Fed VS Recession

Nu blir rumpan glad :)

Men helt i min åsikt, (Nu är jag bull igen, försökt komma in med blev utslängd flera gånger:)

Mvh Corpsee

klart jag blir glad när ni levererar, det vet ni.

corp, du har alltid varit bulle, något annat vore att ljuga 

V&S rulez 

don't be a turkey
NNT

Självklart är jag optimist, hindrar mig inte från att gå kort som du vet. 

Mvh Corpsee

ahh 2 som fortfarande tror vad fed säger. Blir nog färre med tiden. Corpsee du är värd att bli utslängd :). Riktkurs spx för detta år 1700 det var inte illa då säger jag  hälften av det 850 men det är från idag och hela 2009 så du får utöka tiden metod om du vill. Jag räknar med en felmarginal på 100 punkter för min del. Tror inte fed kommer röra räntan innan valet, de får väl fortsätta snacka ned inflationen, går säkert bra :).  

Mvh Jamenvisst

Fan, nu kom det märkliga siffror.

Privatkonsumtionen i USA steg med
0,8 procent i maj, jämfört med föregående månad. Samtidigt
steg de privata inkomsterna 1,9 procent

Sparandet uppgick i maj till 5,0 procent av de
privata inkomsterna, jämfört med reviderade 0,4 procent
månaden före (+0,7). 

Ger sparandet recessionen till slut då kanske? 

Mvh Corpsee

Inlägget är redigerat av författaren.

#5 jag tror inte jag behöver utöka tiden ,historien har bevisat att min track record är betydlig bättre än alla småa och stora bears .

Inlägget är redigerat av författaren.

#7   ok, vi kan väl stämma av första ggn vid kommande årsskifte då. Då vet vi lite närmare då din tid går ut då :). Kan inte ditt trackrecord men fått för mej att du varit bear på guld och även olja ett tag?

Trevlig helg 

Mvh Jamenvisst

38 markera den här tråden,jag kommer och uppdatera den med stor sannolikhet flerar gånger innan året är slut. 

du kom ut ur ide just när usa tampades med ma200.

sen des blev det bara ras

tajming sa bull

don't be a turkey
NNT

#10 mina tekniska funderingar finns i en anna tråd som heter SPX lonterm 

Only in the world of government lies can you call an increase in debt "income." Yet that's exactly what happened - the "stimulus" checks are being counted as an increase in consumer income, but they are no such thing. If I go take out a line of credit from my credit card, my "income" doesn't grow, but golly gee, the government's statistics say it did in this instance. Absolutely astounding stupidity on display here - or blatant, outright fraud. Pick.

Lektyr för metod och corpsee

The Fed "jawbones" about price inflation but does nothing of substance. Big shock - NOT. They're stuck. They're out of conventional liquidity and know what's coming - Bernanke has failed to prevent the deflationary credit contraction, and history is likely to compare him to The Fed in the days of The Depression when all is said and done. I believe he has made the eventual outcome worse. We are now arguing over how much worse it will be elsewhere in the world, and my argument there stands - the Asian Tigers, in particular, are whistling past the graveyard and will soon be forced to face reality. Have you had a look at the Shanghai stock market lately? The prospect of capital flight is still here, and we still need $2 billion a day in foreign money to cover our government obligations. As rates rise elsewhere in the world there is a point where that spigot will get turned off - and if it does, the bond market will collapse with disastrous consequences. This is the 900lb gorilla in the china shop and yet nobody can determine if or exactly when it will happen. My recommendation: Run like hell from anything with duration or credit risk and do it now! 

Mvh Jamenvisst

Professor Roubini som har haft väldigt rätt hitintills fortsätter vara tämligen negativ..

The delusional complacency that the "worst is behind us" is rapidly melting away?and the risk of another run against systemically important broker dealers
Nouriel Roubini | Jun 27, 2008
After the collapse in mid-March of Bear Stearns and the ensuing bailout of Bear?s creditors and the extension of the Fed?s lender of last resort support to systemically important members of the "shadow banking system" (the non-bank broker dealers that are primary dealers) a sense of delusional complacency emerged in financial markets based on fairy tales such as "the worst is behind us", the "recession will be short and shallow", that "housing is bottoming out" or even that "we will avoid the recession". This chorus of cheerleaders included policy makers that had missed the incoming financial tsunami for most of 2007, CEOs and senior financial sector folks who had lost hundreds of billions of dollars with their reckless lending, and investments and a bunch of self serving spin-masters talking non-stop their long books on CNBC and other financial media. This circus of "the worst is behind us" became a pathetic and louder chorus in the two months from mid-March till the end of May. This delusion was for a short couple of months supported by rising stock prices, reduction in credit spreads and interbank spread that, however, remained very high and indicated a persistent liquidity and credit crunch.

