FIRE Away

[don]

there are a number of super seniors where I live who readily agree it's a race between exhausting their lifetime savings and death, in the era of ZIRP . . .


The Market Price of Corruption: Real Rates, the Real Yield Curve, and the GDP Gap

"Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country.

When you won, you divided the profits amongst you, and when you lost, you charged it to the bank...You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out."

Andrew Jackson, Andrew Jackson and the Bank of the United States (1928) by Stan V. Henkels

What is the market price of policy error, careerism, and corruption?

The charts are simple, but the implications are profound.

seign·ior·age

/ˈsānyərij/
Noun

1. Profit made by a government by issuing currency
2. A thing claimed by a sovereign or feudal superior as a prerogative.

http://jessescrossroadscafe.blogspot...d-gdp-gap.html

[ProdigyofZen]

Re: FIRE Away

there are a number of super seniors where I live who readily agree it's a race between exhausting their lifetime savings and death, in the era of ZIRP . . .


The Market Price of Corruption: Real Rates, the Real Yield Curve, and the GDP Gap

"Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country.

When you won, you divided the profits amongst you, and when you lost, you charged it to the bank...You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out."

Andrew Jackson, Andrew Jackson and the Bank of the United States (1928) by Stan V. Henkels

What is the market price of policy error, careerism, and corruption?

The charts are simple, but the implications are profound.

seign·ior·age

/ˈsānyərij/
Noun

1. Profit made by a government by issuing currency
2. A thing claimed by a sovereign or feudal superior as a prerogative.

http://jessescrossroadscafe.blogspot...d-gdp-gap.html

good post thanks!

[GRG55]

Re: FIRE Away

The output gap rears its ugly head again...

[ProdigyofZen]

Re: FIRE Away

The output gap rears its ugly head again...

What output gap? Nothing to see here nothing to see.

As a HF manager told me a few months ago, whats an output gap?

I explained....

He responded: So it's a bullshit concept that doesnt mean anything.

I said: No it is the difference between US consumers the engine of growth spending 250 billion less per quarter than they would have had the recession not occurred. Then went into more depth about it.

He responded: And that is why I don't do macro.

He didnt speak to me again at the lunch table......

[verdo]

Re: FIRE Away

I'm just looking forward to the day when I can safely buy stocks again, when yields are sky high and the monetary system is different. If they want to ignore the output gap...that's cool with me, hah

[don]

Re: FIRE Away

I'm just looking forward to the day when I can safely buy stocks again, when yields are sky high and the monetary system is different. If they want to ignore the output gap...that's cool with me, hah

[GRG55]

Re: FIRE Away

It IS different this time.

Back in 2008 I was certain that by this point after the financial crisis we would have seen "7 & 7"...market P/E = 7 and 7% dividend yields...my indicator to back up the truck. We did see some sectors in Europe trade close to that, but not even close in North America (Toronto, NY, Nasdaq, etc). Completely boggles the mind...

[Raz]

Re: FIRE Away

I never thought I was the smartest guy in any room, but if this Bonar Ponzi Crapola doesn't end very badly I'll believe I'm the dumbest guy in the room.

[don]

Systemic Collapse: A Brief History of Market Manipulation

They have been told all their lives to entrust their savings to the financial experts, believing that a healthy portfolio of stocks and bonds will protect and even grow their wealth so that there will be a nice nest egg left over for their retirement. As this economic house of cards begins to topple, however, people will find themselves in the same position as the Romans under Diocletian or the French of the Revolution or the Germans in the Weimar Republic or the Argentinians under the collapsing peso: having their entire life savings wiped out seemingly overnight.

[charliebrown]

Re: FIRE Away

It's making me puke.

I bought some stock in April of 09. I did not back up the truck, like you I was waiting on even lower multiples. Shiller P/E hit 13. Nice but not nice enough.

