The Dollar...this summer may be it....

[Trajan]

I don't know very much about puts and calls, I had to read the same brief on what a CDS is 5 times, I think, finally get it. I do know what sounds attractive and is and why, because I have been trained so to speak by one of my oldest friends....he gave me Amgen at the original 52 and 2-3 other tidbits, like gold at 998.00.

The 4 times he has told me to go, I did and I have made a killing each time. Figure, sooner or later the magic has got to fail right?

He told me yesterday that the dollar will test a new low this summer, below the July 08 and becasue its 3 years after and all of the poor monetary management piled on top of it , he says and he never says this, he said it will be 'very bad'. For him, 'doing poorly ' means Armageddon.


I saw we dropped thru 70. this morning......He suggested strongly that I not cash in any gold yet and he threw a number at me that I am embarrassed to share as a new high....

may you live in interesting times.

 

[sparky]

So, all the "happy-times" propaganda has had zilch effect. The public's not buying it. They know we're in a Depression. How could they not know? They're underwater on their mortgages, they can't get a loan, their kids and Uncle Arnie can't find work, and the guy in the Oval Office won't do a damn thing to help out. Is it any wonder why so many people are giving up on capitalism entirely. Just take a look at this survey from Globescan for a real shocker:

"American public support for the free market economy has dropped sharply in the past year, and is now lower than in China, according to a GlobeScan poll released today.....When GlobeScan began tracking views in 2002, four in five Americans (80%) saw the free market as the best economic system for the future—the highest level of support among tracking countries. Support started to fall away in the following years and recovered slightly after the financial crisis in 2007/8, but has plummeted since 2009, falling 15 points in a year so that fewer than three in five (59%) now see free market capitalism as the best system for the future.

GlobeScan Chairman Doug Miller commented: "America is the last place we would have expected to see such a sharp drop in trust in the free enterprise system. This is not good news for business."

The results mean that a number of the world's major emerging economies have now matched or overtaken the USA in their enthusiasm for the free market. The Chinese and Brazilians, 67 per cent of whom regard the free market system as the best on offer, are now more positive about capitalism than Americans." ("Sharp Drop in American Enthusiasm for Free Market, Poll Shows", GlobeScan)

Can you believe it? The Chinese like capitalism better than Americans. How's that for irony? And, don't kid yourself, the average working slob isn't spending his evenings thumbing through the Communist Manifesto while strumming L'Internationale on his 6-string. That's nonsense. Americans are practical people. They know they're getting screwed by both parties which is why their support for capitalism has eroded even faster under Obama. It fell "15 points in a year" since 2009. Way to go, Barry.

Mike Whitney: Welcome to Banktopia

 

[sparky]

He told me yesterday that the dollar will test a new low this summer, below the July 08 and becasue its 3 years after and all of the poor monetary management piled on top of it , he says and he never says this, he said it will be 'very bad'. For him, 'doing poorly ' means Armageddon.


.

This year July has 5 Fridays 5 Saturdays and 5 Sundays. This apparently happens once every 823 years.

ooohhhhhh............

 

[Trajan]

He told me yesterday that the dollar will test a new low this summer, below the July 08 and becasue its 3 years after and all of the poor monetary management piled on top of it , he says and he never says this, he said it will be 'very bad'. For him, 'doing poorly ' means Armageddon.


.

This year July has 5 Fridays 5 Saturdays and 5 Sundays. This apparently happens once every 823 years.

ooohhhhhh............

end of days!!!!!!!

 

[Intense]

Heavy Tourism ahead in NYC this Summer with the weak dollar.

[ame=http://www.youtube.com/watch?v=eLdv4a3AVIY]YouTube - Summer In The City Lovin' Spoonful[/ame]

 

[Toro]

Maybe.

I think the dollar will bottom this year. I think a lot of the anti-dollar trades will carry out a lot of people. Well, I know that will definitely happen when it happens.

But I'm just guessing.

And I went short silver today, buying deep out of the money puts that didn't cost me much but will have a huge payoff if I'm right.

Too many dollar bears / silver bulls.

 

[LordBrownTrout]

Aw come on, Trajan!!! I've been listening to an old mentor for twenty years now on silver. He's been on that stuff since the 60's. Anyways, he's never missed a beat on the entire economical spectrum over the last 40 years. Probably why I'm having no qualms about hanging on to silver for a while longer even though I'm deeply saddened with what is transpiring and what's about to happen. Pretty times ain't ahead.

