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  • Now Is The Time To Be Fearful [View article]
    What makes it greedy is when 51% have a vote to take the property of the 49%, and call it the "common good". That's the definition of greed. Greed is not wanting to keep what you have earned, greed is wanting what someone else has so badly that you are willing to use force to take it. Thus an election that determines force should be used by the 51% to take what the 49%has earned is the very definition of greed.

    What makes it ignorant is an assumption that whatever the 51% come up with will actually solve the problem, and indeed, also assumes they know what they problem is.
    Sep 20 04:13 PM | 3 Likes Like |Link to Comment
  • Now Is The Time To Be Fearful [View article]
    "Meanwhile, terrible policy decisions (e.g. Dodd-Frank, Obamacare, higher taxes), "

    Indeed. Contrary to the mouth foaming, uninformed, and gov schooled (see Jaden Smith) self congratulatory back-patters (who love to sacrifice for the family with other people's blood and treasure), the reality the only tool a gov has is coercion.

    Coercion can be the only tool granted to gov by the population. So gov can regulate with regards to coercion, which even then the incentive structures for such regulation need to be in tandem with the goals of the people that coercion is supposed to protect, but gov cannot regulate with regards to prices.

    Thus, any attempt by gov to do so, is just an arbitrarly imposed fixed costs. In other words all such gov regulations are just price fixing, and all price fixing is some sort of wage law. This means Obamacare and Dodd Frank are ultimately maximum wage laws. All wage price fixing creates unemployment, thus as unemployment rises from the price fixing of DF and Ocare, the risk-off trade will emerge.

    However, unlike the price fixing for money mediums, which is done by the Fed and which happen very quickly, the price fixing from fiscal policy (DF and Ocare) will tend to be slower. So the time to be afraid, may not be until later in 2014 or early 2015. We will have to see how fast DF and Ocare add to unemployment as their maximum wage laws begin to kick-in.

    So what we need to look at now, is the subsidies come out of the Fed in the form of accommodation. Especially with QE continuing, Fed notes are being created that eventually wind up bidding up equities. So, as long as that continues, equities will continue to rise and so will bond yields (risk-on).

    We will have to keep an eye out for actual tapering, but barring that, we will need to watch the employment numbers as DF starts to shrink credit and Ocare starts to shrink healthcare and its realted employment. So for now I can see a possibility of 2000 on the S&P and crossing 3% on the 10yr by sometime in 2014.

    At that point we will have to see if worsening employment is creating enough risk-off for the Fed to increase QE and get equities reinflated. For now though, risk-on should dominate, so equities up and bond yields up (hey I thought the Fed said buying would reduce rates - where was the 10 yr when BB started buying?).
    Sep 20 01:46 PM | 3 Likes Like |Link to Comment
  • QC#262, September 3, 2013 [View instapost]
    The jawboning resumes.
    Sep 20 12:43 PM | 2 Likes Like |Link to Comment
  • Stability Of The European Union (21) August 28, 2013 To November 8, 2013 [View instapost]
    And the jawboning resumes.
    Sep 20 12:40 PM | 3 Likes Like |Link to Comment
  • QC#262, September 3, 2013 [View instapost]
    Since we are doing maps. Notice a pattern here?
    Sep 20 08:34 AM | 3 Likes Like |Link to Comment
  • QC#262, September 3, 2013 [View instapost]
    "The FED may not be in control any more."

    Well, if we mean interest rates, its important for everyone to understand that they never were in charge of rates. The ONLY thing the Fed controls is the issuance of monopolized bank notes. We call them Fed notes or dollars. Since the impetus of organizations like the Fed are born from the false idea that a select group of "experts" can "manage" the economy, what has happened over the last few centuries of central banks is the fiddling with the hot and cold valves of the note creation machine. Its this "fiddling" that leads to inflationary booms and busts (before central banks its was just taxes and regulations creating booms and busts), and its this fiddling that has led us to believe there is a business cycle. What has really been causing the business cycle is this coercive intervention of gov, and then they blame the free market (if you've ever had any experience with regulators, they never blame themselves for anything).

    Recognizing this reality presents some modicum of protection for us. The Fed has been creating more Fed notes. Those notes are used to bid up asset prices. Initially when those notes are created, rates dip down, but since this new printing puts new notes in the system, something somewhere gets bid up. The final manifestation of this "inflation" is usually in equities. The inflation (inreasing yield) in equities starts to attract people from bonds, and presto, bond rates go up. This is exactly what we have seen in QE, which is how we get to here...

