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CBDC's

Lets just keep in mind that the best way to introduce these sorts of changes and have them welcomed is to sell them as a solution to a crisis.

Maybe Powell is trying to create the crisis.

This is an environment where they would not want to see strong gold, lest it be pointed to as a solution.

Also one where they not want to see a BRIC's alternate.

King USD...

The king is dead, long live the king!

Welcome to the Great Reset... all pure coincidence I am sure.

Stray mumbling.

 
Zed said:
Academic's always do... they are not so good at people and the real world.

People can bugger anything up.

Stupid is harsh, he was a smart guy but like most smart guys he had things wrong. It's not like we are always right is it?

2c

FWIW.
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As Dan Bongino says. He would be a stupid-smart person. The most dangerous kind of person.
 
Huge moves in the markets this morning (USA time). Central banks must be monkey hammering their figurative keyboards.
 
It's almost lunch time and the trend hasn't reversed yet. Dollar index falling all morning. Gold, silver, stocks, bonds, cryptos all up bigly.
 
Somebody floated a rumor of a December pivot, or at least a .50 rate increase instead of the .75 that November will bring.
 
One BIG thing that is getting missed here is that PHYSICAL metals especially Silver are NOT being refined now in Europe due to the energy crisis. They can't make any spreads with those high energy prices. What do you think this does to the tight physical markets?

Good interview with Andy Maguire. You can skip to ~22 mins for silver talk.

 
dpong said:
Somebody floated a rumor of a December pivot, or at least a .50 rate increase instead of the .75 that November will bring.
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Yeah, slowing or stopping without reversing is enough now. 150 basis points is already baked in the cake.
 
dpong said:
From Tom Luongo's newsletter. I love a good story.

View attachment 1409
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It's hard to imagine that the maths works at 5%. The USA could not possibly roll all it's debt at anywhere near these rates. Which leaves me wondering what he means by sustainable. The only way this works if he gets inflation under control and can bring rates right back down again.
 
Zed said:
Yeah, slowing or stopping without reversing is enough now. 150 basis points is already baked in the cake.
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50 or less was already baked in the cake by the markets. Nothing really changed but pump it they did.

Now... Please SPLAIN me this. How does TLT (treasury bonds - ie "safe") plummet today while HYG (high yield corporate trash) soar?
 
Covers a bit of market history.

The Tories Fiddle While London Burns​

Today we will look back briefly at the Weimar Republic in its early days and how all the symptoms that were present then are present in 2022 Britain.
We will also reference Revolutionary France in the 1790s. Aside from our debt and inflation problems, the chaotic political climate is another major symptom of a failing state and consequently a failing currency.
 
I bought my first house in 1982.

I had NO clue about mortgages. All I knew is after two years in the military I had a rich Uncle to backstop my play.

Got a 3:2:1 buy down mortgage at a 13.25% rate with $5k down on $58K

Payment $525/month and I could barely make that which would eventually increase to $750/month in 3 years.

2 years later and fixed rate was 10% so I refied. Rates have been down hill since until recently.

The sky is the limit to how high rates can go... at least 16% if history is our guide....

MM17_U.S._Interest_Rate-3.jpg
 
Voodoo said:
50 or less was already baked in the cake by the markets. Nothing really changed but pump it they did.
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I disagree, the Fed has strongly signaled 2 x 0.75. If you have not baked that into your stock market outlook by now (aka taken them seriously) then you are f'ing stupid. Really it is the only way that the market can rally on a "maybe the second hike is only 0.5%" outlook.

Voodoo said:
Now... Please SPLAIN me this. How does TLT (treasury bonds - ie "safe") plummet today while HYG (high yield corporate trash) soar?
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TLT moves down as rates move up, price vs rates? I don't see the issue there.

HYG is yielding 8.19% at the moment, ~3% ish over long term bonds (aka baked in the 150bps!). It's an ETF and has probably had the life shorted out of it. I'd say you are looking at short covering here, they are booking profits... I guess in anticipation of a pause. I'm not thinking we will see a real pivot yet so I'm setting my expectations @ pause.
 
