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Ct1977
Posts: 231
Incept: 2009-08-13
East Hartford, CT
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Karl....I'm starting to think the fed has really backed themselves into a corner here. Front page of the WSJ today talks about the currency wars and the dollar decline.
My thought is this: come November, if they do roll out a trillion dollar QE 2, obviously this smashes the dollar to bits and rockets oil north. Now, if they don't roll out QE 2 seems likely the markets will get destroyed. Looks like they have created one heck of a situation for themselves. If the QE isn't large enough equities could get trashed anyway.
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Mayorquimby
Posts: 13907
Incept: 2008-09-18
The Archaic Past
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Buy the rumor, sell the taxpayer down the river...
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They who wish to hurt you, work within the law.
- Morrissey
Gold is theft.
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Rd
Posts: 466
Incept: 2008-02-27
Long Island, NY
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The only inflation that will get us out of this mess is WAGE inflation, any other kind will mean consumers who are 70% of GDP will purchase less goods but spend the same.
Most US consumers are already full of debt, so I feel most will not borrow just to spend more.
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Tesla
Posts: 15541
Incept: 2008-04-03
State of Disbelief
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Grammar alert Quote:trying to "jawbone" people into believing their they're omnipotent. The trillion dollar question is, does Bernanke chief Fed dip**** understand the bond market ? 
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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
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Mikek31
Posts: 4346
Incept: 2009-05-04
Chicago
Online
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Karl, do you have an updated SPX/TNX chart? I'm wondering what the divergence is looking like now...
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Everyone keeps looking at the system and saying "it's not working, it needs to be redesigned somehow." It's working exactly the way the people who own it intend it to work.-Sutluc
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Genesis
Posts: 130663
Incept: 2007-06-26
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Yeah. It says the SPX should be about 725.
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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?
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Mayorquimby
Posts: 13907
Incept: 2008-09-18
The Archaic Past
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Quote:Yeah. It says the SPX should be about 725. Perhaps, but if the bond markets are planning on dumping their bonds onto the Fed via QE 2.0 like last time, it could be the yield curve that rises to meet the equity markets. Or, QE 2.0 could be a nothingburger or not even occur in which case, it might be 725 as you stated. I'm sure there are folks on WS that know but I sure don't.
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They who wish to hurt you, work within the law.
- Morrissey
Gold is theft.
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Pooslinger
Posts: 4378
Incept: 2007-11-06
Illinois
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Look at the TNX go! Wow! That's a new low for 2010.
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Mikek31
Posts: 4346
Incept: 2009-05-04
Chicago
Online
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That chart is just simply bizarre. Something's gotta break; we're almost what, going on 7 months now?
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Everyone keeps looking at the system and saying "it's not working, it needs to be redesigned somehow." It's working exactly the way the people who own it intend it to work.-Sutluc
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Corn1945
Posts: 4167
Incept: 2009-04-30
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Have there been times when stock/bonds have diverged before? If so, what was the cause then?
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Bagbalm
Posts: 4248
Incept: 2009-03-19
Just North of Detroit
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You brought to mind the scene in Jurassic Park where the guy throws his double rifle to his shoulder to shoot the T-Rex and all he gets is CLICK - CLICK. A real 'Oh ****' moment for Big Gun Ben Bernanke.
(I'm enough of a gun nut I realize the primers would likely drive the bullets forward far enough to engrave on the rifling - pop - pop - and then he'd really be ****ed with plugged barrels so he can't reload.)
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Pj
Posts: 1209
Incept: 2009-12-07
Putnam County, New York
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I don't doubt what you're saying Karl, but I'm about to get hit over the head by my oil company today when I fill my tank.
QE2 may be doomed to failure, but it sure is jacking commodities through the roof.
Thanks Ben, you ****ing **********!
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When the Athenians finally wanted not to give to society but for society to give to them, when the freedom they wished for most was freedom from responsibility, then Athens ceased to be free and was never free again.” Edward Gibbon
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Bogey
Posts: 1302
Incept: 2008-03-12
Montana
Banned
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Given enough time, bluffs always have a way of getting called.
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I don't mind Obama so much. It's the people in power that I can't stand.
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Fatso
Posts: 3237
Incept: 2008-02-03
Mars Hotel
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$SPX/$TNX  |
Nevertoolate
Posts: 1218
Incept: 2007-08-26
San Antonio de Bexar de runover with illegals, Texas
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So where will the TNX be when the SPX goes to 725?
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"Socialist never mind stealing, as long as they are the ones doing the stealing. They never mind lying, as long as they are doing the lying."-Mannfm11
Before you attempt to beat the odds, be sure that you can survive the odds beating you.
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Provega
Posts: 1164
Incept: 2007-06-27
Seattle, WA
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Quote:The bond market believes The Fed will FAIL. One question. If the The Fed (via primary dealers) is consistently buying at least 50% of the treasuries offered and The Fed is now the 2nd largest hold of US debt in the world. Isn't this argument flawed, or at least skewed? If the Fed IS the bond market, then what is the Fed telling us?
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Frat
Posts: 1934
Incept: 2009-07-15
NKY
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Karl said:Quote:There's nothing worse for a central banker than for the public to discern that they are out of bullets, but today, "Mr Bond" is clearly saying exactly that. Luckily - for me and my family, at least - there are a lot more "bullets" in my basement than in Bernake's pistol/squirtgun. Generational poverty? Bring it on, and thanks *******!
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We're ****ed. Where's Henry Bowman when you need him?
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Smacktle
Posts: 1358
Incept: 2009-01-20
Texas
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RIP Fed....PLLLEASE!!!
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The faults of the burglar are the qualities of the financier.
- George Bernard Shaw
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End_the_bubbles
Posts: 9515
Incept: 2009-03-25
The New 3rd World
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Quote:Because in the general sense the stock market is comprised of the short-bus riders, and you listen to CNBS and others who are trying to "jawbone" people into believing The Fed is omnipotent. IMO, the "Short Bus" should be a whole lot bigger these days. It would seem a whole lot of folks have collectively lost their minds......
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In the long run even the most despotic governments with all their brutality and cruelty are no match for ideas. Eventually the ideology that has won the support of the majority will prevail and cut the ground from under the tyrant's feet and rise in rebellion to overthrow their masters.
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