't Change Fed Policy [View article]
    How does inflation targeting help the middle class?

    Make things more expensive + low wage growth + constant job elimination = prosperity???

    Explain this to me.
    Oct 9 04:19 PM | 1 Like Like |Link to Comment
  • Political Antics Won't Hurt The Markets - Republicans Better Beware [View article]
    BTW - another funny thing about demographics:

    Young people are usually "liberal" because they're not too far from believing in Santa Claus and the Tooth Fairy - the money will come from "somewhere" to pay for all these great government goodies.

    But something happens to their mindsets after a few years of working and paying taxes - all of a sudden they wonder where 30% or more of their paycheck is going, and for some reason they start voting for a little less government "generosity" that is really just some of their money being given to someone else.

    If this wasn't the case, the "conservative" political movement would have died off a long time ago after all the 1960's "Flower Power" people grew up and started paying real bills, but somehow continued voting liberal. They didn't.
    Oct 9 03:18 PM | 6 Likes Like |Link to Comment
  • Political Antics Won't Hurt The Markets - Republicans Better Beware [View article]
    Well, you're right - demographics is pushing the US towards a full-blown wellfare state faster and faster all the time. Young, immigrants, etc - love that "Big Daddy Government" that will "give" them healthcare, food, cellphones, housing, college education, etc.

    But the cruel joke is that these kids are going to be paying ALL the bills in the future for their "winnings" today. Look at Obamacare - forces young people to pay $300 or more a month for healthcare they don't need (well, maybe a flu shot in the fall), so that some oldster gets subsidized care. And for the immigrants? "Welcome to America - your share of the National Debt is $45,000!"

    So I guess the political winds are shifting leftwards. That's fine - I guess somehow the US will "do it better" than Greece, Argentina, or France has. Now, if we can only keep people like that Facebook guy from moving to Singapore before he sold his stock (to avoid massive US taxes)... Maybe a real big wall to make sure nobody gets out of the leftist Utopia.
    Oct 9 02:59 PM | 5 Likes Like |Link to Comment
  • Most on FOMC continue to see taper this year [View news story]
    Yeah, right.

    And I see myself running a 4-minute mile by Christmas.

    Yellen's nomination is a clear signal that QE will go on unchanged through at least January 2015, perhaps even ramping up sometime before the election.
    Oct 9 02:13 PM | 6 Likes Like |Link to Comment
  • When Silly Analogies Go Viral... [View article]
    Since there are apparently no ill effects from printing money, why don't we just print up a few tens of Trillions and distribute it among the population? Just think - nobody will have to work at low-wage jobs anymore, but somehow a hamburger will still cost $3.
    Oct 9 12:44 PM | 1 Like Like |Link to Comment
  • Obama nominating Yellen to be Fed chief [View news story]
    Upon further thought...

    Maybe there were indications of a serious market drop tomorrow - 300+ Dow points, and they needed to play this trump card now to at least buy another day or two for possible CR/debt resolution. Markets might still drop tomorrow but maybe not as much.

    Otherwise you think they would keep this "in the hole" to use for an X-mas rally kickoff sometime in November.
    Oct 8 08:07 PM | 3 Likes Like |Link to Comment
  • Obama nominating Yellen to be Fed chief [View news story]
    QE will never end. Never. The overnight rate will be near 0% for the next several decades. The current $16.7 Trillion debt limit will seem quaint in about 10 years when the debt is approaching $30 Trillion, and the Fed will still be buying most of as they do now, otherwise rates increase and game over.

    Think I'm wrong?

    Japan. Nikkei 35,000+ in 1990 and barely holding 13,000 in 2013. Abenomics. Currency devaluation. Things are not different or better here. Yellen is a panicked realization that only the Fed can prevent a complete meltdown at this point, and only as long as the magic QE fairy dust still works.
    Oct 8 07:37 PM | 4 Likes Like |Link to Comment
  • Alcoa beats by $0.05, beats on revenues [View news story]
    Estimates lowered from 17 cents to 6 cents since January, and now they make 11 cents and it's supposed to be good news? Maybe Q3 2014 estimate will be 3 cents, and they can beat that with 12.
    Oct 8 04:41 PM | Likes Like |Link to Comment
  • Stocks move to new lows as President indicates zero progress [View news story]
    "They" all need a short-term fix.

