Tuesday, June 29, 2010

Items for Consideration

I really have way too much regular stuff to get done before the holiday weekend so I will leave a few things I am mulling over to think about and comment on.

Items for Consideration
In no particular order:

-Citigroup was halted today due to a fat finger miss trade of 30k. As Mark says, is that all it takes to crush C?

-Further, if this stock was a "non-protected" one, would the drop have held? I think it a bit naive that serious calls were not made about this stock as it is a pet of the government now.

-Some technical types see a big drop coming for stocks. Maybe so, and I have argued that another trip down (to 800 or so on the S&P) will keep regular investors out of the market for a LONG TIME.

-Something to keep in mind when US treasuries keep going lower in yield, where is that money going to go?

-Paul Krugman uses the basic argument that is best used AGAINST his policy ideas today and it is funny if you replace some words:
Of course, I know what will happen next: we’ll hear that the Irish just aren’t doing enough, and must do more. If we’ve been bleeding the patient, and he has nonetheless gotten sicker, well, we clearly need to bleed him some more.
Replace with the idea of pumping the patient full of blood even though he is internally hemorrhaging and it works against money dropping as well.

-TRIN index anyone?

-What if an ECB effort to sterilise its government bond purchases did not work out and nobody cared?

-I was wrong about the Financial Regulation bill being passed, it was not. It will when it really is a waste of time later in the week.

-Both Bernanke and Obama said today the economy is expanding and it is Europe's fault for "headwinds". I feel better.

-On a related note, if we piss off the Europeans too much they may join forces with the Russian Spy network and then we are in trouble!

-The whole game is built on confidence and you need to remember that.

-The feeling that I keep having is that all the tricks and gimmicks used by the policy guys probably should have worked but have not. They are now standing there smiling saying "why don't you believe that all is well?" and it is because people know better now for whatever reason. It is still quiet out there, but something is going to blow up.

Have a good night.


Moneta said...

Something to keep in mind when US treasuries keep going lower in yield, where is that money going to go?

The peak is near.

Suddenly yields will go up and money will magically disappear as market cap tanks.

Then QE will start up again and government will somehow brainswash/coerce investors into putting treasuries into their 401Ks.

Moneta said...

I always thought Keynes was onto something good with his save during the good times and spend during the bad times.

The problem is always with the real world. We forgot to save during the good times and now we keep on spending more and more on sectors that should shrink or disappear.

He should have been more clear. Like specifying that government can only spend if it can prove it can allocate capital efficiently.

So because of the track record, I tend to agree with Osterity for Posterity.