We'll chop until all the inflation is priced, I don't think it is, it will be a volatile trendless market for a while OR it will blow off more and then start an unstoppable decline as the selling will cause more selling again...
Market thoughts
Started by
denleo
, Jun 04 2009 05:58 PM
18 replies to this topic
#12
dcengr
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Posted 04 June 2009 - 08:18 PM
Dennis is good but whether he picks the EXACT top or gets run over by those same unemployed day traders is another story.
I have different theory of why the market has been rallying. Its not joe6packs, its the government. They have been buying. I don't see why not, don't believe its against the law.
I also have a theory they need to stop buying stocks and start buying treasuries as its upsetting Tim's 'your dollar assets are protected' mantra.
Fine world we live in.. next thing they'll just directly tell us what to think instead of trying to manipulate our sentiment by an indirect way.
Qui custodiet ipsos custodes?
#13
milbank
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Posted 04 June 2009 - 08:54 PM
Dennis is good but whether he picks the EXACT top or gets run over by those same unemployed day traders is another story.
I have different theory of why the market has been rallying. Its not joe6packs, its the government. They have been buying. I don't see why not, don't believe its against the law.
I also have a theory they need to stop buying stocks and start buying treasuries as its upsetting Tim's 'your dollar assets are protected' mantra.
Fine world we live in.. next thing they'll just directly tell us what to think instead of trying to manipulate our sentiment by an indirect way.
"Unemployed day trader"
I'm going to tell my accountant to put that on my tax return next year as my occupation.
Edited by milbank, 04 June 2009 - 08:55 PM.
"The power of accurate observation is commonly called cynicism by those who have not got it."
--George Bernard Shaw
"None are so hopelessly enslaved as those who falsely believe they are free."
--Johann Wolfgang von Goethe
#14
arbman
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Posted 04 June 2009 - 08:59 PM
Fed is buying the debt... They did a bunch of permanent repos lately and they also told us that they were going to, so what are you confused about dcengr? The reflation by inflating the money supply is hedged with the stocks and the music will stop when the rates are forced higher a little further. Either we see a spike and collapse or chop and a roll over. Fed wants to slow it down as they've been more and more vocal about it...
#15
dcengr
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Posted 04 June 2009 - 09:42 PM
Fed is buying the debt... They did a bunch of permanent repos lately and they also told us that they were going to, so what are you confused about dcengr? The reflation by inflating the money supply is hedged with the stocks and the music will stop when the rates are forced higher a little further. Either we see a spike and collapse or chop and a roll over. Fed wants to slow it down as they've been more and more vocal about it...
No, I mean they're directly buying futures. Or had one of their proxies do it for them.
Qui custodiet ipsos custodes?
#16
arbman
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Posted 04 June 2009 - 09:50 PM
No, I mean they're directly buying futures. Or had one of their proxies do it for them.
No, here's how it works, the big brokers buy for their firm accounts, the fastest and the most leveraged one is Goldman Sachs, they borrow in return the money from Fed with the stocks as collateral. Obviously, these are timed to bust as many retail speculators as possible. Then GS sells into their short covering and returns the money to the Fed...
There is no real government involvement other than their ability to create money out of thin air for a few days to manipulate the markets higher and higher until the retail starts buying again, at some point the pension funds and other private retirement funds etc buys and the prices may be supported...
I think this is more or less how the mechanism works, there is no secret gov't account or any other buying, it is outright the firm accounts of the large brokers, mainly GS, that's it...
Edit: actually, the retail is mostly out of these markets, it is actually the hedge or quant funds that they are ripping off in these days. In any case, most of the buying in stocks is happening because Fed is monetizing the debt and they are adding liquidity into the system, the manipulations can go only so far...
Edited by arbman, 04 June 2009 - 09:52 PM.
#17
dcengr
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Posted 04 June 2009 - 10:06 PM
Yes I know how that works. This time I think they're buying futures directly. They're cutting out the middle man to do it at strategically important times (usually with announcements by someone or another). The timing has been very coincidental.
Qui custodiet ipsos custodes?
#18
arbman
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Posted 04 June 2009 - 10:19 PM
Actually, it is GS that is advising the gov't about how to do it. The gov't does not have the expertise to efficiently do this, there is no middle man, we have only one man and that is GS, everyone else is secondary...
Hint: the advisors to the pension funds are public information usually listed in their annual reports. You can go and download them from their websites, you will see that everyone of them has a GS fund holding and they are being advised, these guys figured out how to run the finances of the US gov't...
Edited by arbman, 04 June 2009 - 10:22 PM.
#19
dasein
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Posted 04 June 2009 - 11:09 PM
arb, agree, but also agree with dc, the gov is now putting money into specific funds and telling them to invest - and using the expertise of GS to actually determine the trades and act as manager - which is why GS can front run even better now.
every other country has a sovereign wealth fund, why not US?.
best,
klh
klh
