Deflation or Inflation?This is not the right question.The point is that a massive inflationary force is counterbalancing deflationary forces.In fact I do not know why anyone (except FED) would like to buy bonds or notes denominated in dollars.Please explain to me why it is interesting to buy dollar-denominated debt.The dollar is simply crashing. Stocks are up in dollars but the dollar is becoming trash. So that why all this happiness?———————————Who loses?Cautious savers lose!Who wins?Risky gamblers that on a normal capitalist system would have to accept the rules.This interest rate (0-0.25%) on dollar denominated asset is something infamous.The lesson seems to be:Do not lend your money to Uncle Sam if you can buy something else. Otherwise the paper aristocracy will hurt you.

“Wal-Mart just issued $1 billion in Samarai bonds in yen…”The Treasury’s borrowing needs have been exploding and the auctions are getting progressively weaker. This presents a serious problem for the dollar. Once 78 on the USDX is broken the index should freefall. We expect the government will staunchly defend 78, but will lose the battle probably in October or at least by the end of the year. As a result you will see more bonds being issued in foreign currencies such as the yen, yuan and euro bonds. Wal-Mart just issued $1 billion in Samarai bonds in yen. Issuance of foreign currency denominated bonds by corporations and eventually by the US Treasury will signal that the day of the dollar as the world’s reserve currency will be coming to an end. Lenders will want to get repaid in a currency they know will have future value. This kind of issuance puts more and more pressure on the dollar. Issuance of bonds in a foreign currency will be a clarion call that dollar hegemony is ending. The result will be other currencies will gain in strength versus the dollar, but the flip side is that they are all fiat currencies and all will fall versus gold.–Bob Chapman 08/01/09

Good summations on Roubini by the trio, IMOBy Peter Taylor:Prof Roubini had said that the US was likely to face a once-in-a-lifetime housing bust, sharp declines in consumer confidence and deep recession – forecasts that all proved accurate. Last month he warned that a “double-dip” recession was possible unless governments that had embarked on monetary stimulus strategies and gorged on debt found a clear strategy for exit._____________And this, from Tom Stundza:Roubini expects rising general economic growth in 2010 and 2011 but warns there always is a risk of a second slump caused by high government debt, rebounded oil and gas prices and a lack of job growth…”In the short term there has been a massive stockpiling of commodities by China,” Roubini says. “My concern is that China might have accumulated an inventory of commodities that is probably excessive to the growth of their own economy.” This could keep prices down this year. China earlier this year went on a buying spree after the global collapse in demand for metals, energy products and other industrial staples, bulking up its domestic government inventories.China will meet its target of 8% growth in gross domestic product this year, Roubini says, and should grow again next year. So, “as the global economy moves towards growth as opposed to a recession, you are going to see further increases in commodity prices, especially next year,” Roubini says._____________And Bloomberg (noting that “Oil has jumped 56 percent in 2009 and copper has surged 86 percent”):Roubini predicted on July 23 that the global economy will begin recovering near the end of 2009, before possibly dropping back into a recession by late 2010 or 2011 because of rising government debt, higher oil prices and a lack of job growth.

Saving Our Brave, New World by Butler ShafferQuoteAnd so, we seem to have reached that stage where state violence has become its own raison d’être. Social and economic problems are no longer considered within the sphere of authority of legislative bodies; congress is too slow to act when “we need action, now!,” and so the president or governor takes over and appoints – without anyone else’s approval – “czars” to rule over various realms of human activity. My thesaurus advises me that synonyms for “czar include “despot,” “tyrant,” “dictator,” “slave driver,” “duce,” “oppressor,” and “Führer.” One news report informs us that some thirty-two “czars” have been appointed in a number of states.This is what we have become, a consequence that should reveal to all that scribbling words on parchment and calling them a “constitution” is ineffective to prevent any significant number of people from doing whatever they want to do. The response of some mainstream media’s “talking heads” to America’s embrace of “czars” has been not to question the statist power implications, but only to suggest calling such officials by a different name! As has become the norm in our world, if we use an alternative word to describe something (e.g., “waterboarding” instead of “torture”) it becomes a different act.http://www.lewrockwell.com/shaffer/shaffer196.html

Wall Street profits from trades with FedBy Henny Sender in New YorkAugust 3, 2009 –Wall Street banks are reaping outsized profits by trading with the Federal Reserve, raising questions about whether the central bank is driving hard enough bargains in its dealings with private sector counterparties, officials and industry executives say.The Fed has emerged as one of Wall Street’s biggest customers during the financial crisis, buying massive amounts of securities to help stabilise the markets. In some cases, such as the market for mortgage-backed securities, the Fed buys more bonds than any other party.However, the Fed is not a typical market player. In the interests of transparency, it often announces its intention to buy particular securities in advance. A former Fed official said this strategy enables banks to sell these securities to the Fed at an inflated price.The resulting profits represent a relatively hidden form of support for banks, and Wall Street has geared up to take advantage. Barclays, for example, e-mails clients with news on the Fed’s balance sheet, detailing the share of the market in particular securities held by the Fed.“You can make big money trading with the government,” said an executive at one leading investment management firm. “The government is a huge buyer and seller and Wall Street has all the pricing power.”A former official of the US Treasury and the Fed said the situation had reached the point that “everyone games them. Their transparency hurts them. Everyone picks their pocket.”The central bank’s approach to securities purchases was defended by William Dudley, president of the New York Fed, which is responsible for market operations. “We believe that opting for transparency is a greater good,” he said. “If we didn’t have transparency, we’d be criticised on other grounds.”However, another official familiar with the matter said the central bank “has heard that dealers load up on securities to sell to the Fed. There is concern, but policy goals override other considerations.”Barney Frank, chairman of the House financial services committee, said the potential profiteering may be part of the price for stabilising the financial system.“You can’t rescue the credit system without benefiting some of the people in it.” Still, Mr Frank said Congress would be watching. “We don’t want the Fed to drive the hardest possible bargain, but we don’t want them to get ripped off.”….Larry Fink, chief executive of money manager BlackRock, has described Wall Street’s trading profits as “luxurious”, reflecting the banks’ ability to take advantage of diminished competition.“Bid-offer spreads have remained unusually wide, notwithstanding the normalisation of financial markets,” said Mohamed El-Erian, chief executive of fund manager Pimco in Newport Beach, California.Spreads narrowed dramatically during the years of the credit bubble.Brad Hintz, an analyst at AllianceBernstein, said he doubted that spreads would ever return to those levels, a development that could be pleasing to the Fed.“They want to help Wall Street make money,” he said.Additional reporting by Brooke Masters in WashingtonCopyright The Financial Times Limited 2009

Further On GDP – And Stocks | Sudden DebtAugust 3, 2009 –Delving deeper into the GDP numbers just released it becomes quite easy to discern a pattern and possibly make a prediction about the direction of corporate profits.The following figures are in current dollars, at seasonally adjusted annual rates.During the first two quarters of 2009..· Personal consumption expenditures (that’s about 70% of GDP): -$21 billion.· Non-residential fixed investment (that’s structures, equipment, software, etc.): -$481 billion.=> Businesses slashed their investment far faster than consumers reduced their spending. Corporate profits (finance excluded) benefited from cost-cutting, not growth in sales.Furthermore, in the same period…· Private inventories were slashed by a cumulative: -$283 billion.Businesses sold a lot out of inventory already in stock, as opposed to making new items. That’s another short-term boost to the bottom line.Both of the above positive effects cannot, and will not, last long. Therefore, the crucial question is what happens with consumer spending. My thinking is not to expect a turnaround any time soon; indeed, I think things are going to get significantly worse in the next several quarters. Jobs are being lost in the hundreds of thousands each month and hours worked for those still employed are at the lowest level (33 hours/week) since at least 1964.Bottom line: corporations can “save” earnings for a few months by slashing spending but in the end the consumer’s behavior will determine the top line (sales). And that’s where it all plays out.http://suddendebt.blogspot.com/

Well, I wouldn’t say that America has embraced Czars, but certain elements of its government have. The question is, what are the people going to do about it?

There is only ONE opinion allowed in this fascist state:Geithner loses his cool at regulators meeting-WSJNEW YORK, Aug 3 (Reuters) – U.S. Treasury Secretary Timothy Geithner blasted top U.S. regulators in an expletive-laden tirade amid frustration over President Barack Obama’s faltering plan to overhaul financial regulation, the Wall Street Journal said on Monday, citing people familiar with the meeting. Geithner told regulators that “enough is enough,” the newspaper said, citing one person familiar with the meeting last Friday with Federal Reserve Chairman Ben Bernanke, Securities and Exchange Commission Chairman Mary Schapiro and Federal Deposit Insurance Corp Chairman Sheila Bair.The Treasury Secretary said regulators had been given a chance to air their concerns, but that it was time to stop, the newspaper said, citing the person.The Treasury Department could not immediately be reached for comment.Obama in June unveiled a financial regulatory overhaul, sometimes called the biggest since the 1930s. Among other things, the plan would give the Fed added powers, award the government more power to break up troubled companies, and create a new agency to oversee consumer finance.Many major banks and industry trade groups however have criticized the plan, as have some regulators wary that any redistribution of power would reduce their own.According to the newspaper, Friday’s roughly hour-long meeting was unusual because of Geithner’s repeated obscenities and his aggressive posture toward regulators generally deemed independent of the White House.Geithner told attendees that the administration and Congress set policy, the newspaper said.(Reporting by Jonathan Stempel; editing by Carol Bishopric) Keywords: USA TREASURY/GEITHNER MEETING (jon.stempel@thomsonreuters.com +1 646 223 6317; Reuters Messaging: jon.stempel.reuters.com@reuters.net)http://www.iii.co.uk/news/?type=afxnews&articleid=7457110&action=article

That was good.

http://globaleconomicanalysis.blogspot.com/2009/08/federal-tax-revenues-suffer-biggest.htmlreason i dont believe what this lunatic guy said? inflation is expansion of credit not increase of price? tell that to ordinary consumer that depend on food, water, utility, shopping, dinning out, internet, and iphone. if price of these thing that they enjoy everyday is climbing, they gonna say is inflation regardless what happen to credit.currently, people are living with their mean, repairing their balance sheet. they clearly still spending if they find good deal. ISM manufacturing # starting to go up. forget deflation crap talk, it is inflation we need to worry about.

