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Fed Has Pumped 3 Trillion Into Trading Houses in Past Month

By NuttBoxer follow NuttBoxer   2019 Nov 25, 9:05am 299 views   25 comments   watch   nsfw   quote   share    


But that's normal for a booming economy right..

"But I haven’t paid close enough attention to HOW MUCH money the Fed has been pumping in. Pam and Russ Martens’ “Wall Street on Parade” is generally very reliable with facts. In their November 18, November 19, and November 22 columns they stated that the New York Fed has pumped $3 trillion (Gag! Gag!) to the trading houses on Wall Street since September 17, 2019. In the November 18 Column they cite James Grant, editor of Grant’s Interest Rate Observer, saying the Fed has pumped “upwards of $3 trillion” in repo loans. It doesn’t get more reliable than James Grant.

Be still, our your hand over your mouth, and wonder. First, three trillion dollars is a massive creation of money. Gargantuan. Mammoth. Colossal. Brobdingnagian. Not even the Fed, in all its shabby glory, can sterilize that amount easily.

Providentially as I was writing this an old friend called who has forgotten more about markets & trading that ten people will ever know. I asked him about the repo market and he said, there is nothing to compare to it in monetary history. There is no equivalent since January 1980 when the Fed Funds rate, which had averaged 1.5% to 3% during the 1970, shot to 21%. No other comparison. Think back on that time. The great silver spike threatened to bring down huge investment houses, and that was right before Paul Volcker took over the Fed and had to screw interest rates up over 20%. I am not saying the same things will happen this time — they won’t, that was another crisis another time — only that the repo market turmoil is signaling some monstrous blowup coming.

Second, the S&P500 chart since September shows that, whether these infusions are called Quantitive Easing or not, they have the selfsame effect on the stock market. Since September 17 the S&P500 has risen 3.9%.

Finally, think of the implications: were there not a huge need among the banks and financial markets, on the scale of 2008, would the Fed be pumping in $3 trillion? What is that problem? How soon will it explode? While the whole bond market, warped and twisted by negative interest rates, blow up in smithereens?
"

-Franklin Sanders

1   rocketjoe79   ignore (2)   2019 Nov 25, 10:13am     ↓ dislike (0)   quote   flag      

And I just dropped my entire 401K into a rollover IRA: 50% Stock, 40% bonds, 10% alternatives. Probably buying high.

/sigh, I better have a long time horizon.
2   rd6B   ignore (1)   2019 Nov 25, 10:56am     ↓ dislike (0)   quote   flag      

Fake News. Depending on your political views, it must be either Obama, or Orange Man who has levitated the stock markets, not $TRILLION injections by Federal reserve.
3   APOCALYPSEFUCKisShostakovitch   ignore (52)   2019 Nov 25, 12:57pm     ↓ dislike (0)   quote   flag      

OccasionalCortex says
It IS about propping up zombie banks like the Japanese did for 20 years.


Exactly.

Never been a better time to:

OPEN! FIRE!
4   clambo   ignore (5)   2019 Nov 25, 12:58pm     ↓ dislike (0)   quote   flag      

"Don't fight the Fed".
This is for the benefit of those who have a 401k, IRA, or similar.

Interest rates low=stocks go up.

inflation low=interest rates stay relatively low.

energy costs=inflation=higher energy production from fracking=no rise in energy costs

tax rises=kill economic growth; tax cuts=stimulate economic growth

more disposable income=people buy and consume more shit=higher profits=stocks go up

Get it?

I'm balls to the wall stocks and today my portfolio just went up; that's not bad for a day's "work" of looking at blogs and posting eyewash.
5   NuttBoxer   ignore (2)   2019 Nov 25, 2:25pm     ↓ dislike (0)   quote   flag      

clambo says
Get it?


You forgot the point about how creating 3 trillion out of thin air in one month is only done in stable economies where your stock positions will rise to infinity!!!
6   clambo   ignore (5)   2019 Nov 25, 5:53pm     ↓ dislike (0)   quote   flag      

So what is your investment strategy? Or you are just annoyed about the 3 Trillion?
7   mell   ignore (4)   2019 Nov 25, 8:12pm     ↓ dislike (0)   quote   flag      

NuttBoxer says
clambo says
Get it?


