Quotation: "If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered...I believe that banking institutions are more dangerous to our liberties than standing armies... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
That's a quote from Thomas Jefferson. True patriot if ever there was one.
Don't bother trying to sell me on the status quo of today, I don't buy it.
Get ready to rock-n-roll, all you real patriots of today.
And the hits keep right on coming.
That QE money.....most of it is on the books as "on deposit with the FED".
That's great, but the banks have been using it as collateral to make some risky bets.
I have an eerie feeling, that some of those bets have gone bad, really really bad.
I've had this suspicion for months, I think something's been covered up.
It wouldn't surprise me if we soon get a shocker headline, such as "JP Morgan found to be INSOLVENT!"
Not often mentioned in regards to the crash of 1929.....
Channels became stuffed with consumer goods during the months preceding the crash, but big business shrugged it off as a "hic-up" that would work it'self out.
They were confident that it was just a lull and that sales would resume quickly.
As far as the weakness in the economy, they may as well have chocked it up to the weather.
Meanwhile, those with horse sense were looking to pull their cash out of banks and hide it in their mattresses.
I see that, Einstein, it's why I bought at support earlier, like most days.
These posts of mine are to express my opinion of where our leadership is taking us.
What are we celebrating, the chance to have more QE in the near future, after five years of it, and how much better off are we?
Spent 8 million dollars for every new job? Most of those part time?
We're Americans, and I think we can do much better than this.
You know how in chemical reactions there is a catalyst, and in some cases there can be an accelerator?
Well, in the case of the market, I think what's happening in China is the catalyst, and margin debt will be the accelerator.
And there's also a long list of sovereign defaults either in progress or getting ready to go.
4 suicide bankers
3 fleeing forex traders
2 dead former hft bot programmers
and a partridge in the pear tree.
Pud was at the eye doctors.
The eye doctor had a very serious look on his face, and looking straight into puds eye's he said,
"I don't know how to say this pud, but it's critical that you stop playing with yourself."
To which pud replied,
"You're delusional. There is no connection between this and going blind, clinical studies prove it.
If you think there's a connection, it shows you are a knuckle dragging pattern seeking primate that shouldn't be practicing in the medical field."
To which the doctor replied,
"It has nothing to do with going blind, pud. This waiting area is a public place, and if you don't stop what you're doing I'm going to have to call the police on you."
A. Employment rate is not actually 6.6% unless you stop counting the people who's benefits expired before they found work.
B. The stock market being at all time highs means more expendable income for who?
C. Interest rates are at all time lows, but credit demand is fairly low. Trends for V, MA, and AMEX are suggesting that a growing number of people have been using cc's for essential day to day living expenses, and are running into delinquent payment issues.
D. Much of the "printed" money sits in reserve, on the big banks balance sheets.
Although inflation is "under 2%" per the FED way of measuring it, the cost of living, things like groceries and other necessities, has risen sharply over the last five years.
The type of inflation the FED looks for would be caused by a surge in demand for goods and services and would be fueled by genuinely improvements in the jobs numbers, and a rising median income. (We don't expect to see these things and neither do they.)
QE has basically filled the void in the economy that was created by the drastic effects of jobs leaving the country (thank NAFTA) and the resulting crisis in housing and financial markets (and let's not forget the auto industry).
In a fractional reserve system, loans for real estate and autos, among other things, serve to "multiply" the supply of money in the system. Without demand, this doesn't happen, and you get liquidity crises.
In other words, If it weren't for QE 1, deflationary forces would have continued to spiral out of control, (per FED theory).
Many of us feel that the job of QE was done long ago, and right now it is doing nothing but to keep the cost of goods high, and the standard of living low, for many Americans who are struggling with stagnant wages, joblessness, etc.
Labor participation rates are actually worse now than at the peak of the crisis.
Hence, the "lack of inflation."
Judging by your posts, and his, I'd have to say two things.
1) You're right about Tommy
2) He's at least 2K better off than you.
I was just pondering this very topic myself.
The bear case here has tremendous credibility.
Valuations are high, the global economy is weak because consumers are missing in action everywhere, and channels are stuffed with product. BDI has been plunging.
This market was set to take out the recent lows and head even lower, until BOJ announced more QE, which put an immediate bottom on the USD/JPY and sent it up in a hurry, and the stock market followed.
And that's it for now, that's all we have for a clue is to watch that currency pair, which drives the carry trade, which determines direction for now.
As I've began to monitor this very closely recently, I've gotten the idea that it's possible the BOTs for the indexes and ETF's are scanning the buy/sell orders for the currency pair USD/JPY.
It sure looks like it. Whether it's the case or not doesn't matter. What matters for now, is that as a trader you understand, how fragile the situation is.
So far bank runs and currency collapse of some smaller countries have been ignored, but all it's going to take is a story coming out of the Chinese shadow banking system to change the tone overnight.
Note that the recent down turn started precisely when China announced a contractionary PMI on a Wed. night recently, and stories started to emerge about their shadow banking system, and the move escalated, because of the effect these things had on that currency pair.
Until we see this, or some other black swan, you will know the driver of direction.