Thursday the Fed announces its intentions in re QE3 more strongly, but nothing concrete in my humble opinion.
Everything else appears to be pablum.
The fact that no one in banking will be criminally prosecuted is a good thing, because it whizzes people off so badly, maybe they'll concentrate on the bleeding patient, who is bleeding dollars and penalize these clowns civilly. That's where WE need relief, and that should start with CHARGING BANKS FOR RESERVES THEY KEEP AT THE FED ON THEIR BEHALF. That will cause them to "reevaluate" lending that money to joehomeowner so that people with good jobs but on the margin loan to value, can refi and get some relief from those 2006, 5 3/4% loans. Right now, under water in value, they cannot.
Read Quailrunds be afraid very afraid article, and a snatch from Dr. Zoloft, who makes Neurobeni look like Spring Break in Florida in regards to a weak euro, but the POS and POG tell you all you need to know. The shorties are out in full force overnight, expect a pullback in the "short" term, and some sobering CPI figures showing "inflation" dollar degradation is "working" after yesterday's pop to the moon, and silver is the one "they" like to work on first, so expect some sturm und drang today.
I don't know if anyone will notice the CPI lags PPI, but I perceive a 1.2, not .6% pop. with more to go as the printed money hits the fan.
If Friday just holds market wise, we have a new floor for this inflated buzz, if not, it's a do over.
See how that works?
Nobody looked at the increase in new unemployment claims or the fact that the current average is dropping because people are back to starving to death, nobody looked at the CPI of 1.7% for August instead of 1.2% indicated by pundits, and the core increase was .2, not .1--no no, that's not important--what is important is that the irate stretch out of one year became middle of 2015--or a half year, and TWIST--we're back to buying our own bonds to keep irates low, so our refi of the loans can be ignored for everyone under water because NOBODY HAS AN 80% LOPAN TO HOME VALUE--the people in trouble that need help AREN'T THE TRADITIONAL FOLKS WHO DON'T NEED A LOAN.
These idiots keep looking for our lost economy under the bank infrastructure instead of joehomeowner, I guess BECAUSE THE LIGHT IS BETTER.
In any event, the inflationary nature of this cycle is playing out--soon the homes will double, the buying power of your dollar will be cut in half, and that should take----oh---about four years.
Or mid 2015 if we get "lucky". See how that works? No?? Me neither,
but it is commodity and gold/silver friendly.
So join with you in this impossibly complicated and needlessly vapid board, in dispising how I am going all the way to the bank every day to ring up more bazonga bux.
I made $9,000 today. By 2015, that should get me a Big Mac and Fries, but hey, you go with the flow.
Looks like the Urine-pee-ons got a reprieve, and we in turn, because the German high court said it was ok to fund the rest of Europe's bailout on the backs of the Germans, with some codicils of course--BUT--(and this is a good but)
That looks inflationary as hell to the rest of the precious metal community this morning, so we are off to the races with 1.5% popaloonie in the POS. Here's one place where Trickle Down works, it's pumping the general market this morning, and best hope Uncle Ben, no matter how dumb or lacking in efficiency and effect, keeps the party going with blah blah, if not real stimulatum excretatum. Reminds me of the FB CEO's tech meeting yesterday, boosting FB stock. First statement, sad the shares are declining ($38-$18 being no laughing matter) then absolute technical blither blather without a single word as to how to monetize that company. (I can think of about ten ways, but nothing out of the CEO's moil gave us anything in the Facebook co's plan on making some money. Any money.)
Bux up, or rather, down, for PM are flying. In the background I hear the old Repukelican John Boner yelling na-ner-na-ner with respect to our Congress not jumping off the fiscal cliff in January when the pre Bush tax cuts roar into view. His "looking forward to gridlock" makes as much sense as Reagan's borrow and spend to kill off the Russkies who were already bankrupt circa 1978. Folks forget that side of the aisle mortgaged our futures by pumping up the National Debt by THREE HUNDRED PERCENT--about one TRILLION to FOUR TRILLION in eight years. Suddenly, and only somebody as old as I can say 25 years is suddenly, the party of the rich is fiscally responsible! In the meantime, his honorable lead Presidential candidate wants to dump $2 TRILLION MORE into Pentagon spending the Pentagon didn't ask for. (The other guy pumped $20 TRILLION into health care nobody asked for either, so there is no relief between Tweedle Dee and Tweedle Dum.)
The fiscal cliff looks damping to an economy thereafter, and also anti inflationary, so that is also, in my mumbling opinion, a cliff for gold and silver, and certainly the end of hopium and that should start around Thanksgiving, with all the whiners on CNBC and Yahoo financials shoving their purple crayons where the sun doesn't shine.
Until somebody reminds you, the tax bill doesn't hit the fan until April 2014 for individuals, and everybody else will be scrambling to change their fiscal year to take advantage of whatever happens. Wow, that's really a one year reprieve, and the binge will continue as a war between the inflaters who borrow and spend, and those who think the last dime the 1971 dollar is worth deserves to be a nickel in a hurry. For those of you who think retiring at 65 is going to garner you 20 worry free years on a fixed income, best be aware, that 20 years, even at conservative rates, will lop 40% off your buying power. I hope you like oatmeal for breakfast every morning.
