Notes From Underground: Old Faithful Is In Yellowstone, Not the Grand Tetons

For the record, the Jackson Hole meeting actually takes place in the lodge at Grand Teton National Park. Again, the Ben Bernanke of QE fame WILL NOT OFFER UP ANOTHER ROUND OF QE AT THE JACKSON HOLE SYMPOSIUM. To do so would let the scallywags that OCCUPY WASHINGTON TO FINISH ANOTHER YEAR IN OFFICE WITH A GOLD MEDAL FOR IRRESPONSIBILITY. Chairman Bernanke, the WALL STREET MACHINE is hoping that you provide another dose of LIQUIDITY. Do not perform as OLD FAITHFUL and deliver. Force the hand of ELECTED OFFICIALS to actually make a serious attempt to deal with their constitutionally prescribed responsibility, FISCAL POLICY.

If Bernanke does not DELIVER THE LIQUIDITY DOSE, the EQUITY MARKET WILL SELL OFF AS WILL ALL PERCEIVED RISK ASSETS. THE PRECIOUS METALS WILL BE SOLD AS LAST WEEK’S RALLY WILL HAVE ITS SUPPORT LEVELS TESTED. MORE IMPORTANTLY FOR THE MARKETS WILL BE THE CLOSES FOR REMEMBER THAT BERNANKE IS THE FIRST SPEAKER ON FRIDAY MORNING AND HE WILL BE FOLLOWED BY MICHAEL WOODFORD TWO HOURS LATER. ALSO, MARIO DRAGHI WILL SPEAK SATURDAY AND HIS POLICY SPEECH ON THE GLOBAL PERSPECTIVE MAY BE MORE ABOUT ECB FIREPOWER THEN ANYTHING THE FED’S OLD FAITHFUL DELIVERS. AGAIN, THE CLOSES ON FRIDAY GOING INTO A LONG LABOR DAY WEEKEND WILL BE MUCH MORE IMPORTANT THAN THE INITIAL REACTION TO CHAIRMAN BERNANKE’S QE OR NOT QE for Professor Woodford’s “ACCOMMODATION AT THE ZERO BOUND” may provide the outlook for all major CENTRAL BANKS IN A BALANCE SHEET RECESSION.

Be cautious but be prepared as the media is placing TOO MUCH EMPHASIS ON BERNANKE ANNOUNCING SOME NEW TYPE OF STIMULUS. Ben, please just regale us with the success of the QE programs and how equity markets have moved substantially higher, thus generating a wealth effect that stabilized the economy. ANY MORE ACTION FROM THE HOT MONEY OF THE GEYSER MAY SCALD THE FINANCIAL MARKETS.
***LONDON was closed today and the markets were very quiet with little activity. Interest rates showed little movement and EQUITIES closed unchanged. I will take a minute to take the editors of Bloomberg to task for a piece they published last Thursday: “TIME FOR GERMANY’S REVERED BUNDESBANK TO PUT UP OR SHUT UP.” This editorial is devoid of any sense of political economy and is only echoing the thoughts of the EUROPEAN ELITE WHO ARE SO VESTED IN THE PRESENT POLITICAL AND ECONOMIC SYSTEM. The editors claim that the ECB has no choice but to bail out the entire European economy and the Bundesbank is only one vote and NO MORE.The editorial maintains that:
  1. Germany doesn’t have a veto
  2. Jens Weidmann is to represent Europe and not Germany, even though he is the President of the Bundesbank,”Weidmann must make clear that he is more concerned about Europe then Germany. That goes with the job. And, if need be, the rest of the council must be willing to overrule him.”

The Bloomberg team fails to mention that it is the GERMAN TAXPAYERS footing the bill and yet they have never been directly asked about their desire for being the PAYMASTER OF EUROPE. Otmar Issing threw down the gauntlet when he raised the issue “OF NO TAXATION WITHOUT REPRESENTATION.” There is so much to criticize the Bloomberg editorial board for but as usual a naïve view of the political economy of the EU is number one. If the Germans are forced into a situation where they will be transferring their wealth to support the profligate, the German politicians will push the “POLITICAL NUCLEAR OPTION” and call a referendum. The ramblings of a cloistered media elite have no basis in reality. Sycophants are the best of LENIN’S USEFUL IDIOTS.

 

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13 Responses to “Notes From Underground: Old Faithful Is In Yellowstone, Not the Grand Tetons”

  1. whitewavetrader Says:

    Couldn’t agree more! There is absolutely no incentive for Uncle Ben to pull the trigger with the S&P 500 up @ the 1400 level. I could see him doing it from 1160-80, but not from here.

    Investors are unwilling to commit new capital to equities at these levels. A good break would create some interest.

  2. arthur Says:

    the bar to further easing is pretty damn low -http://www.sghmacro.com/?p=3379

  3. yra harris Says:

    Arthur—WHY???????

  4. silverbug2155 Says:

    Now,, later, in a few weeks , in a few months what’s the difference it’s coming and it will be bigger than most can imagine,Best to prepare and protect yourself.Although if you are the minute by minute trader, then it’s time to place your bets at the casino.

  5. algo Says:

    Arthur – that link is full of rubbish. There is nothing in the minutes that is *new* news and nothing that points to QE3 being a 100% certainty pre-election. I think people will be severely disappointed.

  6. arthur Says:

    Yra and algo, hey! not my view… just pointing out the view of these “experts”. It says a lot about the market.

  7. yra harris Says:

    Arthur–you are correct as it says much about the market–come the sunday night opening shoot all the pseudo global macro people–I mean the MBAs

  8. yra harris Says:

    Everybody—CYNICISM INTENDED.Also,go bone up on Michael Woodford’s work on interest rates at the aero bound.Oh,and Draghi is staying home which has all the conspiratorialists salivating.

  9. arthur Says:

    Yes, as Benjamin Graham once said: Even the intelligent investor is likely to need considerable willpower to keep from following the crowd.”

    Thanks!

  10. algo Says:

    Arthur – I know it wasn’t your opinion. 🙂

    I think its sickening to watch CNBC and listen to all of the pundits get on their knees and beg for more QE. Its pathetic. All cynicism aside, I think the market is going to be disappointed. If the Fed does do QE3 in Sep then its pretty clear that they are the only game in town.

  11. arthur Says:

    Yra, this is a practical question related to “expertise”. I have been reading “mad hedge fund trader blog”. Is this guy a serious professional? Thanks

  12. yra harris Says:

    HEADS UP–on a brief review of WOODFORD–it seems as if we are going to hear about the targeting of NOMINAL GDP–this will need further study but at this time this seems to be what Professor Woodford is pushing to the forefront—time to pay close attention to see if markets get any wind of the meaning of this

  13. donker Says:

    “If Bernanke does not DELIVER THE LIQUIDITY DOSE, the EQUITY MARKET WILL SELL OFF AS WILL ALL PERCEIVED RISK ASSETS. THE PRECIOUS METALS WILL BE SOLD AS LAST WEEK’S RALLY WILL HAVE ITS SUPPORT LEVELS TESTED.”

    2+2 is still 5

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