After spending twelve years testing nerve gas successfully, I decided to change careers. I looked for a job that allowed me to try things and fail, yet still be rewarded handsomely; something quite the opposite of what Ayn Rand would have me do. The only jobs with these characteristics were found in government, but I wanted to stay in the private sector. I decided to become an economic prognosticator. I looked back at events of the past ten years, and boldly proclaimed that I had seen them all coming, but no one listened to me then. Next, I gave my predictions for the next two years, making sure I told people what they wanted to hear. “The price of bubble gum will drop like a rock. Short bubble gum!” “The S&P will definitely reach new heights unless it reaches new lows or stays the same.” I exhorted.Offers for speaking engagements came rolling in. The president urged me to join his economic team, but I declined in order to maintain my objectivity and independence. My ship really came in when I began to speak internationally. No matter what I said, there was some place in the world where what I said was true. My credibility soared and with it, my speaking stipends.Financial reporters are pressing me for my latest predictions. They know that what I say can move markets. Let them know this: 2010 will be known as the “Year of the death of the twist tie.” “Health care costs will drop dramatically due to the creation of an unecessary testing czar. The czar will automatically order unecesary tests for all Medicare and Medicaid patients, thereby saving doctors time and effort.” My final prediction involves China. “The Chinese will attempt to consume what they used to send to the U.S., domestically. Since they have so little experience with the unintended consequences of so much consumption, they will soon be buried under tons of crap in their houses, landfills and public buildings. This will add fuel to their building boom as they attempt to accomodate the build up of crap that they formerly exported to the U.S. The U.S. will export prefabricated buildings to China and erase the balance of trade deficit. We will then begin to buy their bonds, manufacture cars to sell to them and bake fortune cookies cheaper with better fortunes inside them.”I wish I started this career earlier. It’s so much more rewarding than the nerve gas factory.

On Deck, GE Capital, which will make GMAC look like small potatoes. Why is GMAC even in Biz still? Makes no sense to me. General Electric could be the one big Company, that when GE Cap implodes, because its GE, people will finally relaize we are in a Depression.GMAC Posts Wider Quarterly Loss as Loan Defaults Rise (Update2)By Ari LevyAug. 4 (Bloomberg) — GMAC Inc., the lender that received $13.5 billion in government bailout funds, reported a $3.9 billion second-quarter loss tied to rising loan defaults and said part of its insurance operations may be sold.The loss, GMAC’s seventh in the past eight quarters, rose from $2.48 billion a year earlier. Results included a $1.2 billion tax charge caused by converting to a corporation, the Detroit-based company said today in a statement. The auto- finance unit’s loss increased to $727 million from $717 million, while the deficit from mortgage operations shrank to $1.84 billion from $1.9 billion, GMAC said.The recession drove up defaults on home and auto loans, and operations will be trimmed to save $1 billion annually by 2010, GMAC said. The U.S. took a 35 percent stake earlier this year, enabling GMAC to keep lending to customers of General Motors Corp. and Chrysler Group LLC after the automakers entered bankruptcy. While government incentives boosted car sales and GMAC’s revenue, losses on older loans are hobbling profit.“On balance, there hasn’t been any sort of dramatic improvement,” said Sean Egan, president of Egan-Jones Ratings Co. in Haverford, Pennsylvania, which upgraded GMAC’s debt six levels to B- in May because of the bailout. “The company lives and dies by its federal government support.” Egan commented before results were released.Mortgage Asset SalesExcluding one-time charges, GMAC’s quarterly loss was about $400 million. The company had a $1.6 billion loss from selling international mortgage assets at a discount, and on provisions, impairments and reserves on non-bank mortgage assets in the U.S. The mortgage operations, which include Residential Capital LLC, boosted originations to $18.5 billion from $13.2 billion in the previous period.The company took a $607 million goodwill impairment on its consumer property and casualty insurance business related to a “strategic review” of the operation, which may include a sale, GMAC said. Chief Financial Officer Robert Hull said during a conference call with analysts today that GMAC will continue support for ResCap if it’s in the interests of stakeholders, while adding that all options will be considered.GMAC’s 6.625 percent notes maturing in 2012 rose 2 cents, or 2.3 percent, to 91 cents on the dollar yesterday, to yield 10.4 percent, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. They’ve climbed 57 percent since March. GMAC doesn’t have publicly traded stock.Bank StatusGMAC, which was permitted to become a bank holding company in December, is counting on added deposits at its Ally Bank unit to help fund new loans. Deposits climbed 13 percent to $25.4 billion at the bank and assets jumped 17 percent to $42.5 billion. The bank’s one-year, 2 percent certificates of deposit, while less than half the 4.05 percent yield a year ago, are among the highest in the country, according to Bankrate.com.GMAC’s worldwide cost of borrowing, which has been above 5 percent since 2005, was helped in the second quarter by a $4.5 billion debt sale backed by the Federal Deposit Insurance Corp. The total cost of borrowing increased to 6.27 percent from 6.21 percent because of other debt expenses. GMAC has $40.9 billion of bonds outstanding, with more than half maturing by the end of 2011, according to Bloomberg data.New vehicle originations, while higher than in the previous two quarters, slumped to $5.6 billion from $12.5 billion a year earlier. GMAC has financed about $320 million of new Chrysler originations through July 20, with the lender handling 10 percent of the automaker’s retail sales in June.Auto SalesThe annual sales pace for U.S. automobiles last month was 11.2 million, the first time this year it’s topped 10 million, according to Autodata Corp. in Woodcliff Lake, New Jersey. The government’s so-called cash-for-clunkers incentive helped GM pare sales declines, bringing more financing business to GMAC.While new business is increasing, so are delinquencies. Contracts more than 30 days past due rose to 3.4 percent from 2.4 percent a year earlier, GMAC said. The company may struggle to boost profit amid the highest unemployment in 26 years and near-record home foreclosures.“Consumer credit will continue to weaken throughout the rest of the year, so that will continue to be a problem,” said Christopher Wolfe, an analyst at Fitch Ratings in New York, before results were released.

Dear Santa, Oh! Please change my standing wish for that Christmas pony, can you can you please?Because this year I really really really need this book!Richard Wilkinson and Kate Pickett, The Spirit Level: Why More Equal Societies Almost Always Do Better. The Penguin Group: Allen Lane, 2009, 331 pp.Huge numbers of people in the United States hold prescriptions for anti-depressants. Huge numbers of other Americans “self-medicate” — through illegal drugs and alcohol. Huge numbers of Americans, in other words, are feeling plenty of pain. Why? What’s causing all this anguish?Our conventional wisdom blames the grind of our always-on-the-go modern existence, the stresses and strains of life in the fast lane. The conventional wisdom, suggests this splendid new book, has that half-right. Stress is indeed doing us in. But that stress doesn’t come from “modern life.”That stress comes from inequality, the vast gaps in income and wealth that so divide us.How can the authors of The Spirit Level, Richard Wilkinson and Kate Pickett, be so sure? They’ve crunched the numbers. All of them, you might say.These two distinguished epidemiologists have identified nearly every social problem where reliable data let us compare how well — or poorly — the major nations of the developed world are delivering a decent quality of life.Epidemiologists study the health of populations, and Wilkinson and Pickett have, naturally enough, included in their comparisons all the basic health yardsticks. In which developed nations, they ask, do people live the longest? What nations show the highest levels of obesity? Where in the developed world do people suffer the most mental illness?But the comparisons don’t stop there. In which nations, Wilkinson and Pickett wonder, do children do the best in school? Where do people born at the bottom of the economic ladder have the best shot at climbing up? Which nations send the most people to prison? Have the most teenage moms? Exhibit the highest levels of trust? Tally the most homicides?Wilkinson and Pickett answer all these questions — and many more. And their answers fascinate. The nations of the developed world, so alike on the trappings of daily life, turn out to differ enormously on the markers that measure how well we lead our lives.People in some developed nations, the data show, can be anywhere from three to ten times more likely than people in other developed nations to be obese or get murdered, to mistrust others or have a pregnant teen daughter, to become a drug addict or escape from poverty.And the nations that do the best, on yardstick after yardstick, all turn out to share one basic trait. They all share their wealth.“If you want to know why one country does better or worse than another,” as Wilkinson and Pickett note simply, “the first thing to look at is the extent of inequality.”The United States, the developed world’s most unequal major nation, ranks at or near the bottom on every quality-of-life indicator that Wilkinson and Pickett examine. Portugal and the UK, nations with levels of inequality that rival the United States, rank near that same bottom.Japan and the Scandinavian nations, the world’s most equal major developed nations, show the exact opposite trend line. They all rank, on yardstick after yardstick, at or near the top.And we see the same pattern within the United States. America’s most equal states — New Hampshire, Minnesota, North Dakota, and Vermont — all consistently outperform the least equal, states like Mississippi and Alabama.People in more equal societies simply live longer, healthier, and happier lives than people in more unequal societies. And not just poor people in these societies, Wilkinson and Pickett emphasize continually, but all people.If you have a middle class income in an unequal society, you’re going to be more stressed and less healthy — mentally and physically — than someone with the same income in a more equal society.So what makes inequality so potent a curse? Wilkinson and Pickett explore the impact of inequality from all sorts of angles. Sociologically, for instance, they explain how “the stresses of a more unequal society — of low social status — have penetrated family life and relationships,” how inequality undercuts the sense and reality of community and fosters, in their place, suspicion and fear.“We tend to choose our friends from among our near equals and have little to do with those much richer or much poorer,” the two authors note. “And when we have less to do with other kinds of people, it’s harder for us to trust them.”The wider the economic gaps between us, The Spirit Level helps us understand, the more social status matters. The more social status matters, the more likely we will be to feel shame and humiliation. The more stress these emotions evoke in us, the weaker we get.“Chronic stress,” The Spirit Level observes, “wears us down and wears us out.”Want the biochemistry behind that wearing down? The Spirit Level has it for you, in passages you don’t have to be a biochemist to comprehend. Wilkinson and Pickett can speak academese as well as anyone. But they don’t speak that here. They’ve attempted instead to make a generation’s worth of scholarship on inequality accessible to the general public. And they’ve succeeded.The Spirit Level appeared earlier this year in Britain. Wilkinson and Pickett, one British daily noted, may have produced “the most important book of the year.” They have. Anyone can order the British edition, right now, online. An American edition will appear the end of this year.“In the past,” Wilkinson and Pickett note as they close this remarkable book, “when arguments about inequality centered on the privations of the poor and on what is fair, reducing inequality depended on coaxing or scaring the better-off into adopting a more altruistic attitude to the poor.”But that’s all changed, the authors point out, now that “we know that inequality affects so many outcomes, across so much of society.” Reducing inequality, they add, has become “a project in which we all have a shared interest.”If you share that interest, get this book. Give this book to others. We need a movement to make the world more equal. This book can help create it.Interested in getting a more in-depth sense of what Richard Wilkinson and Kate Pickett have to offer? Check out the Equality Trust, a new Web portal on inequality that highlights their data and insights.www.toomuchonline.orgToo Much is published by the Council on International and Public Affairs, a nonprofit research and education group founded in 1954.(I cannot recommend this free online weekly highly enough. You can subscribe to free Monday emails at the site. They are timely, short, and sweet, and packed with live links to information and sources you’re not otherwise likely to find!)