Back to financials--and the tax bill grace time stretching over the early part of 2013 -- Not to mention, and this will be the fine print, Congress' attempt to provide ex post facto relief--a law extending or providing new tax cuts after the fact that affects the calendar year 2013--all the way to April 14 2014. Hey, if they can suspend civil right suspensions for all terrorists like they did in Dec 2011, overturning 200 years of freedom to target terroristas, and not define what is a terrorist clearly (I think jaywalking qualifies).
So right after we pass the magic 1 January threshold, I wouldn't be too worried about the continuation of the Bush tax cuts. It will give the Congress a whole year to fight over how to gerrymander that nonsense all over the map. See how that works? You read it here first.
Yesterday's recommendation--sell covered calls -- Jan 13's are healthy, two to three bucks north of today's new high's--seems to work for me. That way I ride both ends against the middle.
Because I don't sleep as it is. Which is cool because considering my advanced age, I need all the time I can muster. Matter of fact, a catnap middle of the day Spanish style separates the 24 hour time frame into what feels like two days...hey they don't even do that in Spain anymore.
Welcome to the new yahoo, where you hunt around for the latest message often in vain. Wednesday there will be a hush as the Fed meets and sweats through language designed to mollify, when the world is looking for where's the #$%$ plan, man? I'm afraid the fear that they will be sorely disappointed will become apparent as the days wears on Wed the 12th--night before, the lead story in Japan has mentioned the dollar is weakening so futures have taken the mildest of upticks, POS included. The world should rejoice seems everyone is hell bent on mistaking the country's currency going into the toilet with "growth". It's like a guy jumped off of the Empire State Building, and comments how much he's enjoying the view on the way to splat city. For us, splat city is when the dollar collapses completely -- then the world will prosper, while we order a footlong that will cost a mere $1000. You want extra mustard and relish? That'll be one hundred dollars please.
How efficacious more TWIST is and lower irates are for another two or five years is meaningless if joeunderwater can't refi his house because Loan to Value of the house isn't met--if you can't finance more than 79.9% the value, and your note is 125% the value, how does 3.5% help you versus, 5, or 9 or 1 percent? And if you had the extra $75 or $100K to bring LTV in line, you mean to tell me you're going to gleefully put that into the house and hope the price goes up enough to cover money you just handed to a gleeful bank? You're hoping for a government bailout that actually gets to joe, with this group of gentiles in charge? Good luck with that.
One clown in charge spends $20 TRILLION in health care nobody asked for, and the other jerk thinks he should force feed ANOTHER $2 TRILLION ABOVE the budget the military has asked for--to do what? Be the policeman for the world until we and our kids are bankrupt? I got a better idea, put a couple nukes on the Frakkistani border, I will be you dollars to donuts there will be five ton vehicles with handcuffed terrorists arriving at American soldier enclaves by the truckload--with the drivers yelling "don't shoot, don't shoot, I got the terrorists right here." This gradualism crap wasn't good enough for Truman, and Reagan misled everyone for 8 years appealing to our worst borrow and spend instincts, instead of the equally obnoxious, but at least fiscally responsible "tax and spend". How the hell we can stand up and applaud borrow and spend, mortgaging future generations as more fiscally, morally, and legally circumspect baffles the living chit out of me, but there you go!
Tomorrow is a good day to buffer your investments with covered call options. Buy deep in the money puts with half the proceeds. But you know my act, better to sleep with half the gain, then not sleep at all hoping the market moves for you.
I have had all the hopium I can handle.
It's turnaround Tuesday, as the market bounces on 9/11, with nary a story by the way about that attack. All eyes are on the Fed, which is out of bullets and has to fill the gun belt with same old same old, which haven't been effective enough for most folks.
The problem with TWIST extensions is, the low irate to be meaningful, folks have to be able to refi. How do you do that if you're underwater and there is no program for folks to get out from under those 5 7/8 rates of 2006--because they can't qualify loan to value? That door was closed 9/2009--as that part of the economic submarine was taking on water, all those with high interest rate anchors around their necks, got the door slammed in their faces to make the refi that would have freed them and an abundance of cash to reenter the buying part of our market place. They've been drowning for five years at higher rates. In the meantime, we just hang on and on an on, waiting for the other 83% of the working population to make enough money to push prices around. We've got some green shoots there, as DC and parts of NY and California are showing life. But don't count on DC much longer if the pay freeze for Fed civil servants hangs on through next year, the third year in a row.
Call my next bleat don't raise the bridge lower the water. Lots of hate and discontent about the Fed civil servant salaries, never mind whether what they are paid for is worth anything, just go with the flow for a minute. Their system is still circa 1980--a defined benefit of about 30% a year upon retirement, and full Social Security. Plus a 401K if they are smart enough to save. And a system that awards them time in service annual increases to match some part of inflation, as well as about a 2.75% raise every two to three years for longevity. It's all very 19th Century, and in the go go years 1946 - 1999 lagged behind private industry about 25%. Designed to do so, in order to offset the fact that, Fed employees are rarely fired, so they don't go through periods of unemployment like their civilian counterparts.
