Banks Paying Back Debt & Setting up the Next leg Down?

[karim0028]

Hey Guys,

Anyone else getting the Eerie feeling that banks have gotten their temporary fill; Pumped up asset markets and made a ton of money on the way up, selling more shares to idiots at the height of this bounce to get the govt monkey of their backs, getting money in their coffers and then will sell out of all equities as the next leg down begins? They are now free of govt debt and can take back their own control decisions....

I heard that Wells Fargo is now paying back the govt (all major banks have) contingent on issuing 10B in stock (at literally what appears to be the peak of this leg up, whoever buys at these levels deserves whats coming to them).....

It seems we are prime for the next leg down; so the banks are just taking profits, paying back debts and getting back to the same ol'e pump and dump game....

[sishya]

Re: Banks Paying Back Debt & Setting up the Next leg Down?

I am getting the same vibe.

[pescamaaan]

Re: Banks Paying Back Debt & Setting up the Next leg Down?

Hey Guys,
selling more shares to idiots at the height of this bounce to get the govt monkey of their backs, getting money in their coffers and then will sell out of all equities as the next leg down begins?

i don't understand...if they sold shares all the way up how would they have shares to dump on the next leg down? they either sold on the way up - which would in effect put negative pressure on prices....or they bought on the way up and now hold huge inventories.

[sishya]

Re: Banks Paying Back Debt & Setting up the Next leg Down?

i don't understand...if they sold shares all the way up how would they have shares to dump on the next leg down? they either sold on the way up - which would in effect put negative pressure on prices....or they bought on the way up and now hold huge inventories.

Naked Shorting

[bcassill]

Re: Banks Paying Back Debt & Setting up the Next leg Down?

The banksters think they have repealed the laws of gravity. They've dodged the bullet and are eager to get back to business as usual. However, if you give most people enough rope, they will eventually hang themselves. If you are one to believe that the economy has truly turned a corner, then you are also likely to believe that the banks will be just fine. However, if you are among those who subscribe to the opinion that we are in the beginnings of a multi-year inflationary depression, then you realize that none of the current TBTF will be left standing in the end. :rolleyes:

[vinoveri]

Re: Banks Paying Back Debt & Setting up the Next leg Down?

Hey Guys,

Anyone else getting the Eerie feeling that banks have gotten their temporary fill; Pumped up asset markets and made a ton of money on the way up, selling more shares to idiots at the height of this bounce to get the govt monkey of their backs, getting money in their coffers and then will sell out of all equities as the next leg down begins? They are now free of govt debt and can take back their own control decisions....

I heard that Wells Fargo is now paying back the govt (all major banks have) contingent on issuing 10B in stock (at literally what appears to be the peak of this leg up, whoever buys at these levels deserves whats coming to them).....

It seems we are prime for the next leg down; so the banks are just taking profits, paying back debts and getting back to the same ol'e pump and dump game....

Wasn't the next leg down supposed to occur after the first dead cat bounce, say in June, and then it got delayed till the dreaded month of Oct, when it didn't happen, and now we're ready for it again .....:rolleyes: Don't hold your breath.

The governments around the world have sold a giant put to the investor class, to wit, "we will never let anything fail again (to the extent it would warrant a market crash). And banks paying back TARP, is just another reason that the the bubble will grow even faster in financial and speculative assets.

I think even iTulip at large has finally woken to this fact. Fiat and Confidence can drive markets until those in the know decide its time again for another crash, and the time ain't now, IMO.

Keep hoping to get back in at S&P 600 or gold at 800? Forget about it, unless you're willing to wait and gnash teeth for another few years, in which case you might get lucky, but then the 50% crash is likely to put the S&P at 1100 nominal.:eek:

[Quincy K]

Re: Banks Paying Back Debt & Setting up the Next leg Down?

Wasn't the next leg down supposed to occur after the first dead cat bounce, say in June, and then it got delayed till the dreaded month of Oct, when it didn't happen, and now we're ready for it again .....:rolleyes: Don't hold your breath.

The governments around the world have sold a giant put to the investor class, to wit, "we will never let anything fail again (to the extent it would warrant a market crash). And banks paying back TARP, is just another reason that the the bubble will grow even faster in financial and speculative assets.

I think even iTulip at large has finally woken to this fact. Fiat and Confidence can drive markets until those in the know decide its time again for another crash, and the time ain't now, IMO.

Keep hoping to get back in at S&P 600 or gold at 800? Forget about it, unless you're willing to wait and gnash teeth for another few years, in which case you might get lucky, but then the 50% crash is likely to put the S&P at 1100 nominal.:eek:

Why in the world would paying back the TARP have anything to do with another bubble growing in financial and speculative assets? Do you have any theory on why this would happen? All of EJ's work that I have read are all supported by facts and historical references. Do you have any that you can share?

You know, facts as opposed to smiley faces?

[vinoveri]

Re: Banks Paying Back Debt & Setting up the Next leg Down?

