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sky_walker618 98 posts  |  Last Activity: Jan 29, 2015 8:22 AM Member since: Jan 27, 2004
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  • sky_walker618 sky_walker618 Jan 29, 2015 8:22 AM Flag

    What might the collapse in global financial economy lead to ?
    "ECB announced QE recently, hoping that it will help to forestall the dramatic slow-down in economic growth in the EU zone. The short-term beneficial effect has already shown up in the EU stock market. But, if you understand what Bill Gross has laid out, such effect will be temporary: it is like giving hormone treatment to a cancer patient -- it does not solve the root-cause of the problem. The same experiment has been conducted in US but failed: the zero-interest-rate and QE4ever have failed to boost the US economy back onto the long-run sustainable growth path.
    So what is next? One of the possibility is wider wars, or possibly WW3. This scenario will be likely, if you start to research on the two decades prior to the WW2 carefully. When the economy is not on good terms, the index of unhappiness of domestic population will likely spike. If such negative sentiment becomes prevalent and left unattended, things can get out hands unexpectedly. So usually the ruling elite will create programs to help to channel the negative sentiment to be subject to controlled release. For an individual, the best way to release stress is exercising; and for a nation, the best release venue is War, an extreme version of exercise. One can argue that the recent global events in 2014 and 2015 have laid out the foundation for such future scenario.
    "

  • In his latest Investment Outlook, Bill Gross pointed out "The good times are over", and explained why more cheap credit cannot anchor the real economic growth onto its long-run sustainable path:
    "If real growth in most developed and highly levered economies cannot be normalized with monetary policy at the zero bound, then investors will ultimately seek alternative havens. Not immediately, but at the margin, credit and assets are exchanged for figurative and sometimes literal money in a mattress. As it does, the system delevers, as cash at the core or real assets at the exterior become the more desirable holding. The secular fertilization of credit creation and the wonders of the debt supercycle may cease to work as intended at the zero bound.
    Comprehending (or proving) this can be as frustrating as understanding the differences between Newtonian and quantum physics and the possibility that the same object can be in two places at the same time. Central banks with their historical models do not yet comprehend the impotence of credit creation on the real economy at the zero bound. Increasingly, however, it is becoming obvious that as yields move closer and closer to zero, credit increasingly behaves like cash and loses its multiplicative power of monetary expansion for which the fractional reserve system was designed."

    I think that the key to understand this is to know that the real "money printing" is not done by central banks, but by the banking system, the shadowy banking system, by consumers, by the entrepreneurs, by hedge fund managers, by investment managers such as Bill Gross, etc. In a credit driven economy, the leverage effect of credit extended determines the economic growth. As all these participants in the economy are taking on more and more debt, the marginal utility of new debt/credit declines and will someday reach the "point of saturation", where the risk of unsustainable liabilities outweighs the utility generated by the marginal debt/credit.

  • In his latest Investment Outlook, Bill Gross pointed out "The good times are over"., and explained why why more cheap credit cannot anchor the real economic growth onto its long-run sustainable path:
    "If real growth in most developed and highly levered economies cannot be normalized with monetary policy at the zero bound, then investors will ultimately seek alternative havens. Not immediately, but at the margin, credit and assets are exchanged for figurative and sometimes literal money in a mattress. As it does, the system delevers, as cash at the core or real assets at the exterior become the more desirable holding. The secular fertilization of credit creation and the wonders of the debt supercycle may cease to work as intended at the zero bound.
    Comprehending (or proving) this can be as frustrating as understanding the differences between Newtonian and quantum physics and the possibility that the same object can be in two places at the same time. Central banks with their historical models do not yet comprehend the impotence of credit creation on the real economy at the zero bound. Increasingly, however, it is becoming obvious that as yields move closer and closer to zero, credit increasingly behaves like cash and loses its multiplicative power of monetary expansion for which the fractional reserve system was designed."

    I think that the key to understand this is to know that the real "money printing" is not done by central banks, but by the banking system, the shadowy banking system, by consumers, by the entrepreneurs, by hedge fund managers, by investment managers such as Bill Gross, etc. In a credit driven economy, the leverage effect of credit extended determines the economic growth. As all these participants in the economy are taking on more and more debt, the marginal utility of new debt/credit declines and will someday reach the "point of saturation", where the risk of unsustainable liabilities outweighs the utility generated by the marginal debt/credit.

  • sky_walker618 sky_walker618 Jan 27, 2015 9:46 PM Flag

    Given the impending possible slow-motion collapse of the global financial system, the WW3 might be inevitable at this point:
    ECB announced QE on Thursday, hoping that it will help to forestall the dramatic slow-down in economic growth in the EU zone. The short-term beneficial effect has already shown up in the EU stock market. But, if you understand what Bill Gross has laid out, such effect will be temporary: it is like giving hormone treatment to a cancer patient -- it does not solve the root-cause of the problem. The same experiment has been conducted in US but failed: the zero-interest-rate and QE4ever have failed to boost the US economy back onto the long-run sustainable growth path.
    So what is next? One of the possibility is wider wars, or possibly WW3. This scenario will be likely, if you start to research on the two decades prior to the WW2 carefully. When the economy is not on good terms, the index of unhappiness of domestic population will likely spike. If such negative sentiment becomes prevalent and left unattended, things can get out hands unexpectedly. So usually the ruling elite will create programs to help to channel the negative sentiment to be subject to controlled release. For an individual, the best way to release stress is exercising; and for a nation, the best release venue is War, an extreme version of exercise. One can argue that the recent global events in 2014 and 2015 have laid out the foundation for such future scenario.

