Could anybody have imagined that the fake "shutdown" reached Oct 16?
Could anybody have imagined that Federal Reserve and US Treasury Dept let Lehman bankrupt?
If you truly believe that YIN, or female energy, is good for the financial market, then the most likely way forward is contraction and unwinding. Of what? The PONZI scheme, which is so massive as to have become "invisible".
Fed does not create money. The consumers, businesses and investors do through banking and shadowy banking system.
If they believe that Fed's QEs has only temporary positive effect on GDP growth, then more QEs will not do much.
These clowns in DC really overplayed their hands this time. It really can get out hand. Should we stock up on necessities?
It is funny that the Congress really like to push deadline. But this time it might get out hand.
Stock up necessities just in case.
Yellen could pump trillions of more phantasy cash into the banking system. However, if enough investors and consumers have doubt about the effectiveness of her dramatic action, then it will not be effective.
If any "austerity" measure is out of question, then the only hope is to continued demographic engineering, which eventually might involve consolidation with Canada and Mexico.
Additional QEs will not work, because the MONEY in the economic system is created by the banking system, shadowy banking system, and by investor's and consumer confidence.
Without those actual money/credit creators' active participation, any QE will only have little or temporary effect.
We can play short-term trades, before the eventual melt-down, which might be deliberate based on my observation so far.
And it is only an illusion that Yellen will really be in charge. Bernanke was never really in charge: he admitted himself about the Lehman Bankruptcy. He stated publicly that he was in favor of a bailout but THEY override him.
I guess it is OK to make some profit. But it really looks like that they are pumping up this bubble and then let collapse someday, within the next decade.
The same can be said about the housing market.
You should worry because nobody in DC cares about a long-term solution for the debt problem.
The Congress created and then resolved a fake "debt ceiling" crisis, while ignoring the long-term insolvency of US finances.
The longer we wait, the worse the eventual crisis.
Now the "debt ceiling" is out of the way, the market can focus on the long-term insolvency of US finances.
The market seems to be so sure about Yellen's willingness to continue to roll out more QEs, and keep the short-term Treasury rate at a level close to zero.
But the question is whether the T-bill rate will stay at close-to-zero level, when more and more overseas investors have doubt about DC's willingness to resolve the debt malaise, hence the willingness to service the interest and repayment of the principals when due.
Here are some possible scenarios on how that might unravel:
One of the steps includes a so-called “haircut”, or a discount, on the value of US Treasuries held as collateral against futures trades.
The interest rate for bonds held with maturity of less than one year would be raised to 3 percent from 1 percent.
“Participants should make necessary funding arrangements to cover any shortfall to their margin requirements resulting from the increase in the US Treasuries haircut,” HKEx said.
One thing I learned from this recent fake "shutdown" drama is that nobody really cares about a long-term solution to the perpetual deficit and ballooning debt problem. I think that a bad collapse is coming for sure, though the timing is uncertain.
Sure. Yellen has superb IQ, and married to a Nobel Prize winner.
The same can be said about Bernanke: his SAT score is almost perfect.
But the only problem is that the financial/economic malaise is approaching the inflection point, and cannot be saved by mortals. ;-))
We are now approaching the inflection point: failed mission of QEs ( to propel US economic growth back onto the long-run sustainable growth path); perpetual fiscal deficit; ballooning sovereign debt. We probably have reached the point of no return.
Many people would argue that all these are part of plan, by pointing out that facts
(1) in 2007, the SEC dropped the Up-Tick requirement for shorting stocks, so that short-term market players can manipulate some stocks to oblivion in short period of time.
(2) in Sept 2008, Federal Reserve decided not to bailout Lehman and instead let it bankrupt. Fed had the tools to do the bailout which would have saved the deeper economy slump.
Senator Portman's plan might be a good one. But you can no longer hear about it on the Mainstream Media. What happened?