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$323.3 Billion In 48 Hours

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Nice title. Yes, infinite, and soon they'll see how worthless it all is. Well, not until they become convinced they 'won'. And as soon as they're sure, the bottom will fall out of everything.

I hope nobody gets miffed at this, for they did before, but this is a beautiful thing we are witnessing.

Is the market alive? Is it self-aware? When trillions upon trillions upon trillions are moving do we see 'quantum-like effects'? Will we see the 'opposite' effect than that intended with the liquidity dump? And if so, how long will it take to coalesce?

What are China going to do with all that toilet paper they've stashed?

People are flying to Treasuries. How long will it take before the monster from the ID breaks into the Treasuries and starts to exterminate?

This stuff is not liquidity it is half-dry concrete! It will turn out to be useless. How dare they believe they are stronger than nature? How dare they think 'they' are the market? They are the gods?

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Guest DissipatedYouthIsValuable
Nice title. Yes, infinite, and soon they'll see how worthless it all is. Well, not until they become convinced they 'won'. And as soon as they're sure, the bottom will fall out of everything.

I hope nobody gets miffed at this, for they did before, but this is a beautiful thing we are witnessing.

Is the market alive? Is it self-aware? When trillions upon trillions upon trillions are moving do we see 'quantum-like effects'? Will we see the 'opposite' effect than that intended with the liquidity dump? And if so, how long will it take to coalesce?

What are China going to do with all that toilet paper they've stashed?

People are flying to Treasuries. How long will it take before the monster from the ID breaks into the Treasuries and starts to exterminate?

This stuff is not liquidity it is half-dry concrete! It will turn out to be useless. How dare they believe they are stronger than nature? How dare they think 'they' are the market? They are the gods?

Yeah I've had that acid trip of insight too. Just malfunctioning neurons producing a pleasing subjectivity? ;)

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What the hell are you talking about?

The problem is bigger than all the banks put together. Just like any other system in this universe it has an operating envelope so long as it stays inside its envelope society as you know it will transform slowly. But what if there is no longer any corner of the world to exploit in any useful way, what if all the peasants are as educated as the Harvard graduates, what if we all know the cost of a hard days work, what if we can buy anything from anyone and have the supplier compete with every other supplier on price. The world has changed a lot in these last few years. There is a systemic problem inherant with a pure capitalizim society, maybe the US would like to blame this one on the warmongers of terror.

Edited by Odin

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Liquidity Issues and Deflation

This question about deflation came up on my blog.

Q: "Ok, I have a question. The hedgies use leverage, make a wrong bet, and owe people money they do not have. The ECB loans out 130 billion spanking brand new dollars (Euros) to pay these people. How exactly is this brand new money (not inflationary) deflationary?"

A: For starters there was no brand new money created ...

http://globaleconomicanalysis.blogspot.com...ity-crunch.html

(My emphasis)

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What the hell are you talking about?

The problem causing this mess won't go away by just increasing the money supply. Debt caused constipation in the system and they try to solve the problem with liquidity diarrhea. My guess is that the proverbial fertilizer will still manage to hit the fan, sooner or later.

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What the hell are you talking about?

I think there is a natural limit to the incline of debt which a human being is able to service before he falls backwards exhausted by effort. Since capitalist economies work on optimistic use of debt created money, the limitation of debt creation needs to be controlled appropriately by responsible lenders, otherwise human optimism extends to manic joy, sacrificing tomorrow for the fulfilment of desires today.

What we are now seeing is the result of a large portion of several billion runners falling backwards and saying "****** it, I can't do any more"

Everyone's been eating far too many sweets in the sweet shop, and you can offer them as many more as you like but they're just going to puke on you.

(And that's before tonight's spliff and absinthe)

Looking at the closing DOW, I think I have an idea where all that new Fed created money is being pumped. I wonder how many people will just keep taking it back out again.

Edited by DissipatedYouthIsValuable

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The problem is bigger than all the banks put together. Just like any other system in this universe it has an operating envelope so long as it stays inside its envelope society as you know it will transform slowly. But what if there is no longer any corner of the world to exploit in any useful way, what if all the peasants are as educated as the Harvard graduates, what if we all know the cost of a hard days work, what if we can buy anything from anyone and have the supplier compete with every other supplier on price. The world has changed a lot in these last few years. There is a systemic problem inherant with a pure capitalizim society, maybe the US would like to blame this one on the warmongers of terror.