  • sky_walker618 sky_walker618 Jan 27, 2015 9:44 PM Flag

    Given the impending possible slow-motion collapse of the global financial system, the WW3 might be inevitable at this point:
    ECB announced QE on Thursday, hoping that it will help to forestall the dramatic slow-down in economic growth in the EU zone. The short-term beneficial effect has already shown up in the EU stock market. But, if you understand what Bill Gross has laid out, such effect will be temporary: it is like giving hormone treatment to a cancer patient -- it does not solve the root-cause of the problem. The same experiment has been conducted in US but failed: the zero-interest-rate and QE4ever have failed to boost the US economy back onto the long-run sustainable growth path.
    So what is next? One of the possibility is wider wars, or possibly WW3. This scenario will be likely, if you start to research on the two decades prior to the WW2 carefully. When the economy is not on good terms, the index of unhappiness of domestic population will likely spike. If such negative sentiment becomes prevalent and left unattended, things can get out hands unexpectedly. So usually the ruling elite will create programs to help to channel the negative sentiment to be subject to controlled release. For an individual, the best way to release stress is exercising; and for a nation, the best release venue is War, an extreme version of exercise. One can argue that the recent global events in 2014 and 2015 have laid out the foundation for such future scenario.

  • sky_walker618 sky_walker618 Jan 25, 2015 9:37 PM Flag

    Firstly, the market might experience a major crash. Then war, as people suffer from bad economy.

  • sky_walker618 sky_walker618 Jan 25, 2015 9:35 PM Flag

    I guess that is one way to go about.

  • sky_walker618 sky_walker618 Jan 22, 2015 8:02 PM Flag

    I think that they wanted to push Putin to start the WW3. But it looks like that Putin knows better.

  • sky_walker618 sky_walker618 Jan 22, 2015 9:09 AM Flag

    Will ECB latest desperate attempt to revitalize the cancerous patient work? If you understand the points made by Bill Gross, you have already got the answer.
    So what will happen after EU falls into recession over the next several years even after the massive injection of the liquidity? War, that is. Increasing inevitable, it looks like.

  • sky_walker618 sky_walker618 Jan 22, 2015 9:06 AM Flag

    The ECB's QE program is another desperate attempt to revive the cancerous patient. The patient does not need more hormone to boost his/her appearance. The needed treatment is to the cancerous cells.

  • sky_walker618 sky_walker618 Jan 21, 2015 1:33 PM Flag

    It is the system, not any sect or anybody's fault.
    The system encourage people to act selfishly since it will bring good for all. Maybe it is true to a certain extent, but there is always a limit, I guess.

  • sky_walker618 sky_walker618 Jan 21, 2015 1:33 PM Flag

    It is the system, not any sect or anybody's fault.
    The system encourage people to act selfishly since it will bring good for all. Maybe it is true to a certain extent, but there is always a limit, I guess.

  • sky_walker618 sky_walker618 Jan 21, 2015 9:06 AM Flag

    Study WW2 carefully. Bad economy in Germany contributed to the rise of Hitler, who was really nobody and came out of nowhere. In hindsight, he, and his regime, was designed to destroy both German and Russia.
    I always wonder how could a person like him, not related to Royal family, not a decorated soldier, not a great painter, nor an heir to large inheritance, rose to the power in Germany. How did he have the foresight to establish his own army, the brown shirt, to help him to govern without the consent of the German upper class?

  • sky_walker618 sky_walker618 Jan 20, 2015 10:04 PM Flag

    When the average people are brain-washed ( or marinated) fully, then some massive events might take place to be blamed on Russia or ISIL. And the WW3 will ensue:
    Step One:
    The major powers will try to destroy the communication capability in the space on both sides. It will be a very expensive operation but it is necessary to destroy as many as satellites on the lower Earth orbit and Stationary Orbits. Many known and unknown weapon systems will be employed. The good news are that the human casualty will be at minimum.
    Step Two:
    If Step One does not stop the war, the major powers will start to destroy the communication and strategic military targets on the Earth surface with known and unknown weapon systems. That operation could be expand to dual-use civilian communication systems.
    Step Three:
    If Step Two does not stop the war, the major powers will start to attack the strategic targets, such as Three-Gorges Dam in China, and YellowStone National Park in US. If the Yellowstone Super Volcano is induced to erupt, then that would be classified as a global extinction event.

