Financial topics

Investments, gold, currencies, surviving after a financial meltdown
Higgenbotham
Posts: 7489
Joined: Wed Sep 24, 2008 11:28 pm

Re: Financial topics

Post by Higgenbotham »

aedens wrote:Repost:
http://www.newyorkfed.org/research/staf ... /sr352.pdf

Consider a member of the payment system becomes suddenly concerned about a
liquidity shortage. Suppose, for instance, this bank wants to conserve cash holdings
because the conduits, SIVs or other off-balance sheet vehicles that it is sponsoring
have drawn on credit lines as experienced in credit markets during the recent market
turmoil.

aedens
aedens,

Thanks for posting that again; I missed it the first time. I learned a lot from reading it.

In previous posts, I have said there is potential for the payments system to lock up. I had no idea there was information out there describing exactly what the problem is and how that could occur. The first few pages of the paper describe how the payments system operates and why it is vulnerable. It basically describes the counter intuitive concept of how systemic risk can create a deflationary outcome in a sea of liquidity. We're floating up on a sea of liquidity now and few can grasp why that isn't necessarily inflationary.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.

aedens
Posts: 4753
Joined: Tue Nov 04, 2008 4:13 pm

Re: Financial topics

Post by aedens »

We have a ways to go....
Wednesday, July 30, 1930: Dow 238.40 -2.41 (1.0%)
Bank loans continue to decline; in past month, security loans down $26M to $8.398B and "all other" down $118M to $8.454B. With low demand for credit, banks have been investing heavily in government and other securities and paying off debt to Federal Reserve.

http://www.nytimes.com/2009/08/02/us/02 ... .html?_r=1
Higgenbotham wrote:
aedens wrote:Repost:
http://www.newyorkfed.org/research/staf ... /sr352.pdf

Consider a member of the payment system becomes suddenly concerned about a
liquidity shortage. Suppose, for instance, this bank wants to conserve cash holdings
because the conduits, SIVs or other off-balance sheet vehicles that it is sponsoring
have drawn on credit lines as experienced in credit markets during the recent market
turmoil.

aedens
aedens,

Thanks for posting that again; I missed it the first time. I learned a lot from reading it.

In previous posts, I have said there is potential for the payments system to lock up. I had no idea there was information out there describing exactly what the problem is and how that could occur. The first few pages of the paper describe how the payments system operates and why it is vulnerable. It basically describes the counter intuitive concept of how systemic risk can create a deflationary outcome in a sea of liquidity. We're floating up on a sea of liquidity now and few can grasp why that isn't necessarily inflationary.

aedens
Posts: 4753
Joined: Tue Nov 04, 2008 4:13 pm

Re: Financial topics

Post by aedens »

The economic downturn is reflected also in weaker U.S. industrial production and capacity utilization data from the Federal Reserve.12 In the final quarter of 2007 and first quarter of 2008, industrial production barely inched forward. Then, over the final three quarters of 2008, industrial production decreased sharply: 3.4 per¬cent in the second quarter, 8.8 percent in the third, and 12.1 percent in the fourth. Similarly, capacity utilization, which was 81.3 percent in the third quarter of 2007, fell in each of the next five quarters to 74.9 percent at the end of 2008.

Federal Reserve Statistical Release, Industrial Production and Capacity Utilization, G.17 (419), Table 11: “Historical Statistics for Industrial Production, Capacity, and Utilization: Total Industry” (Board of Governors of the Federal Reserve System, Mar. 16, 2009).
Attachments
ipg1.gif
ipg1.gif (37.3 KiB) Viewed 6429 times

John
Posts: 11485
Joined: Sat Sep 20, 2008 12:10 pm
Location: Cambridge, MA USA
Contact:

Re: Financial topics

Post by John »


John
Posts: 11485
Joined: Sat Sep 20, 2008 12:10 pm
Location: Cambridge, MA USA
Contact:

Re: Financial topics

Post by John »

I don't want to put words into anyone's mouth, but I believe that
Higgenbotham, Gordo, and freddyv all said some time ago that they
were going short. I imagine that they're all in a great deal of
(financial) pain right now.