“I wish I started this career earlier. It’s so much more rewarding than the nerve gas factory.”Bwahaha! A romantic fiction writer. Good on you “Harley Quinn”.That’s so Ayn Randy of you.

NO JOBS=NO RECOVERY. What a shame when you look at this chart. How do they expect hoosuing or Jobs to recvover when their is massive WAGE DESTRUCTION occuring and thats for thsoe still working.Housing affordability and minimum-wage earnersBy Chris Morris (contact), Alex Richards (contact)Monday, Aug. 3, 2009 | 2 a.m.The map shows the percentage of monthly income a minimum-wage earner in each county would spend on housing, based on the HUD-determined fair market rent of a two-bedroom dwelling and the minimum wage in each state, which ranges from the $7.25 per hour federal minimum to $8.55 per hour in Washington. The Bureau of Labor Statistics estimates that 2.2 million of the 75 million hourly workers in the U.S. earn minimum wage and that roughly one in six U.S. workers are employed part time.http://media.lasvegassun.com/media/img/photos/2009/08/02/bythenumbers.jpg

This guy finally hit it… The program was about trying to raise prices or in fact rasing them. Are they really this stupid to think they can raise prices?Clunker program in overdriveConsumers love the deals, but fallout could include higher pricesExplore relatedCHICAGO (MarketWatch) — Consumers have embraced the “cash for clunkers” program, lending a big boost to car sales and perhaps setting the stage for a stronger rebound down the road.But the stimulus may have some unintended consequences as well, skewing the mix of new- and used-car sales and driving up prices on the fuel-efficient vehicles most in demand as clunker replacements.ReutersCash-for-Clunkers program used cars sit on Ted Britt Ford dealership storage lot in Fairfax, Va.”The reality is this is a brilliant stimulus package,” said AutoNation Chief Executive Mike Jackson on the company’s second-quarter earnings call last week. “This is exactly what stimulus programs are supposed to do.” AutoNation is a network of new- and used-car dealers.The $1 billion federal stimulus program, which provides payments of $3,500 or $4,500 for trade-ins of older, fuel-inefficient cars, kicked off July 24 and in just a week was in danger of running out of funding, forcing Congress to consider slapping another $2 billion into it. On Friday the House approved the additional money and the Senate could take it up as early as Monday. Read more on congressional action on the clunker program.The effect of the program was evident immediately, as carmakers Monday reported better-than-expected July sales. Cash for clunkers was “icing on the cake” for the automakers reporting July sales, industry analyst Lincoln Merrihew of TNS Compete told MarketWatch Radio. See more on July car sales.”It’s not what’s driving all sales — that’s more a function of confidence — but it may be pulling some people into the market who would have bought later in the year or people who would not have been in the market at all,” he said.Merrihew says a more confident consumer had already started steering sales in the right direction when the popular government program kicked in.”And the news of better sales may in and of itself get consumers more confidence to buy cars,” he said. Listen to more of MarketWatch’s interview with Merrihew.At AutoNation, for example, traffic surged 35% in the first week of the program and the company is expecting a 10% year-over-year jump in new-car sales for July. Credit scores for clunkers buyers were “better than normal,” and the program did not hurt the company’s used-car business, according to Mike Maroone, AutoNation’s president.Stimulating higher prices?Jeremy Anwyl, chief executive of Edmunds.com, the auto-buying-guide Web site, said consumers knew the clunker program was in the works and held off many car purchases waiting to jump on the deals.”We’ve seen three or four months worth of clunker activity compressed into a one-week period,” he said. But “what are we really accomplishing? We’re forking over $1 billion to get consumers to do something that they would likely do anyway.”"This isn’t signaling an economic recovery,” he added. In fact, he said, this “artificial boost” is leading to a shortage of cars. Plug in the laws of supply and demand and the result will be higher prices on cars.Already the costs on some vehicles are inching up. AutoNation’s Jackson talked about “price recovery” with analysts, noting that trucks and SUVs are now getting sold for 25% higher than they did a year ago when the sharp hike in gas prices put a big dent in sales.”We could see a buyer’s strike in October,” Anwyl said. “As car prices rise, consumers who have been buying pretty aggressively during the summer are just going to stop.”The auto industry has seen a similar pattern before: In 2001, after the terrorist attacks, General Motors introduced 0% financing with the Keep America Rolling program. Four years later, GM offered consumers the same discounts it gave employees. Both times sales zoomed. But they have been weak for most of the last two years.’Deal happy’Still, cash for clunkers proves American consumers will still respond to great deals and it may signal a pickup in broader spending down the line, one analyst said.”As consumers, we’re deal happy,” said Michael Belcher, a marketing professor and consumer behavior expert at San Diego State University. “If people can afford to spend, they will on a good deal.”"From a psychological standpoint, it’s going to be a good boost,” said Belcher who believes this program might help consumers loosen up on the purse strings elsewhere. But it won’t sustain higher sales for long. “It is what it is — a promotion,” he said.What’s more, Anwyl said that things could get worse because the auto industry has been cutting capacity this year by stopping production on certain models, closing down production plants and laying off tens of thousands of workers.”This is not a fundamental recovery of the car business,” he added. “It’s an exaggeration of the normal seasonality.”Anwyl also thinks there’s another backlash from this. “Here’s the irony,” he said. “As pricing on fuel-efficient cars increases because of this artificially created shortage, then consumers who can’t participate are going to be influenced to buy less fuel-efficient cars” — the opposite of the cash for clunkers goal

here’s the link to Wealth for the Common Goodcool site – check out the quotes!

From the same article, I could say Stiglitz replies:”Among critics of American-style capitalism in the Third World, the way that America has responded to the current economic crisis has been the last straw. During the East Asia crisis, just a decade ago, America and the I.M.F. demanded that the affected countries cut their deficits by cutting back expenditures—even if, as in Thailand, this contributed to a resurgence of the aids epidemic, or even if, as in Indonesia, this meant curtailing food subsidies for the starving. America and the I.M.F. forced countries to raise interest rates, in some cases to more than 50 percent. They lectured Indonesia about being tough on its banks—and demanded that the government not bail them out. What a terrible precedent this would set, they said, and what a terrible intervention in the Swiss-clock mechanisms of the free market.The contrast between the handling of the East Asia crisis and the American crisis is stark and has not gone unnoticed. To pull America out of the hole, we are now witnessing massive increases in spending and massive deficits, even as interest rates have been brought down to zero. Banks are being bailed out right and left. Some of the same officials in Washington who dealt with the East Asia crisis are now managing the response to the American crisis. Why, people in the Third World ask, is the United States administering different medicine to itself?”