But this delusional complacency is now rapidly collapsing as financial markets are back to panic mode. Let?s detail how?


Those of us who had predicted this economics and financial mess (the worst housing bust since the Great Depression, the subprime and mortgage meltdown, the bust of the credit bubble, a nasty liquidity and credit crunch, high and rising oil prices, an ugly recession) well before (in the summer of 2006) 99% of the world had even heard the term "subprime" held to our sound and analytically grounded views that: this would be the housing was not bottoming out, that this would be the worst housing recession since the Great Depression and that home prices would eventually fall 30% plus, that millions of underwater households are at risk of walking away from their homes ("jingle mail"), that the we were in the eye of the financial storm (rather than past it) and this would be the worst U.S. financial crisis since the Great Depression, that credit losses would mount over time well above $1 trillion, that we would have a systemic banking and financial crisis with hundred of institutions going belly up, that the stock market would fall back into serious bear territory after another and last sucker?s rally, that the recession would be deep and protracted (12 to 18 months and U-shaped rather than V-shaped), that the Fed would stay on hold (or even cut rates further by year end) as the economic and financial crisis becomes more severe, that the world would not decouple - financially and/or economically - from the U.S. contraction, that the exchange rate policies of the BW2 countries (partially sterilized intervention creating easy monetary conditions and excessive credit growth) would lead first to asset bubbles and then to rising inflation as the needed real exchange rate appreciation would occur through a rise in prices if the nominal appreciation would be prevented, that BW2 would come under severe strain once this asset bubble would go bust and inflation rose.


Now the delusional complacency in markets is melting away or, better, going bust. With the 3% plus fall in US equity prices on Thursday stock prices are well below their bottoms of mid-march at the peak of the financial panic and back to level not seen since the fall of 2006. Also, credit spreads and interbank spreads are rising again towards their peak levels. Thus, the liquidity and credit crunch is significantly worsening. As argued in this forum the economic contraction would lead to a sharp rise in credit losses well beyond subprime: from subprime to near prime and prime, to commercial real estate, to credit cards, student loans and auto loans, to leveraged loans that financed reckless LBOs, to muni bonds, to further losses from the downgrade of monoline insurers, to industrial and commercial loans, to corporate bonds, to CDS losses.


In February this forum argued that credit losses would be at least $1 trillion. At that time that figure was derided as excessive but by now the IMF says losses will be $945 billion, Goldman Sachs estimates them at $1.1 trillion, George Magnus of UBS estimates them at $1 trillion and the hedge fund manager John Paulson (who made a fortune last year betting against subprime) is estimating them at $1.3 trilliion. Thus, it is now clear that $1 trillion is not a ceiling but rather a floor estimate for what those financial losses will be.


The deleveraging process for the financial system has barely started as most of the writedowns have been for subprime mortgages; the writedowns and/or provisioning for the additional losses have barely started. Thus, hundreds of banks in the U.S. are at risk of collapse. The typical small U.S. Bank (with assets less of $4 billion has 67% of its assets related to real estate; for large banks the figure is 48%. Thus, hundreds of small banks will go belly up as the typical local bank financed the housing, the commercial real estate, the retail boom, the office building of communities where housing is now going bust. Even large regional banks massively exposed to real estate in California, Arizona, Nevada, Florida and other states with a housing boom and now bust will go belly up.


And even large banks and broker dealers are now at risk. After the bailout of Bear Stearns? creditor and the extension of lender of last resort liquidity support the tail risk of an immediate financial meltdown was reduced as that liquidity support stopped the run on the shadow banking system. Indeed in March we were an epsilon away from such meltdown as - without the Fed actions - you would have had a run not only on Bear but also on Lehman, JP Morgan, Merrill and most of the shadow banking system. This system of non-banks looked in most ways like banks (borrow short/liquid, leverage a lot and lend longer term and illiquid). So the risk of a bank-like run on non-bank (whose base of uninsured wholesale short term creditors/lenders is much more fickle and run trigger-happy - as the Bear episode showed - than the stable base of insured depositors of banks) became massive. Thus, the Fed made its most radical change of monetary policy since the Great Depression extending both lender of last resort support to non-bank systemically important broker dealers (via the PDCF) and becoming a market maker of last resort to banks and non-banks (via the TAF and the TSLF) to avoid a full scale sudden run on the shadow banking system and a sure meltdown of the financial system.

While the tail risk of such a meltdown has now been reduced the view that systemically important broker dealers - that have now access to the TSLF and the PDCF - now don?t risk a panic-triggered run on their liabilities is false; several of them can still collapse and not be rescued. The reasons are as follows: liquidity support by the Fed is warranted for illiquid but solvent institutions but not for insolvent ones; and the risks that some of the major broker dealers may face is not just of illiquidity but also insolvency (Lehman had as much exposure to toxic MBS, CDOs and other risky assets as Bear did). The Fed already tested the limits of legality (as argued by Volcker) in its bailout of Bear?s creditors.


