Election as Forcing Function - Part I: On Track for a Bond Market Panic - Eric Janszen

[lektrode]

Re: Election as Forcing Function - Part I: On Track for a Bond Market Panic - Eric Janszen

As jk says, I understand what the Fed's thinking is here, I just don't think it's going to work.

+1
but it IS 'going to work'
just not so much for The Rest Of US.
free money/QE to the priv eq crowd to buy up millions of foreclosures is certainly going to work for them tho...

[shiny!]

Re: Election as Forcing Function - Part I: On Track for a Bond Market Panic - Eric Janszen

+1
but it IS 'going to work'
just not so much for The Rest Of US.
free money/QE to the priv eq crowd to buy up millions of foreclosures is certainly going to work for them tho...

+ 40,000,000,000

[Bundi]

Re: Election as Forcing Function - Part I: On Track for a Bond Market Panic - Eric Janszen

+1
but it IS 'going to work'
just not so much for The Rest Of US.
free money/QE to the priv eq crowd to buy up millions of foreclosures is certainly going to work for them tho...

Maybe helps them to sell existing inventory of mortgage backed securities but it isn't so clear to me that buying for investment purposes because rates are low represents a smart decision given all of the macro factors. These PE firms in theory would need to exit at some point, no? Renting a slew of separate single family homes may not be as easy or profitable as people expect.

[vinoveri]

Re: Election as Forcing Function - Part I: On Track for a Bond Market Panic - Eric Janszen

With respect, this is about creating money to write of the bad debt while making whole the creditors who hold the debt ... in a controlled way attempting to maintain the illusion of order of democracy and rule of law and nothing more (except perhaps dollar hegemony, global power, etc.).


It will likely work w/o a major exogeneous shock or internal revolution. It's "worked" so far for those pulling the strings.
Recall the prognostications in 2009, 2010, 2011 that, respectively, 2010, 2011,2012 was the year that everything would blow up because "at some point it has to end"
Even itulip has modified its prediction that the change would occur in 2013 after the presidential elections to now 2015.

Eventually, some one will be right. Maybe next month, maybe 10 years, maybe 50. Eventually we'll all be dead. I for one am going to focus more the goodness and beauty in life, continue to develop meaningful human relationship and return to philosophy - the coming to grips over these past 6 years of the economic/political/legal corruptions and being disabused on illusions have taken a toll .. for far too long.

[shiny!]

Re: Election as Forcing Function - Part I: On Track for a Bond Market Panic - Eric Janszen

I for one am going to focus more the goodness and beauty in life, continue to develop meaningful human relationship and return to philosophy - the coming to grips over these past 6 years of the economic/political/legal corruptions and being disabused on illusions have taken a toll .. for far too long.

Anticipation fatigue. I've been expecting disaster for so many years and maybe it's happening, but it's a slow process, not a clear-cut event. The Big Crisis will not occur until after I give up expecting it and decide to relax. I'll let you all know when that happens so you can be prepared...

[vinoveri]

Re: Election as Forcing Function - Part I: On Track for a Bond Market Panic - Eric Janszen

Anticipation fatigue. I've been expecting disaster for so many years and maybe it's happening, but it's a slow process, not a clear-cut event. The Big Crisis will not occur until after I give up expecting it and decide to relax. I'll let you all know when that happens so you can be prepared...

Ha Ha, thanks for the laugh Shiny. Please do let me know.

I don't want or look for disaster, but have been expecting something to occur to, as to the title of this thread, a forcing function of sorts, to reset/readjust the system to one of less instutionalized corruption and political capture, but have concluded that while it could occur, historically these changes happen over generations if not centuries (

(and reading hudson and hedges doesn't help)

[llanlad2]

Re: Election as Forcing Function - Part I: On Track for a Bond Market Panic - Eric Janszen

Sure that may be the case but have you thought about this....

If interest rates for mortgages are currently 3% and you think interest rates will be 7% within the next 1 to 2 years what mechanisms and what is occurring in the economy to get to that 7%?

In other words, sure you will buy your house now for 200k at 3% but in 2 years if rates jump to 7% it will be worth 150k.............as the economy and housing crash from the doubling in interest rates.

Unless there is wage inflation. In the Uk rates went from 5% to 12% between 1970 and 1974. Average house prices............doubled.
Admittedly it it was a more unionised manufacturing era with less threat of outsourcing which is opposite to today. But still not impossible.