Tax Facts, found at Wealth for the Common Good:The top 1 percent of America’s households — families with incomes over $450,000 in 2008 — will receive 31 percent of the benefits from the Bush 2001 and 2003 tax cuts over the next ten years if these tax cuts are made permanent.-Center for Budget and Policy Priorities, The 2001 and 2003 Tax Cuts, March 5, 2009In 2009, 70.4 percent of the tax savings from the Bush tax rate cuts on capital gains and dividend income will go to the nation’s top 1 percent, taxpayers who report $1,661,900 in average income. Just 2.9 percent of the tax savings in 2009 will go to households who make under $75,000. These households make up 81.6 percent of the taxpaying public.-Citizens for Tax Justice, Capital Gains and Dividends Tax Cuts Offer Almost No Benefit to Middle-Income Americans and Add to the Nation’s Fiscal Problems, May 13, 2008.Between 1986 and 2006, the top 1 percent of U.S. households almost doubled their share of the nation’s income, from 11.3 percent of the total to 22.1 percent. Over that same span, the share of top 1 percent income paid in federal income tax dropped by nearly a third, from 33.1 to 22.8 percent.-Source: Kyle Mudry and Justin Bryan, Individual Income Tax Rates and Shares, 2006, Statistics of Income Bulletin, Winter 2009, Internal Revenue ServiceBetween 1986 and 2006, the top 1 percent of U.S. taxpayers saw the share of their income paid in federal income taxes drop 32.1 percent. The bottom 99 percent of Americans, in those same years, saw the share of their incomes paid in federal income tax drop just 20.1 percent.-Source: Kyle Mudry and Justin Bryan, Individual Income Tax Rates and Shares, 2006, Statistics of Income Bulletin, Winter 2009, Internal Revenue ServiceIn 2006, the most recent year with complete IRS statistics available, taxpayers with incomes over $2 million paid 23 percent of their incomes, on average, in federal income tax. A half-century earlier, in 1955, taxpayers who made the equivalent of over $2 million, after adjusting for inflation, paid 49 percent of their incomes in federal income tax.-John Cavanagh, Chuck Collins, Alison Goldberg, and Sam Pizzigati, Tax Day 2009: Reversing the Great Tax Shift, Institute for Policy Studies and Wealth for the Common Good, April 2009.In 2004, America’s most affluent 10 percent paid, on average, 17.1 percent of their income in federal, state, and local taxes. The next highest 10 percent paid 19.1 percent of their incomes in total taxes.-Source: Ajit Zacharias, Edward N. Wolff, and Thomas Masterson, New Estimates of Economic Inequality in America, 1959–2004, The Levy Economics Institute of Bard College, April 2009America’s 400 most affluent taxpayers in 1955 reported incomes that averaged, in today’s dollars, $12.3 million. These 400, after loopholes, paid 51.2 percent of their total incomes in federal income tax. In 2006, the top 400 averaged $263 million in income — and paid just 17.2 percent of that in federal tax.-Too Much, Is Taxing the Super Rich a Waste of Time? March 9, 2009In 2010, the top marginal income tax rate in Britain will rise to 50 percent. The top rate in the United States, unless Congress and the White House repeal Bush-era tax cuts for the wealthy, will remain at 35 percent. Last year, the United States had the lowest top tax rate among the world’s major industrial nations. No other major economic power had a top rate under 40 percent.-Source: KPMG, Individual income tax rate survey 2008, October 2008Overall, after taxes, America’s very rich — the top 0.01 percent — have nearly quadrupled their share of the nation’s income since 1979. This top 0.01 percent averaged $24.3 million, after taxes, in 2005. Between 1979 and 2005, the after-tax share of the nation’s income that went to middle-income Americans — households that made between $45,200 and $67,400 in 2005 — dropped by 12.7 percent.Congressional Budget Office, Historical Effective Tax Rates, 1979 to 2005: Supplement with Additional Data on Sources of -Income and High-Income Households, December 23, 2008In 2008, taxpayers in the nation’s poorest 20 percent — average income, $12,000 — paid 11.9 percent of their incomes in state and local taxes. Taxpayers in the top 1 percent averaged $1,445,000 and paid 8.2 percent of that in state and local taxes.-Incomes and Federal, State, and Local Taxes in 2008, Institute on Taxation and Economic Policy Tax Model, April 2009Got that? The poor guy with $12,000 paid 11.9 percent while the millionaire paid 8.2and then of course there is all that hidden offshore secret tax haven wealth being untaxed, and it sure isn’t that guy with the $12,000 hiding it

Revenue And EPS Deterioration Continues As Earnings Season ProgressesSubmitted by Tyler Durden on 08/03/2009 19:36 -0500Earnings Expectations Green Shoots StellarIt was a short 5 days ago that we wrote about CNBC’s misrepresentation of this earnings season as a stellar success for companies. Earnings and revenues were down 32.4% and 15.1% then. Since then the economic situation has deteriorated even more: as of today earnings were down 33.4% and sales have declined 17.4%, respectively, quarter over quarter. And while earnings are now supposed to increase by 114.9% in two quarters by inhaling green shoots and what not, more curious is out of what hat will revenues stage a dramatic 22% increase in just 6 months. If anyone held a gun to my head to indicate when disappointment with guidance/analyst expectations would finally set in, i would have to say middle of February 2010 when miss after miss, both top and bottom line, will demonstrate just what an unjustified joke this rally truly is.

Whatever happened to shame? If I declared bankruptcy I would be embarrassed. Instead, we have serial bankrupts who are considered business leaders. No wonder the average person overextends himself and does not pay his bills.

Might makes right. Its the same sense of entitlement seen with the bankers applied on an international scale.It is the banks God given right to make a lot of money because..that’s what their job is.The US has the God given right to have the best standard of living, even at the expense of the other countries, and therefore the world must do as it says, not as it does.Inflation v Deflation?Someone on this blog said it best:Things you NEED- food, energy, health care, education will rise in actual cost along with inflation.Things you OWN: house, car, stocks, bonds will decrease in value, i.e. deflation.The candle is burning at both ends.

Oyez. Paulson is so-o-o interested in the “environmemt.” Isn’t it nice that in his retirement, he can indulge his passion and we all can benefit from his benevolence and charity and caring? It’s sort of like tithing to one’s country, isn’t it? We all should be so proud.

Thats Classic guest! but true as evidenced by the almsot 40 million on food stamps these days.

But who will buy? and produce what and buy what?

American Express is advertising its “1.85% APY High-Yield Savings Account” today for your savings on the WSJ.com. website. Don’t you just hate these greedbag bankers and their “all-for-me-24.51%-charges-for-use-of-their-money-but-peanuts-for-you-1.85%-for-their-use-of-your-money”?To make the subtraction worse, they get trillions in taxpayer bailout for their debts: we get jail and deeper in debt.

Check out rates at your local credit union. Some are paying 5% on high yield checking accounts and offering 3.95% on auto loans. Forget banks.

Us bottom-feeders have had to resort to dumpster-diving. To borrow a phrase from Maggie Thatcher “there is no alternative” (TINA).Forget expiry dates! Some of this stuff is actually still edible, even if not chock-full of the doctor’s daily recommended dose of vitamins.Sad.

Gloomy, what’s this ‘Cash for Clunkers’ tell ya about our politicians?Consumer debt is over $1.6T higher than normal and these clowns want them to add more.I, for one, think our policitians are not only gnorant but just plain scared!

WAGE DESTRUCTION in over drive. Have to agree to about prices in general. Food, Energy, Gas, Basic Neccessities, etc. are going up and there has been no letup in the increases. So are taxes and fees at local and state levels. I guess they figure they can charge whatever they want for basic neccesisties, since the consumer is’nt spending on things they dont need. I will say that when it comes to things we dont need, there have been price declines, but thats just to clear the inventory. Food especially is becoming one big scam, lower sizes, lower amounts, less weight, fancy packageing to decieve, yet higher prices for less.So we have inflation on the stuff we need and deflation on the crap we dont need.Bend over AVERAGE JOE AMERICAN, they will get you one way or the other. And you better like it… NOTCash for Clunkers, CFC= Cash for Corruption. Waht BS lie and way of funneling more money to Buysiness models that are completely broken.