Sincerely,

John

Higgenbotham
Posts: 7489
Joined: Wed Sep 24, 2008 11:28 pm

Re: Financial topics

Post by Higgenbotham »

John wrote:I don't want to put words into anyone's mouth, but I believe that
Higgenbotham, Gordo, and freddyv all said some time ago that they
were going short. I imagine that they're all in a great deal of
(financial) pain right now.

Sincerely,

John
I went short on July 17 and have lost 2.6% of my net worth as of Friday's close.

One positive for this trade is that the confidence that this board had for the short side is now nonexistent. I'm posting nearly every day that I have a short position and there's nobody else who wants to admit that they are short.

All of the public forecasters I follow with long term bearish bias have moved to the long side. Just a few I can name and their position based on what I can glean from reading the boards:

Robert Prechter: Dow is now in C wave rally and going to over 10,000

Richard Russell: Dow Theory buy signal

Glenn Neely: June high topped indicates wave extension to the upside

Robert McHugh: Dow higher to 10-11,000

Harry Dent: Same as Robert McHugh

Arch Crawford: HIgher until September

Yelnick: Final surge ahead

That's quite a list. Have they led the whole herd to the long side?
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.

Higgenbotham
Posts: 7489
Joined: Wed Sep 24, 2008 11:28 pm

Re: Financial topics

Post by Higgenbotham »

Higgenbotham wrote:I went short on July 17 and have lost 2.6% of my net worth as of Friday's close.
The flip side of that is I won't make much is we really do crash either. I'm happy making around 8% per year after paying taxes and living expenses. That's a lot if you think about it, but most people go for broke (and succeed).
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.

wvbill
Posts: 65
Joined: Sun Oct 05, 2008 9:46 pm

Re: Financial topics

Post by wvbill »

Higgenbotham wrote:
John wrote:I don't want to put words into anyone's mouth, but I believe that
Higgenbotham, Gordo, and freddyv all said some time ago that they
were going short. I imagine that they're all in a great deal of
(financial) pain right now.

Sincerely,

John
I went short on July 17 and have lost 2.6% of my net worth as of Friday's close.

One positive for this trade is that the confidence that this board had for the short side is now nonexistent. I'm posting nearly every day that I have a short position and there's nobody else who wants to admit that they are short.

That's quite a list. Have they led the whole herd to the long side?
For what its worth. I am still short via 2x inverse fund. Actually still positive about 10%, but expect that to disappear quickly.

I (foolishly) missed my chance to get out with a good profit. So, now will hold. I feel there is potential for more loss, here, as the moarket moves higher, but:

I think there is potential for collapse at any time.

I want to be in when that happens.

I am not a trader... Getting stubborn in my old age... Am playing strictly with money set aside for speculation.


Bill

Samir
Posts: 32
Joined: Wed Apr 29, 2009 10:45 am

Re: Financial topics

Post by Samir »

Why does it seem like many of the pundits that were initially bearish are now switching sides? Interesting bit of commentary i saw on CNBC, one of their contributors said he believed the rally was more technical than fundamental in nature (which it is). Can't really say we are coming out of a recession base don a technical rally. Specially when the economic data is still worsening.
Last edited by Samir on Mon Aug 03, 2009 11:20 pm, edited 1 time in total.

aedens
Posts: 4753
Joined: Tue Nov 04, 2008 4:13 pm

Re: Financial topics

Post by aedens »

I have been walking out in a ordely fashion as i conveyed I do not short or ever have. I had 13.4% in equity and now 10.8% in equity.

