SERVING THE QUANTITATIVE FINANCE COMMUNITY

 
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Gmike2000
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Helicopter Ben

October 28th, 2010, 9:03 pm

I know it is not fair to call him this way...besides, it was Milton Friedman's metaphor.Anyways, let's discuss how much money Benji is going to print. One trillion? Two?At what point is this going to multiply. Is it going to multiply in the US where banks are not lending? Or is it going to multiply abroad where banks are lending because their economies are not in a liquidity trap?If the money falls short of what is needed, are we going to deflate? If the money is too much, are we going to hyper inflate? Who is moronic enough to buy treasuries in such an environment? Are the Chinese going to sell into Bernanke's bid (I would)?Finally, do you know how much 1 trillion really is? It is about 10k per US household. It is about 125 bucks for every human on this planet. And that assumes the money does not multiply.....
 
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list
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Helicopter Ben

October 29th, 2010, 12:02 am

Chinese are not interested to print and as US and other ask or beg to increase Yuan value they have squeeze its volume or increase prices. Bonds seem not as active while financial market cash flows far behind economic power. On the other hand pair dollar-Yuan is support each other with respect others such currencies as euro, yen and others. This pair is unstable with its connection and also a tread to global financial system. It should be local or global mechanisms that prevent unbounded accumulation. Accumulated money outside should be invested otherwise they should lost their values. For example, bonds issued in 2010 can be 70% of the bonds will be issued in 2011. Domestic Bonds in Europe or USA 2011 are automatically will replace previous year issued bonds.
 
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farmer
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Helicopter Ben

October 29th, 2010, 7:09 am

I like Bill Gross blaming the voter:QuoteI ask you: Has there ever been a Ponzi scheme so brazen? There has not. This one is so unique that it requires a new name. I call it a Sammy scheme, in honor of Uncle Sam and the politicians (as well as its citizens) who have brought us to this critical moment in time. It is not a Bernanke scheme, because this is his only alternative and he shares no responsibility for its origin. It is a Sammy scheme ? you and I, and the politicians that we elect every two years ? deserve all the blame.If the whole United States burns in hell - which I fully endorse for their sins - it will be far better than the dumbass US voter deserves. Can the nation survive the stupidity of people who would vote Jerry Brown governor? I doubt it. It gives me hope for long life to see their progressive misery.Look at the people of Illinois, with their sexual fetish for being ruled by shiftless felons. Look at our most popular President Bill Clinton the liar. He lies so often he lies even to his own party, telling them the Congress lost in 1994 for not socializing medicine, and the only way to get reelected is to pass it. Why? Because people cling to their abortions and pornography above all else, and will prefer a politician who has their own low standards, even if everything else goes to hell.How many generations did the Germans or the Russians or the Chinese suffer the consequences of their idealistic democratic action? Even today in China, the people's movement deprives people of their most basic personal choice, of how many children to have. Individually, people are prone to sloth, perversion, and heroin abuse. Collectively they are much worse.1,000 generations of disease and starvation will be too good for the descendants of people who elected Barack Obama.
Last edited by farmer on October 28th, 2010, 10:00 pm, edited 1 time in total.
 
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farmer
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Helicopter Ben

October 29th, 2010, 8:00 am

You may think we live in crazy times economically. But it will only get worse. Here I can show you Senator Boxer's entire qualification for holding office in just a few lines:QuoteCalifornia Sen. Barbara Boxer refuses to say whether a newborn baby is a human life. When Sen. Rick Santorum, R-Penn., asked her on the Senate floor a few years ago whether she believed a baby born alive has a constitutionally protected right to live, Boxer was stuck for an answer. Her nonresponsive replies included these:"I support the Roe v. Wade decision. ..."I think when you bring your baby home, when your baby is born -- and the baby belongs to your family and has all the rights. ..."Define 'separation' ..."You mean the baby has been birthed and is now in its mother's arms? ..."The baby is born when the baby is born. That is the answer to the question. ..."I am not answering these questions! I am not answering these questions!"These are the people to whom the Fed governors must answer. Our nation's primary area of progress is in men marrying men. The pillar of our society, our most basic right, is "anal sex." Of course we will very much treasure fucking ourselves economically as well.My ex-girlfriend moved to California and started dating a guy who works for Warner Brothers. He bought her a pair of $300 Jimmy Choo shoes. He told her he would buy her the matching handbag - for $2000 - if she let him fuck her in the ass.$2000 for sodomy? Why??Our nation will no doubt kill itself for liberalism. The California voters - with pension and government deficits that can only be saved by the printing press - will bankrupt themselves for sodomy.They will continue fucking and living off food stamps, the unions will continue voting themselves higher pensions and lower retirement ages, and the Fed will keep printing. Our only product - now that healthcare has been put out of business, and high-tech hardware has moved to Asia, and Wall Street was bullied into lending all our money to deadbeats - is TV shows about people having sex, and a search engine to find the reruns. Our new national pastime is sexting, and searching for sex videos online.While our oil drilling companies were being put out of business, and oil rigs were being towed out of the Gulf of Mexico - and the blue-collar workers of Louisiana were being retrained as pets jumping for a government biscuit - our greatest company was producing a new fashion ornament - the iphone 4, manufactured in China - which is carried so that more people will want to have casual sex with you.Maybe this is what happens when girls join the workforce. Sex moves out of the home, and becomes the main public pursuit. You know it because you have seen it. Men will bankrupt themselves for one thing: sex. George Bush was much more attractive than John Kerry. Barack Obama is much more handsome than John McCain. Even our "Tea Party" political candidates are just a bunch of hot babes.You will say I am backwards. But as long as women have the right to vote, and as long as housewives no longer stay home, there is nothing in our future but bankruptcy.
Last edited by farmer on October 28th, 2010, 10:00 pm, edited 1 time in total.
 
