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I do not completely understand his latest post, and I would like to hear the opinions of those on here.

1) Does Denninger provide good analysis in general, or does he have an axe to grind in support of his own positions?

2) If foreign central banks were to start selling heavily into US treasury issues, would this cause the bond market to collapse?

3) Is it beans time again? ;)

CBs And Other "Real Money" Had Enough?

Oh oh......

From the forum, wire from Reuters claimed original source:

21. There apparently is a new wrinkle to the intermediation trade between buying from Treasury to sell to the Fed with real money, including central banks, now in on the act. Indeed, several Street sources relay central banks were aggressive offers into this morning's coupon pass, with one letting go of a large block of old 5-years. Other offers too are coming in from embedded Asian real money longs -- in the higher coupons -- also looking to sell size without unduly upsetting the market, and especially considering the illiquidity in off- the-run bids from the Street.

Whether influenced or not by the much higher tenders coming in on the Fed Passes ($45 bln tendered for $7.4 bln bought in today's pass for a 16.2% hit rate), fast money has been tattooing the bid and especially so in the belly with the 10-year most leaned on. Note as well, earlier this week the Bank of England (BoE) gilt pass too saw a need to offer paper at or below the market's bid side in order to get sales off.

So now what Ben?

If Foreign Central Banks are selling into Ben's bid then the game is literally weeks or even days away from being over.

I have written for over a year about the potential for a bond-market implosion and subsequent economic collapse.

Bernanke, if he continues to play his "QE" games into this, assuming it is real, must be immediately forced from office by President Obama and/or Congress.

In short we must choose the (much) higher interest rate path and choose it now, because that is now an assured outcome.

We can choose between significantly higher interest rates and an economic collapse along with significantly higher interest rates.

Avoiding the higher interest rate outcome no longer appears to be possible exactly as I have been talking about for more than a year.

And exactly as in the 1930s, we will wind up in the same place with "The Fed" being blamed for the "loss of liquidity" when in fact the truth is that it was the government attempting to spend more than it made, and finding the market unwilling to support insane deficit spending, that led to the bond market dislocation, much higher interest rates, and the second phase of the economic collapse.

We are following the precise same path we went down in the 1930s.

Hope you're ready, and say thanks to Ben, Hank, Geithner and of course Obama, all of whom think they can ignore the realities of the market.

Disclosure: The time to short the phone book is approaching.

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From the forum, wire from Reuters claimed original
(You have posted a message with more emoticons that this board allows. Please reduce the number of emoticons you've added to the message)

Is that a technical term? "From the forum, wire from Reuters claimed original"

Edit: forum IPS error

Edited by Tom Peters

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I do not completely understand his latest post, and I would like to hear the opinions of those on here.

1) Does Denninger provide good analysis in general, or does he have an axe to grind in support of his own positions?

2) If foreign central banks were to start selling heavily into US treasury issues, would this cause the bond market to collapse?

3) Is it beans time again? ;)

1) "Mr. Denninger received the 2008 Reed Irvine Accuracy In Media Award for Grassroots Journalism for his coverage of the 2008 market meltdown."

http://seekingalpha.com/author/karl-denninger.

2) The weight of foreign central banks unwinding treasuries would cause a collapse

3) possibly

TBH, I like Denninger, and the only thing he has not been correct on (yet) is collapsing gold prices.

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Don't worry, I don't understand many of his posts. But, I believe he has a pretty deep understanding of the mechanics of how markets and participants operate. His axe to grind, if he has one, is against political and pseudo political market intervention, the failure of the US govt. and the FED to act on behalf of the people.

I sense he sometimes uses hyperbole to accentuate his point, but that doesn't of itself invalidate it. He does have a tendency, and quite rightly imho, to focus on high impact risks. He's constantly looking for clues that many others wouldn't otherwise think about. Even when he's wrong, I'm still rather glad people like him keep looking.........

2p

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It's simple....

Visit this site every now and then....

U.S. NATIONAL DEBT CLOCK

Just think, a whole lot more debt is off the official books....

...but just at the numbers there, 11+ trillion, and lets say the cost of servicing the debt is set at 5%, well...

That's 550 Billion dollars p.a. just to keep the debt from growing.

Do you see the problem?

List of countries by GDP (nominal)

The US has a GDP of a mere 14 trillion, and this estimate was for 2008.

It doesn't take a maths whiz to see there could be a problem.

ouroboros.png

Edited by cashinmattress

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Don't worry, I don't understand many of his posts. But, I believe he has a pretty deep understanding of the mechanics of how markets and participants operate. His axe to grind, if he has one, is against political and pseudo political market intervention, the failure of the US govt. and the FED to act on behalf of the people.