Now everyday for the last 3 months I see the light on my trading platform is green. Day after day week after week. Gold is down so my savings are down, zirp gives me nothing for my cash and short bonds. The siren song of stocks is strong. I think it is going to take an exogenous shock to knock the wind out of the sails of this "bull" market. Somebody blows up bad Japan?? or maybe a failed state in the middle east Egypt??

The fiscal cliff the sequester and the chaos in Italy has not been enough.

[GRG55]

Re: FIRE Away

It's making me puke.

I bought some stock in April of 09. I did not back up the truck, like you I was waiting on even lower multiples. Shiller P/E hit 13. Nice but not nice enough.

Now everyday for the last 3 months I see the light on my trading platform is green. Day after day week after week. Gold is down so my savings are down, zirp gives me nothing for my cash and short bonds. The siren song of stocks is strong. I think it is going to take an exogenous shock to knock the wind out of the sails of this "bull" market. Somebody blows up bad Japan?? or maybe a failed state in the middle east Egypt??

The fiscal cliff the sequester and the chaos in Italy has not been enough.

The tragic sinkhole incident in Florida seems to have a lot of parallels to what is going on today. The building doesn't collapse immediately, but over many years these acidic water flows (fiscal cliff, political chaos in Italy, Libya, Egypt, Syria, Bahrain, etc., mindless fiscal austerity, QE and more QE to offset the mindless fiscal austerity, HFT and other growing financial corruption and income disparities, and so on) slowly dissolves away the limestone and suddenly one morning we open the paper to read about a catastrophic collapse, while all the pundits claim such a thing could never have been predicted or foreseen. Hoocuddaknown...

[astonas]

Re: FIRE Away

The tragic sinkhole incident in Florida seems to have a lot of parallels to what is going on today. The building doesn't collapse immediately, but over many years these acidic water flows (fiscal cliff, political chaos in Italy, Libya, Egypt, Syria, Bahrain, etc., mindless fiscal austerity, QE and more QE to offset the mindless fiscal austerity, HFT and other growing financial corruption and income disparities, and so on) slowly dissolves away the limestone and suddenly one morning we open the paper to read about a catastrophic collapse, while all the pundits claim such a thing could never have been predicted or foreseen. Hoocuddaknown...

That's really the trick in trying to invest in this environment, isn't it? You can know that there is a structural weakness that is growing over time. But to trade based on it, you need either enormous reserves (such that you can take a finite loss day in, day out until the moment of collapse) or an almost prophetic ability to know not only that a collapse is imminent, but exactly when the staw will break the camel's back.

Given the institutional capture of the tools of governance by the FIRE industry, who knows how long the inevitable can be postponed? The axiom to date, at least for those not privy to iTulip's depth of knowledge, has generally been "don't fight the Fed." Anyone care to put down specific tell-tale signs to look for that would indicate this axiom is weakening in its relevance? If we can come up signs that can differentiate between superficial cracks in the Fed's facade, and structural cracks in its foundation, then we will all be in a position to do very well indeed.

I'm not exactly the best one to come up with a list of such differentiators. But I would welcome very much the speculations of others more learned than I. What do the skilled Fed-watchers here think?

[don]

Re: FIRE Away

"The corporate right and the political right declared class warfare on working people a quarter of a century ago and they've won... Take the paradox of Rush Limbaugh, ensconced in a Palm Beach mansion massaging the resentments across the country of white-knuckled wage earners, who are barely making ends meet in no small part because of the corporate and ideological forces for whom Rush has been a hero."

Bill Moyers



"The escalation of the class war against the poor and the working class is intense. More and more working people are beaten down. They are world-weary. They are into self-medication. They are turning on each other. They are scapegoating the most vulnerable rather than confronting the most powerful. It is a profoundly human response to panic and catastrophe. I thought Barack Obama could have provided some way out. But he lacks backbone.

Can you imagine if Barack Obama had taken office and deliberately educated and taught the American people about the nature of the financial catastrophe and what greed was really taking place? If he had told us what kind of mechanisms of accountability needed to be in place, if he had focused on homeowners rather than investment banks for bailouts and engaged in massive job creation he could have nipped in the bud the right-wing populism of the tea party folk. The tea party folk are right when they say the government is corrupt. It is corrupt. Big business and banks have taken over government and corrupted it in deep ways.