What? That has no relation to anything concurrent.

What we are seeing is the introduction of big loses into the financial system. Nobody is sure where these losses have accumulated so the risk of underwritting credit is much higher. Understand?

Nobody wants to publish their losses until they have an underwriter, once all the losses are published this event will be over. And we will carry on as before. Understand?

What you have done is post some kind of wondering rant about fiscal entropy.

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The problem causing this mess won't go away by just increasing the money supply. Debt caused constipation in the system and they try to solve the problem with liquidity diarrhea. My guess is that the proverbial fertilizer will still manage to hit the fan, sooner or later.

If you spent less time talking shit, and more time learning about money. You might not sound so stupid.

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Two questions to enlightened:

1. Will this money injection trickle down to consumer inflation?

2. If not and it is a temporary, loan money - what will happen when central banks will pull these billions back - will banks be left higher and drier than they are now?

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Two questions to enlightened:

1. Will this money injection trickle down to consumer inflation?

2. If not and it is a temporary, loan money - what will happen when central banks will pull these billions back - will banks be left higher and drier than they are now?

1. No, it's a 3 day loan to provide liquidity during a period of high transaction volume.

2. No, 4% on a three day loan is next to nothing, far more palatable than selling into an illiquid market place.

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1. No, it's a 3 day loan to provide liquidity during a period of high transaction volume.

2. No, 4% on a three day loan is next to nothing, far more palatable than selling into an illiquid market place.

This chain of meta level loans amuses me, it's a systemic collapse with fractal like recursion.

Truly ******ing beautiful, although entirely illusory.

Edited by DissipatedYouthIsValuable

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This chain of meta level loans amuses me, it's a systemic collapse with fractal like recursion.

Truly ******ing beautiful.

It would be if nobody held any reserves or assets. But they hold severeal times their market value in assets.

Check Forbes 2000

Assets - Market Value = Outstanding debts.

All banks are solvent.

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If you spent less time talking shit, and more time learning about money. You might not sound so stupid.

:lol: I just tried to paint a vivid picture of the situation. You have to admit it was not so far off.

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He is saying they're pushing a string. And I think he will be proven right.

Thanks Goldfinger. This is not a time for childish jokes. I have worked in a two trillion dollar a day market; a market bigger in a day than all of the world's stock markets combined for a year and instead of stuffing money down lapdancer's pants in the evenings, or dining with and sucking up to the good and the great: I studied. I observed.

These are insights but not of the drug-induced variety (sadly). These are insights borne of years of observation and toil. Money acts differently according to its 'mass', or its 'velocity' or 'momentum' (although my definition of momentum is more like the mechanical definition rather than that ascribed to the financial term 'momentum'; but I will refrain from defining it here). You might wonder why large amounts of money being lent to banks is called 'injecting liquidity', no? The term 'liquidity' is used to describe a 'thing' and a property of that 'thing'.

But I'm not here to give lessons to people who would need to study for many years before they entered the class. I'm afraid a degree in economics would not take you to the start of this stuff. If I sound arrogant just enjoy that nobody will publish my analyses until it's too late then, in retrospect, I'm just a part of the noise. (I could say the same for many here.)

The people pumping this liquidity are making assumptions based on false assumptions based false models. It is a band-aid at best. The real speculators are sharpening their claws.

They will be followed by the investment banking thugs. It is their nature. They will eat themselves. Not today but soon. Do you know that they will currently be begging speculators not to trash the world economy? But they will not hold off for long. They will break ranks for their function, in this drama, is as agent orange was to brush. They must perform their function and whilst it will be to make money, in making it they will bring it all down; but it is not their fault, although many will blame them for the 'hedge funds' that are currently dying are not 'actual' hedge funds. They are misnomers. They were set up to hold the loot 'injected' by our central bankers. The real hedge funds must now do their jobs - not today, but soon.

The small guy is going to get killed.

