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Post by ccash04 on Feb 25, 2011 10:50:01 GMT -5
No one will be selling into this. I should just give up again I am sellling.... PUTS!
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Post by brosin on Feb 25, 2011 11:15:14 GMT -5
Bros, doesn't the second biggest spike on your chart come in Feb. 10, right before a month and a half of straight up action in the major indexes? Yes - and +1 DM! (I was waiting to see who would catch that) But the market dropped very fast in February and the bears had plenty of control for a few weeks while this number surged. I'm not sure if people are getting my point. I track this number every two weeks. I have never been as stunned (or frightened) by it as I was yesterday; obvious since I wouldn't have started a new thread for this otherwise: It was the strongest increase we have seen +17% rise since Nov & Dec of 2008. When Excess Reserves shoot up that much, it is a sign that things are not good underneath the surface. Take a close as what months saw greater than +10% rises in Excess Reserves (from the previous period) or less than a -10% decline. Maybe that will help illustrate my point / fear here. Data feeding the chart: Excess Reserves Sep-08 59482 Oct-08 267156 349%Nov-08 558819 109%Dec-08 767330 37%Jan-09 796846 4% Feb-09 642085 -19%Mar-09 723116 13%Apr-09 822607 14%May-09 842143 2% Jun-09 749431 -11%Jul-09 732255 -2% Aug-09 765625 5% Sep-09 859996 12%Oct-09 994598 16%Nov-09 1077143 8% Dec-09 1075335 0% Jan-10 1045935 -3% Feb-10 1161998 11%Mar-10 1120517 -4% Apr-10 1050339 -6% May-10 1044908 -1% Jun-10 1035031 -1% Jul-10 1021714 -1% Aug-10 1019585 0% Sep-10 980855 -4% Oct-10 973549 -1% Nov-10 972018 0% Dec-10 991199 2% Jan-11 1041034 5% As of Feb 23 1217550 17%
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Post by deadmoney95 on Feb 25, 2011 11:38:28 GMT -5
but why are you comparing this 17% rise to Nov and Dec 08 (109% and 37%)? Talk about a totally different world. Isn't the more relevant comparison Sep and Oct 09 (12% and 16%), just from a simple apples to apples perspective? And isn't everything prior to 8/10 is a POMO-free world, i.e. of limited direct relevance for purpose of direct comparison anyway?
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Post by deadmoney95 on Feb 25, 2011 11:50:09 GMT -5
BTW, exalt Bros! I promise I'm not trying to hate on your analysis. I just don't see what's got you so riled up, but want to understand because i don't take you getting riled up lightly.
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Post by brosin on Feb 25, 2011 12:05:05 GMT -5
LOL no worries DM I'm a big boy and have no problems with people critiquing my stuff! On the contrary, it is critiques that lead us closer and closer to the truth I believe!
As for your questions, I wasn't trying to imply that it is as bad as it was in Nov & Dec 2008 - only that it was the largest increase we have seen since that period, which by itself is striking.
A 17% rise in excess reserves (money that is being held that does not have to be - they could invest that free money at 0% in any asset class and make free profits) over only a few weeks suggests to me that the banks have been majorly spooked about something. It could end up being wrong, and like in Feb 2010, it may be a BIG TIME buying opporunity when the market goes into free fall mode. But I am riled up because I was relatively concerned already and yesterday's number -- put bluntly -- freaked the hell out of me. I have gotten accustomed to expecting one thing or another on this, but this was about 10x worse than my expectations. Again, I compare it to what my reaction would have been should the FFR drop .02 or .03% overnight down to .12 or .13%.
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Post by ccash04 on Feb 25, 2011 12:07:54 GMT -5
I think also if you are looking at the credit markets one has to take into account the treasury-eurodollar spread, libor, shibor, and other lending metrics. They are not confirming the huge jump as in they have not moved up like they did last april or in 2008...
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Post by ccash04 on Feb 25, 2011 12:08:35 GMT -5
Take that bback shibor looks like shit but TED and libor dont..
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Post by ccash04 on Feb 25, 2011 12:18:51 GMT -5
Take that bback shibor looks like shit but TED and libor dont.. Shibor doesn't look good due to expected and already done tightening/inflation fighting
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Post by jack on Feb 25, 2011 12:29:58 GMT -5
LOL, jack, I'm not sure that one was on clemson's list of possibilities, but it works for me. I trust you are doing better today Novice - we were worried about you yest.
