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  • Stability Of The European Union June 2, 2014 To ??? [View instapost]
    Last Euro status links.
    Dec 5, 2014. 09:41 AM | 3 Likes Like |Link to Comment
  • Predictions For November - Part I [View article]
    "compromise is not bad all the time-simple. And that doesn't mean he is a tyrant."

    However, passing laws that says people should be shot for not accepting the "comprises" of those offering them, is tyrannical, and its not really comprising either, is it?
    Dec 5, 2014. 09:36 AM | Likes Like |Link to Comment
  • Sell, Sell, Sell... The Central Bank Madmen Are Raging [View article]
    "It only suffices for *enough* people to follow the same trend to create a fad or a bubble"

    Well a fad is not a bubble. A bubble is indeed enough people being pushed into the same direction, but that's the point. Its a push. The push comes from a coercive source. That coercive source is gov.

    Either way, we are still left with the same reality. Even during the Fads, there were gov interfering in markets with CBs, subsidies, tariffs, etc, etc.

    The point is that there was no free market, so we can't point to any empirical evidence of a free market causing a boom and bust cycle. What we do have is thousands of years of gov being used to subsidize and price fix, and concurrent to that we have booms and busts.

    What we can also show is that, the freer a market becomes the more prosperous it becomes. That certainly gives gov intervention more wealth to exploit to cause a really big bubble and bust, but that still just shows the damage the gov intervention can cause. However, if you could limit gov to its only natural role in an economy, what you would find is that the booms and busts go away. You would certainly have specific companies or sectors rise and then go away, but that would happen as new sectors and new companies took over. You might find some plateaus, as the next new wave of technology comes on line to create the next big growth spurt, but you would not find a free market that grows and then crashes into oblivion.

    All this boom and bust from free markets is typical doom and gloom talk, and it gets tiresome hearing it without any rational basis for such talk to exist. Its just fearmongering. Its like hearing the S&P is going to crash at any moment for some unexplained fad reason.
    Nov 25, 2014. 04:59 PM | 2 Likes Like |Link to Comment
  • QuickChat #275, November 3, 2014 [View instapost]
    One more.

    Other Observations:

    1) While still high compared to 2004-07, NPL rates continue an impressive decline.

    2) C&I and Credit Card NPLs are at historic lows.

    3) Early Stage Delinquencies at 0.81% are at pre-2007 levels.

    4) Insider Loans at 0.40% are at (at least) 12 year lows.

    5) FHLB Advances (loans) at $443.18 Billion are up $70.13 Billion (18.80%) year over year.

    6) Banks shed another 11,401 employees on the quarter and are now down 31,763 in the last year and 57,236 in the past 2 years.

    7) Collective NIM hit 3.15% which is a historic low.

    8) Loans to Deposits at 69.29% is up from the recent low of 68.90%.

    9) Interest Rates on Auto and Other Individual Loans are at decade lows at 4.67%.
    Nov 25, 2014. 04:49 PM | 4 Likes Like |Link to Comment
  • QuickChat #275, November 3, 2014 [View instapost]
    Interesting observations from

    "Multifamily is up another $7.78 Billion (2.77%) on the quarter and $36.63 Billion YoY (14.52%) - which is by far the biggest yearly gainer in percentage terms. Can't help but feel a tad worried about this continued torrid growth."

    "I'm curious what Customers Bank (CUBI) in Phoenixville, PA will look like in a few years after seeing Multifamily RE loans climb from $214 Million in 2012 Q3 (9.45% of all loans) to $2.208 Billion in 2014 Q3 (40.10% of all loans). Meanwhile their CRE/TRBC concentration ratio has shot up to 520.84% which is considerably higher than 300% guidance. Not saying it won't work, but it's a lot of growth in a short time frame in a risky segment."

    "A lot of observations here, but the major headline of all banking commentary this quarter should be the $71.99 Billion quarter on quarter increase in U.S. Treasury holdings. U.S. banks are now holding $345.49 Billion after a 26.32% quarterly increase. Banks have added $185.80 Billion in the past year which is a 116.35% increase."

    "State Street increased their holdings $7.358 Billion and 264.64% for the quarter. At the end of 2013 they held $0. Bank of America was sitting at $74 million in 2013 Q3 and today (just 1 year later) they hold $54.84 Billion.

    Probably most surprising of all is Wells Fargo which increased their holdings 107.12% ($19.55 Billion) in the quarter to $37.80 Billion. The reason this is a bigger development to me is that Wells has never held any significant UST holdings and in the span of 9 months went from $474 Million to $37.80 Billion."