Suppose that a run - triggered by concerns about illiquidity and solvency - occurs against a major broker dealer (say Lehman) would the Fed come to the rescue again? The answer is not sure: such broker dealer has access to the PDCF but sharply borrowing from this facility would signal that the institution may be bleeding liquidity and be in trouble; thus large access to the Fed facility may cause the run on the liabilities of such financial institutions to accelerate rather than ebb. The reason is as follows: if creditors of the broker dealers knew with certainty that the Fed liquidity tab is open and unlimited the existence of the facility would stop the run. But if there is any meaningful probability that the amount that the Fed would be willing to lend to an institutions using that facility is not unlimited and is not unconditional then use of the facility may accelerate the run - as those first in line would have access to the liquidity provided by the Fed lending to the broker dealer in trouble while those waiting may be stuck once the lending stops. This is akin to a currency crisis in a pegged exchange rate regime triggered by a run on the forex reserves of a central bank. Once the reserves are running down and investors expect that the central bank will run out of reserves the run accelerated and the collapse of the peg occurs faster.


So why the Fed would not provide unconditional and unlimited liquidity to a broker dealer in trouble and thus allow the run to occur? Several reasons: the Bear Stearns actions were borderline illegal; the Fed cannot keep on bailing out any major broker dealer in trouble; the Fed may be running out of Treasuries to swap for illiquid/toxic securities; the Fed is starting to face credit risks from swapping and holding toxic assets (the $29 billion given to Bear, the hundreds of billions swapped via the TAF and TSLF); the authorization for the PDCF expires in the fall; the Fed should not bail out - with risks to its own balance sheet institutions that may be insolvent on top of being illiquid.


Thus, the delusion that TSLF and PDCF implies that the risk of a run against systemically important broker dealers is now close to zero is just a delusion. If a run against Lehman or another broker dealer starts again and this broker dealer borrows $5 billion from the Fed and then $10 billion investors and creditors of this institutions - who need to decide whether to pull out or keep their credit lines - will ask themselves whether the Fed would allow this broker dealer to borrow $10 and then $15 and then $20 and then $25 and then $30 billion and then even more. Unless the Fed credibly commits to unconditional and unlimited lending the use of the facility by a broker dealer in trouble may accelerate rather than stop the run on its short term liabilities. Thus, the argument that - in a world where the Fed has extended its lender of last resort support to non-bank financial institutions - the risk of a run against these institutions is now close to zero is flawed.


Certainly the rising financial tsunami ahead as the economic contraction gets worse, the financial/credit losses mount, the credit and liquidity crunch gets worse will test both the ability and the political willingness of the Fed to further bail out major financial institutions that are in serious trouble. So the worst is well ahead of us - not behind us - for the real economy and financial markets. 

 

**********
Job 28:1-28

Fed ändrar språket från tidigare statement ( Although downside risks to growth remain, they appear to have diminished somewhat,).

Till gårdagens statement:(downside risks to growth remain).

Det är en clear språk ändring .

Marknaden förväntade sig och förväntar sig fortfarande en ränte höjning i Oct eller Dec som sagt i inlägg #0

jag tycker inte att FED kommer och höja räntan så kraftig som den dumma marknaden tror stark på men det tar ett tag innan allmänheten märker detta och rättar till sina stora misstag i form av och vara på sälj sidan .

Nu  har de rättat till lite av sina storamisstag och igår var de kraftig på köpsidan :-)

#5  4,5 månader kvar för metods 1700 om du nu inte har ändrat dej till 1600 för spx? 

Mvh Jamenvisst

Bingo.  Metod vi nådde min nivå på 850 för spx mycket snabbare än jag trodde. Tror dock att det kommer va oroligt ett par år till. Kommer nog även ett race vad det lider så folk tror vi bottnat innan ytterligare än vända ner. Metod har du omvärderat något från ditt mål spx 1700?

Inlägg #5   angående mitt mål på 850 eller halva metods mål som är 1700. 

Mvh Jamenvisst

#0

" I  den här situationen Dollar har goda förutsättningar och stärkas pga kommande högre räntor och råvaru priser har god potential och sjunka och börsen har stor potential och stiga "

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Blev lite överoptimistiskt.

#16 plus #17 faktum är at :marknaden var betydlöig dummare än jag trodde men en uppdatering av SPX,s öde kommer ut om 1 minut. 

marknaden var betydlöig dummare än jag trodde

:D

den kommentaren glömmer vi metod. vi lägger den bakom oss och blickar framåt!