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pro rasslin'

The same guys write the script for Wall Street and the Fed as do rasslin'.

 

Today's story was that the market had almost taken out the lows from wednesday when Big Ben jumped into the ring and vowed that he would whip deflation if it should even dare to come hum.

 

The crowd went wild.

 

The other metaphor that seems apt is Pavlov's dog- back in Greenspan's day the market always went up when he spoke- after a while you don't necessarily even have to nudge it- the response is well established.

 

Best, h

 

PS. I've had CNBC on in the office the last couple weeks as I've been looking at the financials as key to the commodities here. Anyhow, virtually every guest is bullish and they all seem to be bullish because 1) on the one hand, policy has been horrible and is to blame for a poor market and 2) they are absolutely confident that it will be right in the future.

 

Go figure on that.

15 Replies
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Senior Advisor

Re: pro rasslin'

I know you think the feds arsonal is empty. That Ben has no more arrows in his quiver. No by a long shot. So far he has not cut interest rate to below zero. Thus he can tell the banks to start charging storage fees on our money.  Thus that 2% storage fee can be used to pay borrowers to use our money. An incentive to take out a loan, any loan.

 

The experts say that americans don't save enough yet they do their damnedest to make sure there is no incentive to save.

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Veteran Advisor

Re: pro rasslin'

As an oil trader just said, we're not trading crude oil, we're trading equities. Oil fundy's are terrible but when the stock market goes up, oil has been following.

 

Actually, it does appear that Big Ben managed to get the bigs to go "risk on" today. I assume they feel like he gave them a wink and said he's got their backs.

 

So we'll see, and if it holds up we'll likley see new highs in corn next week.

 

The equity index charts still look ominous to me but I shouldn't be surprised that there will be a major defense mounted here.

 

FWIW, h

 

PS- the "all one market", risk on, risk off world is a scary place- if something does go wrong, all markets are correlated and feed on each other.

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Veteran Advisor

Re: pro rasslin'

Hi Don,

 

Actually, I agree, I only find it futile in the long run.

 

If I were to write a prescription that I think would have a slight glimmer of hope of getting us out of this it would include very liberal monetary policy as you describe, coupled with very tight fiscal policy- taking the budget to a surplus through both revenue enhancements and steep budget cuts. You gotta do the fiscal side becasue that is the only way the world would let you get away with the monetary stuff and not kill the dollar.

 

It's different but seems to be working relatively well for the UK.

 

However, of those three matters, I know no one who isn't deeply opposed to at least one and most people are now opposed to all three.

 

I'm guessing that at some point the market will do as it did in the early 30s- essentially move much faster than policy makers are able to act. I think the real hidden message that B tried to get through in his speech was the idea that he isn't behind the curve. NOT.

 

Best, h

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Senior Contributor

Re: pro rasslin'

noxie, your initial post cracked me up. its the old" yeah they screwed it up but next time you just wait and see they will get it right" why would the same people get it right the next time! its just more of the same from the "you cant make this sh## up " file. keep us informed on your thoughts please. what are your ideas on your corn crop? i think in nw iowa there could be some disappointed farmicists. very shallow kernal depth.silage will start next week so we will get a clue. d7

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Frequent Contributor

Re: pro rasslin'

D7, I've been in silage fields for a couple days. My thoughts of a large crop here are greatly reinforced.

 

Aaron

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Veteran Advisor

Re: pro rasslin'

Where the corn is the corn is very good I am not seeing any tip back and so far good stalk strenght.  Kernel depth is very good.  Where the hoies are after the flood water receded there isn't anything. JR

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Veteran Advisor

Re: pro rasslin'

Hi dapper,

 

Occasionally I get a strong opinion about crop size- I think it was '06 I was pretty darn sure that USDA was high on IN and that turned out to be the case. This year I really don't have a strong opinion, yet.

 

I don't think our corn willl be as good as the last two years exceptional yields but I think it will be 20 bpa or so above the IN projected yield which is probably good enough if others chip in and I don't see a major district with broad problems. If I start to have indications otherwise I'll let you know.

 

Our beans could have been the best ever but I don't think that 2" of rain in August will do it- particular since I'm leaning toward fuller maturities. I'm thinking average type good there.

 

Did your pheasnats all drown this summer?

 

Best, h

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Senior Contributor

Re: pro rasslin'

Nox, you said, "I'm guessing that at some point the market will do as it did in the early 30s- essentially move much faster than policy makers are able to act."


I disagree with that characterization. Check to see how many years went by before Roosevelt was even elected. The leadership during the early part of the GR willfully did little - as a matter of policy - just as some maintain the government should have done this time around (and they aren't happy everything isn't OK already and are looking for some one to blame). The current situation is FAR different. In an effort to prevent recession from becoming 'insitutionalized' the Bush administration, Fed, and the financial industry moved literally overnight to take action to avoid REPEATING 1929. We haven't.


Talk about an 'instant gratification' society. We barely avoid the bullet in a financial world that can be torn apart in an instant in the digital age and we can't believe everything isn't solved by the government we blame for doing anything.

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Senior Contributor

Re: pro rasslin'

Who is 'they'?

 

I'll go with Pogo. "We have met the enemy, and 'they' is us."