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jhooper

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  • Negative Interest Rates: Capital's Reproduction Problem [View article]
    Here's how good the FDIC is at predicting the markets.

    http://bit.ly/1z4Ej0S

    http://1.usa.gov/1sZPiVC

    In Oct of 2013, the 10 yr was around 2.50. By Dec it had reached 3%. Since then it has touched the 1.60s. Today its around 2%. Either way, since the FDICs dire doom and gloom prediction of skyrocketing interest rates, rates have fallen by about 100 bps.
    Feb 10, 2015. 11:16 AM | 1 Like Like |Link to Comment
  • Negative Interest Rates: Capital's Reproduction Problem [View article]
    Not to mention the regulators were giving out 1s & 2s in 2006 and 2007 for CAMELS rating. What that tells the banks is that the regulators approve of what the banks were doing, thus encouraging them to continue the same behavior in order to maintain their high CAMELS ratings.

    Also, look at schedule RC-R sometime and note that the assets that got banks in trouble get lower risk ratings by the regulators. As such, the incentive for banks is to hold these types of assets.

    As John Allison says (the former CEO of BB&T), "The problem with gov regulators is not that they induce malinvestment, but that they induce everyone to make the exact same malinvestment at the exact same time."

    http://bit.ly/1qN5u1g

    http://bit.ly/1z4DJQE
    Feb 10, 2015. 11:02 AM | 1 Like Like |Link to Comment
  • Revisions To The Nonfarm Payroll Jobs Report [View article]
    "while I may not take the initial jobs data too seriously, Mr. Market does." "

    Good point. People's emotions are inexorably part of the market.
    Feb 10, 2015. 09:00 AM | Likes Like |Link to Comment
  • Negative Interest Rates: Capital's Reproduction Problem [View article]
    "Sell bonds. "

    Well, now , that's interesting. I guess that means you think rates are about to go up? I could see 2.50 on the 10 yr if the ECB is very successful in its QE, but that's probably the high side. Are you expecting more QE from the Fed?

    If anyone is interested I like this website for tracking various CB balance sheets around the world.

    http://bit.ly/1jsAe3m
    Feb 9, 2015. 03:06 PM | Likes Like |Link to Comment
  • Negative Interest Rates: Capital's Reproduction Problem [View article]
    "Some have argued that one key reason the Fed has raised rates as much as it has is in order to slow down the real estate market. Many feared a housing bubble, similar to the stock market bubble of the late 1990s, and felt that without an increase in rates, mortgage rates would have stayed low enough to fuel even more speculation in the housing market."

    Well, they sure managed to slow down the real estate market.
    Feb 9, 2015. 12:45 PM | Likes Like |Link to Comment
  • Negative Interest Rates: Capital's Reproduction Problem [View article]
    "Some economists argue Bernanke will need to raise rates one more time to show that he is serious about fighting inflation.

    But others say the Fed has already nipped inflation in the bud and that further rate hikes could unnecessarily hurt the economy. To that end, the government reported last week that economic growth slowed to 1.1 percent in the fourth quarter, the weakest pace in three years."
    Feb 9, 2015. 12:38 PM | Likes Like |Link to Comment
  • Negative Interest Rates: Capital's Reproduction Problem [View article]
    "Bernanke should be jailed for treason - for being solely responsible for causing the Great-Recession. It's no claim. It's an incontrovertible fact. "

    http://cnnmon.ie/ZVYHCN

    This resembles the late 1920s. Strong died in 1928, and Young took over. Stong was the NY Fed Gov, and Young was the Fed Chair. Strong was really the defacto Chair until he died. He was basically Morgan's man.

    http://bit.ly/V4poTI.

    Strong had kept the DR rate low. When he died, Young's Fed raised the rate to fight what they thought was an overinflated stock market (though to be fair, Young was on the fence about this).

    Under Strong's influence the DR was typically under 4%. After he died, and under Young, the DR was raised to 6% by Sept of 1929. Does anyone remember what happened in Oct of 1929?

    http://bit.ly/1741Urv

    "Speculation now turns to what new Fed chairman Ben Bernanke, who officially takes over on Feb. 1, will do when the Fed's monetary policy committee meets next on March 28."

    The rate was raised to 5.75. In May of 2006, it was raised to 6% (like in the Fall of 1929). Then in June of 2006 it was raised to 6.25%. Where it stayed until August of 2007. Oct 9, 2007 was the peak for the S&P (but it had started wavering a few months before) before it dropped off steadily unitl March of 2009. From Aug 2007 to Dec 2008, BB started dropping the rate until it reached 50bps in Dec of 2008, but it was too little too late. It was like breaking a dam, and then trying to scoop the dirt back into the hole you just caused.

    He had pulled the carpet out from underneath asset prices by fighting inflation he didn't really need to fight, but which he fought because his dogma about his misunderstanding about economics compelled him to.
    Feb 9, 2015. 12:08 PM | Likes Like |Link to Comment
  • Greece Just Blew Up The Empire's Death Star Of Debt [View article]
    "'I will tell Mr Schäuble that we may be a Left-wing riff-raff but he can count on our Syriza movement to clear away Greece’s cartels and oligarchies,' says Yanis Varoufakis "

    That sort of sounds like Bill Clinton promising to be faithful to Hillary, but, the question remains who will concede what because they both can't get what they want.

    http://bit.ly/1zQggZd
    Feb 3, 2015. 03:05 PM | 1 Like Like |Link to Comment
  • BOA Merrill Lynch Managing Director Ethan Harris: 2015: Stocks Up Near 10%, September Rate Hike. [View article]
    When LTRO took the ECB balance sheet to over a trillion, that was risk-on. US yields ticked up slightly but not much.

    http://seekingalpha.co...

