Kris says treasuries are safe though, bro. There's no reason to believe, in the context of mounting deficits/maturity obligations, that they will ever be unsafe. Empires and monetary systems last forever.

5/27/2011 11:39:00 AM

Quote :

" We just experienced the 2nd biggest selloff of all-time in the us treasury by foreigners."

Link plz

5/27/2011 3:18:48 PM

^^, ^^^ I love how divorced from reality you two are.

Quote :

"Concerns about a slowdown in economic growth, coupled with eurozone jitters, have sent traders flocking to the safe haven of the bond market. Until April, the yield on the 10-year note remained in a tight range -- sitting around the 3.4% mark -- but it didn't last. Over the past several weeks, Treasury prices have steadily risen, pushing yields to five-month lows."

http://money.cnn.com/2011/05/27/markets/bondcenter/treasuries/?section=money_latest

This isn't to say bonds will stay up, if we continue to have good economic reports, prices will probably weaken, if we don't, prices are likely to go up or stay where they are. I'm interested to see how next month plays out. The only thing I feel confident about is that face's doomsday predictions will both continue to be wrong, and continue to be spouted by him.

[Edited on May 27, 2011 at 5:52 PM. Reason : ]

5/27/2011 5:49:53 PM

http://finance.fortune.cnn.com/2011/05/27/dont-believe-the-u-s-default-fear-hype/

5/27/2011 10:07:19 PM

No, the only thing we know for sure is that our economy will undergo a massive shift and that our deficits will continue to mount.


The farther you push a beach ball below water the harder it comes bursting above the surface when you let go.


That baby is way below the waterline right now and its creating quite the tidal wave on its way to the surface. So here is our choice. Face the music now or suppress it further with qe 3

Debt crises are not fine wines. They do not get better with age. My vote would be to take the pain now rather than facing a nightmare later.

6/2/2011 8:14:15 PM

Well your proof of "a beachball" has convinced me. I know now that the world will end due to the pending economic apocalypse.

6/2/2011 8:35:41 PM

Kris, you should have more respect for someone who is trying to help people. Your attempts at humor by making disparaging remarks about me typically fail.

Because you can never refute my statements you try to undermine my credibility. That's a common defense mechanism but its not necessary in this case.

My advice would be to stop taking things personally, and listen to my advice before its too late.
I can lead you to the water but I can't force you to drink. For everyone else's sake and safety please don't attempt to undermine how serious this crisis may become.

6/2/2011 8:47:46 PM

I don't attempt to undermine your credibility, you have none, in the same way that a homeless person wearing a sandwich board that says "THE END IS NEAR" has no credibility. I make fun of you because you are a fool driven by delusion rather than fact.

6/2/2011 9:39:08 PM

You know 5-6 years ago I might have thought the same way you do if someone pointed this stuff out to me. But i would have been wrong then much like you are now.

Do you cover your eyes during the scary parts of movies too? Why do you fear the truth so much? These ideas are not my own, these are the mainstream conversations had daily by the top investment professionals in the world

6/2/2011 9:56:02 PM

Quote :

"these are the mainstream conversations had daily by the top investment professionals in the world"

No they aren't.

6/2/2011 9:57:51 PM

PIMCO agrees with rally, not with Kris.

6/2/2011 10:02:52 PM

PIMCO isn't even top five by assets, but I doubt Bill Gross would agree with the crazy shit face has been spouting or he would be increasing his exposure to canned goods and firearms.

6/2/2011 10:08:53 PM

Who gives a fuck if they aren't top 5? A trillion is e-fucking-nough that their opinion carries a shit ton more weight....a trillion more....than some chode who believes in failed political/economic systems.

6/2/2011 10:25:29 PM

Quote :

"I doubt Bill Gross would agree with the crazy shit face has been spouting or he would be increasing his exposure to canned goods and firearms."

Quote :

"who believes in failed political/economic systems"

I guess you still think you know what economic system I believe in?

[Edited on June 2, 2011 at 10:31 PM. Reason : ]

6/2/2011 10:30:40 PM

Im not talking about the characteristic rallydurham embellishment of a post. All that shit is just stuff he posts to entertain himself. The rest of the meat of his post PIMCO is in agreement with.