Notes: 8/1/09 yoy reality surface lag
Overall sales were down 38% primarily due to decreased selling volumes of 30%, reflecting lower volumes across all regions North America , Latin America, Asia, Europe/Middle East/Africa and all product lines due to the continued global recession as well as destocking by our customers. We were lucky and adjusted and senior management made tough choices.
I was rather close to initial estimates it was 40% as posted in GD.
My opinion was a 40 percent lagging drop Sun May 24, 2009 6:14 pm<====== then, to overall demand. I do not know now at all
when stabilization will accure; October IMO is a tipping point <----------- best guess appears sooner to net settlement

Wed Jul 29, 2009 6:31 am
Insider sales I have noted. I will sell before August 19th what Equity I have left which is 13.4% left. As we assumed the back wall is coming.

Cannot hurt to walk out orderly and see what clears.
http://www.zerohedge.com/sites/default/ ... search.pdf

But one look at a free chart available on the FED’s website would have signaled the era’s blatant abnormalities in the quantity of money available.
On the front end of the credit lifecycle was the extension of money to the consumer.
Further timeline Context: Reporting
Their empirical conclusion was just the opposite: rather than fiat money being created first and credit money following with a lag, the sequence was reversed: credit money was created first, and fiat money was then created about a year later: Having failed to understand the mechanism of money creation in a credit money world, and failed to understand how that mechanism goes into reverse during a financial crisis, neoclassical economics may end up doing what by accident what Marx failed to achieve by deliberate action, and bring capitalism to its knees.
Basil Moore 1983, “Unpacking the post Keynesian black box: bank lending and the money supply”, Journal of Post Keynesian Economics 1983, Vol. 4 pp. 537-556; here Moore was quoting a Federal Reserve economist from a 1969 conference in which the endogeneity of the money supply was being debated.

Volkner seen to that as we remeber and posted here lately.

Sun Dec 07, 2008 3:10 pm
Sir,
Being pressed for time today can you remeber that scammer's name you linked for the coming carbon energy credit scam to unfold very soon on ill advised investors.
--> POP http://hosted.ap.org/dynamic/stories/N/ ... TE=DEFAULT <--- malinvest sic em stiles
The only message from history also is capital generally goes to where it treated best. Thanks if you get time, it just that it popped back in my mind today. Since my Company is in the Dynamic Basic Material Sector Intellidex Index " i just work there" and as like else where its been cold-slow in some sectors and warm in a few of our others " As I usually convey if you do not know a stock better than wife right now stay divendend minded or fixed to preserse capital. IMO

Anyway:
No trade secrets on my investments just basic homework in Dynamic Basic Material Sector Intellidex Index. Stuff to make stuff.
Old school stuff like the farmer has to plow to seed. And even in this infested market of avarice if your in a hole stop digging.
http://mises.org/story/3583
Some of these fixed Vanguard accounts if they go under I feel where back to the middle ages anyway. Even if i looked at metal it
would be silver. I cut my investments in half in July so I have more cash. I bought a TV for $50 bucks and had 3 cars rebuilt
to my mechanical specifications. I have always been frugal and with 3 kids in college it is obvious why.
As we read - This was from John's last link.
"I do encourage the reader to try to use his own brain as well as the thoughts of the writer and look for any value to be added."
Going into this event I assumed 20 percent would vanish. And as the data suggest's 15% are on the edge as in walking down the stairs
to survive this new predicated business cycle. And in modern times, civil governments have the full support of their people for
at least “limited inflation,” meaning “a little corruption” of the money supply. Where we find debased money without widespread protests,
we also find debased people.

I have worked Corporate my whole life but was raised on the farm so the animals were cared before we ate and as many I am a student of history.
Like Burt stated the economy and speculation are 2 different aspects to paraphrase. I try to eliminate the bias from input from many sources
but trends do emerge as tools. From top to bottom mistakes have been made and truly this land is in Judgement if you believe or not.
May the wise and honest repair this land since no one person can. http://generationaldynamics.com/forum/v ... 1740#p3866
Attachments
lemming-with-preserver1.jpg
lemming-with-preserver1.jpg (9.78 KiB) Viewed 6252 times

Post Reply

Who is online

Users browsing this forum: aeden, Bing [Bot] and 112 guests