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| PIMpCO Is Still Talking Their Book in forum [Market-Ticker]
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Debtpie
Posts: 534
Incept: 2009-12-17
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Bubbles come from fear/greed/stupidity.
Any one of those will give you a bubble.
Any two gives you a bigger bubble.
All three gives you a whopper of a bubble.
The bond market is all 3...
[fear] of investing in anything else.
[greed] as in parking your wealth in something "better than CD's" because you "know" the Fed has your back with it's ZIRP and twist to infinity and beyond public policy.
[Stupidity]in thinking A. It will go on for a very long time and B. that you'll be the first one out the door when it "stops going on" and rates rise due to some "unforeseeable" set of circumstances.
The truth comes from PIMCO a lot more than I would expect...maybe they got a little to close to spooking their customer base?...time to play "there's no risk in bonds" tune to keep the withdrawals at a minimum...
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A Leader, or an Opportunist? "A leader has the capacity of vision, the ability to see where things are headed before people in general see those things." Mitt Romney --- DebtPie's definition: a leader decides where "things" should head and "leads" us there.
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Ktrosper
Posts: 1500
Incept: 2010-04-06
ft collins co
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Debtpie wrote..Bubbles come from fear/greed/stupidity. Welcome to the human race. You may as well say that if we eliminate humans we'll eliminate bubbles... Cheap Money is the root cause. Gimme free money and I'll gamble with it all day long because there is zero risk to me if I lose it. On the other hand, if you make sure I'm on the hook for the losses when they occur, my fear of loss keeps my stupidity in check and my greed makes me think twice before rolling the dice with my hard earned dosh ;)
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The unexamined life is not worth living.-Socrates
The only stable state is the one in which all men are equal before the law.-Aristotle
Liberty exists now in the spaces government has not yet chosen to occupy.-Doc Zero
I anticipate that 10 Dallas Cowboys Cheerleaders will blow me this evening.-K.D
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Gen_maximus57
Posts: 4580
Incept: 2007-09-03
Tampa
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Isn't printing press = internal financing?
The ECB and USA both have those...
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Bertdilbert
Posts: 2655
Incept: 2008-12-22
CA
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Quote:“You’re not talking about a bubble because a bubble is about greed,” Jeffrey Rosenberg, chief investment strategist for fixed income at BlackRock Inc. in New York, which has $3.68 trillion under management, said in a June 6 telephone interview. Absolutely correct, the argument I have made. It may be a lot of other things but a bubble it is not.
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Dear Euroland: Relax, Germany has a plan for your money!
Political Capital Defined: We are out of money but will tax our citizens for whatever it takes to "SAVE" the Euro.
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Amgrace
Posts: 2067
Incept: 2008-02-15
New Castle, PA 16101
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American politics as a system has ceased to function, because the system has gone from representing people to representing money. And that is something that can only go well as long as the people have at least some of that money. - Automatic Earth 3/17/2010
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Mannfm11
Posts: 3537
Incept: 2009-02-28
DFW, Tx
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it is a bubble because it is being financed with excessive bank credit. Doug Noland has referred to this phenomenon as the government finance bubble. Who else is financing anything? FNM, FRE, FHA, GE, FRB, UST, all the European acronyms, China, Australia and so on. Remember the cry in Spain? We can't pay 6%? 15 years ago, they were all paying 6%, save for Japan. What is going to happen when they have to pay 6% again? The pile of debt is a hell of a lot bigger than the Fed.
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The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith
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Jspiers
Posts: 2
Incept: 2010-02-05
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Sovereigns are a special breed of debtor. Have you noticed that all of the major countries that have their own printing press have low bond yields: US, UK, Japan?
Only countries that don't print a major currency have trouble attracting creditors.
Until inflation becomes a real rather than imagined threat, low bond yield are here to stay.
A bubble this is not... yet.
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Bertdilbert
Posts: 2655
Incept: 2008-12-22
CA
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Mann, the Fed can buy everything and it can be extinguished.
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Dear Euroland: Relax, Germany has a plan for your money!
Political Capital Defined: We are out of money but will tax our citizens for whatever it takes to "SAVE" the Euro.
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Vitchilo
Posts: 4590
Incept: 2011-04-27
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Hell it's not a bubble, I mean, the American and German taxpayers are good for it, promise!
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"Every normal man must be tempted at times to spit upon his hands, hoist the black flag, and begin slitting throats." -- H.L. Mencken
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Throxxofvron
Posts: 10322
Incept: 2009-02-17
Hyper-Speculative Psycho-Facsistic Parabolic Blow-Off
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Bertdilbert: In Theory that is true. I say in Theory as I am not aware of it ever having been done. I dare say that ''extinguishing Treasury Debt from the Balance Sheet of the FED might raise expectations of extinguishment with certain Other Bond-Holders and expectation of inflation in certain Producers of Energy Products and Goods I'm sure that the FED would never intentionally embark on a buying binge whereby ASSETS of various kinds were bought with naked emissions of money/credit and then certain assets were simply returned to those that they were bought from as happened to suit the political environment of the moment; -that would sound far to much like simply Printing Up Money and Handing It Out to Certain Favored Parties; -but, using this phoney money/credit other wise to SEIZE PRIVATE ASSETS... That sounds kinda like Printing to GIFT One Party and Printing to DIVEST Another. The FED wouldn't DO THAT, now would it? Hmmmm? http://www.zerohedge.com/news/cue-hyperi....Quote:
This pretty much says it all:
BOE'S POSEN SAYS TIME FOR CENTRAL BANKS, INCLUDING BOE, TO BUY PRIVATE ASSETS
POSEN SAYS BUYING PRIVATE-SECTOR ASSETS WOULD HELP ECONOMY
Buy. Real. Assets. Now
An example of such being accomplished, how well this 'extinguishment of debt' and what the repercussions were; would be most enlightening -if You would care to enlighten Me... I know that money/credit is fungible and all; but, what in your opinion would actually specifically be 'extinguished' if the FED happened to 'forgive' this debt? I see that You are from California. -What part? -I have a few other questions and comments; but, I think I'll wait for Your response before I post these questions.