And yes, the economic and political systems you believe in don't work or have failed. Prove me wrong.

6/2/2011 10:38:05 PM

Prove to me you even know what system I believe in.

6/2/2011 10:44:21 PM

How about I post the following excerpts and we look at the facts, Kris?

Instead of you talking for once, why don't you try listening? You are clearly the one who is delusional.

Quote :

"The Federal government borrowed and spent $5.1 trillion over the past four years to generate a cumulative $700 billion increase in the nation's GDP. That means we've borrowed and spent $7.28 for every $1 of nominal "growth" in GDP. In constant dollars, GDP is flat: we got no growth at all for our $5.1 trillion: zip, zero, nada. In constant dollars, the GDP in 2011 might return to the 2007 level, if the economy continues "growing" at the same pace reached in the first three months of 2011. If not, then the GDP will actually be lower than pre-recession levels. If you borrowed $7 to get $1 in your pocket, would that strike you as a good deal? How long do you reckon you could borrow $7 to get $1 of "growth" in your finances? Let's say you need $3,000 a month to pay all the household bills. No problem, just go borrow $21,000 and your household economy will "grow" by $3,000. If this isn't the height of fiscal nonsense, then what is? "

Quote :

"last week's outlier of only 60x more insider selling than buying, the latest Bloomberg S&P500 insider selling (and occasional) buying update shows that corporate insiders are once again reverting to the mean of dumping as much of everything as they can with both hands. The last week saw nearly 150x more insider selling to buying, with just $2.3 million in purchases (nearly half of which was accounted for by the $1MM purchase in Medtronic), offset by $333 million in selling. The biggest sales were Hershey, Autozone, Abercrombie and Fitch, Agilent and Chipotle, better known as some of the biggest bubbles in the current market. "

Quote :

" Remember when the president uttered the magic words back in March 2009, when he said that "profit and earning ratios [whatever the hell those are] are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it" giving the green light for the 2 year bear market rally? Well, if that was global market Risk On, Janet Yellen just gave the Risk Off command. To wit: "forward price-to-earnings ratios in the stock market fall within the ranges prevailing in recent decades, and are well below the early-2000 peak, although corresponding measures for small-cap equities (not shown) appear somewhat elevated....special questions included in the March 2011 SCOOS suggest an increase in the use of leverage by some traditionally unlevered investors (such as pension funds and insurance companies) as well as hedge funds during the previous six months. " Yup: small caps, aka the Russell 2000, aka the Economy according to the Fed's third mandate. Ironically, the Fed realizes the Catch 22 it is caught in, which we noted earlier, namely that stocks are pricing in QE 3, but for QE 3 to happen stocks have to drop 20% from here. Well, this may be the last warning from the Fed."

Quote :

"Goldman Cuts NFP Forecast To 100,000 - Sheer Panic On Wall Street As The Heroin Addicts Demand QE3 NOW"

Quote :

" Just out in Bill Gross' latest monthly missive in which he compares Treasury longs to frogs in a pot, which are slowly starting to boil. As a result, he issues a clarion call to all: "All right fellow frogs, so we’re being repressed and shortchanged in order to allow Uncle Sam to balance its books. Whatta we gonna do about it? “Frogs of the world unite,” as Lenin might have said" and urges bondholders to be properly compensated for their risk by switching out of "rich" fixed rate into "cheap" floating rate exposure. The reason is that nominal yields, Gross contends, just make no sense: "Prices are already nearing the boiling point and his coupons are subzero, CPI adjusted. Total return…and our frog…are cooked, or if not they are certainly trapped in a future low return kettle of water.""

6/2/2011 11:47:14 PM

Quote :

"The point I’m trying to emphasize is that the relationship between the debasement of the coinage and price levels is non-linear. A monetary system can be abused for a long period, but not indefinitely. A tipping point is reached when CONFIDENCE in the value of the currency collapses, leading to a surge in inflation – hyperinflation in this case. The corollary with today’s financial system is that the quantity theory of money is not linear either. However, the abuses are piling up in obscene fashion and we are approaching the tipping point. Today the “path of runaway inflation and fiscal irresponsibility” incorporates all manner of abuses like trillion dollar deficits, bank bailouts, near zero interest rates and Q1, QE2…! In the next chart, I overlaid the price level for the last 223 years, i.e. 1814-2010, over the price level in the Roman Empire in a way that gave me the best fit. Please note – the price level for the last 223 years uses data for Britain from 1788-1843 and from the US from 1844-2010 – hence the term “Anglo-US 1788-2010” in the chart below."