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Gmike2000
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Helicopter Ben

October 29th, 2010, 3:39 pm

The thing is that the FED is much more powerful theses days than any of those politicians. If they embark on QE2, QE3,...,QE(N) and perhaps QE(N+1), then they will essentially own the Treasury. And with that they own the White House as well. They will own the country.When the FED was established as a separate entity (separate from the political institutions) I guess people never envisioned that the FED would one day just buy themselves into the administration. If they want Obama, Hilarious Clinton, and all the other puppets to kneel down before them in return for more "stimulus", they will get what they want. On the positive side though, the FED is objectively more competent than the average politician. But let's hope they do not abuse their new powers.
 
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acastaldo
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Helicopter Ben

October 29th, 2010, 8:25 pm

It is not the Quantitative Easing that I am worried about, it is the Quantitative Tightening at the other end, when the Fed has to start unloading all this paper, over the objections of many (incl. politicians) I am sure. It will take enormous guts.
Last edited by acastaldo on October 28th, 2010, 10:00 pm, edited 1 time in total.
 
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Traden4Alpha
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Helicopter Ben

October 29th, 2010, 8:36 pm

QuoteOriginally posted by: Gmike2000The thing is that the FED is much more powerful theses days than any of those politicians. If they embark on QE2, QE3,...,QE(N) and perhaps QE(N+1), then they will essentially own the Treasury. And with that they own the White House as well. They will own the country.When the FED was established as a separate entity (separate from the political institutions) I guess people never envisioned that the FED would one day just buy themselves into the administration. If they want Obama, Hilarious Clinton, and all the other puppets to kneel down before them in return for more "stimulus", they will get what they want. On the positive side though, the FED is objectively more competent than the average politician. But let's hope they do not abuse their new powers.Hmmm... Are you sure QE comes with more powers? It's like the old saying: "If you owe the bank $100, it's your problem but if you owe the bank $X trillion, it's the bank's problem". After QE(N), we'll owe the Fed c*N trillion so it's the Fed's problem. Moreover, the bonds aren't callable and the Treasuries aren't even collateralized so if we default on all the bonds owned by the Fed, there's not much the Fed can do.
 
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farmer
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Joined: December 16th, 2002, 7:09 am

Helicopter Ben

October 30th, 2010, 9:25 am

I disagree that the Fed has the kind of incentives or powers you describe. Their only real threat would be to cause deflation, but they have no incentive or reward for that.The Fed has become the center of the universe by being sloppy and unpredictable. You can't rely on them to do any particular thing, so you have to worry all day what they will do.
 
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Traden4Alpha
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Helicopter Ben

October 30th, 2010, 10:13 am

The Fed has only become the center of the universe because we think they've become the center of the universe. The reality is that QE won't do much because the current problem with the US economy isn't a money supply issue, it's a money demand issue. The banks, companies, and even a fair number of individuals have enough cash, but they don't see enough attractive opportunities to invest or spend that cash.The Fed can print more dollars, but they'll just sit next to the last stack of dollars printed by the Fed. Or the Fed can withdraw dollars by carting away those unused stacks. Either way, it won't make much difference because money supply is not the issue.
Last edited by Traden4Alpha on October 29th, 2010, 10:00 pm, edited 1 time in total.
 
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farmer
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Helicopter Ben

October 30th, 2010, 10:30 am

QuoteOriginally posted by: Traden4AlphaThe banks, companies, and even a fair number of individuals have enough cash, but they don't see enough attractive opportunities to invest or spend that cash. The Fed can print more dollars, but they'll just sit next to the last stack of dollars printed by the Fed.This pic contradicts your claim:
 
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Traden4Alpha
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Helicopter Ben

October 30th, 2010, 10:42 am

QuoteOriginally posted by: farmerQuoteOriginally posted by: Traden4AlphaThe banks, companies, and even a fair number of individuals have enough cash, but they don't see enough attractive opportunities to invest or spend that cash. The Fed can print more dollars, but they'll just sit next to the last stack of dollars printed by the Fed.This pic contradicts your claim:This pic contradicts your claim:
Last edited by Traden4Alpha on October 29th, 2010, 10:00 pm, edited 1 time in total.
 
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farmer
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Helicopter Ben

October 30th, 2010, 11:04 am

The QE2 scenario only began recently, at the end of your chart depicted in mine. Last August, the Fed was still taking more of a "give it time to take care of itself" attitude. Do you dispute this? Or do you admit the QE talk pushed up stock, commodity, and currency prices?Come on, more people are sitting on stacks of gold relative to dollars as a consequence.
Last edited by farmer on October 29th, 2010, 10:00 pm, edited 1 time in total.
 
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Traden4Alpha
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Helicopter Ben

October 30th, 2010, 11:21 am

Ah, yes and now we turn to the topic of gold.Do you realize that most, if not all, of the recent post QE-2 rise of the stock market represents a devaluation of the dollar? If you price US stock in gold, other commodities, or Euros, you'll find that US stocks haven't done so well. That is, the market doesn't think that QE will make companies more profitable, productive, or efficient (all of which would make companies produce more earnings in commodity-priced and fx terms).
 
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farmer
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Helicopter Ben

October 30th, 2010, 11:33 am

So they are forced out of their stacks of cash, and into stocks. Which means there is more investment for the same level of profit, and contradicts your claim.
 
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Traden4Alpha
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Helicopter Ben

October 30th, 2010, 12:08 pm

Why would they be "forced out of their stacks of cash"? Banks didn't buy stocks.
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