 

[sparky]

perhaps if investment during economic decline is the issue, privatizied public infastructure should be considered>

Chicago, of course, is still a few privatizing steps behind smaller towns like Maywood, Calif., and Sandy Springs, Ga. And its commitment to the Municipal Dystopia agenda hasn't yet delivered the same painful budgetary consequences that may now push the Springs off that course. But if the numbers from Chicago's past privatization deals predict the future, then it and other cities following the same path will indeed face those consequences -- the only question is whether, like the Springs, those cities must bear that pain before voters finally demand a true change of direction.


Reaganomics will bring our cities to ruin - War Room - Salon.com

of course , that might mean becoming a target should the trains not run on time.....

 

[editec]

I suspect the only thing currently sustaining the value of the USD is that so many banks, pension funds, insurancne companaies and foreign nations are holding so much US debt and they are fearful of a real run on the USD.

So I suspect there's a lot of back room deals and agreements going to to keep it from collapsing.

At least until the masters can get their money out quietly and without fanfare.

Once they are out of their position, I don't doubt they'll not only let, but take advantage as greenback collapses.

Am I paranoid?

I doubt it.

In this world, folks, I'm finding that my paranoia cannot keep up with reality.

 

[sparky]

ZZZZZZZZZZZZzzzzzzzzzzzzzzzzzZZZZZZZZZZZZZZZzzzzzzzzzzzzzzzzzz

 

[sparky]

In this world, folks, I'm finding that my paranoia cannot keep up with reality

perhaps i can help you out then Editec>

Mike Whitney: Bernanke Strikes Again!

 

[editec]

this from Marketwatch:

"There have been only four other occasions over the last century when equity valuations were as high as they are now, according to a variant of the price-earnings ratio that has a wide following in academic circles. Stocks on each of those four occasions would soon suffer big declines." ("History bodes ill for stock market", Mark Hulbert, Marketwatch)
​

Stocks are not overvalued because the economy is doing well, but because the Fed's bond buying binge has ignited a flurry of speculation that's pumped up prices. The uptick in margin debt--which is presently at its highest level since 2008--is particularly disturbing. It means that the big banks and hedge funds have been increasing their debt-load to buy equities, confident that QE2 will continue to suppress volatility. But that's a strategy that can backfire if the market drops suddenly and over-extended investors are sent scrambling for the exits. An article on Seeking Alpha explains what's going on:

The above defintiely jibes with my theory of the inflationary effect on investments stemming from supply side policies that we've been pursuing for thee last fourty years having caused investments to climb inappropriately leading to various bubbles popping.

One thing that the right winger economist are RIGHT about is that if the government advantages one market over the other, it has negative effects on the society as a whole because inevitably the market senses the weakness in that market and corrects.

The average American homeowner (not the flippers, so much) got screwed when the USA decided to allow the RE market to overheat thanks to bundling mortgages such that the mortgage originators didn't also assume the risk of the investment.

That created a run up in prices that had nothing whatever to do with supply and demand.

 

[konkon]

I suspect the only thing currently sustaining the value of the USD is that so many banks, pension funds, insurancne companaies and foreign nations are holding so much US debt and they are fearful of a real run on the USD.

So I suspect there's a lot of back room deals and agreements going to to keep it from collapsing.

At least until the masters can get their money out quietly and without fanfare.

Once they are out of their position, I don't doubt they'll not only let, but take advantage as greenback collapses.

Am I paranoid?

I doubt it.

In this world, folks, I'm finding that my paranoia cannot keep up with reality.

There would be some back-room negotiations and speculations going on. But I don't think that the Federal Reserve really cares whether countries outside of the US are going to get stuck or screwed. Perhaps the Federal Reserve wants them to 'cop' a lot of the burden.

The US will try and get out of 'this' any way it can eventually and other countries' concerns will not be high on the agenda.

 

[waltky]

Is the dollar losing its reserve status?...

Could the dollar lose its status?
May 13, 2011: Despite the dollar's dominance over the past six decades, some feel it may be time to reconsider the dollar's historical position as the world's preferred currency.