TO: Gloomy, FYI: a major paper on MARKET MANIPULATION (see link for charts)FM: Guest (my personally typed copy…with this caveat: From 1923 forward, the Federal Reserve’s open-market operations have been carried out by the New York Federal Reserve Bank. The money trust has always been in control: in short, the Federal Reserve (FR) is controlled by the FRNY. Bernanke is merely chairman of the Federal Reserve Board, the spokesman and political representative, of the money trust.)RE: A GRAND UNIFIED THEORY OF MARKET MANIPULATION | August 2, 2009 | Complements to Zero Hedge by Precision Capital Management | August 3, 2009_________________________________________________________________There is much speculation and anecdotal information regarding the rally that began March 6 2009, which have suggested the gains are the result of massive manipulation on the part of the Federal Reserve (FR) and the large institutions that dominate Treasury securities dealing, program trading and the derivatives markets. Traders have reported that traditional indicators and metrics used for market analysis stopped working for periods of time or altogether, and that correlations among markets have been erratic and quick to change. Record program trading by Goldman Sachs as reported by the NYSE, heightened focus on high frequency trading (HFT), outsized profits by the large and well-connected banks, along with unprecedented intervention by the FR in the markets only fuel the manipulation speculation.If we had a big picture model (a Grand United Theory, or G.U.T.) that described the intentions, motivations and actions of the influential players, we could attempt to predict future market direction. A limiting factor is that the rules of the game have changed quickly, and what we believe is important to the major players now may not necessarily have been important twelve or even six months ago. Accordingly, while we will present as much supportive data as possible, our sample sizes will be small and we will rely on educated conjecture when necessary. As such, we would expect to be at worst, self-referentially coherent and, at best, correct in our predictions for the coming weeks and months.The POMO EffectThe theory for which we have the greatest supporting evidence of manipulation surrounds the fact that the Federal Reserve Bank of New York (FRNY) began conducting permanent open market operations (POMO) on March 25, 2009 and has conducted 42 to date. Thanks to Thanassis Stathopoulos and Bily O’Nair for alerting us to the POMO Effect discovery and the development of associated trading edges. These auctions are conducted from about 10:30 am to 11:00 am on pre-announced days. In such actions, the FRNY permanently purchases Treasury securities from selected dealers, with the total purchase amount for a day ranging from about $1.5 B to $7.5 B. These days are highly correlated with strong paint-the-tape closes, with the theory being that the large institutions that receive the capital injections are able to leverage this money by 100 to 500 times and then use it to ramp equities.To wit, the following charts are Time Profiles that we created to show the net point accumulation in the eMini S&P 500 (with other statistics) for each hour of a trading day that meets selected criteria (except that the last “hour” of the day is only 45 minutes). For an explanation of Large Player Effective Volume ™, please see the creator’s website at http://www.effectivevolume.eu.The first chart covers the rally from the date of the first POMO on March 25, 2009 to present (through July 31, 2009) and shows only those 42 days on which POMO were conducted.CHART 1: Time Profile Mar 25 09 to July 31 09/ POMO Days 42…The enormous 68.25 net points gained cumulatively in the S&P 500 in the final 45 minutes of trading (15:30 to 16:15 EDT) on POMO days is immediately obvious. As an aside, the dip into the 12:30 to 13:30 EDT hour is generally a tradable intraday low. There are also other tradable edges on which we update readersThe FRNY also conducts POMO in Agency (Freddie/Fannie) securities with usually only a day’s notice as opposed to the one or two week’s notice for Treasury POMOs. We call these Agency POMO days POMO(A). There is also a tape-painting effect on these days (not shown), but it is less pronounced. Following is a chart of those days on which “neither” POMO nor POMO(A) were conducted.Chart 2: Time Profile Mar 25 09 to Jul 31 09/Non POMO & NON POMO(A) (n = 32…Note there is very little average edge in any given hour on the days in which the FRNY “doesn’t” flood the large banks with liquidity.Finally, here is a chart of all the days in March 16, 2008 to May 19, 2009 rally, which is the last comparable rally (in our opinions) in terms of length and strength.Chart 3: Time Profile Mar 16 08 – May 19 08…Noe that most of the gains were made on average in the first half of the day with nearly no tape-painting.From here forward, we must adopt a more conjecture and theory-oriented approach.Bernanke vs. the New York FedIt is easy to assume that the Federal Reserve headed by Bernanke and the regional FR banks (especially the Federal Reserve Bank of New York) operate with the same motivations, ambitions and desires. However, we hope to demonstrate here that their interests, though sometimes aligned, do not always converge and that, in fact, there may be an outright tug of war on between Bernanke and FRNY that is playing out in violent fashion in the equities and Treasury markets. It is important to note here that we identify Bernanke by name because his upcoming re-nomination bid (next January 2010) imparts political aspirations that transcend his title. There are also other major players involved that we don’t mention (Larry Summers) because it is beyond the scope of this report.High Yields the Biggest Threat. We believe the largest problem facing Bernanke is high and rising long term interest rates. With record funding requirements by the Treasury, looming refinancing disasters in commercial real estate (CRE), massive upcoming defaults in prime, Alt-A and credit card, and waning enthusiasm for the US Dollar, he can ill afford the economic meltdown that a massive repatriation of US Treasuries and Dollars would have. Once long term yields reach a critical level (which we cannot know and would be difficult to even estimate), the FR becomes locked in a money printing cycle that will ultimately become hyperinflationary and result in the FR having to buy every US Bond, Note and Bill in order to prevent the economic Armageddon that comes with a panicked exodus from US debt and currency. Such a meltdown would be a 10 on a scale of 1 to 10 whereas last Fall was perhaps a 2 or 3, at best. As economist Robert Wenzel points out:“And keep this is mind, we have never seen a collapse of a currency like the dollar. Even the hyperinflation during Germany’s Weimar Period cannot serve as an example. Since the dollar is the reserve currency of most of the world, a panic out of the dollar means more dollars will return to the U.S. shores than any country has ever experienced.“Other countries have had collapsed currencies, but never in the history of world of finance has so much currency been held outside a country of issue that that could come flying back, almost on a moment’s notice. If the panic out of the dollar starts, even if Bernanke stops printing money (unlikely), all the dollars flying back into the U.S. could cause a huge price inflation all on its own.”Killing the Stock Market to Lower Long Term Yields. If Bernanke’s biggest threat is high long term yields, the easiest way to prevent or postpone a yield ramp is to kill the stock market and create a flight to safety situation that lowers long term yields. As the 30 Year yield started rapidly advancing in May of this year, we became increasingly vocal that this was a likely scenario. When it hit 4.83% on June 10 (and the 10 Year broke 4.00%), and we became aware that M2 non-seasonally adjusted (M2 NSA) was on the decline as it had been the previous summer preceding the fall meltdown, we become open to the possibility of a large correction, perhaps to retest the 666 low in the S&P 500. Previously, we had been very bullish because of the inflationary money printing. Indeed, the S&P 500 corrected about 32% of its gains from its June 11 high and Treasuries had a sizable rally. On the break of the widelywatched head and shoulders neckline in the S&P 500 in early July, we speculated there would be another failed rally that would finally reverse and take equities much lower. What happened, of course, was the monster rally that rose to new highs.During this time, we revised our theory and became open to the possiblity that there would not be an intentional market crash, but that Bernanke and the FRNY would engage in a dance that would see equitities rise, then correct just as Treasuries were in danger of picking up downward momentum (and yields upwards momentum), then correct again just when it appeared that equities were in danger of crashing. In retrospect, this was the more logical choice because the FRNY, with the large member banks on its board, would not have permitted another major equities downturn if it could help it. Nor would the administration have permitted this, as it needs as much political capital as possible to achieve its massive reform agenda (including healthcare). Such political capital would evaporate in an instant with another major hit to 401(K)’s. Not to say that Bernanke prefers a falling stock market (which would hurt his chances of re-nomination), but it is the lessor of two evils. For those who wonder why Bernanke, an expert in depressions, is operating from the Japanese playbook that resulted in their “lost decade,” we submit that it is intentional and preferred to financial apocalypse.As we have written often, this clash of the Titans, equity vs bonds games, is a very dangerous one with much to go wrong. However, to date, it has worked. We have seen one short covering rally after another that has resulted in a materially higher stock market and long term yields under apparent control. We should also note here that we are intentionally painting a binary picture to emphasize probablities when, in fact, there are many shades of gray. If the stock market crashed, it would severely jeopardize Bernanke’s ability to be re-nominated as Fed Chairman. Similarly, the FRNY does not want economic Armageddon as a result of skyrocketing interest rates. In fact, the long term interests of Bernanke and FRNY are closely aligned, while the short term interests have Bernanke favoring Treasuries over equities, and the FRNY vice versa. Unfortunately, long term interests seldom carry great weight in politics.How to Ramp Treasuries. So far, we have discussed POMO as the preferred means of equities ramping. Likely there are many other things at play, but POMO is the most obvious. On the flip side, we need to discuss what goes on in the Treasuries side that allows them to gain (and yields abate). To test the theory of whether POMO money was simply being diverted from equities into Treasuries by the large banks, we created Time Profiles (not shown) of POMO vs non POMO days during the June Treasuries rallies, and found there was not a noticeable edge that would suggest as much. Also, there is no reason to assume that large financial institutions would willingly participate in a stock market decline when their short term interests are so heavily weighted in favor of rising stock markets. Instead, we believe (1) that the Treasury auctions, beginning in June have been rigged to demonstrate heavy interest in long term US Treasuries, and (2) money supply volatility (as measured by the 13 week % change in M2 NSA) has been whipsawed from a historic high to a near-historic low, with the intent by Bernanke of cooling equity rallies (and encouraging Treasuries recovery). We wrote a detailed analysis of this latter phenomenon last week and summarize it after the next paragraph.Record Treasury Auction Participation. As to (1), above, we do not believe it was a coincidence that the June 2009 auction in the 2,5 and 7 Year (all for record amounts) went off spectacularly, with high bid to cover ratios and high non-primary dealer interest. 30 Year bonds were able to push through resistance on this strength after having retraced to the critical 61.8% level from the prior high (which was the first leg up in the 30 year since its drubbing temporarily on June 11). We will get to the importance of technical levels in the 30 year later. We do not know the exact meanes of how these particular auctions could go so well while prior months’ (for lesser amounts) had not. All we can measure is the effect, which is all too perfect for us to believe it was an accident.The M2 Volatility Facotr. As we wrote last week, M2 NSA has a seasonality that typically peaks in the third week of April, then declines into the third week of July. We found a strong correlation between the degree of whipsaw of M2 (M2 Volatility) and the likelihood of a large stock market correction or crash into the third week of October, with corresponding high volatility during such time. Historically, the FR does not have much ability to directly influence M2, with its effect typically confined to the monetary base (M1). However, the Fed has now historic “emergency” powers, including the congressionally approved ability to pay interest rates on excess reserves, and we believe the record M2 Volatility is an intentional act by Bernanke. Exactly how and the speed with which effects can be induced by Bernanke on M2 are unknown to us (another point for future exploration). Another possible side effect of a shrinking supply of Dollar (in the form of M2) is that, with excess money sidelined or otherwise tied up, it is easier to steer money from equities to Treasuries and, correspondingly to have a tight leash on yields. Unfortunately, with record M2 volatility comes a greatly increased risk of a stock market crash, that even record POMO operations and other innovative FRNY machinations may not be able to avert.Charting the Rebound in Treasuries with the 30 Year BondThe 30 Year bond continuous futures contract has been behaving technically the best in our opinion (as oposed to the 10 Year Note or other ETF based proxies), and we will use it to demonstrate the sequence of events in its recovery Also shown is the S&P 500 continuous futures contract.Chart..1. June 11, 2009—the low is (to date) in for the 30 Year and the high is in for the S&P 500. Both post strong reversal candles. At this point, the 30 Year had the critical 5% yield target in sights (high of 4.82% intraday). Equities had had a nice run and could afford a correction.2. June 19, 2009—the last Friday before the dreaded record Treasury auction week ahead, the 30 Year retraced to critical 61.8% support from the high posted two days prior, but closed strong enough to abate fears of a gap down on Monday. That following week, the 30 Year would post new highs for the month into Thurday’s 7 Year auction and equities also had a higher week led by a huge rally on June 25 for no apparent reason (which was, though a POMO day).3. July 8, 2009—As equities resumed their downward direction in the following weeks, the 30 Year eventually posted its high on this date, which was also the low for the S&P 500 that broke the neckline of the head and shoulder pattern. This would be “the” July low for the S&P.4. July 13, 2009—The rally in the S&P really began with the strong short covering on this date, led by the record earnings announcement by Goldman. Further outsized gains were made two days later on the JP Morgan earnings that allowed the S&P to clear most of the difficult mid-range resistance.5. July 20, 2009—With the S&P 500 within a hair of punching through to new highs, the 30 Year had retreated again to its 61.8% resistance intraday, but very successful 3 and 6 month auctions allowed for a strong close.6. July 27, 2009—One week later, on the start of another record auction week, the 30 Year actually pierces the 61.5% resistance intraday and closes dangerously low, but just above it. The 3 Month, 6 Month and 20 Year TIPS auctions had strong demand and saved a likely return of the 30 Year to contract lows as the S&P continued to make new highs. The continuous futures contract for Gold (not shown) precisely hits its 61.8% resistance. A break to the upside, would warn of an inflationary retest of the 1,000 level and would be a disaster for Treasuries7. July 28, 2009—Gold reverses to the downside sharply overnight and the EuroYen forex cross (not shown) posts an equally large reversal to the downside, indicating an aversion to risk (supportive of Treasuries as a safe haven). We believed at the time that these markets had been manipulated to intentionally send a signal that the Treasury auctions would be successful overall this week and that upside action in equities was limited. Equities would make higher gains on Thursday after Wednesday’s poor 5 Year auction, but Treasuries were short term spared, even after the poor results of the 2 Year auction on the day prior date (which we wrote at the time we thought was a head fake). What surprised us was the worse showing at the 5 year the following day.8. July 30, 2009—Demand had been spared for Thursday’s 7 Year auction, which saved the entire week and allowed for the next day’s (Friday) huge (nearly 2 big points) gain in the 30 Year that broke through prior swing high resistance. At this point, the Bernanke has averted disaster and has a week before facing another round of Treasury auctions (the 3,10 and 30 Year) and an FOMC meeting.Signals from Leading MarketsAs we suggested in (7) above, leading markets, such as gold and the EuroYen can be manipulated as key points to generate signals that savvy market participants can read. We find it no coincidence that FRNY has large holdings of gold and exactly two currencies, the Euro and the Yen. These markets turn or break through important support and resistance levels all the time; however, looking to whether Treasuries or equities are in jeopardy at a particular moment can give clues as to whether an actual signal is being given as opposed to normal market movements.Putting It All Together—the Weeks AheadThe stakes could not be higher for the week of August 10 to August 14, 2009. What is troubling is that, as we mentioned in (8) above, demand had to be saved for July’s 7 Year auction as opposed to the prior month where all the auctions fared well. We don’t doubt that Bernanke will pull out all the stops to ensure a decent showing of demand in the 10 and 30 years on August 12 and 13, especially in light of the August 12 FOMC meeting (and his assumed desire to be reappointed after next January). However, we are not so sure he will be entirely successful. If, as we suspect, the results have the potential to disappoint, the 30 Year will need to have advanced further (ideally to a safe level above the July high) to absorb the disappointing auction news without leading to a prolonged selloff in Treasuries. With the 30 Year having closed just over its 61.8% resistance Friday, it is in a bullish stance to do just this, though it is a bit overbought. While equities and Treasuries can both advance or decline in semi-lock-step temporarily, even for as long as a week, a move that strong in Treasuries through resistance requires a hit to equities, and we would expect a moderate to strong down move into next Monday (August 9) if Treasuries were able to end up pushing through the early July highs.If, on the other hand, Bernanke has locked in excellent support for the 10 and 30 Year auctions, then Treasuries merely need to tread water and not violatae the 61.8% retracement of last week’s range (currently 116’18). In this case, we would see only a minor decline or a continued nominal upward push in equities. There are other variations on this theme, but the logic and methodology should be clear by now. And, while it is a bit early to favor one side or the other, we are currently leaning toward a nervous Bernanke and the need to ramp Treasuries at the expense of equities into August 9. Equities have had more than a nice run and can suffer a bit of correction. Key will be watching the close on Wednesday. A failed POMO paint the tape close could signal that an equities correction of at least a few weeks has gotten underway.ConclusionNothing would please Bernanke and the FRNY more than to see both low longer term yields and higher highs in equities for perpetuity. However, the juggling act required to ramp both equities and Treasuries is unprecedented in both consequence and complication. In the end, we have low expectations of success. Hopefully, with this framework, we will be able to better navigate the markets and steer clear of the next major crisis, should it arise. As always, we will be monitoring markets within the framework of these ideas in real time and will report findings to our reader, beginning with our analysis of overnight action this morning.– A weekend supplement to The Precision Report, August 2, 2009—complements to Zero Hedge of Precision Capital Management.http://www.zerohedge.com/article/guest-post-grand-unified-theory-market-manipulation

