Wednesday, November 30, 2011

Hmmmmm

Coordinated global central bank liquidity drive

The central banks of the United States, euro zone, Japan , Canada, Britain and Switzerland announced on Wednesday coordinated global action to provide liquidity to the financial system, lowering the price on existing dollar swaps.

Posted by mark @ 01:32 PM (2454 views)
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47 thoughts on “Hmmmmm

  • general congreve says:

    Glad to hear that everything is so find and dandy that there is absolutely no need for panic measures.

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  • general congreve says:

    But what’s good for the goose is good for the gander…

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  • It is me or has the value of all currencies dropped against assets today. Gold up, Silver up, Stocks up.

    I am sure it will all be back in the red in a few days.

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  • general congreve says:

    @3 – Damn tech analysis, didn’t tell me this was coming! 😉

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  • You would have needed Mystic Merv’s Crystal ball.

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  • @3 – Damn tech analysis, didn’t tell me this was coming! 😉

    I wonder if techieman saw this one in the waves.

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  • general congreve says:

    Yep, I never guessed that they may yet further cheapen fiat money. Consequently I am totally surprised at being fundamentally f4cked!

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  • general congreve says:

    Sorry Techie, just can’t resist. It’s a cheap shot, I know. Only messing though 😉

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  • mark wadsworth says:

    GC, what makes you think that this is a panic measure, this is all part of their cunning plan for becoming richer while everybody else apart from you becomes poorer.

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  • GC, what makes you think that this is a panic measure, this is all part of their cunning plan for becoming richer while everybody else apart from you becomes poorer.

    It looks like a panic move, unplanned, but I agree that the effect will be the same i.e. to drive paper currency into the ground.

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  • Impressive stuff, gold up by almost 2% in one day. What happened to the FTSE today, didn’t it do even better? Carry on polishing that coin of yours HPW!

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  • Hmmm.. Why do central banks need to loan out money at interest anyhow? Let’s just have a permanent worldwide 0% interest rate policy and have done with it.
    The central banks can use credit controls to control inflation.

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  • Carry on polishing that coin of yours HPW!

    Silver is the thing to be buying now. If everyone bought a few physical ounces, the price would go through the upper atmosphere.

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  • general congreve says:

    @11 – As long as you haven’t got your shares on account with MF Global or some similarly dodgy outfit, happy days for the paper investment boys too! Yay! 🙂

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  • general congreve says:

    @9 – See, I don’t joke when I say Merv is unwittingly in my employ. You can say what you like, but I say he’s earned that knighthood!

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  • Max Keiser London 19th Nov 2011 Kings Head:-

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  • i notice MF global has landed a load of farmers in the manure

    i still say dump gold and buy shares – go against the tide for the best returns

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  • Looks like everyone’s a winner then GC, just some chose to trumpet it more than others. That said, I suppose in the absence of the long-awaited but always imminent HPC keeping up with the cordial banter between you and Techie keeps the site active.

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  • Mark, which Mark are you, the LVT guy or the bank shares guy? If the latter, you have done better than anyone today.

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  • i still say dump gold and buy shares – go against the tide for the best returns

    Going with the tide is buying shares…..

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  • sibley's b'stard child says:

    For some bizarre reason these threads always call to mind a group of men playing Soggy Biscuit with a Kruggerand.

    Buon appetito!

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  • general congreve says:

    @21 – Fortunately you can’t eat gold.

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  • Yeugh gross,
    But very very funny.

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  • Keiser Report: Gold Wars (E208)

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  • hpw

    how is buying shares going with the tide, for the past 12 months people have been gold mad i have been buying bank shares

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  • general congreve says:

    What people, who do you know apart from me and HPW?

    Most people are invested in shares, even if they think they are not, their pension fund takes care of that. That is the tide my friend. Us goldbugs bark is far louder than our bite I think you’ll find, just see below:

    Image and video hosting by TinyPic

    Apologies, 2009 is the latest data I have for stocks, I’m sure if allocations had changed dramatically in favour of gold we’d all have heard about it by now though:

    Image and video hosting by TinyPic

    Good luck you brave contrarian!