    $300B on the debt limit gets us to $17T even and probably about 4 months of breathing room.

    CR with current spending levels, elimination of the 2.3% medical device tax, and a 1-year delay of the "Individual Mandate" to match what Obama did for the business mandate. The 17% "shutdown" can drag on a lot longer than the debt limit issue.
    Oct 8 03:20 PM | 1 Like Like |Link to Comment
  • Goldman: Selling gold a "slam dunk" [View news story]
    I sure am glad Goldman Sachs is looking out for me!

    What a wonderful, generous, caring Wall Street Bank to go out of their way to make sure the "little guy" does well with his investments.

    I think I'll send GS a fruit basket to thank them for keeping me from losing money. You can always count on good old Goldman to share their proprietary knowledge with everyone for free, so that we all get rich in these crazy markets, not just them.
    Oct 8 03:14 PM | 1 Like Like |Link to Comment
  • Sometimes Stocks Do Crash [View article]
    Depending on who wins and loses, the trade might be "reversed".

    Wall Street wins = All trades stand.

    Wall Street loses = "there was a problem with the exchange", trades cancelled.

    You might get away with snagging something for 25% off, but never 50%+ off.
    Oct 8 03:03 PM | 5 Likes Like |Link to Comment
  • Fed Likely To Postpone QE Tapering Decision Into 2014 [View article]
    "Such a massive asset buying program was never intended to be permanent."

    Mr. Putnam,

    Nice article and good analysis. But you may have wasted your time because of the line I've highlighted. QE may not have been "intended" as a permanent feature of our economy, but after 4.5 years and running during this "recovery" it has become obvious that the economy would disintegrate without it. QE at some level will ALWAYS exist as the Fed's primary tool now, as ZIRP will probably not be changed for the next several decades or so either. Japan has had 0% rates for almost 25 years now.

    Therefore, as the economy waxes and wanes, QE will adjusted up and down from the (now likely) baseline of $85B per month. During growth, perhaps the Fed will cut to $10B per month, and during recessions perhaps increase to $150B or even $250B per month. The idea that even the slightest hint of "tapering" could be muttered a mere three months from now is laughable, based on what happened when they tried it this year. With the Fed crew you've mentioned, and possibly with Yellen as the Chair, there will be nothing but nervous continuum on QE throughout 2014.
    Oct 7 05:27 PM | 1 Like Like |Link to Comment
  • Is The Debt Issue Phony? [View article]
    I'm not advocating no Medicare, or no Social Security, etc. But what I am advocating is that everyone stop thinking about these programs as "accumulated savings" and see them for what they really are - a promise made on behalf of future generations that they will pay for something, without any knowledge of whether they will want to or even be able to.

    Detroit made some pension promises based on anticipated future taxes. Then all their population and jobs left, and those promises are worthless. Don't be too sure that all the money you have planned for will be available from other people's income streams in the future. Is it "fair" since you've paid in for so long? Only as fair as making a promise that someone else's grandchildren are obligated to keep.
    Oct 4 05:36 PM | 5 Likes Like |Link to Comment
  • Is The Debt Issue Phony? [View article]
    What is the account number on your Medicare account? How much do you have in there? You must have something in there since you "paid for it".

    Oh, or maybe what you mean is that you expect future generations to give you some of their income for your medical care, since you gave some of your income to support people older than yourself.

    I'm sure those future generations will have to carefully consider your request, especially if they are paying interest on a $40 Trillion deficit, and mostly work 29.5 hour jobs at Starbucks.
    Oct 4 04:19 PM | 3 Likes Like |Link to Comment