Dr. R,You said that you would be the first to call a recovery! You’ve now called a recovery. Were you the first?

The food is better than expected. Should be cause for a market rally.

Thank you, thank you for posting this. I was looking for it.Th Obama Administration’s attempts to push for more Fed power in the name of “overhauling financial regulation,” IMO, is shaping up to be one of Capitol Hill’s most critical battles, an unbelievable fight. If Obama wins, the Fed will have the power even to break up corporations.Opposition to the Fed’s power grab is building, especially from a lot of corporations and banks not in the in-crowd. Opposition’s even gaining political traction in Congress. Smaller banks and corporations have grown increasingly more worried about the domination of the Fed and are putting on the pressure.But Little Boots, aka Geither, who apparently can’t stand the heat in the verbal kitchen, lost round one, IMO, by lashing out at opponents like a sloven, physically taking an aggressive stance and spitting out expletives like broken teeth. He and the Fed oppose a new federal agency that would oversee consumer relations; they don’t want any power taken from the banking cartel and John Dugan, the Comptroller of the Currency.This latest power grab must seem like old home week to the bankers with Larry Summers back in the White House. It was Summers, Robert Rubin, Greenspan and Bill Clinton, after all, who orchestrated the repeal of Glass-Steagall, enabling America’s big bankers to go hog wild until they were “too big to fail.”On July 2, 1999, Robert Rubin retired as Secretary of the Treasury and passed the baton and his work to dismantle G-S to Larry Summers. In October, Rubin joined Citigroup where he would eventually be paid over $115 million.Wrote Robert Scheer on November 2, 1999 for the LA Times:“Only last week, as the bill (to repeal G-S) was being pushed through a congressional conference committee, Treasury Secretary Lawrence H. Summers rushed back from a trip to China to huddle with lobbyists representing Citigroup, Goldman Sachs, Merrill Lynch and other financial giants. The meeting was closed to the media and public, but one participant told the New York Times that Summers lectured the lobbyists on how to spin this bill so it appears to be in the public interest. ‘He said it would be very unfortunate if any financial institution were to suggest that they do not see the broad public purpose of this legislation,’ the lobbyist reported.”The first week of November, S.900, the Gramm-Leach-Bliley Act, was reported out of committee and passed in the Senate 90-8 and in the House 362-57. Glass-Steagall was dead.As to the current fight, true to banker form and not to miss a chance to cook the accounts, according to the NY Times yesterday, “Mr. Dugan has charged that small and community banks, primarily the province of the F.D.I.C., played a role in the meltdown. Ms. Bair has responded with thinly veiled contempt.“A more low-key figure than Ms. Bair, Mr. Dugan has also worked as a lawyer representing some of the largest banks. He derives much of his influence from his close relationship with Mr. Geithner, reinforced when they worked on the banking crisis last year under the Bush administration.”

The Obama opiate: Crisis deepens, crowds cheerby Larry Chin.http://www.globalresearch.ca/index.php?context=va&aid=14604.and/or.. with more links..http://onlinejournal.com/artman/publish/article_4974.shtml

Errr….”Commodities May Correct in H2:2009 Due to Excessive Chinese Stockpiling But Rise in 2010 as the Global Economy Starts a Growth Recovery”…sounds like he’s calling a recovery to me, IMHO.