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  • how is buying shares going with the tide, for the past 12 months people have been gold mad i have been buying bank shares

    I don’t know anyone who holds gold, yet EVERYONE I know holds shares.

    People may be talking about it, most are selling, but NO ONE is buying…..apart from a few central banks and the Chinese.

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  • i know of loads of people who sold shares in 2008 and have not ventured back in

    pensions are different they have to have holdings

    as for gold you only need to stand by a gold atm for a laugh lines of GC clones buying gold from them

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  • GC / HPW – “Financial genius is a short memory in a rising market”.

    Ok i vill say zis only once and refer you to what i said Last Week!!!!!

    “[http://www.housepricecrash.co.uk/newsblog/2011/11/blog-looking-ugly-35390.php]

    “15. Actually i – this morning liquidated all of my Short Euro / Long USD position. I also liquidated the majority of my short positions in S&P. Why? Because it looks (short term) a bit oversold. When you add the armageddon type headlines its normally time to expect a bounce, add to that the septics having yesterday off and a gap down (for them) at the opening FOLLOWED BY A SHORT SQUEEZE would be no surprise to me.

    Next? Santa rally? Hmmm I will be selling the rallies, although as usual depends on how big they are and when. ”

    “21 Obviously we could go lower but the impulsive (S&P) fall from 1270 to 1150 in ten days looks to be nearing a completion. I for one would rather be sidelined and be happy with whats been taken off the table then risk a hundred or so S&P points for the lowish probability of another 50 to 100.

    As for buying it here…thanks but no thanks……. a surprise COULD still be to the downside.”

    “25. – if i was going to trade it (S&P) (punt it really) it would be a long around here with a stop @1144 and looking for a short squeeze up to around 1186. ”

    Since the stock markets are correlated to the Eurozone situation – for reasons that you allude to in 1. And HPs seem to be correlated to Share markets… sort of… an analysis of Stock price movements is a fair indication of the probable move in the Euro and potentially hps.

    As i look now EurUSd has been up to 13330 but now trades down around 13285 (low 13200s last week). These moves are pretty normal really but i would expect to see more decent Euro upside, even if there is a test of those 13200 lows first, before we trend back lower again”

    See i dont say much re price levels these days but when i talk about what looks to be turns you boys no risten [sic]!! Still people were telling me the Euro was about to collapse and guess what….??

    Apologies anticipated and will be graciously accepted. Of course if you didnt understand my posts thats your lookout. 😉 Happy to admit to being wrong when i am …. but….

    As for Gold you can look at what i posted to Drewster, admitedly per Hurst. “The date of this is November 9th where he basically says that a peak was expected, then a trough “around the end of November”. Then another move higher. He then states that the market will “become more exciting” into 2013. (meaning a new high then) .” – essentially though he doesnt think the recent high around 1900 USD will be breached for a number of months. Brave call really.

    Obviously it would have been better to have gone long Shares than Gold..?

    GC werent you harping on about a Stock Market crash a few days ago…. ? [I actually think there will be but as usual with the markets many people go too soon].

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  • general congreve says:

    @28 – You know loads of people who sold in 2008 do you? I’ll be sure to rely on that anecdotal accuracy when assessing future investments. Take a good look at the Reuters graph @26. Throughout 2009 the allocation of stocks hovered between 53.5% and 57.5%. Never below half of global assets, and that’s when things were at their bleakest for stocks in recent history. As for pensions being different, of course they count, we are looking at aggregate demand, not just what a few of your mates down the pub claim to be up to.

    @30 – More hedging then 😉 Could go up, could go down! Come on, where in that lot did you predict a central bank intervention? 😉

    Yes, shares did better than gold on the back of this news. Which is lucky really, because as you can see, it’s going a significant way towards making up for the earlier losses I made selling gold at $1715/Oz a month ago and investing the proceeds in the FTSE100. Gold may be up 1.87% on the month, but I’m now only 0.006% down on buying the FTSE, so catching up I suppose:

    Image and video hosting by TinyPic

    Image and video hosting by TinyPic

    Yes, I still think that if they stop coming up with hairbrained schemes to put of the Euro collapse, it will collapse, and there will be a massive loss of confidence in the stock markets. I suspect gold will be hit too, not as badly as stocks though, as people sell gold to take profts to cover losses elsewhere. Ultimately, gold will bounce back quickly and head higher, eventually stocks too will gain ground and prove to be a more reliable wealth preserver than cash at least.

