Disqus - Latest Comments for SWRichmond

Re: Gasparino Clarifies Liquidity To Attacking Bloggers Who Call GE

SWRichmond — Mon, 20 Jul 2009 18:36:43 -0000

These two comments are interesting:
Gasparino: "One of the reasons the Fed has given them this designation [BHC] is so they can trade, they can make some money trading, and that will provide liquidity for their clients."

Gasparino: [Goldman says] "Listen, we don't need deposits to borrow cheaply, we do have the Fed, we do have the access to the discount window…"

In essence, Gasparino reports that the Fed has hired Goldman to provide liquidity, and in return Goldman gets to borrow for nothing at the discount window and reap profits from HFT. This certainly jives with Tyler's reporting on Goldman's portion of program trading, Goldman's involvement in SLP, Goldman's angst about Serge and the FBI's rapid response.

Who needs depositors when the Fed has your back? Anyone wonder now why the market just goes up? Anyone wonder now why Goldman has a record quarter? Calling this a clusterfuck would give it unwarranted cachet.

Re: No Green Shoots For Moody's REAL Index

SWRichmond — Mon, 20 Jul 2009 14:51:32 -0000

OT,

http://bloomberg.com/apps/n...

"U.S. Rescue May Reach $23.7 Trillion, Barofsky Says (Update2)"

"By Dawn Kopecki and Catherine Dodge

"July 20 (Bloomberg) -- U.S. taxpayers may be on the hook for as much as $23.7 trillion to bolster the economy and bail out financial companies, said Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program."

"The Treasury’s $700 billion bank-investment program represents a fraction of all federal support to resuscitate the U.S. financial system, including $6.8 trillion in aid offered by the Federal Reserve, Barofsky said in a report released today."

Hey DK, the recession is over! Woo Hoooo!

Re: Frontrunning: July 20

SWRichmond — Mon, 20 Jul 2009 09:07:46 -0000

This too:

http://www.govexec.com/stor...

"The presidents of the American Postal Workers Union, National Rural Letter Carriers' Association, National Association of Letter Carriers and National Postal Mailhandlers Union co-signed the Tuesday letter to White House Deputy Chief of Staff Jim Messina, warning that the U.S. Postal Service is at risk of defaulting on a $5.4 billion payment to prefund retiree health benefits at the end of September.

The letter alleges that USPS "may not be able to make payroll in October and will be forced to issue IOUs instead."

Re: Sunday Readings

SWRichmond — Sun, 19 Jul 2009 20:08:45 -0000

Two years ago, many predicted this unfolding event thus: "It will be like watching a slow motion train wreck." And so it has been, and is.

Re: Relative Central Bank Balance Sheets And Currency Races To The Bottom

SWRichmond — Sun, 19 Jul 2009 09:33:09 -0000

GG,

Gold is a currency, and FOREX interventions are a substitute for gold transactions / convertibility.

http://seekingalpha.com/art...

Re: Dark Pools And Karl Denninger

SWRichmond — Sat, 18 Jul 2009 14:35:15 -0000

Bowyer: "What if debt was not the problem in the first place." OMFG. How can he say that shit with a straight face?

Karl slammed GE twice, they won't have him back.

Re: Goldman Sachs Full Frontal

SWRichmond — Fri, 17 Jul 2009 13:02:27 -0000

"But the key thing to keep track of is whether Goldman will do a placating PR media campaign or merely stay shut in their shell."

Personally, I am thinking "stay shut in their shell", above it all, see?

The tinfoilers always said that on the other side of a major collapse all the bad stuff would be shoved into one bank and then failed away, leaving everyone else looking righteous.

Interesting.

Re: Some More Observations On The Goldman Squidweb

SWRichmond — Thu, 16 Jul 2009 21:47:36 -0000

Put your broad brush away, dude.

Did you come to offer some defense of Goldman, or some offense against ZH? They are not the same thing you know.