[Edited on June 2, 2011 at 11:50 PM. Reason : a]

6/2/2011 11:49:33 PM

I apologize for the triple post but I just saw above where someone asked me for more information about the 2nd largest selloff of all time by foreign owners of the US treasury.

Quote :

"Second Biggest Weekly Drop Ever In Treasurys Held In The Fed's Custodial Account As Foreigners Dump There was one truly interesting observation in this week's Fed balance sheet update: not that the actual balance sheet hit a new all time record (which it did at $2.779 trillion), or that the Fed added another $24 billion in Treasurys to its balance sheet, or that total reserves hit a new all time record, increasing by $53 billion to $1.59 trillion. No. The biggest surprise was that in the just ended week, Treasury securities held in custodial accounts at the Fed, considered by some the best real-time representation of foreign holdings of US Treasurys considering that the TIC update is not only wildly inaccurate in its monthly update, but is also 3 months delayed, dropped by the largest amount in 4 years. From a total of $2.704 trillion, USTs held in custodial accounts declined by $18.7 billion to $2.685 billion. This is the second largest decline in history, only topped by the $22.1 billion in the week of August 15, 2007 which is the week that followed the great quant crash of 2007 that wiped out, among others, Goldman Alpha. "

[Edited on June 3, 2011 at 12:38 AM. Reason : a]

6/3/2011 12:38:15 AM

Quote :

"The Federal government borrowed and spent $5.1 trillion over the past four years to generate a cumulative $700 billion increase in the nation's GDP. That means we've borrowed and spent $7.28 for every $1 of nominal "growth" in GDP."

How stupid. This was narrowed specifically to scope the depression. During a recession, government debt should rise and GDP will fall.

The rest is just observations on short term ups and down in the market. You only like to look at the market noise when it confirms your worldview, otherwise you ignore it and write it off as noise.

Quote :

"In the next chart, I overlaid the price level for the last 223 years, i.e. 1814-2010, over the price level in the Roman Empire in a way that gave me the best fit. Please note – the price level for the last 223 years uses data for Britain from 1788-1843 and from the US from 1844-2010 – hence the term “Anglo-US 1788-2010” in the chart below."

How useless to overlay the two. First off, we know that inflation was a result of the fall of rome rather than a cause of it, so the chart completely fails to correlate what he wants it to. Secondly, it's completely arbitrary. He used no sort of standard for the years, he started them at whatever he wanted to make it look like it match. Third, our inflation since removal from the gold standard shows stability.

I don't know why I bothered to type this considering you can do nothing but parrot the things you want to hear. It's amazing to me that you suggest that I am not listening when you completely ignore anything that isn't what you want to hear.

6/3/2011 1:03:18 AM

inflation is always and everywhere a monetary phenomenon.


You'd be best served to do some reading rather than typing. I didn't get this smart from re-gurgitating failed economic theories I learned in college. I got it when I searched for truth.

Also, once again you are just ignoring the information. Re-read this excerpt and then tell me why inflation being stable for the past 10 years has anything to do with what will happen now that we are experiencing a debt crisis?

Quote :

"The point I’m trying to emphasize is that the relationship between the debasement of the coinage and price levels is non-linear. A monetary system can be abused for a long period, but not indefinitely. A tipping point is reached when CONFIDENCE in the value of the currency collapses, leading to a surge in inflation – hyperinflation in this case."

Again, I lead you to the water but I can't force you to drink. I can ask that you stop poisoning other people with your failed ideology though.

Do you have any fucking idea how leveraged our system is right now? Any clue? The Federal Reserve's balance sheet is leveraged at 50x! The banks are about as bloated as they were pre-crisis. Do you know what the fuck is about to happen? Chaos. POOF. Wipeout.