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  • GC at 4
    “damn tech analysis didn’t tell me this was coming”

    Yes it did, add the 144 day moving average to your chart.

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  • general congreve says:

    @33 – Obviously I was being sarcy, but tis true the 144MDa has held very well.

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  • so to maintain the baiting and / or banter – btw hello TC hows things? been a while!?! or is that me not being here much? –

    I will make it very very simple for you GC since you seem to switch off after reading 6 words on anything other than your beloved…

    “i would expect to see more decent Euro upside” means buy the Euro…

    ” the impulsive (S&P) fall from 1270 to 1150 in ten days looks to be nearing a completion.” – means its not going much lower ..

    ” I for one would rather be sidelined and be happy with whats been taken off the table” – means get out of shorts.

    “Next? Santa rally? Hmmm I will be selling the rallies, although as usual depends on how big they are and when” means expect a rally but wether thats sustainable or not , as far as i am concerned the jury is out.

    ” if i was going to trade it (S&P) (punt it really) it would be a long around here with a stop @1144 and looking for a short squeeze up to around 1186. ” …. means buy the S&P @ 1150 looking for a target of at least 1186 (although yes the 1186 should have said short term.

    Did i do it? Well liquidated all shorts, basically very near the lows, but no i didnt buy the market because really i am not into that anymore and actually dont need to do it.

    As for predicting the Central banks co-ordinated actions. Nope but as i sit here i am not at all surprised . Actually i did predict the central banks would participate in some currency support some time ago, but yes i got that one wrong.

    I could tell you over and over again times when Mr. Market suggests / screams “something” is going to happen but what that “something” is i neither know nor particularly care. Thats for others to fret over.

    Finally as for shares v gold, well you are being very selective. Obviously i meant in terms of the response announcement. (but actually in terms of % gains on the day in £ you probably dont need to rely on your argument anyway, i really havent worked it out). I was actually referring to my own sort of size and what i would trade as a ratio between Gold and the stock indicies. But in general, General, we can all play with different time periods and show whatever we want.

    I hope the rally continues into the new year actually. But i am not saying it will – need some more info in that one (see more hedging just to please you).

    I refer again to the quote GC – it sums you up :). As for having a go at Mark, leave the young wippersnapper alone… yes he has much to learn, including how to express his views, but thats not his fault, and he does it without malice :).

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  • GC what you must remember is that you were expecting a collapse in the Euro any time . Its ok you were not alone. But you illustrate the difference between an analyst and a trader.

    Thats why on the floor a local would, short term, nearly always make the analyst look a complete f*ckwit, oppose his position and smile at him when the market went the trader’s way.

    A trader maximises gain and has no allegiance to either the long or short side of anything. The analyst is wedded to his position and will stay with it because it “can’t” go against him. The trader will just hunch his shoulders and just move on with a reversed position or look for another place to buy / sell or another market to go into. The trader will lose more often than win but will cut losses quickly and (if he is any good) will load up on the basis of kellys at the extremes, when he senses fear or greed. So for a position trader his win / loss ratio may be around 30/70 but his per position profit / loss ratio can be huge.

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  • general congreve says:

    @36 – Apologies if I’ve accidentally given you the wrong impression, I do get all the technical jargon, so sorry that you felt the need to spend the time typing all that out!

    But in general, General, we can all play with different time periods and show whatever we want.

    That’s the nail on the head and the point I was make @32. In real terms the FTSE is down since 2000, gold is up by about 400%. But yes, looking at things from my term angle or from the juxtaposed ultra short-term view (FTSE vs. gold today) can give startlingly different results.

