John Hussman: Bubble, Crash, Bubble, Crash, Bubble... [View article]
Why can't the US (Fed, Gov'ts, WS, et al) accept and adjust to a more prudent consumer psychology? It's happening, whether desired or not, thanks to the decades of unproductive largess. The savers of impoverished Asia have financed us to this state. No one needs a military to defeat us now. We're going down volumtariy with our fourth flat sreen, thrid family car, and unused extra bedrooms. BO was right about he need for change - but not the kind he had in mind.
Why the Market Is Not a Forward Looking Indicator [View article]
Asset swap? What's the "asset" they are swapping for the acquired treasury debt? I believe they are simply creating new US dollars which go to the PD's. The Fed's new asset is more treasuries. Their new liability is the dollars they created and gave/owe to the PD's. The Fed's balance sheet grows magically to hold and cover the QE purchases. As a country we are buying our own debt for newly issued currency of the realm. I don't see this as a "swap" of existing assets.
BTW, the last I looked, bank reserves (basis for new lending) at the Fed are NOT increasing.
Bonds Today Are Risky; If Preservation of Principal Is Your Main Objective, It’s Time to Shift Your Asset Allocation [View article]
If its going to "end badly" on the scale you are implying, why not short the USD, equities and governemnt bonds? The short funds were the big winners in 2008.
Sign of Another Bubble: Swap Rates Lower Than Treasuries [View article]
The swaps may simply be trying to maintain a targeted duration balance between the asset and liability sides of their balance sheets. The swaps could (should) have more to do with blancing total interest rate risk management than with the relative interest expense of the instruments. They could be trying to be close to neural in overall estimated duration of their market exposure. This can vary between banks based on asset mix, liability mix and the maturity/duration assumptions for each component.
Unfortunately, like mercury, those bonds/debt are now out there, somewhere, and still growing in volume by any measure. Eventually they will require debt service and will always command market prices. Whether the Fed/Treasury combine owns them, or they are dumped into another govenrment SPE, they are out there. The volume represents a bubble of sorts. The current risk aversion that is keeping treasures valuable will eventually turn against both the debt and an economic recovery. The bond holders are betting it is a self-sustaining bubble of value/fear/"safety'. Other investments in new production capability may never look good ehough to survive the debt trap.
TARP capped a number of efforts to stop the cascading meltdown in the global financial system. If not brilliant, and if not perfect, it was enough. And, unlike most government initiatives, It actually worked. It helped greatly to avoid a second great depression, and even ended up costing much less than aniticipated. It is one of the best things the government has done in many decades.
Ultimate Bubble and the Mother of All Carry Trades [View article]
Or, will the miners steadliy spend a lot more than $600 ot try to keep up with the demand represented by a $1200 price or $2K price, and so on. Maybe if and when gold reverts to production cost, that cost will be $2K or more.
What Railroads, Copper Are Saying About the U.S. Economy [View article]
At the end of the day, without having any natural resources to offer us, and with hunderds of millions of uneducated people in poverty, China has still accumulated $1T of our debt, and counting. Regardless of constitutional philosophy, who has been the fool?
John Hussman: Bubble, Crash, Bubble, Crash, Bubble... [View article]
Why the Market Is Not a Forward Looking Indicator [View article]
BTW, the last I looked, bank reserves (basis for new lending) at the Fed are NOT increasing.
Bonds Today Are Risky; If Preservation of Principal Is Your Main Objective, It’s Time to Shift Your Asset Allocation [View article]
Jeff Saut: 'Equity Risk Premium Exceptionally Large'- A Bullish Sign [View article]
Sign of Another Bubble: Swap Rates Lower Than Treasuries [View article]
Extreme Risk Management: Revolutionary Approaches to Evaluating and Measuring Risk [View article]
Sign of Another Bubble: Swap Rates Lower Than Treasuries [View article]
The Opposite of Monetization [View article]
Geithner's TARP Eulogy [View article]
TARP Deadbeats List Climbs as Congress Votes on Expansion Bill [View article]
What Are Today's 'Extraordinary, Popular Delusions?' [View article]
WSJ Hits Mary Schapiro Hard: Only the Tip of the Iceberg [View article]
One of These Trends Is Not Like the Others [View article]
Ultimate Bubble and the Mother of All Carry Trades [View article]
What Railroads, Copper Are Saying About the U.S. Economy [View article]