When you combine massive leverage and and a liquidity drought you get chaos. Our only option is to proceed with QE3. Otherwise it's fucking lights out, period. Our central planning is playing the role of God here. They can make this market go face down ass up if they want. Do you not get it?






[Edited on June 3, 2011 at 1:20 AM. Reason : a]

6/3/2011 1:13:02 AM

Quote :

"inflation is always and everywhere a monetary phenomenon"

Do you even know what that means? You realize that statement renders the chart you just posted completely meaningless right? What is the meaning in relating two solely monetary trends if they indicate nothing more than monetary trends?

Quote :

"Our only option is to proceed with QE3."

Ok, when? Give me an estimate.

[Edited on June 3, 2011 at 1:25 AM. Reason : ]

6/3/2011 1:22:54 AM

When stocks crash enough.

6/3/2011 1:30:24 AM

So when stocks crash and people rush to bonds, you think the Fed will start buying them in mass? Why would they do that?

6/3/2011 1:32:57 AM

^ I understand perfectly well what it means. Inflation is when you print fucking money.

Inflation is NOT prices going up. Prices going up is a result of inflation.

We have massive inflation right now because we are printing money.

Prices on the other hand are not rising a ton overall, however they are rising in many markets (food, energy, etc) and they are falling less fast in other markets (real estate) than they would if we weren't experiencing INFLATION.

People tend to get awfully confused about the definition of inflation, therefore I am detailing the difference between inflation and prices.

Rome experienced massive inflation when they pulled the shennanigans we are now pulling. Get the net?



I don't know when the Fed will announce QE 3. How the hell could I possibly know that? They will do it when stocks start falling rapidly. Stocks will go down as these companies equity approaches zero.

As their company's equity approaches zero, they will say hey we need QE3.

The people will say no we dont want QE3. The Feds will ignore them and launch QE3.

The risk trade will be back on as people rush out of the dollar and into risk assets with the hope of minimizing their loss of purchase power due to the inflation of QE3.

[Edited on June 3, 2011 at 1:37 AM. Reason : a]

6/3/2011 1:35:26 AM

Quote :

"Inflation is when you print fucking money."

No. It's not. You could print money and inflation could go down, or you could not print money and inflation could still go up. It seems you don't understand what inflation is. Inflation reflects the demand for money. The supply of money or the demand for things that aren't money both impact this.

6/3/2011 1:48:48 AM

You are completely wrong, sorry.

Inflation is a monetary phenomenon, period.

Inflation is not prices. Prices are a result of inflation.

Quote :

" Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term `inflation' to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages. There is no longer any word available to signify the phenomenon that has been, up to now, called inflation. . . . As you cannot talk about something that has no name, you cannot fight it. Those who pretend to fight inflation are in fact only fighting what is the inevitable consequence of inflation, rising prices. Their ventures are doomed to failure because they do not attack the root of the evil. They try to keep prices low while firmly committed to a policy of increasing the quantity of money that must necessarily make them soar. As long as this terminological confusion is not entirely wiped out, there cannot be any question of stopping inflation"

[Edited on June 3, 2011 at 1:57 AM. Reason : but why take my word for it?]




Kris, can you please rebuff the United Nations next after you get done getting clobbered by my logic?

Quote :

"The United Nations warned on Wednesday of a possible crisis of confidence in, and even a "collapse" of, the U.S. dollar if its value against other currencies continued to decline. The UN’s mid-year review of the world economy did not get covered widely. The UN economic division said that a crisis of confidence in the dollar, stemming from the falling value of foreign dollar holdings, would imperil the global financial system. This trend, it said, had recently been driven in part by interest rate differentials between the U.S. and other major economies (see table above) and growing concern about the sustainability of the U.S. public debt, half of which is held by foreigners including the Chinese government. "

[Edited on June 3, 2011 at 2:15 AM. Reason : ding ding ding]

6/3/2011 1:54:19 AM

Quote :

"Inflation is a monetary phenomenon, period."

I just said that with this sentence:
"Inflation reflects the demand for money"

Do you really not know what that means?

Quote :

"Inflation is not prices. Prices are a result of inflation."

No, prices are the relationship between money and goods.

Quote :

"but why take my word for it?"

You can do little but parrot the words of others, in this case a so-called economist who doesn't understand what inflation is and why it can't be what he wants it to be.

