View Full Version : Dollar intervention
Here's the chart of the balance of Euro in the U.S. ESF (Exchange Stabilization Fund) account, along with the USDX and Euro values themselves on the right hand scale.
http://www.nowandfutures.com/images/esf_euro_yen.png
The very large drop recently (the blue line) tells part of the story. Another part is told by the Treasury site itself - that recent data about the drop was delayed for almost three weeks before it was made public.
Another part is told by very recent data not being made public for the last two weeks running.
What the ESF did is simply sold about 10 billion Euros and bought dollars - plain and simple massive intervention that virtually everyone has missed or ignored or pretended doesn't exist or whatever.
That chart and others, including one for the yen balance, are on my currencies page.
All this noise about what's going on with gold or the dollar or whatever... and the raw facts are sitting there at http://www.treas.gov/press/international-reserve-position.html, just like the ECB data about gold manipulation & control. :rolleyes:
i'm blown away by that chart. a cloaked - not an invisible - hand.
when were the purchases, and when did the information actually get posted at the official site?
phirang
08-08-08, 07:56 PM
I'm really, really annoyed that I didn't catch this before-hand. At least I didn't sell a red-cent of my long-gold, long-copper positions...
Did they time this with the ECB report to imply a spurious causality? It gives the financial media fresh carrion to pick at and something to attribute to the trade.
i'm blown away by that chart. a cloaked - not an invisible - hand.
when were the purchases, and when did the information actually get posted at the official site?
It really frosts me sometimes to hear and read all those newsletter & blog folk talking about gold and the dollar... while not doing their homework.
Anyhow... my records don't show the specific date but from memory, it was 3-4 weeks after the actual intervention - probably week ending July 4th.
Another intervention very likely started the week of July 18, since the last data posted is from week ending July 11. There is also strong and similar evidence in the Fed's Z1 publication for similar intervention in early 2005.
I'm really, really annoyed that I didn't catch this before-hand. At least I didn't sell a red-cent of my long-gold, long-copper positions...
Did they time this with the ECB report to imply a spurious causality? It gives the financial media fresh carrion to pick at and something to attribute to the trade.
The thought has (*cough, cough*) crossed my mind... "funny" how the recent ECB gold sale of 500+ tonnes happened the same week that the ESF hasn't reported on yet.
As an aside, it's so very hard not to appear like some weirdo seeing a conspiracy or cartel or whatever behind things... with actual facts like the ESF actions and the ECB gold manipulation/control data. :(
metalman
08-08-08, 09:50 PM
The thought has (*cough, cough*) crossed my mind... "funny" how the recent ECB gold sale of 500+ tonnes happened the same week that the ESF hasn't reported on yet.
As an aside, it's so very hard not to appear like some weirdo seeing a conspiracy or cartel or whatever behind things... with actual facts like the ESF actions and the ECB gold manipulation/control data. :(
fed says no interventions since euro was launched in 1999...
http://research.stlouisfed.org/fred2/data/USINTDCSDM_Max_630_378.png
are they lying?
never mind. data are only to 2003. (http://research.stlouisfed.org/fred2/series/USINTDMRKTDM)
fed says no interventions since euro was launched in 1999...
http://research.stlouisfed.org/fred2/data/USINTDCSDM_Max_630_378.png
are they lying?
never mind. data are only to 2003. (http://research.stlouisfed.org/fred2/series/USINTDMRKTDM)
Here's a Fed site that says that they haven't intervened at all since 1999.
http://www.newyorkfed.org/markets/quar_reports.html
... except they very carefully state that "U.S. Monetary Authorities Did Not Intervene in FX Market during (period)"... and don't mention the ESF or its actual record and balance or that the ESF is part of the Treasury and not related to the Fed.
http://en.wikipedia.org/wiki/Exchange_Stabilization_Fund
Greenspan etc. taught them well... it's not a lie...
How many tinfoil hat points do I get now? :eek:
1. is the esf managed by the fed or the treasury?
2. another piece of evidence: james sinclair just sent out an email noting sharp growth in u.s. dollar bonds held by the fed for foreign cb's. in the last 3 weeks they grew at an annualized 38%, the prior 3 months the rate was less than half that. so the foreign cb's surged their dollar purchases.
krakknisse
08-09-08, 05:00 AM
I was going to post yesterday about my "gut feeling" that a USD/EUR reversal of this size and time span had to be somehow orchestrated, partly at least, by TPTB.
Long term: YAWN. Short term: whatever. But remember, NO GEARING. You don't want to be caught out with a margin call in these times. I remember seeing a phrase on a blog: "Buttf*d by Bernanke"... This is one of the reason's I'm very skeptic of options - they have a definite expiry date, so easily manipulated. Though my trigger finger is itching to buy some puts on some local banks... Theta will kill you, though.