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Post by clemsontygr on Feb 26, 2011 12:24:41 GMT -5
I've made no claim to the size of the coming bump, only that the potential is near. Should start within 5-7 trading days, will prolly last about 2-3 weeks, ( if it happens at all) best I can tell. PM's may get hit hard too. But they will recover quickly thereafter along with everything else. The reason I'm am holding is the high potential for a "bank holiday" . whether it happens or not, i couldn't tell ya. BUT, if it does, and your in cash, your not going to participate in the "revaluation" if the markets are closed for x # of days. BUT you can participate after. (read markets will double in 4-6 months.) But I believe that the market doubling will still not outperform the PM's move. Therefore, I'm HOLDING. Tin foil hat is all shined up and ready to go public baby Seems Tyler D is seeing something on the horizon as well: by Tyler Durden on Thu, 02/24/2011 - 15:59 #994650 Absolutely correct. The problem is that the amplitude swings from the median are getting so large that the Fed is overshooting massively in either direction. We will probably see a huge (deflationary) market crash first which will result in an all out money printing and thus USD debasing follow through from the Fed. www.zerohedge.com/article/ice-hikes-oil-margins-second-time-weekI'm off to the BUNKER till this chit settles out
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Post by ask2lern on Feb 27, 2011 8:45:51 GMT -5
On a different tangent I cleaned my local coin shop out of their last silver eagles.. all they could sell me cuz all they had left was 11... buying more slw and slv tomorrow You should ck with your local dealers to see if they have any cull silver dollars just tell them no holes............they are .77 oz pure silver and you can usually get them for melt value or even a bit less.............to determine the price you should offer is .77 X Spot....they are buying them behind spot in most cases because most people have no idea what they are worth................very low premium and no dealer reporting requirements upon liquidation....over 1000 oz's of bullion silver requires dealer to issue a 1099.........just my 2cents................GL
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Post by kbk3ck on Feb 27, 2011 9:52:46 GMT -5
Great info there. Welcome back man.
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Post by brosin on Feb 27, 2011 17:44:42 GMT -5
I've made no claim to the size of the coming bump, only that the potential is near. Should start within 5-7 trading days, will prolly last about 2-3 weeks, ( if it happens at all) best I can tell. PM's may get hit hard too. But they will recover quickly thereafter along with everything else. The reason I'm am holding is the high potential for a "bank holiday" . whether it happens or not, i couldn't tell ya. BUT, if it does, and your in cash, your not going to participate in the "revaluation" if the markets are closed for x # of days. BUT you can participate after. (read markets will double in 4-6 months.) But I believe that the market doubling will still not outperform the PM's move. Therefore, I'm HOLDING. Tin foil hat is all shined up and ready to go public baby Seems Tyler D is seeing something on the horizon as well: by Tyler Durden on Thu, 02/24/2011 - 15:59 #994650 Absolutely correct. The problem is that the amplitude swings from the median are getting so large that the Fed is overshooting massively in either direction. We will probably see a huge (deflationary) market crash first which will result in an all out money printing and thus USD debasing follow through from the Fed. www.zerohedge.com/article/ice-hikes-oil-margins-second-time-weekI'm off to the BUNKER till this chit settles out Hey Clem, just to clarify - when you say 'the size of the coming bump,' in this case bump means a down move, correct?
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Post by demanuel2001 on Feb 27, 2011 17:46:21 GMT -5
What's got you so riled Bros - is Gaddafy boycotting the Oscars or something?
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Post by timber on Feb 27, 2011 17:48:04 GMT -5
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Post by brosin on Feb 27, 2011 18:03:49 GMT -5
What's got you so riled Bros - is Gaddafy boycotting the Oscars or something? Are you going to provide anything of substance to this thread or just belittle the importance of anything/everything I've said? Now the 2nd joke you've made in a serious thread. I answered that exact question not more than half a page up..
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Post by jack on Feb 27, 2011 18:08:42 GMT -5
What's got you so riled Bros - is Gaddafy boycotting the Oscars or something? Are you going to provide anything of substance to this thread or just belittle the importance of anything/everything I've said? Now the 2nd joke you've made in a serious thread. I answered that exact question not more than half a page up.. I deleted my mosquito post Bros - even though it wasn't meant to be anything more than a statement of fact (which might suggest to some that there will be a glut of natural gas/home heating oil on the market soon)
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Post by brosin on Feb 27, 2011 18:18:50 GMT -5
Haha Jack I had no problem with that
I just wish demanuel would at least throw me a bone if he's going to come in here for the 2nd time to make fun of it
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Post by demanuel2001 on Feb 27, 2011 18:34:12 GMT -5
Look Bros I didn't mean to tick you off but I really cannot see the reason for your concern. OK markets are risky and we have risen a lot from the bottoms reached in March of 09. But as I've repeatedly said, I think our biggest risk right now is a resurrection of inflation which, if anything will be good for the markets. After last week, we are still getting the bounce as folks realize that Libya will not cause the world to fall apart - yet. As long as money stays loose and interest rates stay low - the current earnings yield on the market is a deal. Some folks may think Buffett is past it but he has another $38 billion to invest. We may have issues if the Fed turns off the money spigot but I don't see them doing that while all the other stuff is going on in the Middle East and Africa. Now what exactly is your basis for saying the world is about to end - because frankly I don't see it.