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Zed said:
I disagree, the Fed has strongly signaled 2 x 0.75. If you have not baked that into your stock market outlook by now (aka taken them seriously) then you are f'ing stupid. Really it is the only way that the market can rally on a "maybe the second hike is only 0.5%" outlook.



TLT moves down as rates move up, price vs rates? I don't see the issue there.

HYG is yielding 8.19% at the moment, ~3% ish over long term bonds (aka baked in the 150bps!). It's an ETF and has probably had the life shorted out of it. I'd say you are looking at short covering here, they are booking profits... I guess in anticipation of a pause. I'm not thinking we will see a real pivot yet so I'm setting my expectations @ pause.
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They are both bond fund ETF's. The riskier one rallies today while the safe one falls badly. That's not normal.
 
The bond bulls are sticking to thier postive outlook but you have to say this looks like a definitive breakout after an epic down trend in rates. the chart suggests that 4.75% is a possible pause point and a likely correction would be to the 3.25% area with trend, price and Fibo support sitting down around there.

US30Y_2022-10-22_08-19-39.png
 
Voodoo said:
They are both bond fund ETF's. The riskier one rallies today while the safe one falls badly.
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Yes I know... BUT the riskier one is @ a much lower relative level BECAUSE it is the softer target for shorting therefore it will move harder if the impetus to cover is triggered.

What you gonna short TLT or junk debt???? I'd short the junk... aka it's a trade that got over done and is unwinding... for now.

Voodoo said:
That's not normal.
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It's pretty much what you'd expect if the market is starting to price in a pause.... a butt ton of short covering.

This is normal.
 
Zed said:
I disagree, the Fed has strongly signaled 2 x 0.75. If you have not baked that into your stock market outlook by now (aka taken them seriously) then you are f'ing stupid. Really it is the only way that the market can rally on a "maybe the second hike is only 0.5%" outlook.



TLT moves down as rates move up, price vs rates? I don't see the issue there.

HYG is yielding 8.19% at the moment, ~3% ish over long term bonds (aka baked in the 150bps!). It's an ETF and has probably had the life shorted out of it. I'd say you are looking at short covering here, they are booking profits... I guess in anticipation of a pause. I'm not thinking we will see a real pivot yet so I'm setting my expectations @ pause.
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The market had not priced in 75 yet for December. Here is the ZH article. It was between 50 and 75.

FedSpeak & Yentervention Spark Buying Panic In Bonds, Stocks, & Gold | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
www.zerohedge.com www.zerohedge.com

1666389101897.png
 
Zed said:
Yes I know... BUT the riskier one is @ a much lower relative level BECAUSE it is the softer target for shorting therefore it will move harder if the impetus to cover is triggered.

What you gonna short TLT or junk debt???? I'd short the junk... aka it's a trade that got over done and is unwinding... for now.



It's pretty much what you'd expect if the market is starting to price in a pause.... a butt ton of short covering.

This is normal.
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I don't think this has anything to do with shorting. Here is a longer term chart of the ratio of the HYG divided by TLT. It has clearly outperformed lately which makes little sense in a rising rate environment. But this really accelerated today.

1666389421677.png

What I think it shows is that people are starting to figure out that governments OFTEN do NOT repay their debts. If companies fail they know the process and might get some back in bankruptcy. You get nothing from a bankrupt government.
 
Voodoo said:
The market had not priced in 75 yet for December. Here is the ZH article. It was between 50 and 75.
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Yes the stock market has, in fact it has run ahead of 150bps... "the market" isn't a generic whole, bonds are traded by a group with a totally different outlook. You simply cannot look at expectations data and conclude that the stock market is in the same head space. The covering rally in stocks today showed you that this is true. You simply cannot argue with the market reaction, those covering short are taking profit here because what they have baked into the price looks like it may not come about.

Think about it!!!! If the stock market has only baked in the next 75bps then why the hell would it rally on an anticipated change in the rate rise after that one? There would be no reason!!!!!!