    "Wells Fargo's prior peak was $2.232 Billion in 2008 Q4 and now has grown to $37.80 Billion in 9 short months. To put this into perspective their growth in loans during this period was $32.46 Billion.

    Wells Fargo can take in deposits and pay out 0.04% in Demand Deposits and 0.05% in Savings Accounts and invest that money in 10-Year Treasuries earning over 230 "risk free" basis points. If I'm Wells why would I ever lend to anyone but businesses and the government?"

    "I've taken the quarterly increase in Bank holdings and split it into a monthly figure; e.g. the $71.99 Billion Q3 increase comes out to $24 Billion per month for July, August and September. The Fed purchases can be found using the Tentative Outright Treasury Operation Schedule from the Fed web site.

    Wells Fargo and Bank of America combined were purchasing $12.76 billion per month during the 3rd Quarter - just two banks were almost matching the monthly Fed purchases."

    "Pretty lucky for the Fed that just as they were winding down UST purchases a handful of big banks decided this was the perfect time to invest. Among other conclusions, this tells us that these handful of banks are taking a very large risk if rates ever start to increase or they feel very, very comfortable that rates won't be increasing any time soon."
    Nov 25, 2014. 04:42 PM | 4 Likes Like |Link to Comment
  • Sell, Sell, Sell... The Central Bank Madmen Are Raging [View article]
    That's true for me too. There are some that I definitely read, but the discourse really helps me think. Its sort of like thinking out loud, but with a response that helps you think about things you might not have otherwise.

    My advice is not to let the disagreement upset you. If you can get past all the insults and the condescension, it can be a very educational endeavor. If you can learn to control how you feel, 90% of life's stress evaporates.
    Nov 25, 2014. 04:03 PM | 3 Likes Like |Link to Comment
  • Sell, Sell, Sell... The Central Bank Madmen Are Raging [View article]
    "I don't know about you, but I give zero credit to people who call for some amorphous crash during a historic, extended bull run."

    Up above I was just told that people have a big herd mentality, and that they will all stampede at the same time for "amorphous" reasons.

    Does that mean you disagree with their analysis. I know I do. Markets crash for reasons that make sense. If you understand how the world works, then you can divine what those reasons are, instead of being shocked, and then claiming is just irrational people all stampeding for "amorphous" reasons.
    Nov 25, 2014. 04:00 PM | 1 Like Like |Link to Comment
  • Sell, Sell, Sell... The Central Bank Madmen Are Raging [View article]
    But there is no fad where all fads collapse all at the exact same time.

    But for the sake of argument, let's say there is, and everyone is part of the herd. Then how do you propose that these same herd followers can suddenly not be herd followers and stop all the rest of us from following the herd.

    What all this is, is just another variation of the "you are determined, but I am not" argument that tyrants use to trick people into letting the tyrant control their lives.

    Again, no one can show where a free market has led to everyone all at the same time led to a massive bubble that was subsequently collapsed by everyone at the same time.

    What we do have is plenty of empirical data of gov intervention utilizing subsidies to run up asset prices and then reversing those policies to cause the collapse or some other price punching a hole in the bubble.

    Select fads or examples of select companies rising and falling (which blows up the whole monopoly argument) are not examples of a market with no gov intervention in price that led to everyone all making the exact same mistake at the exact same time.

    Heck, we can't even all agree on what a free market is, much less all investing in all the same things at all the same times. If we were, then who is selling us the securities. That means somebody else is selling.

    This century old attempt to tell us everyone knows about the bubbles and their causes is classic regulatory cowardice. The politicians and their regulators create a big mess, and then want to blame others for it. This is the undisputed pattern of history.
    Nov 25, 2014. 03:57 PM | 1 Like Like |Link to Comment
  • QuickChat #275, November 3, 2014 [View instapost]
    Good article dealing with the new PPI category of "trade services".

    Remember, its all about watching to see what the Fed will do. The Fed doesn't manage the economy. It screws it up. So what we are watching for are things the Fed will do that wind up transferring wealth away from the unwary. We are trying to be the suckers.

    When the Fed dries up Fed notes, it removes the very thing that is keeping asset prices up. The IRS does the same thing. The next question is volume. How many Fed notes will the Fed or the IRS destroy. If they only destroy a little. Asset prices will only be affected a little. So, we are looking for the set of circumstances that will result in Fed notes being significantly destroyed to really damage asset prices and thus bring on a meltdown (like 2009).