Go over to jsmineset.com and read his post about frantic telephone calls coming in.
Good to see the hard work of ITulipers validating this gut feeling with hard data. For the newbies - and I count myself in: your gut feeling will improve in time. There's so much good stuff here (in between the aliens). I'm not making any money on that short-term gut feeling, though. And the opportunity cost of developing it is significant. But it will give you a measure of control that could be invaluable in developing the stomach to withstand these churns. Don't get churned out!
About gold: gold lease rates are increasing somewhat, so short interest is increasing. However, gold relative strength index (14 days) is as low as 25, and RSI-30 is 35. These levels were seen last in the May 2006 dip bottom. So RSI says strongly oversold, whereas gold lease rates point to a weak increasing short interest. It's a "battle of the shorts vs longs", but with a desperate, besieged central banking system on the side of the shorts. On the side of the longs: the best fundamentals seen since the post-French revolution devastating hyperinflation. Central banks are trying to fight gravity, so just wait...wait...wait.
Since I started following ITulip the tone and tenor of nearly every piece of news has turned decidedly bearish - even tourists over here (from worldwide) are cutting purchases of "sweaters & trolls". Signs of contraction are everywhere! Long post - first significant post in some time - hooray for ITulip!
K N
1. is the esf managed by the fed or the treasury?
2. another piece of evidence: james sinclair just sent out an email noting sharp growth in u.s. dollar bonds held by the fed for foreign cb's. in the last 3 weeks they grew at an annualized 38%, the prior 3 months the rate was less than half that. so the foreign cb's surged their dollar purchases.
The ESF is managed by the Treasury.
Here's the current picture of all Fed custodials - they have "recovered".
This is all custodials - Treasuries and agencies:
http://www.nowandfutures.com/images/fed_custodials.png
And this breaks agencies out, showing various growth rates and the percentage of agencies of total custodials.
http://www.nowandfutures.com/images/fed_custodials_agencies.png
Good to see the hard work of ITulipers validating this gut feeling with hard data. For the newbies - and I count myself in: your gut feeling will improve in time. There's so much good stuff here (in between the aliens). I'm not making any money on that short-term gut feeling, though. And the opportunity cost of developing it is significant. But it will give you a measure of control that could be invaluable in developing the stomach to withstand these churns. Don't get churned out!
Markets are indeed more treacherous than normal now, and that's also the primary reason I post stuff like ESF and ECB data. "External influences" do exist and failing to see them for what they are can help to cause poor decisions... or rattle one's cage unnecessarily.
About gold: gold lease rates are increasing somewhat, so short interest is increasing. However, gold relative strength index (14 days) is as low as 25, and RSI-30 is 35. These levels were seen last in the May 2006 dip bottom. So RSI says strongly oversold, whereas gold lease rates point to a weak increasing short interest. It's a "battle of the shorts vs longs", but with a desperate, besieged central banking system on the side of the shorts. On the side of the longs: the best fundamentals seen since the post-French revolution devastating hyperinflation. Central banks are trying to fight gravity, so just wait...wait...wait.
A buy point (trade within a trade) is probably developing, and seasonals are due to turn soon.
I'm seeing different data than you on gold lease rates, or perhaps using a different time scale. The one year rate has been in a range since early June and the one month rate has gone up a bit during the same period.
Jim Nickerson
08-09-08, 09:41 PM
US dollar rallies as extent of worldwide recession becomes clearer By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 10:13pm BST 08/08/2008
US dollar rallies as extent of worldwide recession becomes clearer (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/09/cndollar109.xml&CMP=ILC-mostviewedbox)
The psychology of global markets has shifted hugely over recent days as it becomes clear that Europe, Australasia and parts of Asia are sliding into recession.
The US dollar has launched its best rally in half a decade, reflecting a recognition that half the world is in even worse shape than the US. In fact, America is the only G7 country to eke out modest growth this summer.
The US dollar index - currencies watched closely by traders - smashed through resistance yesterday in the biggest one-day move since the long dollar slide began seven years ago.
.
.
We see a deep global recession," said Albert Edwards, chief strategist at Société Générale.
"Growth prospects in the Eurozone, Japan and the UK have deteriorated. Most now accept that recession has already begun in all three," he said. Mr Edwards predicted a "collapse" in emerging markets next. "You ain't seen nothing yet," he said.
The commodity slide boosts the dollar as petro-payments are recycled into euros, not the greenback.
A Bundesbank study found that for every $1 sent to the Middle East or Russia for oil, the eurozone gets 40 cents back. Europe is the chief supplier of cars and industrial good to the petro-economies. The US receives just 10 cents.
