Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (186969)	4/25/2022 7:13:50 PM
From: sense	2 Recommendations Recommended By dvdw© Lee Lichterman III Read Replies (2) \| Respond to of 217742

Made a few biting comments on the trading today on my page.. Cynicism seems the only obviously legitimate growth market, currently... and I should probably spend some time focused on figuring out how to capitalize on that accelerating trend ? More as its also clear how much open space in the market remains to be penetrated... as levels are significantly lower than what they would be in a properly mature market ? The easiest thing I found to hang "policy focused" comments on was El-Arian's recent two-faced commentary... a couple links in my posts... ranging from "Fed credibility" and "rates" focus with "policy mistakes" and "even bigger policy mistakes"... all focused on rates discussion... while at the same time saying the market is overly focused on rates discussions... and should notice the far bigger problems he notes elsewhere, instead... in credit risk and liquidity. So, he trots that out... rates focus is wrong... while ignoring credit risk issues and liquidity... even as he introduces today's comments by noting the (patently obvious) evidence of liquidity risks already being realized. And while criticizing others focusing on rates instead of on liquidity: Proceeds from his prior points saying "the Fed has lost credibility on inflation because not tightening enough"... to apparently without irony saying... "they have to raise a mere 50 basis points at next opportunity" (in order to not lose credibility even more)... in spite of rates focus being a mistake... "and then have to make sure everyone knows [that apparently the reason he is trotting out there speaking with forked tongue and foot-stomping the points today] that the next 50 basis point rise, required for "credibility"... in a regime where rates and rate changes don't really matter... given "what are still very loose financial conditions"... critical that you have to know... that next 50 basis points will be the last rise in rates... He leaves out... "because the wheels are already coming off no matter what they do on rates"... So, the "policy mistake" issue was about not raising rates nearly enough to combat inflation... but "the bigger policy mistake" would be raising them enough to actually work to combat inflation ? Thus they are avoiding making "an even bigger policy mistake" by raising rates insignificantly too much in a way that doesn't matter... when rates aren't really the issue that matters, anyway... but are the one that they want you to focus on... And, on that... steaming pile of bullshit... the market turned higher, on a dime... as they said they knew it would in the linked interviews... in a massive whipsaw... that exactly fits the pattern building in a giant megaphone tied to volatility whips... on the UVXY chart... that's quite a bit larger than the megaphone on the SPY chart tied to liquidity effects already being seen as driving volatility in result of rates effects resulting from a couple of 30 basis point swings on no news ? Markets driving 30 basis point swings causing a static volatility/liquidity megaphone... drove them to "de-risk the trade" by talking the market down on Friday ? Except... way, way too much ? So, talking it back up again today... because... whipsawing back this way... will fix the problem of whipsawing it that way. all the way back on...Friday ? Clearly.... the cynicism is less than that deserved... as this fraud of a "Weekend at Biden's" market is clearly dead on its feet... being dragged around... re-positioned as required... but... way too obviously... the suspension of disbelief long since failing... we can all see its not real... and almost no one left has any incentive to continue to pretend or play along with the gag... So, it leaves an open ended statement... that "yeah... we're done mucking with rates rises, now"... but in full expectation that awareness exists... that rates rising isn't really the point... with a larger "recognition event" being increasingly likely to occur any minute now... I summarized some of that view in this post... which, however, is lacking some historical reference in relation to my prior posting (over a year ago, now) on the subject of planning an "exit trade" from QE... in which I noted it seemed likely that the banks would do everything possible to do to prevent exiting QE... including pushing the market off a cliff, as required, and following through on that threat: "nice market ya got there... sure would be a shame if anything were to happen to it"... in order to try to force it to not happen... Because, what they really want... is to force another "bailout" in which QE is converted from a form of leverage applied as capital substitution... that still requires that it has to be repaid... to instead make it into a direct replacement of banks losses... that has it "gifted" to the banks instead of them needing to pay it back... pretty much as Biden is now trying to do now in seeking to buy votes with "gifting" non-repayment of student loans... Not that you need to go that far out of your way... to object to that planned theft on practical grounds... but: An obvious problem with that... is that it appears true that the banks (at least) didn't understand the nature of the linkages between QE and its "substitution of capital" functions... as it relates to leverage, inflation and substitution effects... They seem to have actually believed that in QE they had invented a form of "money printing" that had the inflation removed from it. So, if they did what they wanted... and just converted the QE into a "gift" to the banks as a bailout... what it would do in fact is convert the time value of the substitution effects in "delayed inflation" occurring under deflationary conditions... into a leveraged reversal of that prior effect imposed by having its prior impacts being un-suspended... with leverage under inflationary conditions... ie., you'd get an immediate leap into hyperinflation... as ten plus years of "capital substitution" with leverage... suddenly became... a flood in ten years worth of money printing being unleashed all at once... with interest and "leverage" applied. That it's an obviously bad idea... doesn't mean they won't still try to do it.... given greedy pigs often make that error in failing to contain their greed ? But, it does sort of convert winning the goal of their effort into a moot point... as it creates a Chinese finger trap out of the QE problem... as you can release from the capture by relaxing the effort applied struggling against it... but, doing so... does actually liberate movement in full degrees of freedom of motion... not just enabling the ones you like and leaving the others you prefer to see remain confined as limits applied only on competitors... ? They "can" steal ownership of everything that "transfers" under QE seemed it had enabled... but, doing so now makes the takings worth less more and faster than it adds value to ownership of the the things being stolen... not only destroying the "value" of that stolen... but ending the value of the money used, while destroying the future value of our allowing them to sustain their positions... or steal from others, again, by being allowed to make more fake fiat money, or fraudulent transfer schemes... Technology requires that we don't need to have banks anymore. Reality in what banks are... requires that we need to not have banks anymore. That technology also enables frauds... doesn't mean you will succeed in efforts trying to force people into knowingly letting you defraud them... ? So, CBDC's are dead... and crypto is probably dead too... just failed experiments on the path to inventing a reason for banks to continue to exist and grow their power over others... when they shouldn't exist... And, that's probably why they will end up going back onto a gold standard.... as its the only choice you can make in a form of money that might reinvent a real reason for them to continue to exist... that also enables them in sustaining the practices of frauds that they persist in practicing... against the truth that "if you don't hold it, you don't own it"...