Now look what happened. The hare stopped to rest on two major recessions, the rug was pulled out from under his house being a major part of his retirement, and the hiring folks have everyone who works by the ballyoonies when it comes to getting raises. The tortoise just plods along with his annual COLA increases and voila, in 10 years doubles his salary.
Suddenly Uncle Sam's kids aren't the poor kids on the block. They're ahead for the same reason the tortoise beat the hare. And the hare's are #$%$ they want turtle soup.
What they should be looking at is not why the Fed gets more bux, but why they get less.
See how that worked?
Maybe I can sneak this in under the yahoo radar. Though the FOMC Thursday announcement of QE III "plan to have a plan" is a virtual certainty, if you believe market betters, some of the money is coming off the table this morning in anticipation of too little, too late, so what, doesn't work, alleged peak S and P (though the NAS is still almost half the 2001 price)--I'm looking within that two day envelope for a release of the meeting notes, and this session followed by another Bernanke bleat publicly thereafter, for more QE. TWIST out one more year and low irates out till end of '15, another year, and maybe, hope against hope, penalizing banks instead of rewarding them for parking all that cash in the govt, and not lending it to joeunderwaterhomeowner. Looks like all the traditional refi's are tapped out. Time for those underwater to get these 3%'ers hanging out there, and this board came up with sliding scale of 2.75 to 3.5 % for everybody who had a job, and needed to refi up to 125% LTV.
That's not the plan for the Thursday release--it's going to be at worst a plan to make a plan at best, what I outlined above, but there is a 99% chance it will be something in the way of taking our paper dollar and shredding at least another fifty cents off the top.
If houses appreciate the 3% a year they "should" -- just add 33% to the 2002 price--all the $300K homes then should be $400K nominal now.
How's that working out for you?
Sep 10 3:00 PM Consumer Credit Jul - $8.0B $10.0B $6.5B -
Sep 11 8:30 AM Trade Balance Jul - -$46.0B -$44.0B -$42.9B -
Sep 12 7:00 AM MBA Mortgage Index 09/08 - NA NA -2.5% -
Sep 12 8:30 AM Export Prices ex-ag. Aug - NA NA -1.4% -
Sep 12 8:30 AM Import Prices ex-oil Aug - NA NA -0.3% -
Sep 12 10:00 AM Wholesale Inventories Jul - 0.0% 0.3% -0.2% -
Sep 12 10:30 AM Crude Inventories 09/08 - NA NA -7.426M -
Sep 13 8:30 AM Initial Claims 09/08 - 370K 369K 365K -
Sep 13 8:30 AM Continuing Claims 09/01 - 3315K 3300K 3322K -
Sep 13 8:30 AM PPI Aug - 1.2% 1.2% 0.3% -
Sep 13 8:30 AM Core PPI Aug - 0.1% 0.2% 0.4% -
Sep 13 12:30 PM FOMC Rate Decision Sep - 0.25% 0.25% 0.25% -
Sep 13 2:00 PM Treasury Budget Aug - NA NA -$134.1B -
Sep 14 8:30 AM Retail Sales Aug - 1.0% 0.7% 0.8% -
Sep 14 8:30 AM Retail Sales ex-auto Aug - 0.1% 0.8% 0.8% -
Sep 14 8:30 AM CPI Aug - 0.6% 0.6% 0.0% -
Sep 14 8:30 AM Core CPI Aug - 0.1% 0.2% 0.1% -
Sep 14 9:15 AM Industrial Production Aug - -0.3% -0.2% 0.6% -
Sep 14 9:15 AM Capacity Utilization Aug - 78.9% 79.2% 79.3% -
Sep 14 9:55 AM Mich Sentiment Sep - 73.0 73.5 74.3 -
Sep 14 10:00 AM Business Inventories Jul - 0.2% 0.4% 0.1 -
More in-depth information is available fr
I got 1230 EST for the release and 2PM for the jawboning for FOMC. This morning, it's the cringe before the binge.
We get the release and '"we're really REALLY thinking about QEIII" but I think the market is in for a huge disappointment and FED punts and points to down the road a bit. It might lay out what cards might be on the table in future, but I think that will smother the rally at first. TWIST is a requirement, and low irates to keep it looking like they're doing something, but frankly, I think joerefi is tapped out by end of this refi house buying time frame.
Then the binge after folks decide they're really really going to do something.
Just when you thought I couldn't count to 14, absent mindedly I laid today's diplomatic killing in the wrong country, it's Libya. There is medicinal value in coffee, and I need my meds obviously. Nonetheless, the market and the POS are well off the highs due to exuberance over German high courts giving limited go signals for the German bailout of the European euro bound union.
Sometimes the magic works, and sometimes it doesn't. The Libyans "ask" us to control ourselves in re their religion, and emphasize it by killing four innocent people. I think we should apologize, and send the note attached to 30 megatons of attention getting armament.
And since I failed geography, I'll let the Guys in Charge pick the target of opportunity. It's such a target rich environment, and I confuse so easily, so, I don't trust myself to pick the right part of Arab country. I might not care.