You Stupid Fool (Bernanke)
The Market Ticker ® - Commentary on The Capital Markets
Posted 2009-11-16 14:26
by Karl Denninger
in Federal Reserve
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You Stupid Fool (Bernanke)
 

Does anyone remember my ranting at Paulson when he was talking about his "Bazooka"?  Here is what I said:

This joins the list of other "dead wrong" statements you've made, of which I am keeping a running copy and sent them around on the 19th of July. 

How many times do you get to be wrong as Treasury Secretary Hank before you resign in shame?

And now I must ask again - is that really a Bazooka in your pocket, or an empty launcher?  I'm not the only one that's curious you know; the bond market seems to think it smells like BS, and so does the stock market.

Fannie and Freddie collapsed, remember?

Paulson was proved - and rather quickly so - to be completely full of crap.

Bernanke's comments today may have just provoked a dollar catastrophe - a collapse move that may have just begun.  Witness this chart:

The market took about 10 minutes to discern that Bernanke's "concern" was BS, and now has pushed in the chips - "all in" - breaking key support below 75 - and still going.

The carry traders have redoubled their bets and obviously intend to force Bernanke to either put up or shut up.

The problem with Paulson's claim is that when the market called the bluff he wound up sticking the taxpayer for up to $400 billion, of which more than $100 billion has now been dissipated.

It appears the FX market intends to force Bernanke (and Geithner) to either defend the dollar or allow it to collapse.  The violence of this move and the concurrent "ramp job" that accompanied it in the S&P 500 makes clear a few points though.

  • The "efficiency" of transmission between this move down and the move up in the stock market is lower than the previous moves have been, although the correlation remains intact.

  • The FX markets will press this bet incessantly as they did when Geithner last mouthed the "strong dollar" mantra.

The Fannie and Freddie game wound up bankrupting both firms and forcing the government to bail them out.

Who is going to bail out the United States Government if and when the FX markets and carry traders cause a disorderly collapse in the dollar?

Just as with Paulson's idiocy I'll bet not one person in Congress or The Administration will stand up and put a sock in Bernanke, despite the fact that we are again seeing the "ALL IN!" game when the person doing it is holding 2-7 off-suit.

But this post, if Bernanke has indeed provoked a collapse of the dollar, is one I will be printing as a full-page advertisement in USA Today - if there still is a USA Today, or for that matter any other national newspaper to which one can freely insert material, in a couple of years.

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User Info You Stupid Fool (Bernanke) in forum [Market-Ticker]
Xanares
Posts: 2595
Incept: 2008-11-10
Green
Between Sicily and Tunisia
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You'd think they'd have learned by now, unless it is their intent of course.
Genesis
Posts: 130711
Incept: 2007-06-26
Admin A True American Patriot!
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The correlation with the stock market is starting to come unhinged.

Paulson's Bazooka played prominently in the collapse last year. This will, I suspect, play prominently in the coming one.

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Mayorquimby
Posts: 13909
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Green
The Archaic Past
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Just in time for those winter heating bills. Nice.

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They who wish to hurt you, work within the law.
- Morrissey

Gold is theft.
Xanares
Posts: 2595
Incept: 2008-11-10
Green
Between Sicily and Tunisia
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Hope not, but likely it will. If not, there's no shortage of stooges around with mics up their noses to do that trick.

Fidgit
Posts: 17784
Incept: 2008-02-18
Green
Tax Unit #1,384,923,781
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Well, I've been dithering about whether to make that loan against my 403b.

Will be sending in the paperwork tomorrow.

Bad juju goin on here...
Brushyourteeth
Posts: 1403
Incept: 2009-09-02
Green
State College, PA
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But the media and J6P will blame China and the speculators for the weakness in the dollar and spike in heating oil, and Bernanke/TurboTimmy will be praised for collapsing the economy through their "strong dollar policy."

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"The only stance they've (our world leaders) ever known is to bend over in the shower!"
Ldog
Posts: 320
Incept: 2009-06-11

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Gen:

What to do? Crash positions? I'm frightened.

Funny thing--I went to high school with Warsh. I wonder if he has any idea what he is party to?

Anywhooo get your tennis helmets on fellas...things are getting interestinger and interestinger.