This liquidity will 'seem' to work but it cannot for its properties change when it hits its target. Perhaps 'gaseous' might be a better representation of its character as it is pumped, but it will soon solidify. Perhaps water on a hotplate? Is there a way I can describe this that will not attract idiot comments from twits?

It is like a drug. The market will need more and more and more but no amount will be enough.

This will seem crazy now and for some weeks. Then, when it comes to pass, this post will be a part of the noise. It will all be obvious with hindsight.

Either way, you do not want to be holding debt right now. Any debt. I would hope that GBP and CHP will do okay for a while and Goldfinger will tell you that there is something yellow and shiney that would get you through this as well, but any and all debt is about to lose any and all credibility, or parts thereof.

Even the mighty US Treasury could have is faith torn from it by reality.

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1. Will this money injection trickle down to consumer inflation?

Not directly, of course. Indirectly I think it is inflationary in a way as the Greenspan Put was. People know they can do bad things and might most likely get bailed out in the end. You would not do that if the money was 'real'. You'd be much more careful, because no one could just lend you an amount of money that equals more in gold than the Federal Reserve (officially) holds at present market prices.

Edited by Goldfinger

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It would be if nobody held any reserves or assets. But they hold severeal times their market value in assets.

Check Forbes 2000

Assets - Market Value = Outstanding debts.

All banks are solvent.

Of course they are, we WANT to believe.

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Thanks Goldfinger. This is not a time for childish jokes. I have worked in a two trillion dollar a day market; a market bigger in a day than all of the world's stock markets combined for a year and instead of stuffing money down lapdancer's pants in the evenings, or dining with and sucking up to the good and the great: I studied. I observed.

These are insights but not of the drug-induced variety (sadly). These are insights borne of years of observation and toil. Money acts differently according to its 'mass', or its 'velocity' or 'momentum' (although my definition of momentum is more like the mechanical definition rather than that ascribed to the financial term 'momentum'; but I will refrain from defining it here). You might wonder why large amounts of money being lent to banks is called 'injecting liquidity', no? The term 'liquidity' is used to describe a 'thing' and a property of that 'thing'.

But I'm not here to give lessons to people who would need to study for many years before they entered the class. I'm afraid a degree in economics would not take you to the start of this stuff. If I sound arrogant just enjoy that nobody will publish my analyses until it's too late then, in retrospect, I'm just a part of the noise. (I could say the same for many here.)

The people pumping this liquidity are making assumptions based on false assumptions based false models. It is a band-aid at best. The real speculators are sharpening their claws.

They will be followed by the investment banking thugs. It is their nature. They will eat themselves. Not today but soon. Do you know that they will currently be begging speculators not to trash the world economy? But they will not hold off for long. They will break ranks for their function, in this drama, is as agent orange was to brush. They must perform their function and whilst it will be to make money, in making it they will bring it all down; but it is not their fault, although many will blame them for the 'hedge funds' that are currently dying are not 'actual' hedge funds. They are misnomers. They were set up to hold the loot 'injected' by our central bankers. The real hedge funds must now do their jobs - not today, but soon.

The small guy is going to get killed.

This liquidity will 'seem' to work but it cannot for its properties change when it hits its target. Perhaps 'gaseous' might be a better representation of its character as it is pumped, but it will soon solidify. Perhaps water on a hotplate? Is there a way I can describe this that will not attract idiot comments from twits?

It is like a drug. The market will need more and more and more but no amount will be enough.

This will seem crazy now and for some weeks. Then, when it comes to pass, this post will be a part of the noise. It will all be obvious with hindsight.

Either way, you do not want to be holding debt right now. Any debt. I would hope that GBP and CHP will do okay for a while and Goldfinger will tell you that there is something yellow and shiney that would get you through this as well, but any and all debt is about to lose any and all credibility, or parts thereof.

Even the mighty US Treasury could have is faith torn from it by reality.

This is a really niave "newbie"-type question. I'm finding all this really rivetting and trying to understand. What I really want to know is - are Bush, Brown et al rushing around like headless chickens in the background KNOWING that armagheddon is just around the corner yet pretending all is ok .Or do they just hope it will work out if they pretend its all fine.

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