You forgot the point about how creating 3 trillion out of thin air in one month is only done in stable economies where your stock positions will rise to infinity!!!


The thing is that it's incredibly hard to time when the house will come crashing down. And even if. If all countries and strong economies engage in QE there will be mutual debt forgiveness etc. I a feeling equally uneasy about the Fed pumping money but clambo is right that. you have to take advantage as long as you take gains regularly and use those funds for doomsday. The Fed can keep the markets high longer than any short can stay solvent. Plus the economy under Trump is really booming otherwsie we wouldnt have had such an extended bull run. I keep pushing out the recession goalposts, it's now late 2020 or even 2021. The Feds bazooka is mighty and other countries don't have the balls to go against QE.
8   marcus   ignore (12)   2019 Nov 25, 8:30pm     ↓ dislike (0)   quote   flag      

mell says
Plus the economy under Trump is really booming otherwsie we wouldnt have had such an extended bull run.


Lol !!

Thanks NuttBoxer.
9   mell   ignore (4)   2019 Nov 25, 9:03pm     ↓ dislike (0)   quote   flag      

marcus says
mell says
Plus the economy under Trump is really booming otherwsie we wouldnt have had such an extended bull run.


Lol !!

Thanks NuttBoxer.


The economy is booming and the Fed is pumping. Under Obummer only the Fed was pumping.
10   marcus   ignore (12)   2019 Nov 25, 9:36pm     ↓ dislike (0)   quote   flag      

mell says
Under Obummer only the Fed was pumping.


Deficits were decreasing under Obama.

Stock market up has little to do with anything Trump has done.
11   mell   ignore (4)   2019 Nov 25, 9:50pm     ↓ dislike (0)   quote   flag      

marcus says
mell says
Under Obummer only the Fed was pumping.


Deficits were decreasing under Obama.

Stock market up has little to do with anything Trump has done.


False. Trump cut red tape like no one else that's why UE is at record low and business activity at record high. The only credit wrt the economy Obummer gets is that he let the Fed shoot the bazooka and got out of the way mostly. Until Obummercare.
12   mell   ignore (4)   2019 Nov 25, 9:52pm     ↓ dislike (0)   quote   flag      

The Fed doing this extreme QE meddling is the new normal. Everywhere. Look at crook Draghi pushing hard for negative interest rates in Europe. I'd like to pay 50% less for houses as well but as long as the Fed doesn't get out of the way and the Dems don't stop importing illegal and legal immigrants en masse you have to go with the flow and put your money to work so it can run with inflation or preferably better.
13   marcus   ignore (12)   2019 Nov 26, 12:15am     ↓ dislike (0)   quote   flag      

mell says
alse. Trump cut red tape like no one else that's why UE is at record low and business activity at record high


You crack me up ! TRumps massive tax cuts are the difference, and they are costing us big time. That's not free money (those deficits in growth time) , even if it seems like it so far.

So gullible. Shouldn't it be, gullimell ?
14   Shaman   ignore (2)   2019 Nov 26, 4:36am     ↓ dislike (0)   quote   flag      

marcus says
TRumps massive tax cuts are the difference


PAUL Ryan’s tax cuts mostly do benefit the wealthy, and maybe they shouldn’t have gotten the same scale of tax cut as the rest of us. They don’t need it, and the corporate tax cuts were enough to juice the economy without giving Richie Rich a huge tax break he didn’t need. We could definitely stand to raise the taxes on the rich back to where they were and leave them there, but the tax cuts for the lower earners have been helping, especially the lowest earners have been making out great with all the credits for kids.
My adult niece with five kids who is on welfare waits patiently for her return every year when she gets like $15,000 back. It’s enough to live on for most of the year.
15   NuttBoxer   ignore (2)   2019 Nov 26, 6:51am     ↓ dislike (0)   quote   flag      

clambo says
So what is your investment strategy? Or you are just annoyed about the 3 Trillion?


Is an economic crash an "annoyance"? Would love to be in your shoes, you must have every contingency planned out already.