Re: Frontrunning: July 16

SWRichmond — Thu, 16 Jul 2009 13:11:03 -0000

Interesting, and I appreciate the reply. I have always contended that, politically, inflation is preferable to deflation, and so would be chosen. Inflation allows transfer payment checks to continue and keeps the army deployed / empire relatively intact. Inflation thus allows government to continue as it is. You have helped me see something else: "The greedy bastards want to be made whole." By allowing big investment managers / houses to be "made whole", such as it is, inflation helps them keep their jobs. Rampant defaults / writedowns get people fired. If inflation is sufficient, everyone can hide their misdeeds and the business structure status quo remains, along with the government status quo. Inflation, then, has a better chance of preserving the status quo of everyone who had a hand in creating the crisis.

After a sufficient bout of inflation, the complaining can begin, Bernanke can be blamed and replaced, and we start over. That is assuming they don't lose control of it in a currency crisis-of-confidence. Which is altogether another story.

Re: Frontrunning: July 16

SWRichmond — Thu, 16 Jul 2009 08:49:23 -0000

The McCulley piece is very very interesting. Key points:
1. A glowing review by McCulley of more aggressive monetary policy via targeting of inflation levels, or even price levels.
2. An invitation for central banks to inculcate a climate of inflation expectations, specifically by, in essence promising to be irresponsible (in what McCulley calls the orthodox sense, his viewing reflation as the responsible course). Bernanke writing on his recommended policy for BOJ during its lost decade:
"A successful effort to eliminate the price-level gap would proceed, roughly, in two stages. During the first stage, the inflation rate would exceed the long-term desired inflation rate, as the price-level gap was eliminated and the effects of previous deflation undone. Call this the reflationary phase of policy. Second, once the price-level target was reached, or nearly so, the objective for policy would become a conventional inflation target or a price-level target that increases over time at the average desired rate of inflation.”
One cannot help, when reading this description of the first stage, but to summon up images of a step change in currency valuation such as was undertaken by FDR; how else to quickly "eliminate" a "price level gap"?

One must also ask, in earnest, why someone from PIMCO is advocating inflation. My immediate reaction is that fear stalks the halls at PIMCO. Does PIMCO have less to lose from inflation than from massive defaults? Is it that bad? Thoughts anyone?

Re: Sprott On Problems And... Problems

SWRichmond — Wed, 15 Jul 2009 20:28:52 -0000

Mr. Sprott's article is excellent and illustrates yet another issue facing Treasuries. It is clear what will happen to USD.

Re: Sprott On Problems And... Problems

SWRichmond — Wed, 15 Jul 2009 20:27:00 -0000

IMO, and at this point, yes. The problem facing holders of dollars is the dollars themselves. I describe my investment positions as "dollar-short", hedged by a substantial cash (dollars) position to avoid being forced to liquidate my dollar shorts in a period of deflation that may precede the dollar blowup. Getting the ratios right is the tricky part.

Re: These Are The People Who Do Not Want The Fed's Veil Lifted

SWRichmond — Wed, 15 Jul 2009 16:21:07 -0000

Judge,

Are you that woman the Fed hired to do PR?

It's not working.

Re: These Are The People Who Do Not Want The Fed's Veil Lifted

SWRichmond — Wed, 15 Jul 2009 16:20:12 -0000

"You act as if there are only two solutions: Fed run by central bankers, or effectively controlled by Congress."

I never said any such thing.

No Fed. Period.

Re: These Are The People Who Do Not Want The Fed's Veil Lifted

SWRichmond — Wed, 15 Jul 2009 16:16:22 -0000

"It is not a 'managed economy'. It's simply allowing the money supply to grow to maintain the cost of capital so business' can expand as they have need."

If that isn't managing the economy I don't know what could be. Besides, they are not "allowing" the money supply to grow, they are managing the money supply to ensure it grows at the rate they deem appropriate. You dissemble.