    "Rates seem to be going up in spite of the FED's best efforts to keep them at zero."

    And why I comment on this...

    "After all it would seem they have no where to go but up."

    Rates will go up during prolonged QE, because it creates the notes that ultimately get used to bid up equities. Without QE, rates will go down, because equities would go down. Without the extra notes to keep equities bid up, people begin to sell because buyers are harder to come by. When they do, they seek safety, and bond rates go do. So rates do have somewhere else to go. They can go back down and stay there.

    This will happen because the real productivity (even by GDP standards) doesn't justify equities and rates where they are at. Now compound this lack of productivity and weak employment with Obamacare and Dodd Frank. All regulations are maximum wage laws, and maximum wage laws mean unemployment. So more pressure on employment means risk-off, equities get even more pressure and bonds get even more buyers, which helps keep rates low.

    So, given all this, how in the world could the Fed ever take its foot off the gas pedal? They may, because as I noted before, they think they control interest rates, so they think they have to "manage". Their managing is creating the risk-on and risk-off. Knowing this is how we protect ourselves. If they ever really do end QE, expect the inflation support for equity prices to end, and then move accordingly.
    Sep 18 04:56 PM | 6 Likes Like |Link to Comment
  • QC#262, September 3, 2013 [View instapost]
    I've got a feeling all this tapering talk is just jawboning. They've been talking like this for a while, but yet the never change the policy.

    As long as QE is on, its risk-on. Stocks will keep going up and so will yields (funny - I thought we were told Fed buying lowers rates, well, they've been buying and rates have been going up).

    And, from what I have read about Yellen, she seems to want to print more than BB does. It just seems logical to think that nothing is going to change until BB is gone, and then the only change that seems logical is QE goes to $95 billion a month.
    Sep 18 02:15 PM | 5 Likes Like |Link to Comment
  • Larry Summers Withdraws - Implications For Investors [View article]
    Well, looks like we got the "stall".
    Sep 18 02:03 PM | Likes Like |Link to Comment
  • But How Near Is The Fall? [View article]
    Looks like a Red Green fan here.
    Sep 17 03:49 PM | Likes Like |Link to Comment
  • Another Preemptive Withdrawal From The Fed Chair Race [View instapost]
    Ad hominem and rudeness? It's funny how people that support coercion, suddenly feel insulted when their lack of reason is exposed. It's also interesting how they think others control how they feel, which is why they are so concerned with rudeness.
    Sep 17 06:04 AM | 3 Likes Like |Link to Comment
  • Another Preemptive Withdrawal From The Fed Chair Race [View instapost]
    My hat is off to Chris.
    Sep 17 06:00 AM | Likes Like |Link to Comment
  • Another Preemptive Withdrawal From The Fed Chair Race [View instapost]
    "well-established existence of the public good "

    Well established? Talk about your lack of empirical evidence, or even basic logic and reason.

    Oh wait, its probably the same "well-established" evidence of a rock that keeps away tigers. The empirical evidence shows the rock works because we don't see any tigers. Kudos to anyone that recognizes the off beat reference.
    Sep 16 08:30 PM | 2 Likes Like |Link to Comment
  • Larry Summers Withdraws - Implications For Investors [View article]
    I just guess Thoreau wanted "no gov" like what we have in Somalia.

    I do believe that is the correct, programmed macro short-cut key response.
    Sep 16 08:26 PM | 1 Like Like |Link to Comment
  • Larry Summers Withdraws - Implications For Investors [View article]
    Yellen has made some comments about the "Quit Rate", and expressed concern that it is not going up. The impression I have about her is that she will tend to QE even more than BB.

    September may not bring taper, but a stall until Yellen can start directing policy.
    Sep 16 08:24 PM | Likes Like |Link to Comment
  • Another Preemptive Withdrawal From The Fed Chair Race [View instapost]
    " financial markets and politics are joined at the hip "

    Indeed. All this separating politics from the economy is just a bunch of semantics by people wanting to use the political process to separate people from the benefits of their labor (income). Its an old bromide that goes way back in an attempt to use semantics to make people think politics should be separated from finances. Well what good is freedom of speech, if all your speaking can't stop others from taking your property. What point would there be in speaking out in such a scenario?

    Make no mistake, finance is politics and politics is finance. Its all about the money, and all the semantics about the public good are just head fakes to make people think its not.
    Sep 16 02:23 PM | 2 Likes Like |Link to Comment