Is this guy right?

[GRG55]

Re: Is this guy right?

what it means is that the the US gov will not be able to sell treasuries because the chinese will under sell to the buyer, this is how they will bankrupt the US. Of course other counties could ignore the Chinese ask price to keep the system going, but seeing as chinese are a major buyer it will still significantly hurt the US.

Are you sure?

At this moment Treasury yields are hitting historical lows, and well below alternatives, including commercial money market paper, suggesting demand is pretty damn healthy.

We need to ask ourselves why is that. And then ask ourselves "If a large supply of short term Treasuries hits the markets what will happen?"

Along those lines then, what is the difference between the Chinese "dumping" Treasuries and, say, Hank Paulson "dumping" ohhhhh maybe $700 Billion of Treasuries on the market [I just made that number up btw...:rolleyes: ]? For a short time yields go up as the new supply searches for a bid and gets absorbed. And then? Former Chinese owned Treasuries will have changed hands at a discount and then be in the hands of someone else. So what. Will any of that really have any permanent effect on T-bill rates?

If you think we should be worried about the Chinese wandering the world searching for a buyer to make a low-ball bid for their Treasuries, then you should be equally worried about Bazooka Hank doing exactly the same thing.

[marvenger]

Re: Is this guy right?

well i think the short term US treasury yields are low because peoplr don't know where else to put their money and Foreign CB's have no where else to put their money. I'm not sure if there is enough cash around to overcome several trillion bucks worth of treasuries the chinese could put on offer before the treasury could get some action. I guess if there was enough cash the Chinese would then have a shit load of cash with which to buy a shit load of commodities to further build up a self sufficient economy and cause rampant US inflation????...they're building a hell of a lot of nuclear reactors but need foreign uranium and they're already buying aussie coal interests which we'll have to sell more of coz we're also up shit creek.

If hank can't find a buyer then the FED just holds them and expands their balance sheet which is akin to printing and inflationary I think, which will piss off the chinese no end but they didn't buy the treasuries in the first place because they thought they'd do this anyway eventually. So they might have had enough of making cheap crap for the US for paper, they might think they've got enough paper to look after themselves and cause a major shit storm in the US. If this happened the US would want to scrap the old currency and start again I guess with a few Middle eastern states added to the USA????

man I have no idea what the hell is going to happen!! All I know is the current system is shot and because it was based on a super power that appears to be no more there could be a major scary power vacuum occuring.....or the conspiracy rumours of a new one world currency run by the international bankers could offer a solution???

[LargoWinch]

Re: Is this guy right?

to accurately predict the last moves in a chess game. And this is where we are now. The last moves are now being played-out.

Well from my point of view, the US has only its King and Queen left on the chess board (military and Oprah).

Why is China and Saudi Arabia not buying slowly and quietly PMs with a tiny tuny portion of their reserves? Maybe they are doing it, but if not, aren't they scared of losing their wealth?

[phirang]

Re: Is this guy right?

Are you sure?

At this moment Treasury yields are hitting historical lows, and well below alternatives, including commercial money market paper, suggesting demand is pretty damn healthy.

We need to ask ourselves why is that. And then ask ourselves "If a large supply of short term Treasuries hits the markets what will happen?"

Along those lines then, what is the difference between the Chinese "dumping" Treasuries and, say, Hank Paulson "dumping" ohhhhh maybe $700 Billion of Treasuries on the market [I just made that number up btw...:rolleyes: ]? For a short time yields go up as the new supply searches for a bid and gets absorbed. And then? Former Chinese owned Treasuries will have changed hands at a discount and then be in the hands of someone else. So what. Will any of that really have any permanent effect on T-bill rates?

If you think we should be worried about the Chinese wandering the world searching for a buyer to make a low-ball bid for their Treasuries, then you should be equally worried about Bazooka Hank doing exactly the same thing.

I think the Fed will sell the short end of the yield curve and buy the longer stuff...

[GRG55]

Re: Is this guy right?

Well from my point of view, the US has only its King and Queen left on the chess board (military and Oprah).

