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ShelladyOptions
Senior Contributor

OptionEye....June 1st.

OK....Now what. 

 

As I sit here and listen to the President speak at Honeywell in Minnesota the Dow Jones has started to drop again. The jobs report was absolutely horrible. No silver lining possible. I am at a loss for words. Probably makes some of you happy that I have no words..   🙂

 

On a more serious note...I too am hearing cash corn tightness is responsible for the rally today sprinkled with weather and a little Chinese buying/stimulus. 

 

I am very interested to see how this all plays out. 

 

Ten year yields getting crushed. Gold rallying. Everything telling me we have no answers for our problems. Where do we go from hear?

 

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4 Replies
GoredHusker
Senior Contributor

Re: OptionEye....June 1st.

In the near term, I have no idea where we go.  In the long term, it appears the only way out is for massive haircuts and defaults.  This will be one way to equallize the have's and have not's.  Of course, it will also mean that China takes one of the biggest hits. 

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p-oed Farmer
Senior Contributor

Re: OptionEye....June 1st.

Scott..... I am not sure as to where we go from here but one thing I do know is this..... 

There is a lot of pressure building up with all of this money leaving the markets..... It is lurking out there..... Don't be on the wrong side when it decides as to what it wants to do as I feel it will be big when it does........ p-oed

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plesums
Senior Reader

Re: OptionEye....June 1st.

gored, the one that should take the hit is the fed. Creating money out of thin air to buy treasuries and then getting paid interest for doing so. Shame on them!!!

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GoredHusker
Senior Contributor

Re: OptionEye....June 1st.

I think you might have it a bit backwards.  Yes, the Fed does print money out of thin air.  However, they're loaning this money out to banks at zero interest and then buying it back paying interest via treasuries.  It's no wonder banks aren't loaning money.  It would be like you loaning me a million bucks at zero interest.  I loan it back to you for two percent.  I do nothing with your money at all but loan it back to you, and I still make 20 grand a year in the process.  One can't blame the banks in this instance either because they're not the ones that set the rules for the game.  Why would a bank loan money to consumers who may or may not pay it back when they have the security of just loaning it back to the gov't pocketing the spread? 

 

 

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