Why in the world would paying back the TARP have anything to do with another bubble growing in financial and speculative assets? Do you have any theory on why this would happen? All of EJ's work that I have read are all supported by facts and historical references. Do you have any that you can share?

You know, facts as opposed to smiley faces?

Perhaps you should read my post again and think about it ... for at least a few minutes (hint: focus on the word,PUT) ...

I'd draw you a picture but don't have any crayons. )))

Seriously, my comments are simply opinion, which is what the thread solicited.

[karim0028]

Re: Banks Paying Back Debt & Setting up the Next leg Down?

Wasn't the next leg down supposed to occur after the first dead cat bounce, say in June, and then it got delayed till the dreaded month of Oct, when it didn't happen, and now we're ready for it again .....:rolleyes: Don't hold your breath.

The governments around the world have sold a giant put to the investor class, to wit, "we will never let anything fail again (to the extent it would warrant a market crash). And banks paying back TARP, is just another reason that the the bubble will grow even faster in financial and speculative assets.

I think even iTulip at large has finally woken to this fact. Fiat and Confidence can drive markets until those in the know decide its time again for another crash, and the time ain't now, IMO.

Keep hoping to get back in at S&P 600 or gold at 800? Forget about it, unless you're willing to wait and gnash teeth for another few years, in which case you might get lucky, but then the 50% crash is likely to put the S&P at 1100 nominal.:eek:

I'm simply observing You are right, the market seems to levitate... The dollar is in for a miniature rally and i am surprised that the market is just churning and not falling....

But, then again, the P/E ratio's are just too out of whack, there is almost no way that this is sustainable, i have to keep to my understanding of the laws of physics, business and finance.... All rallies eventually turn when that last idiot finally jumps on the bus...

Almost all companies unequivocally are overvalued and that cant stay forever, so either the dollar tanks quickly or profits soar or the stocks have to go down...

Also, with banks paying back TARP you say that the bubble could get bigger, but i look at it from a different point of view, i say that they may be paying back TARP and paving the way for another fall in markets (along with shorting them all the way down) and along with that pain and misery for main street and just want to make sure they dont have Govt on their back telling them what to do....

[charliebrown]

Re: Banks Paying Back Debt & Setting up the Next leg Down?

i dont have any hard facts either but i kind of believe vv.
banks pay back tarp, then they get the gvt off their back and can go back to biz as usualy. (increase leverage, off balance sheet stuff, opacity of assets etc. etc.). Hey relax the gvt is back stoppping us. I also believe that there has been a put on the fire econ. can't prove a thing, but it just smells like it. central banks funnelling money to places where it will buy risk assets. yes one day just as EJ et. al. say it will end badly. I really think when the gvt loses control of interest rates is when the party will be over. Or high commodity prices will force the people to either heat and eat or pay off their debt.

[pescamaaan]

Re: Banks Paying Back Debt & Setting up the Next leg Down?

i agee with Vv too
karim claims the next down leg is coming...

all the actions of the banks (paying back tarp, business as usual) suggest the opposite is about to occur. another run up circa 2004-2007

remember, the problems the banks faced mainly had to do with real estate and complicated MBS, CDO, etc....

now that the fed owns all this junk paper, the banks balance sheets are clean (mostly).....so now they're free to expand again and here we go with another bubble...

[Quincy K]

Re: Banks Paying Back Debt & Setting up the Next leg Down?

i agee with Vv too
karim claims the next down leg is coming...

all the actions of the banks (paying back tarp, business as usual) suggest the opposite is about to occur. another run up circa 2004-2007

remember, the problems the banks faced mainly had to do with real estate and complicated MBS, CDO, etc....

now that the fed owns all this junk paper, the banks balance sheets are clean (mostly).....so now they're free to expand again and here we go with another bubble...

The TARP was used as collaterall when there was absolutely no liquidity and the world was ending. I don't see that scenario happening again and I believe that the banks(or companies) that continue to have bad assets will be allowed to fail(at a controlled pace) as the TBTF's will be able to buy the assets for market values.

The TARP was needed before to save the System from collapse and I no longer believe that it will be needed or offered in the future.

[Quincy K]

Re: Banks Paying Back Debt & Setting up the Next leg Down?

Perhaps you should read my post again and think about it ... for at least a few minutes (hint: focus on the word,PUT) ...

I'd draw you a picture but don't have any crayons. )))

Seriously, my comments are simply opinion, which is what the thread solicited.

Wasn't there a Japan put? In fact, very few, if any at all, of their banks(or large companies for that matter)were allowed to fail(the BOJ did their own version of the TARP) as opposed to the US. That is the direct correlation(Japanese scenario) that EJ has tried to convey here on some of his posts. That we are going to have a muddling through process for years and years with no increase in GDP. All we really have is history and prior events to try and forecast.

I'd draw you a picture but I don't have the time or the tolerance.