Financial topics

[Higgenbotham]

The triangle on the oil chart is one of the most interesting things I see at this juncture. The range from the Osama killing to the sovereign debt panic is from 115 to 75 and since then range has narrowed consistently until oil recently sits almost exactly in the middle of the range at 95.

I found out I'm not the only one to have the thought that higher oil prices will throttle the consumer, yet lower oil prices will throttle the producer, one possible explanation for why this range has been inexorably narrowing.

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[aedens]

Cyprus Popular Bank, also known as Laiki, and Bank of Cyprus - have units in London which remained open throughout the week and
placed no limits on withdrawals. t
http://www.zerohedge.com/news/2013-03-2 ... our-dreams

"It was made clear to our Latvian friends that if they want to join the euro, they should not provide a haven for Russian
money exiting Cyprus," a euro zone central banker said.

"By 2020, the US Government will be spending more annually on debt interest than the total combined military budgets of China, Britain, France, Russia, Japan, Germany, Saudi Arabia, India, Italy, South Korea, Brazil, Canada, Australia, Spain, Turkey, and Israel."

"Through government spending the indulgence of one is the burden of another; through government borrowing, the excess of one generation becomes the yoke of the next; through international bailouts, one nation's extravagance becomes another nation's debt"
"Everyone takes, nobody makes, work doesn't pay, indulgence doesn't cost, money is free, and money is worthless."

~ Canadian MP Pierre Poilievre

Hard rain is coming, last warning, prepare... If lucky we get past 2015 and even the thinking republicans which you can count on ONE hand
admit the rest are over 10 years behind us, we the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

The hedge has been removed and even then they still deny his mercy.

https://www.youtube.com/watch?v=uM0MmEIaIrk

[vincecate]

When is the question and the only thing I can say about that is it's already taken much longer than I ever could have imagined.

This has gone on much longer than I too could ever have imagined.

Amen to that. The markets can stay irrational longer than you can stay solvent. But I hope everyone here is still solvent. If this goes on for more than another 2 years I will be hurting. Either S&P down or silver up big works for me. I will be really surprised if it goes on more than 2 years from now.

I fixed up my hyperinflation simulation some more. If you want to really understand the mechanics of hyperinflation, the internal feedback loops, I think this simulation is the best tool out there. I think at this time in history it is a really good thing to invest some time to understand hyperinflation. Huge debt and deficits will have consequences and you can better prepare if you understand things.

http://howfiatdies.blogspot.com/2013/03 ... ation.html

[Reality Check]

The markets can stay irrational longer than you can stay solvent. But I hope everyone here is still solvent. If this goes on for more than another 2 years I will be hurting. Either S&P down or silver up big works for me. I will be really surprised if it goes on more than 2 years from now.

I fixed up my hyperinflation simulation some more. If you want to really understand the mechanics of hyperinflation, the internal feedback loops, I think this simulation is the best tool out there. I think at this time in history it is a really good thing to invest some time to understand hyperinflation. Huge debt and deficits will have consequences and you can better prepare if you understand things.

http://howfiatdies.blogspot.com/2013/03 ... ation.html

Right now it is looking like high inflation ( maybe not hyperinflation ) in countries who can print their own money, and deflation, in countries like Greece, Spain, Cyprus, Italy and France, who can not. France is an interesting case, French Banks bet heavily on Sovereign Debt as the most secure investment, the socialist President ran on a platform of larger government, economic expansion and allowing the rich to keep only 15% of the money they make, and instead is delivering higher taxes, negative growth, and government austerity. The difference between France and Obama land is France does not have helicopter Ben printing French Franks so the government of France can continue growing government spending.

Once again housing prices are starting to climb in traditionally high price U.S. housing markets. My nephew just paid 8 times as much for a house that is just slightly larger than mine. He was in a bidding war for who could pay the most over asking price. Even as an established patent attorney he can not really afford it. But he needed it for a growing family, so he is betting on inflation.

I am still not convinced rapid deflation is not going to hit the U.S. in addition to inflation. But with Obama's re-election and Helicopter Ben sticking with the "print whatever it takes for as long as it takes" theory of economics, it is hard to argue with high inflation coming ( or already here ) by anyone's measure of inflation.

I am helping my children and younger relatives prepare for inflation, and working with my siblings to insure our real estate is paid off, and liquid assets are in hard currency, in case the inflation bets fail.

[Reality Check]

http://www.reuters.com/article/2013/03/ ... 3I20130327

Banks have still not re-opened in Cyprus.

But the first official list of Capital Controls was leaked.

These are limits on when and if, anyone can access or benefit from their own money deposited in banks of Cyprus. or money/currency carried on their persons in Cyprus.

The government of Cyprus acknowledges the leaked list is official, but still subject to change before the banks re-open.

Checks of any kind will no longer be honored by banks in Cyprus. Withdrawals must be made in person or at a cash machine.