    So, articles that help us determine how much the Fed will move and when, will help us watch out for the mistakes the Fed will make.
    Nov 25, 2014. 03:37 PM | 3 Likes Like |Link to Comment
  • Sell, Sell, Sell... The Central Bank Madmen Are Raging [View article]
    "because trend following behavior works as a practical matter"

    Only when there is an universal coercing mechanism, like a gov gun compelling people into that trend.

    Without that coercive trend what you get is a great deal of diversity. Religion is a great example. When is the last time all religions collapsed all at the exact same time? However, we can point to a time in history when gov was using coercion to favor the Catholic Church. That subsidy led to all sorts of strife that damaged entire economies.

    "The strategic aim was to overthrow Queen Elizabeth I of England and the Tudor establishment of Protestantism in England"

    We also see this in the middle east, where entire economies have been mired in poverty for years due to the strife caused by the attempt to use gov to subsidize one religion in favor of another.

    Religion is a consumption item in the economy, just like banking is a consumption product. The mechanics and pitfalls of picking one religion is the same as picking one bank note.

    Only the use of coercion can create the results off pushing a large fist into the middle of a large mattress with a bunch of marbles spread out on it. All the marbles will roll to where the fist is pushing down, thus creating the illusion of randomly following a trend.

    As has been noted elsewhere, Jason cannot show a time of a free market, thus he can't show a free market boom and bust. He will say "freer", but that's just a back door to saying, "yes there was still gov interference but I don't want to admit that".

    It is just fantasy land thinking that all humans will all make the exact same malinvestment at the exact same time when you can't even get them all to voluntarily go to the same church. In fact, you have great strife over the attempts to make people go to the same church. Now, you can have pockets were people invest in certain sectors or companies and the sector or company doesn't pan out, but that's price discovery and experimentation. That's different than all or nearly all sectors collapsing in price all at the same time.

    No, reality shows that the hand of coercion causes one person to inflate while another person deflates. The hand of coercion can cause this on a massive scale when it is gov doing the subsidizing.
    Nov 25, 2014. 02:36 PM | 2 Likes Like |Link to Comment
  • Sell, Sell, Sell... The Central Bank Madmen Are Raging [View article]
    "I can argue facts, I can't argue philosophy"

    Well, you aren't doing either. Philosophy is what we use to fill in the gaps between facts, but to be useful the philosophy must be consistent with the facts.

    The approach you guys have been using is to say X caused Y, but X doesn't exist.

    Then when someone points out the FACT of your illogic, you say, "Well, I just know you are wrong".

    "My dad always told me - son, never argue with a fool. Two minutes in, you can't tell the difference."

    In this case, it took less than two minutes.

    When you have some decent philosophy that comports with the facts, then you will have something worth listening too.

    In the meantime, you can just be comfortable with being shocked and surprised the next time some gov action leads to a bust which caught you completely unprepared and damages your wealth.
    Nov 25, 2014. 01:13 PM | 1 Like Like |Link to Comment
  • Fake Growth, Fake Money, Fake Jobs, Fake Financial Stability, Fake Inflation Numbers? [View article]
    "Money does not need to be, and basically isn't, a store of value any longer."

    That will never be true. Money is really an agreement for the exchange of assets. Money mediums are simply the tools people use to represent those transactions. Stocks are the same thing. Stocks aren't assets. You can't eat them or live in them. Stocks represent an idea. The idea is one of ownership in assets. Stock notes face the same dilema Fed notes face. If you issue them in such quantities that the ownership rights they represent become so polluted, then people will no longer have interest in them.

    So, why won't they have interest? Because they no longer represent value. So, notes have to be a store of value. If not, then they are just leaves or gravel.

    "And, those that insist that it must be and want to bury it in the back yard are going to lose lots of value."

    Just curious. Who do you know that is doing this?

    "That's their fault, not the central bank's."

    Do you really believe a central bank is perfect and can never make mistakes? Of course, if the central bank is so perfect, why should people shun its notes so much.

    "Nobody's taught or made to "bow down.""

    That's a laugh, even Gruber said they were stupid and he's part of the gov education system. Its no different than when the Catholic church advocated for the gov and the gov rewarded the church with mandatory tithes.

    "the money only has to hold its value for the time between selling one asset and buying any other. "

    What you are describing is just the window of time that you realize that the money has been a store of value. If it can be exchanged for assets (things people value), then it always has had value. This notion that the value only comes into existence at the moment of use, is a contrived twisting of language. When the money is in your pocket, in an electronic bit fashion, or in a safety deposit box, it can at any moment be exchanged for assets. That's why it has value. It was always storing value. Its just a feature of really good money mediums is that they are always a store of value which affords you the luxury of time in order to make purchasing decisions. If the money puts you in a situation where you have to spend it as fast as you get it, it is poor money because it doesn't give you the option of time.