FACT! The stock market looks as far forward as it can (aka as far as it finds credible) and trades on that expectation. The Fed CLEARLY said 150bps so that is in their mind. When that expectation looks wrong for any reason they will close open profits and the stocks will rally. Today we saw that... maybe it gets legs, depends how much of the market thinks that we don't see the full rise.

All the Fed has to do now is surprise with a 1% hike next and it will crush the stock market, they will then doubt the expectation for the next move.

Always forward looking, always as far as they think they can see... and this one was telegraphed. Remember the start of this when it was the opposite and they expected a pivot and ignored the guidance because the Fed had trained them that it always pivoted! I think they have broken that little Pavlovian expectation.
 
Voodoo said:
I don't think this has anything to do with shorting. Here is a longer term chart of the ratio of the HYG divided by TLT. It has clearly outperformed lately which makes little sense in a rising rate environment. But this really accelerated today.

View attachment 1426

What I think it shows is that people are starting to figure out that governments OFTEN do NOT repay their debts. If companies fail they know the process and might get some back in bankruptcy. You get nothing from a bankrupt government.
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Looking longer term HYG has been a MUCH softer market. It was not as over priced as government paper. This is relative performance since before 2008 on a percentage scale. You can see we are not far off 2008 apocalyptic lows for HYG so short covering is to be expected. TLT on the other hand isn't discounting rate cuts yet, flattening @ the best I'd guess. These are two different markets that don't move together over a wider time scale. I don't think you can in anyway infer that the USA is about to default from this data!!!

If Powell tries to cut rates and the bond vigilantes will not let him then maybe you are talking default BUT it will be a soft default, they will monetize debt because they have no other option. They are highly unlikely to pull the pin on a hard default, that would be the end of the USA as reserve.


HYG_2022-10-22_09-38-10.png
 
Goldies clawing back some ground... speaking of short covering gold stocks have to be top of the pops.

1666404940767.png
 
Gold Options... still got those way out of the money insurance positions!

1666405899522.png

Silver as well...

1666405808880.png
 

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Zed said:
Which leaves me wondering what he means by sustainable.
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"Sustainable" for them. Break the backs of small buiness and debt slaves. Overpriced houses get repo'ed because you are a renter in the new system not an owner. You will own nothing & be happy........ aka ......... they will own everything & you will be misserable.
 
Twitter is run by retards... banned again, some trigger word in some post and all of a sudden "I'm encouraging self harm". Read the post and I'm actually suggesting a week of adult recreation without using naughty words.

SNOWFLAKES!
 
Uglytruth said:
"Sustainable" for them. Break the backs of small buiness and debt slaves. Overpriced houses get repo'ed because you are a renter in the new system not an owner. You will own nothing & be happy........ aka ......... they will own everything & you will be misserable.
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Yeah well, it can't last without direct debt monetization. If the bond vigilantes are here to stay and are playing hardball the Fed is in the "fugged bucket", it's printsville USA!

At least that is good for gold!
 
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Negative interest rate swaps were supposed to be impossible, so much so that some systems would not allow the trade. Then some quants worked out that in fact they could mean free money, a virtually guaranteed win. Jeff explains...



... now watch it five times and explain it to me slowly. In my defense it is late here...
 
Zed said:
Twitter is run by retards... banned again, some trigger word in some post and all of a sudden "I'm encouraging self harm". Read the post and I'm actually suggesting a week of adult recreation without using naughty words.

SNOWFLAKES!
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Retards.... you're gone. Lol can't say that anymore either. Got a time-out on the other site for that word.
Anyway, speaking of GDXJ I see a nice inverse Head and Shoulders bottom potential. With much stronger RSI on the right shoulder as well.

1666445227809.png
 
Years ago as a young waif I had the chance to talk to some old timers (who are long since gone) about the depression.

"What was it like?" I asked. They told me "There just was no money."

I tried to wrap my head around that statement and never could grasp what was going on.

I think we're about to learn what 'there just was no money' meant in the next few years.
 
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