I'm just a voice saying something is very wrong. Used to be a common theme here before 2008.
16   NuttBoxer   ignore (2)   2019 Nov 26, 6:54am     ↓ dislike (0)   quote   flag      

marcus says
TRumps massive tax cuts are the difference


I got a tax hike last year, not a cut.
17   NuttBoxer   ignore (2)   2019 Nov 26, 6:59am     ↓ dislike (0)   quote   flag      

mell says
The thing is that it's incredibly hard to time when the house will come crashing down.


This is the reason I play it safe, don't want to be caught with my pants down when central banks pull out their massive hard-ons and start fucking everyone into debt oblivion. The thing is, this entire economic cycle of debt is unprecedented, not just this past month, but the past 10 years. And not just in American history, in human history. We all know a crash is coming, but not when, or how bad. And I think even I'm underestimating that last.

Picking the bones is fine, but you better be pretty fucking sure you can clear out in plenty of time. And not clear out of stocks, or bonds, but out of ALL assets that only have value in dollars. And don't hedge on the current value of assets like housing/land, or you will be very short.
18   rd6B   ignore (1)   2019 Nov 26, 10:53am     ↓ dislike (0)   quote   flag      

NuttBoxer says
nd don't hedge on the current value of assets like housing/land, or you will be very short.

Not clear what kind of assets, other than AF's yams and bullets, will not be losing value. Even gold/silver is not buying much necessities during times of extreme duress.
19   mell   ignore (4)   2019 Nov 26, 1:22pm     ↓ dislike (0)   quote   flag      

Record low UE and wage rises for the lower earners, something Obummer wasn't able to accomplish. No recession in sight yet. Wait for the next year to reassess.
20   NuttBoxer   ignore (2)   2019 Nov 26, 1:34pm     ↓ dislike (0)   quote   flag      

rd6B says
Even gold/silver is not buying much necessities during times of extreme duress.


Depends on what you consider to be real money. History says it's always been gold and silver, and I doubt that's changing anytime soon.
21   rd6B   ignore (1)   2019 Nov 26, 2:07pm     ↓ dislike (0)   quote   flag      

NuttBoxer says

Depends on what you consider to be real money. History says it's always been gold and silver, and I doubt that's changing anytime soon.

My late relatives, who lived through WW1 and WW2 in Europe said that even value of gold and silver crashed during those years. For example, if in 1939 one could by a ton of potatoes for x grams of gold, then in 1943 it was may be 1/3 ton for the same amount of gold. What made you survive was access to YAMS! and people who could legally carry guns. Admittedly, value of paper money from previous regimes was much lower and often even money from the current regime did not buy much. So...logically what you want in crisis times is YAMS! which you sell to the rest of population for inflated price (=ownership of agriculturally productive land and knowledge how to farm).
22   komputodo   ignore (3)   2019 Nov 27, 5:39am     ↓ dislike (0)   quote   flag      

rd6B says
So...logically what you want in crisis times is YAMS! which you sell to the rest of population for inflated price

So you can watch people spend every last penny they have on a few yams while you are stacking assets and feeling proud of yourself.
23   NuttBoxer   ignore (2)   2019 Nov 27, 8:10am     ↓ dislike (0)   quote   flag      

rd6B says
My late relatives, who lived through WW1 and WW2 in Europe said that even value of gold and silver crashed during those years. For example, if in 1939 one could by a ton of potatoes for x grams of gold, then in 1943 it was may be 1/3 ton for the same amount of gold.


I have a hard time believing yams could keep up, but with no charts on the historical price of yams, it's hard to tell. Here's what gold and silver typically do in a financial crisis:


24   rd6B   ignore (1)   2019 Nov 27, 8:46am     ↓ dislike (0)   quote   flag      

NuttBoxer says
Here's what gold and silver typically do in a financial crisis:

That's relative to paper money, which you can not eat.
komputodo says
So you can watch people spend every last penny they have on a few yams while you are stacking assets and feeling proud of yourself.

Better if everyone starves, I guess
25   rd6B   ignore (1)   2019 Nov 27, 9:18am     ↓ dislike (0)   quote   flag      

Although gold inflation relative to first-necessity goods will likely apply only in the case of extreme crisis such as occupation of country, widespread breakdown of society etc. In other, less extreme cases @NuttBoxer is very likely right:http://pricedingold.com/wheat/

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