    @37 – I agree and if you’re a good trader – personally I do wish to risk my minimal capital finding out – then more power to you. But for everyone else, there’s the bigger picture. Maybe profits won’t be maximised for the long term investor, compared to the elite trader who can reliably trade the majority of moves in a market, but slow and steady often wins the race and all that. 😉

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  • general congreve says:

    @39 – do NOT wish to risk!

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  • Sorry i didnt come back chaps – was watching the lillywhites taking a bashing by the bubble and squeaks!

    First GC – then i will come back to you TC

    GC @ 40 – yes i understood you to mean that.

    [email protected] My reasoning for posting 36 was that you yourself said you didn’t bother to read the detail of what i have written. That seemed clear by the reference to it seeming like i could be on the wrong side of the market and had not anticipated, what is a move (at the very least) exaggerated by a short squeeze. Although the squeeze may very well continue – lets see what the retrace looks like when it comes before passing judgement on that.

    In terms of me “hedging” my comments. I actually just express what i think but essentially traders always recognise they may possibly or probably be wrong. Thats why we always say we think its going to do this but recognise that it COULD do that but with (what we perceive
    ) to be a lower probability. If we didnt think like that we would either never take a trade (i.e. we wouldnt think anything is more probable than anything else – the EMH / Random Walk therory) or we would never have a stop (we wouldnt recognise that the opposite COULD happen).

    Here is a 10 min vid explaining what i mean. (by the way this was posted after i had already made my comments based on my own interpretation, the 1150 i was talking about happened outside of US hours. I actually paid 1152.7 on the last 25% of my position – had taken profits higher up on the other 75% ) :

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  • TC

    I’m actually a bit confused by what you are asking. Who is selling bonds? QE involves buying bonds with new money, which then have to be sold back later (in general) or rolled over if they were to mature in the interim. The reason QE has to be unwound is because it is supposed to be inflationary.

    As for creating money for the public sector – by which i think you mean for infrastructure projects. Yes that can be done but thats a government issue, not a BoE decision. I am by no means an expert on this but the point is (i think) one impacts the balance sheet of the BoE with the Banks as counterparties and the other adds to the governments deficit.

    However, as i said i really dont need to concern myself too much with that…. so i dont. MW seems to be the go to guy on thid stuff.

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  • general congreve says:

    @41 – OK I’ll cease with the hedging teasing now and accept it is an integral part of the mindset of a trader! I agree that anything is probable, but I think it is nearly 100% (I’m hedging a little there I know – but I’m putting the ‘nearly’ in because I don’t want to start a debate on the fact no one can know the future for sure) likely we’ll be seeing gold higher this time next year (think I said the same thing last year and year before that).

    Which brings me neatly back round to your earlier quote/quip: “Financial genius is a short memory in a rising market”.

    I quite agree. However, can you tell me what that has to do with selling a flat in July 2007 at the height of the property boom, pulling the proceeds of the sale from Icesave two days before they collapsed and then invested the money in gold (for the time being until circumstances make me reconsider my position?). Like you say, you can’t be sure of the future, so perhaps you’ll allow me to crash and burn on gold before passing judgement on my supposed future ineptitude at market timing. 😉

    @43 – So the government can spend loads of money it doesn’t have while pretending it’s ok because it’s going to pay it all back later. “You see, we haven’t printed to meet obligations, we’ve borrowed to create growth and jobs, the additional tax take from which we will use to pay back the debt”.

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  • general congreve says:

    @45 – I’m not saying you’re wrong, I mean why don’t they do it the Robert Mugabe way? Would save a lot of @rsing about. The reason is because to do so, would illustrate that their actions are blatant theft from the electorate to such a degree, that a few of them might actually wake up and notice. Hence why it is made into the convoluted ‘not-so blatant theft’ pantomime that you question.

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  • 43. Ask the Greeks 😉

    44. I just like the quote…. I’ve been dying to use it . Just really saying to be aware of the potential for being wrong and don’t pat yourself on the back too often. I was actually told that once myself from someone who had seen it all and made over $20m and lost a fair amount of it only to remake around $50m overall. At the time I had no clue who he was or what he was going on about but I was a young lad being particularly lairy, and had made shall we say a fair few quid that month. And guess what he was (eventually) absolutely right. But I will say that losing that money was probably the best thing that happened to me as a person and as a trader.

