...you are worth more than the private FDIC:
"Pursuant to these requirements, staff estimates that both the Fund balance and the reserve ratio as of September 30, 2009, will be negative."
- FDIC Memorandum, September 28, 2009
Tuesday, September 29, 2009
If You Own a Pack of Chiclets...
...you are worth more than the private FDIC:
"Pursuant to these requirements, staff estimates that both the Fund balance and the reserve ratio as of September 30, 2009, will be negative."
- FDIC Memorandum, September 28, 2009
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The FDIC has always been broke, they are backing up trillions with 10's of billions, which means they are insuring deposit with money they don't have. Anyways, this is not new news. As long as the great con of man continues ( a rising stock market being bid up on no volume by 3 players, of which none of them will sell a single share) we should be in for a higher equities market regardless of what happens in reality. How does this dilemma come unglued? Who will be the seller? Mom and Pop don't have anything left to sell. Am I going crazy?
ReplyDeleteI don't think so, but why would the three con men continue the charade if they are not conning anyone?
ReplyDeleteexactly, what is the point of this exercise? Can a higher stock market really fix all that is wrong? Because that seems to be where they are concentrating their efforts. Screw the unemployed, just get AMZN higher and all will be ok. Or maybe people really have so much money that they don't mind pissing it away....again FDR, if cash is king then why is everyone so eager to dump it. You seem to be hoarding something that no one wants. People would rather trade a worthless piece of paper, U.S. dollars, for an even more worthless piece of paper, common stock certificates. Why do people hate holding currency so much? As soon as they get some in their bank account they rush to turn into into something worthless, as fast as they can
ReplyDelete"if cash is king then why is everyone so eager to dump it. You seem to be hoarding something that no one wants. People would rather trade a worthless piece of paper, U.S. dollars, for an even more worthless piece of paper, common stock certificates."
ReplyDeleteCompared to recent highs, 2009 dollars buy about...
...50% more S&P shares
...40% more real estate
...400% more business suits
...200% more pizza
...150% more oil
...250% more corn
...20% more silver
...50% more platinum
...5% more gold
...15% more Euros
...100% more classic cars
...300% more HDTVs
...400% more PCs
...100% more Chinese stock shares (was 200%)
...40% more German stock Shares (was 100%)
...20% more Korean stock shares (was 100%)
I love that no one agrees with me while I rake in money. As I always say, crowded boats sink.
Of course, that's when compared against the highs, which puts cash in the best possible light. Not a very enlightening thing to do, methinks.
ReplyDeleteHow much more of those things does the current dollar buy compared with 5 years ago? 10 years ago? 20?
To follow up on my own message, I do agree that we're going to see deflation in the near to medium term, although you may not see very much of it in some areas (e.g., California).
ReplyDeleteAnd even if you do see a lot of it, the chances are almost 100% that the average person in the area in question is worse off regardless, because their wages are falling faster than the prices of goods and services are.
FDR
ReplyDeleteDo you think that SRS is a good way to short
RE ? and of the three major indexes to short, do you have a favorite vehicle for that ?
That was about 5 minutes ago...lol!!! Posting at Wed 12:25am.
ReplyDeleteUp late night reading your amazing commentary!
"exactly, what is the point of this exercise? Can a higher stock market really fix all that is wrong?"
Retaining order of the people is the #1 priority of the FED. REMEMBER THAT.
I would not be surprised if they are literally programming the index by hand at this point.
In my opinion, there are two games to be played. One with monopoly money and one with real money.
Trade carefully, you never know when one becomes the other...
FDRAOA,
ReplyDeleteI agree that deflation is occurring because Americans are no longer profitable for the banks. Most Americans can't or won't borrow much more, but what about the rest of the world. Surely the Chinese are willing to pick up the slack and go deeply into debt for the central bankers. Won't this fact drive currency inflation? Or, will this only affect the yuan and the price of things relative to the yuan.
Thanks,
D
"How much more of those things does the current dollar buy compared with 5 years ago? 10 years "ago? 20?"
ReplyDeleteI didn't recommend being in cash 5-10 years ago, I recommended a fully leveraged long position in junior-senior gold and silver miners, and selling puts against mjor indexs and emerging markets.
"but what about the rest of the world. Surely the Chinese are willing to pick up the slack"
ReplyDeleteClearly they aren't picking up the slack, since snake oil cash remains marked down to 0%.
As many here know, I think decoupling is a joke and always has been a fabricated story to sell bad shares. CA alone was a bigger economy than China at peak, and has proably crashed less or the same.
Simply put, economically, the rest of the world is insignificant. Politically and militarily, they are needy.
"Do you think that SRS is a good way to short"
ReplyDeleteFor playing short term trends it is barely ok, provided you are disciplined and sell it at a profit. All the short ETFs and double/triple ETFs are losers in the long run. You could make a good living just shorting all of them in all conditions.
So my favorite way to short just about anything is to find an ETF that supposedly runs inverse to my position and short that.
JPM says that we are going through a long period os asset reflation right now that will continue for the next few years. What are they missing? You are in the asset deflation camp, which was correct until March. From then on we have been in a steady period of reflation. I saw your numbers above which outline peak to trough buying power but going forward is what matters. Your 2009 dollars look to buy you less in 2010 if the trend continues. I guess I am wondering what will get your deflation stance back on solid ground going forward? You are definitely in the camp that thinks this period of asset reflation is temporary, but what will be the next lever to ignite another bout of deflationary pressure on assets?
ReplyDelete"JPM says that we are going through a long period os asset reflation right now that will continue for the next few years. What are they missing?"
ReplyDeleteDecent traders.
So, the memorandum suggests that the FDIC has about $40 billion in 'securities' that it hopes to convert to cash someday, but in the meantime they want the banks to pay 3 years worth of estimated FDIC dues, in advance, so they can have a positive fund balance. I am curious what securities the FDIC has in its 'accounts.'
ReplyDeleteWell, as you know, "Securities" wouldn't need to be called securities if they were inherently secure.
ReplyDeleteAnd anytime a private corporation has a .gov website, you can be sure that massive corruption is the rule.