  • sky_walker618 sky_walker618 Jan 20, 2015 2:21 PM Flag

    I guess that the Elite believe that once large amount of infrastructures are destroyed and the hundreds of trillions of global debts are wiped, what is left of the civilization on this planet can restart.
    But the miscalculation could be: once the Yellowstone super volcano is to erupt, the dark ash cloud could cover the sky of the Northern Hemisphere for at least two years. Things can get out of control. :-))

  • I think that all the noises, such as ISIL, EBOLA, Terrorism, etc., are designed to distract the average people from the real problem: impending slow-motion collapse of the global financial system. In the end, the WW3 will be provoked, as it was during WW2.
    Here is the comment made by the legendary fixed-income investment manager Bill Gross in his latest Investment Outlook:
    "...
    If real growth in most developed and highly levered economies cannot be normalized with monetary policy at the zero bound, then investors will ultimately seek alternative havens. Not immediately, but at the margin, credit and assets are exchanged for figurative and sometimes literal money in a mattress. As it does, the system delevers, as cash at the core or real assets at the exterior become the more desirable holding. The secular fertilization of credit creation and the wonders of the debt supercycle may cease to work as intended at the zero bound.
    Comprehending (or proving) this can be as frustrating as understanding the differences between Newtonian and quantum physics and the possibility that the same object can be in two places at the same time. Central banks with their historical models do not yet comprehend the impotence of credit creation on the real economy at the zero bound. Increasingly, however, it is becoming obvious that as yields move closer and closer to zero, credit increasingly behaves like cash and loses its multiplicative power of monetary expansion for which the fractional reserve system was designed.

  • I think that all the noises, such as ISIL, EBOLA, Terrorism, etc., are designed to distract the average people from the real problem: impending slow-motion collapse of the global financial system. In the end, the WW3 will be provoked, as it was during WW2.
    Here is the comment made by the legendary fixed-income investment manager Bill Gross in his latest Investment Outlook:
    "...
    If real growth in most developed and highly levered economies cannot be normalized with monetary policy at the zero bound, then investors will ultimately seek alternative havens. Not immediately, but at the margin, credit and assets are exchanged for figurative and sometimes literal money in a mattress. As it does, the system delevers, as cash at the core or real assets at the exterior become the more desirable holding. The secular fertilization of credit creation and the wonders of the debt supercycle may cease to work as intended at the zero bound.
    Comprehending (or proving) this can be as frustrating as understanding the differences between Newtonian and quantum physics and the possibility that the same object can be in two places at the same time. Central banks with their historical models do not yet comprehend the impotence of credit creation on the real economy at the zero bound. Increasingly, however, it is becoming obvious that as yields move closer and closer to zero, credit increasingly behaves like cash and loses its multiplicative power of monetary expansion for which the fractional reserve system was designed.
    "

  • sky_walker618 sky_walker618 Jan 16, 2015 9:00 AM Flag

    CNBC tried to convince you that the main cause of the current heightened market volatility is due to de-peg of the Swiss Franc from EURO. But there are more to these stories than what meets the eyes:
    "
    The wild card is the oil related derivatives. If the oil stays below $60 or goes even lower, toward single digit, then unpleasant surprise might emerge out of the City of London and the Wall Street. As all the financial markets are connected, especially through the over-the-counter derivative markets, the heightened risk in a few hundreds of billions worth of oil related derivatives could easily be translated into the heightened risk in tens of trillions worth of derivatives indirectly linked to the oil prices, probably through highly leveraged "hedging positions" created by the major hedge funds. Such unwinding of financial system, if there is a unwinding, could be even more ugly than the subprime mess in 2008, partially due to the fact that the Federal Reserve has already carried $4 trillion on its balancesheet and US Sovereign debt load has reached $18 trillion as the result of the previous financial crisis. And its negative impact on the global economic growth will be immediate and will exacerbate the already difficult capital/investment situation in the oil and related industries.
    "

  • Reply to

    Legal fees? Can you believe it??

    by sky_walker616 Jan 14, 2015 1:17 PM
    sky_walker618 sky_walker618 Jan 15, 2015 1:31 PM Flag

    Sure. But they are also active market makers of various financial derivative markets. Given the crash in oil price and heightened credit/liquidity problems, they did not report a big loss from the regular business?
    The big loss is expected because it is impossible to perfectly hedge all the position in the inventory and the counter-party default. Maybe we will see it in Q1 15 report.

  • when many Wall Street professionals were seeing the incoming credit crunch and tried to liquidate their leveraged positions financial derivatives and in bank stocks.

    Even a guest on CNBC today was talking about the potential failure of banks due to the recent turmoil in the oil prices and currency market. But the trading desk usually hide the losses for as long as they could. And the news will come out only they could no longer hide their losses, as in Lehman's case.

    But this time will be different. Given $18 trillion Sovereign balancesheet and $4+ trillion Federal Reserve balancesheet, a taxpayer bailout of any failed bank is unlikely. The bondholders and probably uninsured deposit holders will have to take "haircuts".

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