    I don’t know what size you have and I do actually think you will be fine, but I don’t know where the market goes, that’s all really. I am interested what happens to gold, and I do also think the gold / silver spread would make sense (i.e. buy gold / sell silver).

    May you be lucky and everything go well for you and if it doesn’t I really hope you don’t “do your brains” :).

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  • TC 46 . Yes they MIGHT do that at the end when (sorry if) they find that nothing else works but I think we are a fair way off that at the moment. The point is – as GC makes that a. Would be (potentially depending on size hyper) inflationary as they would almost certainly lose credibility in the markets. Chicken and egg as to which of those happens first. So QE (as i think we all more or less agree) has not be inflationary enough via persuading people to borrow and banks to lend.

    If have said before that this is not likely to work and is throwing good money after bad until the excesses of debt have been de-leveraged out. You can persuade people to borrow more if the banks are happy they will get the money back but if those folks are already maxed out then what?

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  • TC BoE is interested in getting the money back otherwise why bother to demand assets for “new” money? So no they wont print money unless there is some kind of guarantee attached. If you print money for whatever reason, i.e. really print money the BoE knows how unpalatable that will be to the markets. Hence the government runs a deficit to fund services. Otherwise why wouldnt you always just print to pay public servants etc? So in short no or not yet :). Never say never, but definitely not to pay those pesky pensions :).

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  • general congreve says:

    @48 – Ah, so you were just throwing the quote in cos you liked it, while allowing it to tarnish my good reputation! A little unfair if I may say so! 😉

    Anyway, I totally understand about not being too cocky. Let me explain some of my financial history, as there is something you are unaware of.

    In my first proper job, whilst still living at home, I had a few quid left over every month after nominal rent and beer money was subtracted. On my Dad’s advice I invested much of this surplus in tech shares, like he was doing. Now I already had a fair concept of how the markets worked, so the idea wasn’t alien to me. I looked into it and started drip feeding money in. This was in early 1998. Over the next couple of years I watched my money grow by about 300%. As I got more and more involved, I read more and more about the tech sector. Around Spring 1999 warnings started to appear in the MSM and on sites I frequented, like Motleyfool, that Tech shares were a dangerous bubble. The more I learnt the more I concurred with this opinion.

    Come November/December 1999 everything screamed sell to me. I told my Dad I thought we both should sell outof tech shares. In his typical authoritarian (bless him) manner he scolded me. “They might wobble a bit son, but shares always go up in the long run, you’d be an idiot to sell”. Chastised by his know doubt superior grasp of the situation I didn’t sell.

    One company I held were Imagination Technologies, bought for about £2.93 a share, they rose to around £8 a share at peak IIRC. They crashed so hard they have never been worth selling, even now they are only about 32p I think. Always go up? Chuckle. Luckily, and partly due to holding Matalan shares (a suggestion of my Dad’s to his credit this time) in addition to my tech shares, my total losses were mitigated to only 1 grand. But two grand original stake, could have been six grand if I’d followed my own research and intuition.

    The same thing happened in 2007 with a small ISA I’d had since 1999, not in tech this time. It had doubled in value (nominal anyway). I saw the markets were flying high and figured we were due for the cataclysm that did befall us. Again, I told the old man we should both get out of any shares we had, again I was told shares always go up in the long run, foolishly I listened to the old man (hadn’t I learnt the first time!). I sold at the same price I paid in 1999 (a real loss after inflation) in 2009 and put the money towards gold. With the markets as they currently stand, that was a better investment move than holding onto it.

    That’s the last time I am swayed by the advice of supposedly wiser others, especially when it is simple sound bites like ‘the market always goes up’. I listen to my own research and intuition first now.

    So, as you can see, I have been schooled by losing money in markets myself, and it was an even harder, having known that if I hadn’t bloody listened to people who thought they knew better, I’d have profited handsomely. At least I only lost a couple of grand learning the ropes.

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  • general congreve says:

    @48 – You probably already know that when I bought gold I also allocated 10% of my metals fund to silver, so already on that one. Been good to me so far.

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