Everywhere I look I see misallocated capital: houses no one can really afford, highways to get to those houses, docks and ships to deliver endless streams of useless consumerist Chinese junk to people who would never have thought they could afford it in the first place, idle factories that used to manufacture said useless consumerist junk. All of this is the legacy of your goddamnable geniuses in the Federal Reserve and their management of the economy via the money supply (too much and too cheap).

Audit the Fed, arrest the directors, then close the damned places for good.

Re: These Are The People Who Do Not Want The Fed's Veil Lifted

SWRichmond — Wed, 15 Jul 2009 15:22:28 -0000

"That's prosperity. You can thank the Fed for controlling money supply allowing business/entreprenurs to grow, have the capital to innovate and control inflation to a very modest level."

Thank the Fed for productivity gains? Laughable. Were there no productivity gains before central banking?

Re: These Are The People Who Do Not Want The Fed's Veil Lifted

SWRichmond — Wed, 15 Jul 2009 15:20:39 -0000

The issue IS black and white. No one is smart enough to make decisions for 300 million individuals. No one should have the power to do that. Any such power will be abused and may not be allowed to exist in any person or group, certainly not in a person or group that is backed by the government with its legal monopoly on the use of force.

Never. Nowhere.

Re: These Are The People Who Do Not Want The Fed's Veil Lifted

SWRichmond — Wed, 15 Jul 2009 15:17:50 -0000

"Listen, I don't defend the Fed as perfect, it is run by men.... it is a human institution."

Exactly correct. And what group of people are smart enough to manage a $14 Trillion dollar economy composed of 300+ Million individual decision makers?

No group of people, ever.

Re: These Are The People Who Do Not Want The Fed's Veil Lifted

SWRichmond — Wed, 15 Jul 2009 15:16:01 -0000

Seriously, yes we can. Historically, national banks are agents created for looting the taxpayer. No person or agency is smart enough to manage an economy. Managed economies don't work. When they fail, they fail spectacularly. Free market economies fail too, but from lower plateaus and IMO less destructively.

You are advocating a managed economy, and in so doing are advocating allowing some group of people to make economic decisions for the rest of us, just because they can. No one should have that power. No one.

Re: These Are The People Who Do Not Want The Fed's Veil Lifted

SWRichmond — Wed, 15 Jul 2009 15:09:37 -0000

"And inflation, depressions, devaluations all occured before the Fed."

Yes, but now they happen as a direct result of the actions of a government agency, the same government that has a legal monopoly on the use of force.

"The bottom line is we've had an unparalled level of prosperity and growth the last 50 years under the Fed"
Phony growth and borrowed prosperity, which we're going to have to pay for now. Maybe you've got yours and are happy?

"do you really think the politicians controlling it could do better??"
Nope, their job is merely to provide a playing field and act to protect me from force and fraud, not to be the source / protector of the force and fraud itself.

Re: These Are The People Who Do Not Want The Fed's Veil Lifted

SWRichmond — Wed, 15 Jul 2009 15:02:43 -0000

Monetary policy is what brought us to where we are now. Do you like it?

Re: The Modern Day Reverse Alchemists

SWRichmond — Tue, 14 Jul 2009 08:57:14 -0000

Anyone have thoughts to share on GTU versus CEF?

Re: Frontrunning: July 1

SWRichmond — Tue, 14 Jul 2009 07:33:21 -0000

SO....$1.1 Trillion new debt so far in FY'09 through June, and the remaining $740 Billion new debt from now through September 30th '09? That's some funny shit there.

Re: Housing Tunes: ACME Cheap Credit Vs. Wile E Housing Bubble

SWRichmond — Tue, 14 Jul 2009 07:07:03 -0000

http://www.youtube.com/watc...

Re: Housing Tunes: ACME Cheap Credit Vs. Wile E Housing Bubble

SWRichmond — Tue, 14 Jul 2009 06:52:43 -0000

Disgust is one thing; but to do something about it, that's THE thing.