Why is China and Saudi Arabia not buying slowly and quietly PMs with a tiny tuny portion of their reserves? Maybe they are doing it, but if not, aren't they scared of losing their wealth?

You are trying to apply our value system to societies that bear only a superficial passing resemblance to ours.

In the case of Saudi, for example, they do not consider their Central Bank reserves as "wealth". They do not consider even their vast oil reserves as "wealth".

In their minds their true wealth comes from the fact that, unlike we "unbelievers", they have "The Truth".

Their oil reserves and all that derive from it are merely "a gift from God", is how they would describe it.

It cannot be emphasized enough that trying to understand the motives and actions of other peoples, while viewing them through the prism of our own value system, is a mistake we make repeatedly to our own frustration. IMO, this is especially true when our increasingly secular societies (and Canada, France and the UK are far more fiercely secular than the USA) apply those standards to the conservative Muslim nations, where their religion and their daily lives are seamlessly intertwined, as one guides the other.

There is nothing more hilarious than a western journalist, with absolutely no understanding of Christianity and the hugely influencial role it has played in defining his/her own societal value system, trying to explain to the rest of us the motives, behavours and attitudes in the Islamic world.

[GRG55]

Re: Is this guy right?

I think the Fed will sell the short end of the yield curve and buy the longer stuff...

Is this because you think they need to try to offset the inflation risk [yield increase] that may be priced in at the long end because of the issuing of $700 B of new Treasuries?

[marvenger]

Re: Is this guy right?

In their minds their true wealth comes from the fact that, unlike we "unbelievers", they have "The Truth".

Is this how you think the sheiks who control the oil think? I don't know any sheiks but I wouldn't have thought that 20 virgins in heaven is what they are after, it's 20 virgins here on earth that can be bought.

[c1ue]

Re: Is this guy right?

Why is China and Saudi Arabia not buying slowly and quietly PMs with a tiny tuny portion of their reserves? Maybe they are doing it, but if not, aren't they scared of losing their wealth?

Besides the fundamentally different worldview GRG points out, it is also useful to be aware that in the world of geopolitics, money itself is merely a single counter.

The true resource of Saudi Arabia is the oil sitting in the ground, as acted upon by the oil spigot pouring a stream of oil onto the rest of the world.

So long as Saudi Arabia has this stream - which is a significant percentage of the total oil stream - they will always be able to get money.

Its like the old Kipling saying:

Gold is for the mistress -- silver for the maid --
Copper for the craftsman cunning at his trade.
"Good!" said the Baron, sitting in his hall,
"But Iron -- Cold Iron -- is master of them all."

Well, back then coal was taken for granted. Today in many respects it is oil.

Of course modern living involves a lot of crap, and China's mineral resources are fully invested in its own population.

But cheap labor plus large sums of state directed investment are also a big chip in the game. By supplying almost everything (manufacturing) outsource-able to the US and UK, that too is a way of tapping into the world income stream.

The losing of wealth thus is relative. So long as both GCCs and China still net gain from their relationship with the US and US dollar, fine.

I have been pointing out that a significant dollar fall would break this bargain though.

[marsien59]

Re: Is this guy right?

Shocking if true:-
http://www.tickerforum.org/cgi-ticke...www?post=64606
Mike

I started reading Karl Denninger "ticker" for more than 12 months and
those who took his advice to get out of the market near Mach 10,2008 are smiling today by following his 20 year timing signal as quoted from http://tinyurl.com/464osn
It was discussed in the ticherforum that this timing signal is valid with many indexes around the globe

Near the 2nd and 3rd charts

"For a bit of history, here's a lesson from the last time we were here with a bear market."
"Here's a hint kids, and this one's free - here's a long-term timing signal that, over the last 20 years, has never lost money."

"This is a very simple timing signal that requires no more than 2 minutes a week to monitor and yet if you followed it over the last 20 years it has produced very few whipsaws and on balance has had you out of the market for all major bear trends and in the market for all major bull trends."


Yvan F

[nathanhulick]

Re: Is this guy right?

Shocking if true:-
http://www.tickerforum.org/cgi-ticke...www?post=64606
Mike

That site is comedy gold. Every thread is just posters parroting Denninger. That thread you linked has someone basically repeating his same post about "not wanting to destroy our credibility" 3 minutes after he posted it.

