Sunday 31 May 2009

Vigilante Man

yo!..million pound note...innit!


PALOOKAVILLE FINANCIAL
capitulation day
+249...

...nobody here in palookaville...


...knows anything about bonds...




THE END OF MORAL HAZARD


...but we know about debt...


...bad debtors pay more...


...credit is...


...where credit is due...


FEAR OF 'FLATION


...he who pays the piper...


...calls the tune...


...not so good when you're in a hole...


STOP DIGGING


..."The Treasury bond sell-off is now putting pressures on other markets in the economy. We should worry most about housing where borrowing rates are rising notwithstanding the Federal Reserve purchase programme. Indeed, according to data released on Thursday, already 12pc of US households are facing difficulties meeting their mortgage payments.

Housing is still central to the stabilisation and eventual recovery of the US and global economies. Any further decline in house prices will erode the collateral many Americans borrowed against, dampen their already-fragile consumption appetite, and increase the headwinds facing a banking system that is finally regaining its footing. The US can ill-afford a further sell-off in US bonds at this stage in the economy's rehabilitation process. Yet there is no easy way for policymakers to address this challenge.

As an illustration, consider the dilemma facing the Federal Reserve. Should the central bank step up its purchases of both Treasuries and mortgages in order to stabilise interest rates, but at the risk of adding to the distortions in these markets; or should it refrain from intervening further and risk a return of widespread economic and financial disruptions?

I suspect that, when push comes to shove, policymakers will opt for greater purchases of mortgages and Treasuries – not because they really want to, but because the alternative is viewed as worse.

Believe it or not, there is a silver lining in all this. As they contemplate this difficult situation, they can draw some comfort from one thing: with the anchoring of the short-term policy rate near 0pc, the steepening of the yield curve is generating significant profits for banks.

Remember, banking is fundamentally about mobilising cheap deposits (at the short end of the curve) and, supported by deposit insurance and central bank liquidity windows, lending at the longer-end of the yield curve. Come to think of it, the smartest trade for investors today is to find a bank that, unencumbered by legacy issues, is able to take advantage of an enormously attractive environment for old-style banking."

...Mohamed El-Erian is chief executive of Pimco....


CHERCHEZ LA FEMME


...or...


...follow the money...


...me...


...I wonder about the banks, the shadow banks, and the men that run them...


...has it all been deliberate?...


...surely not...


...who would benefit...?


..." For a long time, this column has warned that the bond-market vigilantes would ultimately rebel against the Western world's profligate borrowing and spending – not least the ill-judged, cowardly and ultimate grotesque "bail-out" packages for well-connected banks that should anyway be allowed to fail...."

...Liam Halligan...


Friday 29 May 2009

Rising, Rising, Rising...

yo!..rawhide...innit!


PALOOKAVILLE FINANCIAL
capitulation day
+247...


...the story so far...


...the clever b*stards that run the financial world...


...have bust the banks...


...in turn...


...the banks have bust the sovereign states...


...the sovereign debts...


...have spooked the bond market...


WELCOME TO THE END OF THE WORLD


...apparently...


...it all started with property speculation...


...caused by bubble money...


...when the bubble burst...


...many, many, many...


...suckers got taken out...


...the politix...


...were busy with their expences claims...


...and their business interests...


...they are either responsible for the current mess...


...or incompetent...


...that is...


...guilty...


...or...


...stupid...



KEEP THEM RATES A RISING


..."Yields on 10-year Treasury bonds have risen relentlessly since March when the Fed first announced its plan to buy $300bn (£188bn) of US government debt directly, a move that briefly forced rates down to nearly 2.5pc, a level thought to be the Fed's implicit target.

Yields have jumped to 3.69pc – after spiking as high as 3.74pc on Wednesday – pushing up the standard 30-year mortgage loan to 5.08pc and lifting the borrowing cost for corporations...."

...Daily Telegraph...



LOSE THE DOLLAR


...here in...


...palookaville...


...we can't gloat...


...as we have our own currency problems...


...we could all go down together...


SLOW BOAT TO NOWHERE


...in China...


...they are hoping for a new world currency...


...and a new world order...


...first though...


...they may have to start buying some of their own stuff...



RALLY ROUND THE RALLY


...sucker, sucker...


...off the wall...


...will still be long...


...when markets fall...


THEY ALSO THINK


...that have no brains at all...


...it's the property stupid...


...the collateral is not what it was...


...every time it falls...


...well it's not...


...pennies from heaven...




Wednesday 13 May 2009

Remorse : The New Bull Market

yo!...pitchforks averted...for now...innit!


PALOOKAVILLE FINANCIAL
capitulation day
+231...


...here in palookaville this morning...


...the talk is all about...


...forgiveness...


SERIOUS REMORSE


...the recession...


...caused by the ending of polititions expence claims...


...is almost over...


...as new money will be created...


...by...


...increasing their salaries...


...to compensate for their loss of privilige...



THE GOOD NEWS


...is that...


...this will increase their pensions...


...and this is a much more secure form of income for them...


...maybe now that they won't be spending all their time...


...working out how to claim maximum benefits...


...they will be able to find jobs for the 2.2 million newly unemployed...



TAKE AND GIVE


...the great debt...


...caused by the massive cost of MP's expences and pensions...


...is to disappear...


...they are to give back all of their extravagent takings...


...the national debt...


...will now not be...


...£240,000,000,000,000...


...after all...

Monday 11 May 2009

The Green Green Shoots of Home

yo!..capitulation up...innit!


PALOOKAVILLE FINANCIAL
capitulation day
+229...

...the old town looks much the same...

...as I step down from the train...


...and there to greet me...


...are...

...my momma an poppa...


RIDING ALONG ON THE CREST OF A WAVE



...here in palookaville this morning...


...everything goes along as if nothing has happened...


...world trade has collapsed...


...ships are mothballed...


...the newly unemployed are in their homes and not on the streets...


...the boarded up shops go unnoticed...


...there is no return on our savings...


...the country is bust...


...but our government still sits in westminster...


SAUCE FOR THE GOOSE


...still cramming their pockets with our money...


...while raising our taxes...


...and robbing our pensions...


...no wonder that no-one was at the helm...


...when the banks went bust...


RALLY ROUND THE FLAG


...they are starting to talk about a melt-up...


...as stock prices have risen for 9 weeks...


SUCKERS

...it's a bear market rally...


...but a long one...


...all the talk is of panic among the fund managers...


...afraid to miss the train...


...the last train to palookaville...