    The erosion of time is the erosion of a standard of living. If a gov money is eroding the standard of living, then it is taxing them the same way the IRS erodes the standard of living by taking away your Fed notes altogether.

    Gov didn't invent money and money mediums. It confiscated them. Why? Because for gov spending is power. People respond to those incentive structures. They are not angels as you claim. They are people, and people will act in their self interest. What we have to do is make sure those self interests work in favor of everyone's self interest. That's how we all get richer. Telling ourselves lies about a central bank does not accomplish that goal.
    Nov 25, 2014. 01:08 PM | Likes Like |Link to Comment
  • Sell, Sell, Sell... The Central Bank Madmen Are Raging [View article]
    The debate is the value. I learn more from fighting with people than I do from a "sober, and non-inflammatory" piece. (I realize that such a choice of words is to denegrate in an ever oh so sober manner, which is part of the, "you all need to do as I say because I have declared I am better than you" history the human race has had aka Gruber).

    Yes, the value is bringing the readers to engage in exciting inflammatory debate. People need to learn not give others the power to insult them. If a person can do that, you can hear all sorts of challenging things and learn from them. Instead what we get is slavish devotion to dogmas about gov control based on assumptions of what people wish were true instead of desire to find out what is true.

    In order to sharpen a knife, you have to subject it to some abrasion.
    Nov 25, 2014. 12:45 PM | 3 Likes Like |Link to Comment
  • Sell, Sell, Sell... The Central Bank Madmen Are Raging [View article]
    "but I'm about as ceratin as I am of anything that you're wrong."

    Yeah, that's a real convincing argument.

    Next please.
    Nov 25, 2014. 12:40 PM | 1 Like Like |Link to Comment
  • Fake Growth, Fake Money, Fake Jobs, Fake Financial Stability, Fake Inflation Numbers? [View article]
    "That's what's irrelevant, in fact, because modern money is not a "store of value." It's a "medium of exchange"

    If it weren't a store of value, it wouldn't be a medium of exchange. Leaves are not stores of value, which is why they are not mediums of exchange.

    The "value" is the thing you consume. If you can't exchange your medium for assets, then your medium has no value.

    "It, in itself, had to be an asset"

    No, that's not what was happening. It wasn't an asset. An asset is something you eventually consume. Some assets just take longer to consume than others, and some take a really, really long time, like land, but eventually even erosion changes the land. What is really going on here is that the medium had value because it couldn't easily be counterfeited. It was a durable medium. Technology is doing that now with crypto. Paper is so last century, but the properties of what makes a good medium a good medium still exist. If Midas had really existed, people would have started to view gold like gravel. All these properties for money exist for paper as well. Money mediums must be produced on a price sensitive basis. They must represent claims on assets that people find valuable. That's why gold was prized, and why one day crypto will be as well. It represents a relationship to human action, and human action is what creates value by creating assets.

    Which you stumble into here.

    "The only time one needs to know the value of money is at the particular instant of using it to engage in commerce"

    Again, first you say money is not a store of value and then you say it is. Make up your mind.

    Akin to this

    "you know that notes depreciate over time and yet you choose"

    If they are not a store of value, then how can they depreciate?

    The problem you have is that you are talking in terms of catch-phrases and platitudes you have heard somewhere else, instead of really researching and then thinking about what all these things really are and how we use them in life.

    I will agree with you that people need to get out of the central bank notes and into other notes. A central bank creates poorly managed notes, whereas a private company has to create price sensitive notes. A central bank will forever pollute the CB note's claim on assets, whereas a private company must be careful not to pollute its notes. Since gov schools teach people to bow down and worship gov institutions, most people don't realize the threat the CB notes present to them. Thus, they don't realize they need to dump those notes as soon as they can, and find far better price sensitive notes in the equities markets.

    However, if banking were price sensitive as well as say Apple, people would have the luxury of choosing between price sensitive bank notes and price sensitive stock notes. Actually, CBs still face the demands of the market, its just that bloodshed can also be the market correction for a really bad central bank. The point of reaching enlightenment is to understand that bloodshed is a very primitive form of human interaction, but again, because of gov schools, not everybody knows that.
    Nov 25, 2014. 12:38 PM | Likes Like |Link to Comment