We have got to attempt to tell the truth, and that truth is painful. It is a truth that is against the thick lies of the mainstream. In telling that truth we become so maladjusted to the prevailing injustice that the Democratic Party, more and more, is not just milquetoast and spineless, as it was before, but thoroughly complicitous with some of the worst things in the American empire."

Cornel West


"Politicians are the public face of corporate power. They are corporate employees. Their personal narratives, their promises, their rhetoric and their idiosyncrasies are meaningless. And that, perhaps, is why the cost of the two presidential campaigns is estimated to reach an obscene $2.5 billion. The corporate state does not produce a product that is different. It produces brands that are different. And brands cost a lot of money to sell...

Unfettered capitalism is a revolutionary force which turns everything into a commodity. Human beings become commodities, the natural world becomes a commodity, that you exploit until exhaustion or collapse...

You can dismiss those of us who will in protest vote for a third-party candidate and invest our time and energy in acts of civil disobedience. You can pride yourself on being practical. You can swallow the false argument of the lesser of two evils.

But ask yourself, once this nightmare starts kicking in, who the real sucker is."

Chris Hedges



"The most sacred of the duties of government is to do equal and impartial justice to all its citizens.”

Thomas Jefferson



Politicians from both sides of the aisle will swear pious oaths to protect and foster the well being of the middle class. They will say that their policies and proposals are all designed for its betterment. And yet the state of the middle class continues to dwindle into despair and disrepair. Why is this?

It is not because of the predominance of a right or left ideology, of taxation and deficits and austerity. It is not because of the re-emergence of a perversion of the gospel, in the predestination of prosperity. We have seen all this before. It is not because in our comfort we have lost the sense of the imperative of common cause.

It is because of the overwhelming corruption of power, and of the cynical amorality of thoroughly modern political managers who worship power and personal wealth as ends unto themselves.

It is driven by the allure of the monied interests, and their corrupt political bargains. It is a child of the subornation of perjury on a massive scale. It is the unscrupulous servility to power of those who have sworn to uphold and protect the law. What is truth? Whatever suits us, whatever we say it is. It is not the triumph of evil so much as the absence of any sense of the good, of honor, and of simple common decency.

And it is marked by the daily subverting of the law as a matter of convenience and comfort to the insatiable few, and the cravenness of their enablers, driven by personal ambition, ignorance, and fear. It is the will to power, the elevation of the ascendant self and the system that supports it, above all else. Greed is good. Whatever works. And the enemy is all that is not the self, which is the other.

And where there is nothing sacred, the people perish.

http://jessescrossroadscafe.blogspot.com/

[charliebrown]

Re: FIRE Away

The problem is with ZIRP you are almost forced to "Trade" otherwise your savings will be inflated away day after day. If the blow up happens in a week or a month or a year, I will be OK. If it takes 10 years, just like "old" guy I am in trouble. The savings that I built up in a high wage job that does not exist any longer cannot be replaced.

Unless a hot war breaks out, I think the thing to watch will be inflation in staples. The fed is never going to undo QE, which means the gvt will always have a buyer for treasuries. What is going to break is the middle class. When the price of food, clothing, medicine, shelter, transportation, and taxes reaches some threshold, j6p is going to once again begin defaulting on this massive debt of mortgage, credit card, college loans, car loan etc.

Although i don't believe in substution in CPI, it is valid in this case. if food goes up in price people will switch from steak to chicken from chicken to turkey, turkey to beans. But at some point no matter what they are going to start defaulting in mass on their loans.

Ability for J6P to service debt is going to be the breaking point.

[don]

Re: FIRE Away

EJ had a lot to say about the iron bound nature of a zero interest rate but even EJ failed to foresee the manifold uses that FIRE utilizes in ZIRP.

The degree of class warfare is breathtaking . . .