Harley, I think you’ve created a new surreal American hero—Wayward N. Giddy, PIG’s CEO, sort of a private slob to catch a public slob, the Congressional Op. You had me on the edge of my seat, cheering for Giddy, nearly fainting in ecstasy, Oyez-ing myself hoarse, screaming, You can take this job and shove it, I ain’t workin’ for you no more, you suckers, now you’re gonna pay. Lord, I can’t wait to see their faces… It was just too good to be true! Like Johnny Paycheck. Alas.You’re good, Harley. You’re good!

It may be a fool’s chore to defend a bought and sold political system, but what is the future a tea partier envisions? One suspects it involves a great deal of starvation and illiteracy.

This post last fall from WHATEVER ties Pelosi and Biden to the current financial crisis:bill clinton’s repeal of glass-steagall at heart banking crisis ( 26 September 2008 )the glass steagall act passed during the depression era, tightly regulated the u.s. banking system. it stood the country in good stead for about 70 years –until bill clinton signed the bill in 1999 which repealed the glass steagall act.according to an article in the new york times, from 1995, robert rubin, treasury secretary at the time, is on record as saying the clinton ‘administration continues to favor allowing banks to merge with insurance companies as well as securitites firms.’the 1999 financial services modernization act, written by phil gramm, who had been advising john mccain up until this past july, was passed by both houses of congress and signed by bill clinton in the same year, the new law effectively repealed glass steagall and the bank holding act of 1956 which prohibited financial companies from owning banks and insurance companies.glass steagall prohibited the merging of banks, securities firms, and insurance companies, while the financial services modernization act allowed for huge financial conglomerates.both nancy pelosi and joe biden voted yes on repealling glass stegall on november 4, 1999 and bill clinton signed the bill into law one week later. barack obama was in the state senate at the time, so his hands are clean. and john mccain abstained from voting…it is important for people to know where the blame lies. and it is squarely on the shoulders of congressional members from the 90s and especially bill clinton.http://thekrays.wordpress.com/2008/09/26/bill-clintons-repeal-of-glass-steagall-at-heart-banking-criss/

The Royal Scam and the Deflation Head-Fake Using the book And the Money Kept Rolling In (and Out): Wall Street, the IMF, and the Bankrupting of Argentina, comparisons between Argentina and the current state of the US show the same framework:In a single stroke you:a) lose the burden of external debtb) by devaluation lose your internal debtc) Make the nation competitive as a manufacturing power.d) Scare the people back into compliance, even exultation with their low wages.e) With the renewal of manufacturing, re-cast the power that your military rests onf) During a time of Peak Oil, radically reduce unnecessary consumption while insuring strategic (military) supply.g) By doing that, suck in the oil powers of Russia, Iran, and Venezuela enough to knock them off-base, first with high prices, then low prices.h) Club China into submission to the G-8 money powers again – and best of all:i) Enrich insiders beyond their wildest dreams, insuring their dominance for a generation to come.http://www.oftwominds.com/blogaug09/KaPoom2CHS.htmhttp://www.amazon.com/Money-Kept-Rolling-Out-Bankrupting/dp/1586482459

Bernanke’s Exit Dilemma | WSJ | Opinion Journal | Aug 4 by George Melloanhttp://online.wsj.com/article/SB10001424052970203517304574306401079643202.htmlDoes anyone really believe the Fed will contract the money supply as the economy starts to show growth?Federal Reserve Chairman Ben Bernanke assured readers of this page (“The Fed’s Exit Strategy,” July 21) that he has the tools to prevent the huge reserves he’s pumped into the banks from generating an inflation that would abort an economic recovery.But does the Fed have the guts to use those tools? Will it risk censure from Congress and the Obama administration if it tightens money at the crucial juncture when inflationary omens accompany a reviving economy? Mr. Bernanke signaled the probable choice by writing that “economic conditions are not likely to warrant tighter monetary policy for an extended period.”…[T]he Fed’s continued easing of interest rates during the 2003 economic recovery created the credit bubble that collapsed last year with such devastation…With its federal-funds interest rate target at near zero, the spigots are now wide open. And as Mr. Bernanke promises, they will likely remain that way for an “extended period.”Quite apart from the question of the Fed’s will, there is another large issue. Mr. Bernanke’s assurances to the contrary, there can be doubts about whether his tools are really adequate to deal with the powerful inflationary pressures the politicians are in the midst of creating in the form of a mountainous and rising federal deficit…The federal budget deficit is projected at an incredible $1.8 trillion for the fiscal year ending Sept. 30, almost half of proposed federal spending. The Treasury’s financing needs will be even higher than that when you count in the various “investments” the government has made in auto, housing and other dubious ventures…nationalized health…would yet add hundreds of billions more to the deficit.The Fed has been financing a significant part of the government’s profligacy, and it is riding a runaway horse. Even if it has the means to cope with present financing needs, will it be able to do so when, and if, the economy actually recovers and it has to finance both a recovery and a spending-crazed government?…The Treasury (and Congress) has been depending on the Fed’s massive buying of Treasury bonds to keep the government’s financing costs within reasonable bounds—as weakening international demand puts downward pressure on bond prices and upward pressure on the interest rate the Treasury must pay. The yield on the 10-year Treasury bond is below where it was a few weeks ago but well above early this year when investors world-wide were seeking the safety of U.S. Treasurys. Even massive Fed support hasn’t been enough to prevent slippage in bond prices this year.The Fed has more than doubled the size of its balance sheet in the last year to over $2 trillion. As of July 30, it held $695 billion in Treasurys, up $216 billion from a year earlier. In addition, it has added nearly half a trillion of mortgage-backed securities it purchased to keep Fannie Mae and Freddie Mac, now wards of the government, afloat.Adjusted reserve balances of member banks exploded in late 2008, soaring to $950 billion from $100 billion in four months as the Fed has pumped liquidity into the banking system. They peaked at nearly $1 trillion in May. The reserves provide banks with a shield against runs but they also are high-octane fuel for bank lending, which means they can touch off another credit bubble, and the accompanying inflation, when credit demand picks up again…With the huge volume of Treasury financing coming down the road, the Fed will have plenty of bonds to sell (it already has, in fact). But the Fed buys Treasurys primarily by creating new money, or in other words by inflating the money supply. Will it have the nerve or even the capacity to “sterilize” inflation by reselling the bonds to soak up bank liquidity? Again, there are those political pressures. Will the Fed’s admittedly bright money managers be able to strike a balance between warding off inflation and leaving the banks with sufficient liquidity to finance an economic recovery?As to that huge volume of mortgage-backed securities the Fed is now holding, what is to be done with them? They are “toxic,” which is why the Fed bought them as a means of keeping Fannie and Freddie solvent. They are “guaranteed” by Fannie and Freddie, which means they now are guaranteed by the U.S. Treasury. So they are yet another liability to add to all the other liabilities being piled on the Treasury. The Fed already has financed them once; will it have to finance them again when they come up for redemption?In short, there are very good reasons to doubt that the Fed can cope with the political problems of avoiding inflation. The technical problems don’t look very easy either.Mr. Melloan is a former deputy editor of the Journal editorial page. His book, “The Great Money Binge,” will be published in November by Simon & Schuster.

That’s no surprise … so what’s your plan?Best -

“It is no surprise, yet is should be a total shock, that the correlation between market volume and price moves has gotten to a 7 year low of -0.81!“Aside from a few machines that allegedly provide liquidity yet really just buffer the complete lack of volume, nobody has been buying into the rally. Statistically – this amount of incredulity was last seen in 2002. And in the absence of real buyers and sellers, gunning the market is easier than taking candy from a baby… and avoids those 202 caller IDs.“Another way to describe the data: large volumes on major down days, nominal volumes on increasingly lighter up days.”—Tyler Durden, Zero Hedge 08/04/09http://www.zerohedge.com/article/ramping-market-disappearing-volume-volume-price-correlation-81

g,some did, some will and less frequently for some.

You just don’t get it … you don’t need gas if you have no job to go to, and the days of simply driving around for pleasure are gone in the New America. So take your food stamps and go home and watch the next installment of O on TV like the good little dependent you are supposed to be. We’ll send the bus when it’s time to vote again.

Kind of takes me back to the 1970′s, when the 1-pound can of coffee became the 12-ounce can of coffee and my 25-cent candy bar was about two-thirds the size of what used to be my 10-cent candy bar. It’s the last-gasp of trying to assert pricing power where by all rights there should be none. But it is inflationary nonetheless, and I must say that the last time I was in the US the things I needed were indeed ticking up in prices, so I find it difficult to buy all that talk about deflation.Note to self: Try to find that old WIN button.

I would think you would see higher commodity prices in any case in the coming year. If there is indeed recovery (isn’t everything just coming up roses these days?), you get demand-pull inflation. In absence of recovery, you have little to no CAPEX going into most of the sources of the commodities, and as things creak along and break down, you get cost-push inflation. And if your functional currency is the USD, you get a loss of purchasing power parity as your currency continues to slide.

I notice there is no discussion of the dollar. The dollar has taken a hit while equities have gone up. The euro has also gone up against the dollar, breaking through resistance at 140.30.”We do not know the exact meanes of how these particular auctions could go so well while prior months’ (for lesser amounts) had not. All we can measure is the effect, which is all too perfect for us to believe it was an accident.” Perhaps this is due to the “daisy chain” scenario of London Banker? Central banks mutually scratching each other’s backs to rig markets?Interesting also to see the role played by gold and the euro/yen cross in this article.

Very interesting insight! Reminds me of some of the stuff Antal Fekete has been saying about in terms of his Iron Law of the Burden of Debt. Seehttp://www.professorfekete.com/articles.aspHow this affects the arguments pro and con for inflation vs deflation would be interesting to know.

i see fall in dollar as greater economic justice and greater good for USA and globally. fall in dollar is the ultimate economic norm that should be un-manipulated.