[Guest]

Re: Election as Forcing Function - Part I: On Track for a Bond Market Panic - Eric Janszen

Anticipation fatigue. I've been expecting disaster for so many years and maybe it's happening, but it's a slow process, not a clear-cut event. The Big Crisis will not occur until after I give up expecting it and decide to relax. I'll let you all know when that happens so you can be prepared...

Basically yes. The markets are not kind. The only way to survive is to distance yourself. Vast majority of people will be burnt out or will have given up when the real crazy stuff happens. It is really hard to stay cool but it is the key to surviving the volatility and maybe even making some money

[Guest]

Re: Election as Forcing Function - Part I: On Track for a Bond Market Panic - Eric Janszen

Unless there is wage inflation. In the Uk rates went from 5% to 12% between 1970 and 1974. Average house prices............doubled.
Admittedly it it was a more unionised manufacturing era with less threat of outsourcing which is opposite to today. But still not impossible.

Exactly!

[llanlad2]

Re: Election as Forcing Function - Part I: On Track for a Bond Market Panic - Eric Janszen

Exactly!

Wage price inflation is definitely more likely if repatriation of jobs takes place due to protectionism and trade wars.

Obama complaint against China raises threat of trade war

[ProdigyofZen]

Re: Election as Forcing Function - Part I: On Track for a Bond Market Panic - Eric Janszen

In that scenario, unemployment most likely rises to 10 to 12%. Not sure I see wage inflation with an extra 4 to 6% unemployed.

[llanlad2]

Re: Election as Forcing Function - Part I: On Track for a Bond Market Panic - Eric Janszen

In that scenario, unemployment most likely rises to 10 to 12%. Not sure I see wage inflation with an extra 4 to 6% unemployed.

Difficult to picture I know. But unemployment rose at the same time peaking in 1975, the UK had to go to a 3 day working week to conserve energy, suffered major devaluation etc.
Classic example of stagflation.

[ProdigyofZen]

Re: Election as Forcing Function - Part I: On Track for a Bond Market Panic - Eric Janszen

Difficult to picture I know. But unemployment rose at the same time peaking in 1975, the UK had to go to a 3 day working week to conserve energy, suffered major devaluation etc.
Classic example of stagflation.

Yes, llanlad but the difference between the 1970s in the UK and US to today is debt.

[raja]

Re: Election as Forcing Function - Part I: On Track for a Bond Market Panic - Eric Janszen

Sure that may be the case but have you thought about this....

If interest rates for mortgages are currently 3% and you think interest rates will be 7% within the next 1 to 2 years what mechanisms and what is occurring in the economy to get to that 7%?

In other words, sure you will buy your house now for 200k at 3% but in 2 years if rates jump to 7% it will be worth 150k.............as the economy and housing crash from the doubling in interest rates.

Yes.

The opposing force to inflation is the woresening of global economic Depression.
People with big money will spend it in fear of inflation.
The rest will not spend it out of fear of unemployment . . . or because they don't have any money as a result of already being unemployed.

Speaking of predictions, in June 2012 Jim Rickards called for QE in August or September. It was on Capital Account -- http://www.youtube.com/watch?v=FgngIN7CO1Q
I'm not surprised he got it right . . . .

I am really impressed by Rickards. Somebody on iTulip recommended his book "Currency Wars", and I have been devouring it. Learning so much. Also, I've been searching out internet videos featuring him, and there are a lot. Of course, in the videos you only get little bits . . . but his book is like a course on the recent economic history of the world from a man who has been involved in it on many levels.
He has some interesting things to say on gold . . . .

[ddn3f]

Re: Election as Forcing Function - Part I: On Track for a Bond Market Panic - Eric Janszen

Yes.

The opposing force to inflation is the woresening of global economic Depression.
People with big money will spend it in fear of inflation.
The rest will not spend it out of fear of unemployment . . . or because they don't have any money as a result of already being unemployed.

Speaking of predictions, in June 2012 Jim Rickards called for QE in August or September. It was on Capital Account -- http://www.youtube.com/watch?v=FgngIN7CO1Q
I'm not surprised he got it right . . . .

I am really impressed by Rickards. Somebody on iTulip recommended his book "Currency Wars", and I have been devouring it. Learning so much. Also, I've been searching out internet videos featuring him, and there are a lot. Of course, in the videos you only get little bits . . . but his book is like a course on the recent economic history of the world from a man who has been involved in it on many levels.
He has some interesting things to say on gold . . . .

I am curious, what does he have to say on gold? Does he see a return to some sort of gold-backed currency?