[labasta]

Re: Is this guy right?

Good info Mega,

I know it's speculation, however, but I can add to that. A patient of my father's is a retired BOE employee (high up if I can remember correctly). He told him that (my memory is very loose here) an international auditing agency (can't remember the name) audits the treasuries' books by 30 September every year. This year was the first time this agency was not allowed to look at the books.

Now, I'm not a financial guy and this story was told to me once, so details are vague.

This could be the end of globalisation. The day that they can no longer keep building up water on one side of the dam, with water all on the foreign creditors side and none on the American side. That isn't trade. Both parties aren't benefitting (except a tiny handful of financiers on the American side). It is empire building pure and simple. Another word for that would be gauging, or pirating (theft).

The water pump (house prices) is broken and cannot be patched up. This bailout could be just a last attempt of dropping the required water over the other side before the shit really hits the fan the following year or year after. Maybe they are hoping to get the water pump fixed by then. I doubt it though. Are the rats leaving the ship yet? This really could be 1931 again with two years before all banks shut their doors. (if I read another article correctly)

I'm now going at least 50% gold, the rest cash for as long as I can (until the banks close their doors). Unsurprisingly, I will not be keeping it in a bank, since no bank inthe work is sfae, including the bullionvault in Switzerland.

Mr.Mortgage's and now EJ's posting of their alternative plan would get the water pump working a lot quicker. But that plan, as I have understood it, would not include the pirates who benefitted from globalisation. The water would pump on the American side (where it should have been pumping the entire time). The plan wil be implemented however, but I fear after all the banks have closed their doors. The thieves will do all they can to keep the global system of thievery in place which will make the situation worse when the banks finally do close their doors.

Good luck to you all.

[marsien59]

Re: Is this guy right?

That site is comedy gold. Every thread is just posters parroting Denninger ...........

Hi, here is an other thrustworthy site <1> parroting K. Denniger as proof.

Recession is officially annonce by NBER at Jesse's Café<1> on Dec 1st 2008.
K.D had posted <2> on mars 2008, 8 months yearlier.

If it is not a proof, it is a BIG correlation. So, this TA timing signal<2>
(20 wk & 50 wk ) is worth watching for long terme DIS/INvesting.
So 2 sites with 8 months differences. Better be warned in advance by following this easy to watch timing signal. Remember it.

Quote
"No, a proof is a proof. What kind of a proof? It's a proof. A proof is a proof, and when you have a good proof, it's because it's proven." - Jean Chretien (When discussing what type of proof Canadians wanted from the US before assisting in a war with Iraq)


<1> Jesse's Cafe http://tinyurl.com/6o5p29
<2> K.D. Forum http://tinyurl.com/464osn

Yvan F

[Master Shake]

Re: Is this guy right?

Do you believe every freaking thing you read on the Net?

[icm63]

Re: Is this guy right?

These guys are the bookies/agents for selling USA debt.

Here are the primary dealers: BNP Paribas Securities Corp., Bank of America Securities LLC, Barclays Capital Inc., Cantor Fitzgerald & Co., Citigroup Global Markets Inc., Credit Suisse Securities LLC, Daiwa Securities, America Inc., Deutsche Bank Securities Inc., Goldman, Sachs & Co., RBS Greenwich Capital, HSBC Securities Inc., J. P. Morgan Securities Inc., Merrill Lynch Government Securities Inc., Mizuho Securities USA Inc., Morgan Stanley & Co. Incorporated, UBS Securities LLC

These primary dealers (PDs) all have hopelessly impaired balance sheets (they are insolvent) and as a result Treasury auctions are on the brink of total failure. And if Treasury auctions fail...

So if one bookie goes bust, you would expect another to step up, but if they dont, due to risk of holding bad paper, then things get difficult.

Of course foreign central banks (FCB) are less interested in USA debt you would have to be blind, deaf and stupid not to be.

if the FCB, just slow the rate of USA debt purchases, thats enough to send interest rates higher, dont kid your self 2009 is going to be the year that the USA must live smarter.