When the U.S. dollar experienced a pronounced devaluation during the last recession, the Organization of the Petroleum Exporting Countries (OPEC) argued against pricing oil in dollars. OPEC members complained that a weaker dollar resulted in declining revenues after converting to other currencies and some OPEC countries even went so far as to demand to be paid in euros which was particularly strong at the time.

China also joined the chorus of dollar doomsayers warning that it was "reconsidering" including the dollar as part of its foreign currency reserves. China is by far the largest holder of foreign currency reserves with a reported $2.85 trillion as of the end of 2010. About 65% of this ($1.85 trillion) is held in U.S. securities while 26% ($741 billion) is denominated in euros. Japan also maintains a significant U.S. dollar exposure with nearly $900 billion in its reserves. As the fastest growing economy on the planet China certainly has the means to build up a considerable reserve fund, but it is America's dependency on deficit financing that makes so many U.S. dollars available for purchase in the first place.

The latest estimate is that the deficit for this year will require at least $1.5 trillion in financing to close the operational gap and will push the country's total debt very near -- if not beyond -- the current $14.3 trillion cap imposed by the government. While the debate over America's debt policy is fodder for another day, the one undeniable fact is that this dependency on foreign creditors places the dollar in peril. A sudden sell-off by one of the larger debt holders would seriously devalue the dollar and set in motion a series of events that could trigger another recession.

If not the dollar, then who?

See also:

Commercial real estate poisoning small banks
May 13, 2011: The troubled commercial real estate is slowly killing off the nation's small and regional banks, and industry experts fear the worst is yet to come. The delinquency rate on commercial mortgage-backed securities hit a record 9.62% in April, according to a report by Trepp, a firm that tracks commercial real estate and banking data.

Analysts expect that to rise above 10% by year end. On the bright side, that forecast marks a slight improvement over prior estimates that called for defaults to top 12%. The bulk of these rising delinquencies is falling squarely on the shoulders of the nation's already struggling small and regional banks, forcing dozens to close. Thirteen banks failed in April, with nearly all them heavily exposed to commercial real estate. It's a familiar pattern that U.S. regulators say they've been observing for several months. "Commercial real estate is a common thread among the more recent bank failures," said David Barr, spokesman for the FDIC. "When the [financial] crisis started in 2008, most banks got into trouble because of residential mortgages, but in 2009 we started to see that slowly transition over to commercial real estate."

Small to regional banks -- defined as banks holding less than $100 billion in assets -- have $784 billion in commercial real estate loans on their books, according to the Independent Community Bankers Association of America. That's about 71% of the total market. The biggest reason these smaller banks commandeer such a large portion of the market is because the bulk of commercial lending is "a local business," said Barr. When the housing bubble popped in 2007, those small and regional banks were left holding billions of dollars worth of risky commercial real estate projects. Those included newly constructed vacant buildings as well as unused land.

"While the whole [downturn] was triggered by residential mortgages, commercial real estate has been source of most of losses for the smaller banks," said Matt Anderson, a managing director with Trepp. At the height of the bubble, small-to-midsized banks underwrote more than $200 billion in risky land and construction loans, where the collateral on the loan wasn't office space but vacant land or incomplete construction sites. Among the 13 banks shut down last month, commercial real estate loans made up 79% of their non-performing loans, defined as loans in default or close to default. Non-performing residential real estate loans made up only 15% of those loan portfolios.

More http://money.cnn.com/2011/05/13/markets/commercial_real_estate_banks/?iid=Popular

 

[Big Fitz]

He told me yesterday that the dollar will test a new low this summer, below the July 08 and becasue its 3 years after and all of the poor monetary management piled on top of it , he says and he never says this, he said it will be 'very bad'. For him, 'doing poorly ' means Armageddon.


.

This year July has 5 Fridays 5 Saturdays and 5 Sundays. This apparently happens once every 823 years.

ooohhhhhh............

end of days!!!!!!!

555 Number of the... wait... no that's only good in cribbage. Or is that four 5's and drawing the jack?

I'd love to see the internals on that poll that article Gort linked to. Something tells me it's internals smell like poo.

 

[Wiseacre]

I think there's a lot riding on what happens over the next few months with respect to raising the debt limit. If it is perceived that whatever action is taken is insufficient to begin addressing the fiscal problem, then I can see the likelihood for a falling dollar and rising inflation. QE2 ends in June, which is another hit on the market with less capital flowing in. IMHO it doesn't look good.