Bears Chat at The Wall Street Examiner

Federal Reserve considers explicit pledge: Low rates if inflation stays down – WaPo

The Federal Reserve is leaning toward an explicit commitment to keep interest rates at rock-bottom levels, as long as inflation remains low.

The pledge would be an attempt to strengthen assurance that the central bank will not tap the brakes on the recovery until it is certain that the momentum can be sustained. The Fed already has vowed not to raise rates — a move that would slow economic growth — at least until the unemployment rate falls to 6.5 percent or inflation rises above 2.5 percent.

It is strongly considering adding a third prong to that promise: not to move if inflation is below a certain target.

http://www.washingtonpost.com/business/economy/federal-reserve-considers-explicit-pledge-low-rates-if-inflation-stays-down/2013/09/23/9207e1a6-220e-11e3-966c-9c4293c47ebe_story.html

One Thing’s for Sure: The Commies Know How to Throw a Party!!! (aka “The Lujiazui Financial Forum”) – Spock – Bears Chat

Ya gotta hand it to the Communist Chinese: for, as shown here:

http://www.lujiazuif…/lujiazuiforum/

…they are currently throwing one heck of a caviar-and-champagne-fest, under the guise of an “Economic Reform Forum”.

However, infesting this little get-together is every single Western Pigman bankster and his brother, all offering their “fixes” for the Global Monetary Ponzi System.

None of said “fixes”, though, include:

1. Abolishing fiat currencies and reverting to a specie-backed money.

2. Outlawing fraudulent fractional reserve lending practices.

3. Dismantling criminal central bank enterprises

4. Shutting down the “Shadow Banking” system of securitization/derivatives

…of course.

Speaking of that not-so-little Shadow Banking issue, here is a link to a talk from the meeting:

http://www.lujiazuif…/155603193.html

…whereby it is revealed that China’s Shadow Bank system has amassed a whopping, eye-popping:

THIRTY-TRILLION YUAN

….(or approximately five-trillion U.S. fiatscos) of debt, all backed by such “sure-fire” investments as empty cities and exotic CDO-type instruments.

Hmmm, what could possibly go wrong with that?

Yet, this revelation isn’t what shocked a jaded and cynical Spock. Nope, that honor goes to this little-known secret, also revealed between sips of Moet and mouthfuls of Beluga:

http://www.lujiazuif…/155609036.html

And that is that China–whom a naive Spock thought was “debt free”–has a staggering:

TWO-HUNDRED AND TWENTY-PERCENT DEBT-TO-GDP RATIO!!

…proving that even so-called “Prudent Commies” are running their own–albeit somewhat smaller than other nation’s–Ponzi Monetary System.

(Spock Conclusion): Don’t  be lookin’ for no real reform to come from this gathering. Rather, simply expect more of the same, with the addition of a few hangovers and indigestion on the part of the AlphaPig attendees.

How Many Minskys can Dance on the Head of a Pin? Spock – Bears Chat

Anyone familiar with Hyman Minsky’s work, explained here:

http://en.wikipedia….ki/Hyman_Minsky

…is aware of what is known as “The Minsky Moment”, whereby a Ponzi economic or financial system collapses of its own, bloated, weight.

In fact, among many other times throughout history, the world reached just such a moment in 2008. It began with the collapse of Bear Stearns in March, 2008; then cascaded through to engulf Fannie, Freddie, and the FHLBs.  And finally culminated in the vaporizing of the entire world’s rickety edifice of debt, securitization and derivatives, built over decades.

This “economic neutron bomb” destroyed thousands of banks, insurance companies, pension funds, money market funds, hedgies, and even traditional businesses such as McAuto manufacturers. Not to mention dragging down virtually every single stock market and crashing McMansion prices, to boot.

Of course, the Alpha Thug governments and central bank Pigmen swooped in and undertook the most massive, pervasive, nationalization/stimulation/monetization scheme the world has ever witnessed. This unprecedented, coordinated effort on the part of the AlphaPigs bought us an additional five years or so of time.  At a cost of approximately fifteen-trillion fiatscos pumped into rebuilding the destroyed Ponzi Monetary System, depending on which source one believes
.
Needless to report, these panicked actions on the part of TPTB incited the F12-punching crowd to run up even more-egregious bubbles in virtually all asset classes, as every speculative monkey and his brother dove into every risky speculation—while those with financial sobriety watched in abject horror.

But now time appears to be running out on Infinite QuantSleaze and Perpetual Deficit Duplicity, leading to not one, or two, but potentially dozens of “Minsky Moments”, all trying to dance on the head of the proverbial pin at once.

So, which of these imminent implosions will next drag us down into the abyss?:

1.    The bursting bond bubble?
2.    Synchronized stock market crashes?
3.    Yet-another McMansion price meltdown?
4.    Some soon-to-be-revealed derivatives “cascading cross default”?
5.    A sovereign debt default?
6.    The collapse of the EuroZone?
7.    All of the above?

(Spock Conclusion):  There are so many “Minsky Moments” waiting in the wings, it’s difficult to prognosticate which—or how many—will scroom us. But make no mistake about it: the clock is ticking on this latest round of “Borrow-and-Print-Our-Way-Back-to-Prosperity”.

However, while I’m not exactly sure when (or which of) these “MMs” will make their appearance, I am quite certain that the response from the A-Ps this time will be my long-lamented “Everybody Loses a Hand” program, to be discussed at length in another missive.