6/3/2011 2:15:55 AM

That's rich. When I post things you say I'm crazy and that no one else but me thinks like this.

When I post excerpts from mainstream financial moguls I get "you are parroting others", which is it?

Care to dispute Carl Icahn next?

Quote :

"the entire "system is not working properly." His warning, stated in a very politically correct fashion, is that "there could be another major problem" either next week, or next year."

Want to bash Mark Mobius?

Quote :

" Bloomberg reports: "There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius said"

This is happening. You are doing everyone a disservice by pretending it's not. This is the future.

[Edited on June 3, 2011 at 2:27 AM. Reason : a]

6/3/2011 2:26:24 AM

Quote :

"When I post things you say I'm crazy and that no one else but me thinks like this. When I post excerpts from mainstream financial moguls I get "you are parroting others", which is it?"

Don't sell yourself short, you do both. You either post the market noise or random quotes that slightly confirms your worldview, or you post the craziest things I've ever heard anyone say, often you will post one and follow it up with the other. What you don't do is process that information as well as contradicting information and provide a sane and logical argument. Instead you post vague doomsday predictions.

6/3/2011 9:34:53 AM

Full blown panic today. Worst job numbers you could possibly imagine

6/3/2011 10:13:46 AM

Except that it's rebounded quite nicely with some good news in the non-manufacturing sector.

You obviously have a good understanding of the markets and economics in general but your tendency to sensationalize Glenn Beck style undermines your points a lot.

6/3/2011 11:11:22 AM

Quote :

"So when stocks crash and people rush to bonds, you think the Fed will start buying them in mass? Why would they do that?"

While it's impossible to track the money due to the Fed's secretive transactions, I think it's fairly common knowledge (though not common enough) that the primary dealers (http://www.newyorkfed.org/markets/pridealers_current.html) are manipulating the stock market. Sure, some of the money they throw into bonds; that's part of the deal. JPM and HSBC are manipulating silver at least, GS is doing God's Work, and I'm sure most of the other primary dealers are in on the game too. Some of this newly created money is going towards keeping the stock market up, and if there was any justice in this country, the people responsible would be in jail.

Quote :

"The people will say no we dont want QE3. The Feds will ignore them and launch QE3."

The people might, but investors will scream for it. Without QE3, this will be a devastating summer for the stock market, guaranteed.

6/3/2011 11:40:21 AM

Right the people who have to buy food and gas will hate qe3.

The people whose investments are only worth 1-2 yrs salary will loathe qe3

The 1% of the country that owns the wealth will want qe3 and they will get it bc they run the country


Look, I know you guys don't want to hear this. But we are fucked. I'm not buying enough food for everyone so you might want to save yourself

[Edited on June 3, 2011 at 12:22 PM. Reason : a]

6/3/2011 12:17:05 PM

For an example of what happens when foreign creditors realize that you can't pay, here is Troika's (IMF, ECB, EC) demands of Greece:

Quote :

"GREECE WILL REDUCE PUBLIC SECTOR EMPLOYMENT GREECE TO REDUCE TAX EXEMPTIONS, RAISE PROPERTY TAXES OVERALL ASSESSMENT GREEK PROGRAM `SIGNIFICANT PROGRESS GREEK ECONOMY TO STABILISE AT TURN OF YEAR GREECE NEEDS TO REINVIGORATE STRUCTURAL REFORMS "

Awww yea, it's that austerity. You know, that thing that we are desperately trying to avoid.

6/3/2011 12:34:44 PM

interesting that they included tax increases

6/3/2011 12:44:47 PM

Yeah, but that won't be for the "super rich" (like is suggested in the United States). It's going to be for everyone, and with government workers losing their jobs, things could get pretty bad. Expect to see some wicked riots and burned buildings.

6/3/2011 12:52:24 PM

we do QE3 --> food prices re-spike --> there will more be blood on the streets (particularly in the ME) --> fuel prices re-spike --> our GDP goes down --> we do more QE...rinse repeat


...i really don't think there will be QE3

6/3/2011 1:05:28 PM

The banksters don't give a shit about any of that.