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DIONYSUS: " Thou hast no knowledge of the life thou art leading; thy very existence is now a mystery to thee. " -from 'The Bacchantes' By Euripides “During times of universal deceit, telling the truth becomes a revolutionary act.” -George Orwell
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Kajet
Posts: 30
Incept: 2011-11-13
Warsaw, Poland
Banned
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Quote:How anyone can logically argue that bonds are not a "bubble" under that definition is beyond me. Lending to a sovereign government (or anyone else) who has rapidly deteriorating credit quality at ever lower interest rates is the definition of stupidity. Unless you believe you're lending in a deflating currency. If you look at the sinking asset prices, that argument could be made. The concept that US$ real interest rates are negative is based on prices of consumable goods - it's the same concept that helped Greenspan blow the property bubble by keeping asset prices out of the mix. Deflationary pressures might actually make this setup somewhat, I hate to say it, sustainable (though perhaps not for decades). |
Bertdilbert
Posts: 2655
Incept: 2008-12-22
CA
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Throxx,
It is not a question of whether a default will occur, but what form it will take when it happens. At some future point the government must clear the balance sheet.
When nobody is left to buy your crap, the Fed will be the only buyer left.
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Dear Euroland: Relax, Germany has a plan for your money!
Political Capital Defined: We are out of money but will tax our citizens for whatever it takes to "SAVE" the Euro.
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Gen_maximus57
Posts: 4580
Incept: 2007-09-03
Tampa
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Quote: Only countries that don't print a major currency have trouble attracting creditors. This is why EURO Bonds are coming... |
Throxxofvron
Posts: 10322
Incept: 2009-02-17
Hyper-Speculative Psycho-Facsistic Parabolic Blow-Off
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Betrdilbert:
Where would the FED get the Money to buy up Private Assets and Treasuries with?
-Ah, that's right: out of thin air with a few key-strokes on Bernanke's laptop...
Let's see what is really being contemplated:
IF the FED buys up Treasuries AND Assets, and then tears up the Treasuries; then ALL the FED will have done is PROVE that the ONLY way for the US Government to Default without Bankrupt US Treasury Bond Holders IS TO USE THE FED TO CONFISCATE/STEAL THE REAL ASSETS Of NON-TREASURY BONDHOLDERS WITH COUNTERFEIT MONEY/CREDIT.
Counterfeit Money/Credit is perfectly suitible to be used to STEAL Property AND/OR Bailout Insolvent Institutions and Oligarchs, now isn't it?
What is being contemplated is NOT QE -NOT a 'Sterilized Monetization; but, a scheme of Real Asset Confiscation and Politically directed Socialization of Losses masked by monetary sleight of hand.
Now, I must have missed it: where did You say You were in California???
-Anywhere near PIMpCoLa -er, um, Disney?
I know quite a few People in Cali. Myself; -Maybe You know some of Them...
EDIT/Posting Limit:
Yeah, Bertdilbert; -Your way of doing it sounds much less like a total ****ing scam than what I described.
Too bad that Dumb-ass Geithner is more likely to cut one of his thumbs off trying to carve a nickel with a pocket-knife.
-Guess they better hire Corzine or Diamond to do their whittlin' for 'em.
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DIONYSUS: " Thou hast no knowledge of the life thou art leading; thy very existence is now a mystery to thee. " -from 'The Bacchantes' By Euripides “During times of universal deceit, telling the truth becomes a revolutionary act.” -George Orwell
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Bertdilbert
Posts: 2655
Incept: 2008-12-22
CA
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Throxx
It will go more like this. Geithner will whip out his pocket knife and whittle a 5 trillion dollar nickle. Githner will hold the nickle and Obama will kick that bitch in the direction of the Fed. Bernanke will catch it and instruct the boatload of economist to grab wheelbarrow and run 5 trill bonds over to the treasury paid in full. The Fed has to return excess profits which the wooden nickle represents and kicks it back to Geithner.
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Dear Euroland: Relax, Germany has a plan for your money!
Political Capital Defined: We are out of money but will tax our citizens for whatever it takes to "SAVE" the Euro.
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Jstanley01
Posts: 8176
Incept: 2008-07-30
San Antonio, Texas
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Eegads, Throxx.
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You can't cheat an honest man. ~P.T. Barnum
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Mannfm11
Posts: 3537
Incept: 2009-02-28
DFW, Tx
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Bert, if the Fed bought the debt, the dollar wouldn't be worth the ink to print one. Says law would go out the door, as there would be no exchange at all. The Fed is getting away with this because there is more debt than money and the bank balance sheets look like crap. Ditto Japan. The death of the Japanese bond will be as sudden as Hiroshima. No one will see it coming. All paper money, including the gold standard paper money, was anchored in debt and nothing else.
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The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith
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Swingtrader
Posts: 9108
Incept: 2007-08-12
United Oligarchic Goldman Sachs States of America
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Pimco is always talking their book.
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Swing said "Well, it is collapsing as we watch.This is what it looks like." Australian federal judge Jayne Jagot, doing what US judges need to do!
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