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Post by brosin on Feb 27, 2011 19:20:19 GMT -5
Look Bros I didn't mean to tick you off but I really cannot see the reason for your concern. OK markets are risky and we have risen a lot from the bottoms reached in March of 09. But as I've repeatedly said, I think our biggest risk right now is a resurrection of inflation which, if anything will be good for the markets. After last week, we are still getting the bounce as folks realize that Libya will not cause the world to fall apart - yet. As long as money stays loose and interest rates stay low - the current earnings yield on the market is a deal. Some folks may think Buffett is past it but he has another $38 billion to invest. We may have issues if the Fed turns off the money spigot but I don't see them doing that while all the other stuff is going on in the Middle East and Africa. Now what exactly is your basis for saying the world is about to end - because frankly I don't see it. Okay that is all fair enough - but you are speaking in generalities and I am speaking specifics. Everyone and their grandma is fearing inflation much more than deflation right now - and well, that is not that surprising given the run the market has been on. Just like everyone is bullish at tops and bearish at bottoms... using "as long as money stays loose and interest rates stay low" as a caveat is like saying "things are going to keep going up, unless they go down." Now that's where I'm talking specifics and have been all thread even though you say you don't see it. Here is an even more simplified version: - Excess Reserves went up more from Jan 2011 to Feb 2011 than in any month since the last 3 months of 2008, and is now at the highest levels we have seen in history - I have always viewed this as bank's reluctance to take on risk, especially from month to month - The most recent number shocked me despite my already bearish bias - Taken in tandem with what the overnight lending markets have been showing over the past few weeks AND the unrest in the Middle East, not only do/did I see no reason to be very allocated on the long side, but I feel that it is prudent that people actively sell. I do not even pretend to know exactly what it is that is spooking the lending markets.. but there is definitely something there. I fully trust everyone to be able to make their own decision with what I am suggesting; I also fully trust the data I watch and when it is signaling something bad Do not mistake what I am saying. Wherever this fallout leads us (my own opinion is 1130 / 50), I think it is a longer term buying opportunity and will play it as such. For most people here who are traders first and long term investors second, I don't think many are even considering that we may drop much at all, let alone a greater than 10% drop as I am suggesting.
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Post by theMIST on Feb 27, 2011 19:25:07 GMT -5
Brosin,
Forgive my naivete, but aren't banks required to add to capital reserves when they are lending more?
Don't the links I posted earlier in this thread show just that?
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Post by brosin on Feb 27, 2011 19:28:49 GMT -5
These are excess reserves. There are required reserves and there are excess reserves. Excess reserves as a sum total of the whole banking sector is typically at zero
Yeah sorry I wasn't sure - I had opened up your links the other day but wasn't sure what specifically you were referring to it them
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Post by brosin on Feb 27, 2011 19:32:22 GMT -5
Including this month's move:
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Post by demanuel2001 on Feb 27, 2011 19:32:42 GMT -5
I'll bear your concerns in mind and stay on alert - I just don't find your concerns about reserves to be persuasive.
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Post by kbk3ck on Feb 27, 2011 19:33:26 GMT -5
Are you going to provide anything of substance to this thread or just belittle the importance of anything/everything I've said? Now the 2nd joke you've made in a serious thread. I answered that exact question not more than half a page up.. I deleted my mosquito post Bros - even though it wasn't meant to be anything more than a statement of fact (which might suggest to some that there will be a glut of natural gas/home heating oil on the market soon)This GLUT of home heating fuel soon needs to become truck and POV fuel.
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Post by benvestor on Feb 27, 2011 19:34:01 GMT -5
maybe the QE2 is going into reserves this time a little more
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Post by brosin on Feb 27, 2011 19:36:46 GMT -5
I'll bear your concerns in mind and stay on alert - I just don't find your concerns about reserves to be persuasive. Do you have any counter arguments? I'd like to be bullish if that is the right move...
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Post by kbk3ck on Feb 27, 2011 19:36:55 GMT -5
My 69 year old father is currently running a crew 24/7 because he has been called out of retirement by MORE money than I can wrap my head around to get a pipe line holding/pumping station (new construction ofcourse) finished. Oh yes Bros, we got WAAAY more reserve than we need. LOL
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Post by demanuel2001 on Feb 27, 2011 19:40:24 GMT -5
I'll bear your concerns in mind and stay on alert - I just don't find your concerns about reserves to be persuasive. Do you have any counter arguments? I'd like to be bullish if that is the right move... I gave you my counterarguments - you didn't find them persuasive. Beyond that - short of the Fed reversing course I cannot see anything happening on the money and reserves front that is an immediate problem.
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Post by brosin on Feb 27, 2011 19:42:03 GMT -5
*** All that money is long term inflation of a degree we cannot even imagine ***
But that's the point of why I was bullish throughout 2010 even at the worst of times, ERs were heading in the proper direction (down) which meant banks were lending, the economy was moving, and things were improving. It is almost as if once POMO took effect, the market went into haywire and the banks stopped lending immediately. And maybe that is the point in that the Fed is crowding out all private demand. This is what my Uncle had to say - fwiw he is a fin'l advisor:
"Cash is sitting on bank balance sheets. Working in a bank, I know banks are not lending those reserves. Why lend when the Feds give the banks the money and then buy bonds with a 100 - 250 pt spread with no risk and no reserve requirements? Even a simple man can figure this is easy profits for the banks. QE2 needs to be rethought."
(I should add that he is bullish! Which makes me LOL. His statement about QE2 needing to be rethought is referring to it mainly putting profits directly into the banks pockets and not at all reaching everyone else which he believes is to be the plan [i'm a little more tin-foil hattish of course ;D] )
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