    The ECB is on the verge of growing their balance sheet. Granted, we have some different factors this time, but if ECB QE has the same effect as ECB LTRO, then the dips into the 1900s for the S&P are, in theory, a buying opportunity.
    Feb 3, 2015. 02:58 PM | Likes Like |Link to Comment
  • BOA Merrill Lynch Managing Director Ethan Harris: 2015: Stocks Up Near 10%, September Rate Hike. [View article]
    "It is hard to put a positive spin on the weakness in Q4 factory orders, as it likely points to a slowdown in business activity in the current quarter extending beyond the oil industry. If the slowdown in business investment were isolated to the energy space, job and income losses would be contained. But a glance at the detail reveals weakness through Q4 in a wide variety of industries including primary metals, fabricated metals, construction machinery, industrial machinery, computers, power transmitting equipment and transportation equipment. Nondurable shipments have fallen for six consecutive months; mostly reflecting the sharp drop in oil and petroleum product prices. This weakness won’t necessarily translate into weaker real GDP, but it will affect corporate revenue and profit figures, which, like orders, are reported and thought of in nominal, not real, dollar terms. "
    Feb 3, 2015. 02:55 PM | Likes Like |Link to Comment
  • Greece Just Blew Up The Empire's Death Star Of Debt [View article]
    What was the story of an official visiting Greece to sign some important documents, discovered that his gold pen had been stolen when he laid it down on the table? In controlled outrage, he announced that he would allow five minutes for the pen to be returned. He pull out his pocket watch, and set it down on the table and had the lights turned out to give the thief the comfort of not being identified when he returned the pen. When the official had the lights turned back on, he discovered his watch was now missing as well.
    Feb 2, 2015. 03:41 PM | 6 Likes Like |Link to Comment
  • Q4 2014 US GDP Estimate: +3.6% [View article]
    But isn't it essentially shifting cash from a "DDA" on the Fed's balance sheet to a "CD", with a corresponding shift on the bank's side of moving from overnight to an "investment" account, like an investment in a Credit Union CD as an investment?

    Or, I guess you are saying that since it is locked up in a CD, then its not an overnight waiting to be deployed in a loan or a security.
    Feb 2, 2015. 01:08 PM | Likes Like |Link to Comment
  • Q4 2014 US GDP Estimate: +3.6% [View article]
    If you don't like interest on reserves, you are going to love this.

    "The Board of Governors of the Federal Reserve System announced in a press release today that it plans to conduct a series of three weekly TDF operations in February that offer 21-day term deposits with an early withdrawal feature. Term deposits in this series will settle on the same day the operation is executed, eliminating the three-day lag between the execution of an operation and settlement in previous tests. The operations in this series will employ a floating-rate format, with the rate set equal to the sum of the interest rate on excess reserves (currently 25 basis points) plus a fixed spread of 3 basis points. The maximum individual award amount per operation will be set at $20 billion.

    For more details about TDF operations, visit the Term Deposit Facility Resource Center for Term Deposit Facility Overview, Step-by-Step Guides and Frequently Asked Questions.

    In order to participate in the Term Deposit Facility, an eligible institution must complete the steps outlined on the Term Deposit Facility Setup page. Please note the typical time from submission of the necessary forms, requests and agreements to being ready to participate is between 7 and 10 business days."

    Here are the links.

    http://1.usa.gov/1uD4jhW

    http://bit.ly/1BVlfp2
    Feb 2, 2015. 11:51 AM | Likes Like |Link to Comment
  • Interesting Times For All Commodities And Investments!! Chapter 105... [View instapost]
    "beyond the tipping point "

    Maybe that was the tipping point, but the onslaught had been going on with the ink on the Constitution still wet (though the Constitution wasn't necessarily designed to protect Capitalism). We had two central banks before the Fed Res, subsidies for steamships & railroads, protectionist tariffs, a civil war, the Railroad Commission, Spanish-American War, Lyman Gage and LM Shaw using the US Treas as a proto central bank, and so forth.

    Makes you wonder if the ideas of Capitalism will spring up somewhere else, and where will that be? Maybe Chile. Maybe Liechtenstein, Switzerland, and Bavaria form a new union based on these ideals. Maybe the US will fracture into separate countries to accomplish this.

    I believe Benjamin Franklin once said that where ever freedom is, then that is my home.
    Jan 31, 2015. 11:57 AM | Likes Like |Link to Comment
  • Interesting Times For All Commodities And Investments!! Chapter 105... [View instapost]
    "and grants themselves enormous wealth and special privileges"

    Funny you should say that.

    "No woman was to be exempt from wife-sharing."

    "Bokelson beheaded one woman who refused his sexual advances."

    http://bit.ly/1BIBMfT

    Remember this?

    "Girls as young as 11 were given a plastic Star of David, signifying that they had "the light" and were ready to have sex with the cult leader."

    http://nyti.ms/1BIBNAk

    The theme here is not that Marx and Engels represented new, enlightened and revolutionary thought, but rehashed tyranny and cultism. They shared all the sames themes that advocates for tyranny always do.

    They always make this "public good" argument, which is really just a fraud to rationalize to everyone (and probably to themselves) that their brutality is justified.

    "He gave His power to kings only to ensure the public welfare and to be the support of the people"

    http://www.iupui.edu~histwhs/H114.dir/H114...

    http://bit.ly/1yKanuK


    We can stop wasting time with these guys, and move on with human advancement via Capitalism and the peace and prosperity it provides.
    Jan 31, 2015. 11:03 AM | 1 Like Like |Link to Comment
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