Ldog
Pooslinger
Posts: 4385
Incept: 2007-11-06
Gold
Illinois
Online
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Ldog: I'm sure he would tell you to go read the "10 things to do now" ticker as a guide.
Genesis
Posts: 130711
Incept: 2007-06-26
Admin A True American Patriot!
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10 Things. NOW.

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Maddymax
Posts: 4660
Incept: 2008-02-26
Green
PONZIVILLE
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how about the senate saying no reconfirm

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Ben's policy will lead to wage deflation and commodity inflation which will lead to the Greatest Depression and Uprising Ever.
Who needs TA we got POMO
Maxi
Posts: 129
Incept: 2009-10-13

Lander, WY
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Quote:
The "efficiency" of transmission between this move down and the move up in the stock market is lower than the previous moves have been, although the correlation remains intact.


It has been moving and today accelerated into gold and silver. The violent moves blew through technical resistance in both metals.
Glasshammer
Posts: 260
Incept: 2009-09-02

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75 = The End Begins
74 = ?
73 = ?
72 = Game Over

Did KD ever post what events happend at each corresponding level?
Is 72 the worst case scenario or did I set the bar too high?



Eternalblue
Posts: 4721
Incept: 2007-08-09
Green
sokali
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REST OF WORLD TO BUKKAKE BERNANKE: DO SOMETHING OR WE'LL DO IT FOR YOU...
Striker754
Posts: 671
Incept: 2009-07-09

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If you have done the 10 things, what is the 11th thing to do? How do you protect against the dollar collapse?
Bronco
Posts: 13
Incept: 2009-02-25

Colorado
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Are you guys in cash at all?

I'll be honest - I read read read all day long and still dont know what to do exaclty.

Do most people here still belive in holding cash or FRN's for a full stop or deflation or what exaclty?

Damed either way it seems. I have some metals and some cash and some overseas investments.

I have done all 10 of the 10 things - am out of the stock market (I do believe another crash is a comin), but do we sit on cash till then to buy cheap, or do we risk getting skull F'ed as the dollar drops!
Tesla
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Green A True American Patriot!
State of Disbelief
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#11 Assume the crash position - put your head between your knees and kiss your ass goodbye smiley

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"Even a dog knows the difference between being stumbled over and being kicked." -Justice Oliver Wendell Holmes

"Neither the wisest Constitution nor the wisest laws will secure the liberty and happiness of a people whose manners are universally corrupt." -Samuel Adams
Randy123
Posts: 5776
Incept: 2008-09-24
Green
Earth
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He has a number in his head. 11k, 12k, gold 1500.....who knows? We don't know.

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China is the Enemy. Wake Up.

New Normal. Same As The Old Awful.
Cjworkman
Posts: 7948
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Green

Banned
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71.50 on $DXY...

that's the break and crash level.

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Maxi
Posts: 129
Incept: 2009-10-13

Lander, WY
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The only thing holding it at present is intervention in the Euro at 1.50.
Glasshammer
Posts: 260
Incept: 2009-09-02

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Cjworkman

Thanks for the response. If you could elaborate why its 71 as opposed to 72 I would really appreciate it.
Reza30
Posts: 289
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Dashingdwl
Posts: 9759
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Gold
los angeles
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Sadly, we are being led by idiots.

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When you are hard and disciplined, you can be principled. People fear you because they have no leverage against you. It's the truest form of Liberty.
Wearedoomed
Posts: 3584
Incept: 2009-01-14
Silver
slightly red state
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Can't wait to have greenbacks that say 1.0 × 10^9 Dollars on them. Course, that ad in USA Today will cost 1.0 × 10^15.

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And you, my father, there on the sad height,
Curse, bless me now with your fierce tears, I pray.
Do not go gentle into that good night.
Rage, rage against the dying of the light.

Jjm
Posts: 187
Incept: 2009-11-10

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You all are not paying attention. Have you forgotten what happened last Summer? This bubble is going to blow up in their faces - again (China, cough, cough) - and when the markets and commodities tank, the USD is going to soar. There is no other way to move and store large chunks of cash as these other assets sell off. Yes, the dollar index may eventually drop to 40, bui I see the dollar going to 90 before it hits 40.

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"In a mania, all investments are at the mercy of the greater fool. As in: if you can’t find one, you’re it."
-- Alex Daley

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