I sense he sometimes uses hyperbole to accentuate his point, but that doesn't of itself invalidate it. He does have a tendency, and quite rightly imho, to focus on high impact risks. He's constantly looking for clues that many others wouldn't otherwise think about. Even when he's wrong, I'm still rather glad people like him keep looking.........

2p

That's very good summary of Denninger IMO. I think he's got an enviable technical depth of knowledge and his familiarity with securities law is equally impressive. He's also very good at articulating the simmering resentment against the oligarchy (many would say kleptocracy) that we live under today.

He goes overboard at times, but don't we all?

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"time to short the phone book " , what does this mean even?

I assume that he is suggesting that you could pick any company you like (a name in the phone book), and take out a short position on it. Ie the siutation he is predicting is so bad that it doesn't matter who you short.

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I assume that he is suggesting that you could pick any company you like (a name in the phone book), and take out a short position on it. Ie the siutation he is predicting is so bad that it doesn't matter who you short.

I get the meaning now, but it seems a phrase contained to him or herself http://www.google.com/search?complete=0&am...G=Google+Search

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Following Denninger since March 07, when he was just blogging and gave me an introduction to technical analysis.

He goes overboard on occasion - a year ago he gave credence to the rumour that UK credit cards were being refused in eastern Europe - but he's been right on the trend every step of the way. He's political, but maybe politics is not discounted enough by the indexes. Anyway, can't see how his overall thesis will be disproved.

Deflation. 1930s experience. Rest of the world screwed harder than US. $ strong. US treasuries in a bubble. Gold an indifferent investment.

I took a $ position. It's a marginal loser - foolish speculation! But cash must be king because the debt can only be satisfied through awesome retrenchment. There is no other way.

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I was introduced to Denninger from here.

A smart guy. Very insightful... he used to post a lot of videos on Google, not so much now.

I don't always get what he is on about, he's a good person to check into now and again. he has no time for Bernake and the Fed - with some justification. He had hopes for Obama but appears to have given up on him - same ol', same ol'.

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I was introduced to Denninger from here.

A smart guy. Very insightful... he used to post a lot of videos on Google, not so much now.

I don't always get what he is on about, he's a good person to check into now and again. he has no time for Bernake and the Fed - with some justification. He had hopes for Obama but appears to have given up on him - same ol', same ol'.

I am very surprised to hear that, because I didn't from day 1.

edited to add - O'Bombya IS and WILL BE part of the problem.

Edited by grumpy-old-man-returns

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I assume that he is suggesting that you could pick any company you like (a name in the phone book), and take out a short position on it. Ie the siutation he is predicting is so bad that it doesn't matter who you short.

That's cheery morning reading.....

It appears he hasn't got the message from Brown et al about the green shoots.

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We can choose between significantly higher interest rates and an economic collapse along with significantly higher interest rates.

Avoiding the higher interest rate outcome no longer appears to be possible exactly as I have been talking about for more than a year.

He appears to have forgot about the catch 22 with this, higher rates will cause more defaults leading to total collapse.

Denninger appears to be ignoring this fact or doesn't want to consider it.

For me what this highlights is the fact that single interest rates no longer work, what we need are more than one. All existing debt needs low rates to keep it serviceable and new debt needs a higher rate to try and stop this catch 22 from happening.

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He appears to have forgot about the catch 22 with this, higher rates will cause more defaults leading to total collapse.

Denninger appears to be ignoring this fact or doesn't want to consider it.

For me what this highlights is the fact that single interest rates no longer work, what we need are more than one. All existing debt needs low rates to keep it serviceable and new debt needs a higher rate to try and stop this catch 22 from happening.

denninger also thinks that the pog will collapse iirc.

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price of gold. :rolleyes::D

edited - remember you not supposed to say the other word, so pog or pm's (precious metals) keeps them baffled.

Can we start referring to the price of property too?

Edited by OnlyMe

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well now you have made me mention the word I might as well post this famous quote from the same link:

"There can be no other criterion, no other standard than gold.

Yes, gold which never changes, which can be turned into ingots

bars, coins, which has no nationality and which is eternally and

universally accepted as the unalterable fiduciary value par excellence"

Charles de Gaulle

;)

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Can we start referring to the price of propoerty too?

pop (price of property)

poi (price of oil)

morning OnlyMe. :)

edited - oops...poo (price of oil) ;) All, btw the pop one is made up, the others are used in board speak

Edited by grumpy-old-man-returns

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