Anyone with large sums of money in time deposits, such as retirement accounts, will no longer be able to remove any of the money early ( even if they pay the small penalty they agreed to for early withdrawal) If you have a 10 year certificate of deposit for 10,000 Euros you must leave the entire 10,000 Euros in the bank for 10 years, even if the terms you deposited it under allowed early withdrawal with a small penalty.

A withdrawal limit of 300 Euros ( $380 ) per day on demand deposits such as checking accounts and non-interest bearing ( non-time ) savings accounts.

Withdrawals form cash machines are still limited to 100 Euros per day.

No money or currency of any kind will be allowed to be carried out of the country.

Credit Cards used outside of Cyprus by citizens of Cyprus will be limited as to the amount they can charge.

Credit Cards issued by a bank in Cyprus will have a limit on how much they can be charged if used outside of Cyprus.

http://www.reuters.com/article/2013/03/ ... 3I20130327

[gerald]

Some are more equal then others, some are just stupid, and It is sometimes very wise to think through one's actions and several moves later in the game. Unintended consequences can be a real problem.

The circus has come to town --

http://www.zerohedge.com/news/2013-03-2 ... -uniastrum

[Higgenbotham]

This article is from last year. I've been seeing a similar situation for a few weeks, perhaps more so. The current ratio is 0.0352 and has been falling all day.

Copper-Oil Ratio Signals Drop in U.S. Stocks

By David Wilson - 2012-03-21

Commodity prices are signaling this year’s rally in U.S. stocks will fade, according to Gina Martin Adams, a Wells Fargo & Co. strategist.

The CHART OF THE DAY shows how she drew this conclusion: by comparing the ratio between copper and crude-oil futures with the Standard & Poor’s 500 Index.

“When copper is accelerating faster than oil prices, stocks tend to do particularly well,” Martin Adams wrote two days ago in a report with a similar chart. “Much the opposite has been the case recently.”

From this year’s peak on Feb. 6, the ratio fell 9 percent through yesterday. The S&P 500 advanced 4.6 percent during the same period.

“The direction of copper is historically one of the best leading indicators” of global economic growth, the New York- based strategist wrote. This contributes to the copper-to-oil ratio’s usefulness as a stock-market gauge, the report said.

Price moves affecting the ratio can make or break earnings estimates, Martin Adams added. Her projection of $102 a share in S&P 500 profit this year assumes commodity costs will be little changed. Copper rose 11 percent for the year through yesterday, and oil rose 6.9 percent.

http://www.bloomberg.com/news/2012-03-2 ... tocks.html

COPPER OIL RATIO.png (14 KiB) Viewed 2898 times

[Higgenbotham]

Amen to that. The markets can stay irrational longer than you can stay solvent. But I hope everyone here is still solvent. If this goes on for more than another 2 years I will be hurting. Either S&P down or silver up big works for me. I will be really surprised if it goes on more than 2 years from now.

The S&P is up 40 points over the past 6 weeks and I have been 100% short all that time, but trading around the clock to mitigate damage. If it continues up at the rate it has the past 6 weeks and moves similarly, and I stay 100% short, 400 more points up will break me. But there are a couple things that could happen to worsen the situation - either my health could give out before my bank account does, or my trading could worsen. So far my health seems OK and my trading has been consistent.

[vincecate]

Amen to that. The markets can stay irrational longer than you can stay solvent. But I hope everyone here is still solvent. If this goes on for more than another 2 years I will be hurting. Either S&P down or silver up big works for me. I will be really surprised if it goes on more than 2 years from now.

The S&P is up 40 points over the past 6 weeks and I have been 100% short all that time, but trading around the clock to mitigate damage. If it continues up at the rate it has the past 6 weeks and moves similarly, and I stay 100% short, 400 more points up will break me. But there are a couple things that could happen to worsen the situation - either my health could give out before my bank account does, or my trading could worsen. So far my health seems OK and my trading has been consistent.

The nice thing about my long term options is that I don't feel any need to watch them close. The risk is limited to what I put in. The bad thing is that if I am wrong they expire worthless. Since I can't imagine going another 2 years, I have gone in rather heavy, for me. I have been keeping this hyperinflation faq, debating on many bboards, and think I have the only hyperinflation simulator on the web. I think it is realistic to say that I understand hyperinflation better than 99.9% of the investors out there. In my estimation the odds of silver shooting up, priced in US dollars, is much higher than people think. So I think long term options on SLV are a good buy. Even if I am wrong again, I think I will be able to look back and still think it was a reasonable gamble.

[gerald]

interesting --

http://www.zerohedge.com/news/2013-03-2 ... ve-banking

A few more banking crises in the Eurozone– especially one in which insured depositors are made to participate in the so-called “bail-in”–will likely cause the faith in government deposit insurance to completely evaporate and with it confidence in fractional-reserve banking system.

hmmmm -- and the masses will do what?