Nissan: Demand Will Fall Off A Cliff After ‘Clunkers’ Runs Out

WHAT YOU DON’T KNOW CAN’T HURT THEM. GO. READ READ READ FOR YOUR CHILDREN’S SAKE. WISE YOURSELF UP OR BE PART OF THE PROBLEM. ALL THE EVIL YOU CAN SEE IS BUT THE TIP OF THE ICEBERG…

This statement represents how skewed the markets are becoming: “The resulting profits represent a relatively hidden form of support for banks, and Wall Street has geared up to take advantage. Barclays, for example, e-mails clients with news on the Fed’s balance sheet, detailing the share of the market in particular securities held by the Fed.”When do we get our e-mails “detailing the share of the market, in particular securities, held by the Fed”? And we wonder why the investment bankers are so much more “savvy” than we, the “retail investors” who neither are privy to the bankers’ insider information, nor their handout/bailouts, nor are we able to spend every working hour watching and trying to figure out their manipulated movements to fleece our 401(K)’s, and if we could, we can’t afford their HFT machines to beat their moves.Frankly, I don’t see the stock market as a form of “investing” anymore. It’s more a form of being taken to the cleaners.

‘Disaster Capitalism’ gone wild!Excerpt:Neoliberalism is “a particular organization of capitalism, which has evolved to protect capital(ism) and to reduce the power of labour. This is achieved by means of social, economic and political transformations imposed by internal forces as well as external pressure,” and it entails the “shameless use of foreign aid, debt relief and balance of payments support to promote the neoliberal programme, and diplomatic pressure, political unrest and military intervention when necessary.”[85] Further, “neoliberalism is part of a hegemonic project concentrating power and wealth in elite groups around the world, benefiting especially the financial interests within each country, and US capital internationally. Therefore, globalization and imperialism cannot be analysed separately from neoliberalism.”[86]Joseph Stiglitz, former Chief Economist of the World Bank, wrote in his book, Globalization and its Discontents, “In the 1980s, the Bank went beyond just lending for projects (like roads and dams) to providing broad-based support, in the form of structural adjustment loans; but it did this only when the IMF gave its approval – and with that approval came IMF-imposed conditions on the country.”[87] As economist Michel Chossudovsky wrote, “Because countries were indebted, the Bretton Woods institutions were able to oblige them through the so-called ‘conditionalities’ attached to the loan agreements to appropriately redirect their macro-economic policy in accordance with the interests of the official and commercial creditors.”[88]The nature of SAPs is such that the conditions imposed upon countries that sign onto these agreements include: lowering budget deficits, devaluing the currency, limiting government borrowing from the central bank, liberalizing foreign trade, reducing public sector wages, price liberalization, deregulation and altering interest rates.[89] For reducing budget deficits, “precise ‘ceilings’ are placed on all categories of expenditure; the state is no longer permitted to mobilize its own resources for the building of public infrastructure, roads, or hospitals, etc.”[90]Joseph Stiglitz wrote that, “the IMF staff monitored progress, not just on the relevant indicators for sound macromanagement – inflation, growth, and unemployment – but on intermediate variables, such as the money supply,” and that “In some cases the agreements stipulated what laws the country’s Parliament would have to pass to meet IMF requirements or ‘targets’ – and by when.”[91] Further, “The conditions went beyond economics into areas that properly belong in the realm of politics,” and that “the way conditionality was imposed made the conditions politically unsustainable; when a new government came into power, they would be abandoned. Such conditions were seen as the intrusion by the new colonial power on the country’s own sovereignty.”[92]“The phrase ‘Washington Consensus’ was coined to capture the agreement upon economic policy that was shared between the two major international financial institutions in Washington (IMF and World Bank) and the US government itself. This consensus stipulated that the best path to economic development was through financial and trade liberalization and that international institutions should persuade countries to adopt such measures as quickly as possible.”[93] The debt crisis provided the perfect opportunity to quickly impose these conditions upon countries that were not in a position to negotiate and with no time to spare, desperately in need of loans. Without the debt crisis, such policies may have been subject to greater scrutiny, and with a case-by-case analysis of countries adopting SAPs, the world would become quickly aware of their dangerous implications. The debt crisis was absolutely necessary in implementing the SAPs on an international scale in a short amount of time.The effect became quite clear, as the result “of these policies on the population of developing countries was devastating. The 1980s is known as the ‘lost decade’ of development. Many developing countries’ economies were smaller and poorer in 1990 than in 1980. Over the 1980s and 1990s, debt in many developing countries was so great that governments had few resources to spend on social services and development.”[94] With the debt crisis, countries in the developing world were “[s]tarved of international finance, [and] states had little choice but to open their economies to foreign investors and trade.”[95] The “Third World” was recaptured in the cold grasp of economic colonialism under the auspices of neo-liberal economic theory.

How many Henry Kissinger pals does it take to murder a planet and every species on it? Eh?Does this one illustration not cause readers to begin to comprehend the stratospheric level of consolidated, consummated wealthpower you are up against? You are here at RGE because you want to increase your money, but stop and think: money is only the means to the end of having happiness…it’s happiness everyone is going after – as indeed I argue they should – but human happiness is what’s at stake like never before in this pivotal time when WE are the adults alive. Can’t you see how ridiculous it is – what a waste of precious, limited time it is to tell ourselves a Pelosi or a CARS program is worth focusing on? What denial we are in – how unawares! We are collectively blind to 99% of the picture – just like TPTB want people, NEED people to be.After reading the above article, you tell me: What hope have the honest, busy working people of any country to ever even know, much less control, who and with what forces are playing daily double deadly dealing destruction behind the scene of our lives – playing with our very safety and happiness and survival – as if this was all just a video game?!The crucial vital essential point: even if Marvin the Martian came down here and vaporized every last elite wealthpower giant on this globe tomorrow, due to the very nature of transaction itself you would start re-growing elites-on-earth the very same day.The elite wealthpower giants are not the enemy or the problem, people: we only have them because the general human consensus is still believing in having them. This belief is killing us all and this planet, but the consensus CAN change, is changing – and MUST change. The enemy and the problem is our species’ fatal acquiescence to the WORST IDEA EVER…the bad idea of having, allowing, wealthpower giants on earth! No one has ever been able to get ahead of what they do behind our backs!Having wealthpower giants is a luxury this planet can no longer afford! IT DOESN’T WORK FOR ANYBODY.The enemy IS AN IDEA. Stop exhausting yourselves, humanity, forever and forever pulling leaves: it’s easier and quicker to do the one effective and efficient thing: dig the poisonous vine out by the root. Nothing less than digging the root will get you your best happiness!The world writhes in hell so needlessly – none of this madness polluting our world with violence and misery is necessary.WECANBESOMUCHHAPPIER!But not while the idea survives, to allow wealthpower giants to exist. Wealthpower giants are never going to stop doing what they do! Help rid your species of the idea to have wealthpower giants! Hurry!

We ain’t seen nothing yet. It’s appalling to hear the Obama Administration spin, and previous to that the Bush Admiistration, when it’s obvious most of the U.S. population is facing a severe drop in their standard of living. I don’t blame Republicans or Democrats, I blame government all together. Damn right you better not flaunt your wealth GS employees! Cheers to social safety nets like food pantries and hand me down clothing… thier future looks bright!P.S. Hot stock tip: Invest in pitch forks and torches!

Here’s a thaught, signicantly increase social security benefits and pay for it by printing more money. Inflation! What inflation? Another option is to do the soilient green thing (spelling?) at around age 60ish, sparing the country “elite” of course. This option helps reduce medical care costs as well. Or, whip up a nice war using nukes to quickly reduce the population. Perhaps, go the socialism route to offer a decent life for most, but with a caveate that the current wallstreet elite can live in excess still. Further, take a cue from the Russians and distribute vodka to appease the masses. Decisions, decisions, awe shucks! Let’s just continue to play the financial shell game until one of these hands is called out for us. Mell was right, “It’s good to be the King”.

I, the all powerfull Oz, envision a day when countries will merge, and derive benefits of efficiencies from their merger. A great nation, called the United Nations of North American, formely known as Canada, the U.S., and Mexico will emerge. In doing so, a period of growth, fueled by new found efficiencies will take hold. Yet, alas, this course will run dry, as the disparities grown from greed and decepiton hinders the new country. But, even further out, the United Nations of NA will merge with the United States of South American, United Asian Alliance and the European United Nation. Once again, benefits of efficiencies arise only soon to dissipate as an elite group hordes far too many resources for themselves. One last merger shall take hold. Enter the African Alliance. Wash, rinse, repeat… Finally, after no more desperate opportunities for merging… The self proclaimed global elite, sieze the global economy, monopolize the army, and create a distinct two class world. The haves and have nots. It is now crystal clear, the limited world resources shall be consumed, drunkenly by the minority world elite. The have nots are essentailly, in another world, to preferably serve the haves or die.

Add bankrupt schools to your list too

It’s hard to tell because they were going through their own mad dalliance with socialism at the time. If you can remember the decay, dysfunction, and dolor that was 1970′s Britain, you might say it resulted from the tumble of the pound … or was it the other way around?

looking at 10/30years yield, people are more afraid of 10/30years bond than stock market. no surprise here, consider tsunami of wasteful cash for clunker alike program federal/state level, tsunami of bond origination by Treasury, tsunami of federal spending like ObamaCare.

NEW THREAD