[Edited on June 3, 2011 at 1:10 PM. Reason : ]

6/3/2011 1:10:30 PM

The rise in food prices is more complicated than just inflation IMO

[Edited on June 3, 2011 at 1:23 PM. Reason : oil prices too]

6/3/2011 1:23:14 PM

Sure, there are other factors (speculation, for instance), but inflation is the driving force causing prices to trend upwards. Even mainstream sources are now admitting that we effectively export inflation with our monetary policy.

6/3/2011 1:32:55 PM

I think inflation might play a role but supply and demand are still the biggest factors, especially in what occurred in Egypt.


but thats a different thread

[Edited on June 3, 2011 at 1:39 PM. Reason : either way people are hungry]

6/3/2011 1:38:22 PM

When we hungry we eat. When we hungry and there isn't enough food, we...overthrow the government.

6/3/2011 1:42:16 PM

When we hungry we eat. When we hungry and there isn't enough food, we...overthrow the government.


we overthrow the government and we eat bullets.

6/3/2011 1:43:35 PM

...and iPads.

6/3/2011 1:47:46 PM

So can someone post some links for my reading that show inflationary pressures were the primary factor in rising food prices in the middle east?

because, like I said, I was under the impression that supply and demand were pretty much at work

Egypt is one of the largest importers of wheat/grain in the world

meanwhile some of the worlds biggest grain producers have been hit with some epic weather lately (climate change?????)



-Pakistan had those massive floods
-Australia had their own massive floods
-Russia had a pretty bad drought and crazy wildfires last year
-China, who rarely imports any grain, is currently in a massive drought and is buying up a lot of stuff to feed their massive population


-I'm really not sure if the floods on the Mississippi will affect USA production but they might. I think they occurred after most of the uprisings though I won't count them.

6/3/2011 2:17:13 PM

Inflation isn't one of those things that's easy to chart. You don't know who the money is going to, you don't know if it's being spent or hoarded; in short, you don't know money velocity. That's why the Federal Reserve is always reactive; they have an inflation "target," but it takes time for inflation to rear it's head, so by the time it's time to "pull back," it's already too late.

6/3/2011 2:24:33 PM

pretty much sums it up.

Quote :

"Whenever I unleash a tirade at home about how Federal spending has leaped 40% in three years and how the government is now borrowing 42% of its spending, my wife points out that nobody cares because the deficit doesn't impact them at all. This always stops the tirade in its tracks, because it's so obviously true. As long as the Federal checks keep being issued and everyone gets their 17 "low-cost" meds paid by Medicare, the National Defense State gets unlimited billions to spy on the citizenry and indeed, the entire world, gasoline at $1,000 a gallon flows freely in Afghanistan and other distant corners of the Empire, and Wall Street writes itself billions in bonuses, then nobody cares about the deficit. The only way anyone will feel the deficit is if their share of the Federal swag is trimmed to pay the interest on the ballooning debt. But the Federal Reserve has a solution to that eventuality: keep interest rates (and thus yields on new Federal debt) super-low. At zero interest, $50 trillion in debt costs nothing. Heck, you and I could handle the interest payments on $50 trillion at zero interest. At 1%, the interest is "only" $500 billion a year--no big deal, as we can easily borrow another $500 billion a year, no problem. After all, the bond market hasn't barfed yet and we're already borrowing $1.65 trillion a year, plus hundreds of billions "off-balance sheet" in "supplemental appropriations.""

6/4/2011 12:37:45 AM

Quote :

"gasoline at $1,000 a gallon flows freely in Afghanistan"

I'm pretty sure Afghanistan doesn't produce any gasoline. I'm pretty sure the only things Afghanistan produces are opium and misery.

6/4/2011 1:07:53 AM

he's talking about the price of gasoline in afghanistan. You're so hell bent on making a point that you can't be bothered to read and learn anything other people are warning you about.

It's currently $400/gallon so yes this is a bit of hyperbole but it's a truly bit point in his argument. Perhaps you could scroll down a few more paragaphs to get to the crux of the statement, rather than trying to discredit an entire article based on one line, particularly since you made a reading comprehension error...?

[Edited on June 4, 2011 at 1:33 AM. Reason : a]

6/4/2011 1:25:18 AM