This bias is now going into reverse. Moreover, Danske Bank says there has been a $70bn net outflow of investment from the eurozone over the last year. It appears that foreign governments are sated on European bonds.
The drip-drip of bad news in America is now being trumped daily by the icy douche splashing over Europe. The markets were stunned by leaks from Berlin last week that Germany's economy had shrunk by 1pc in the second quarter. Yesterday Italy revealed a 0.3pc contraction.
The last straw was an admission this week by European Central Bank president Jean-Claude Trichet that "downside risks had materialised" and there was no clear end in sight.
The comments were followed by the ECB's lending survey yesterday, confirming that banks have cut back sharply on mortgages and household credit.
BNP Paribas said it was now clear that the ECB had misjudged the severity of downturn. The monetary squeeze of the last year has raised mortgage costs by 150 basis points in Spain, Italy, Ireland and other states that rely heavily on floating-rate contracts. House prices are dropping in several regions at rates that match the US slide.
Bernard Connolly, global strategist at AIG, said the falling euro would come too late to prevent a severe economic crunch across southern Europe. "We think the EMU credit bubble is about to burst," he said.
Current account deficits have already reached 10pc of GDP in Spain and Portugal, and 14pc in Greece. The region depends on foreign capital flows to keep its economies afloat. This is now under threat as investors become alert to the solvency risks of debt deflation, causing a blizzard of warnings from rating agencies on the health of the banks in these countries.
Over the last few months the US dollar appears to have hit the bottom of its cycle, suggesting its relentless slide since 2001 may finally be over.
Arguably, the US is now super-competitive. Airbus and Volkswagen are shifting production plant across the Atlantic. US furniture and textile companies have stopped outsourcing to China, and are coming home.
The International Monetary Fund says the dollar has fallen 25pc to 30pc on a global basis, just as it did in the late 1980s. There was no shortage of dollar doomsters at that time, warning that America was finished - left behind by Japan and Germany. Events played out otherwise. America was on the cusp of a recovery.
Will this be repeated? The US current account deficit has fallen from 7pc of GDP to under 5pc early this year, or nearer 4pc after adjusting for the oil spike.
As the Habsburgs used to say, "the situation is desperate, but not serious".
It really frosts me sometimes to hear and read all those newsletter & blog folk talking about gold and the dollar... while not doing their homework.
Anyhow... my records don't show the specific date but from memory, it was 3-4 weeks after the actual intervention - probably week ending July 4th.
Another intervention very likely started the week of July 18, since the last data posted is from week ending July 11. There is also strong and similar evidence in the Fed's Z1 publication for similar intervention in early 2005.
Add this to your bullshit meter, spot gold prices have declined from $960ish to $860 gold metal price for coins is still above $905, spot silver is in the 15's and coins are in the high 17's low 18's, that huge!
Add this to your bullshit meter, spot gold prices have declined from $960ish to $860 gold metal price for coins is still above $905, spot silver is in the 15's and coins are in the high 17's low 18's, that huge!
And the spread on AU $20 Libs over Eagles is up to $100 from $20 five years ago.
Add this to your bullshit meter, spot gold prices have declined from $960ish to $860 gold metal price for coins is still above $905, spot silver is in the 15's and coins are in the high 17's low 18's, that huge!
http://www.nowandfutures.com/g2/bullshit_detector.gif
Bart, does the ESF data include the repo lines with ECB?
The dip in EUR reserves might be liquidation of the repo lines? Or would that be the fed's business?
Bart, does the ESF data include the repo lines with ECB?
The dip in EUR reserves might be liquidation of the repo lines? Or would that be the fed's business?
To the best of my knowledge, no. The ESF is a Treasury operation.
There are swap lines between the Fed & ECB though, and its around a $50-55 billion "allocation" currently if memory serves.
I won't even venture a guess on the EUR reserves dip cause - too many possibilities.
The ECB OMOs are still in a very high range - 466 billion Euros last week.
Andreuccio
08-11-08, 12:12 PM
A buy point (trade within a trade) is probably developing, and seasonals are due to turn soon.
I feel like my son in the back seat during a family outing for asking this, but:
Are we there yet?
I feel like my son in the back seat during a family outing for asking this, but:
Are we there yet?
It's possible, but best guess - no.
Also, I never trade until the trend is no longer against me.
Andreuccio
08-11-08, 12:44 PM
Also, I never trade until the trend is no longer against me.
This may be a stupid question, but what does it mean for the "trend to be against you"?
This may be a stupid question, but what does it mean for the "trend to be against you"?
There is no such thing as a stupid question when something isn't clearly understood.
For me, the primary indicator of the trend being against me is literally drawing a trend line on a price chart and seeing if the trend is running opposite to my position or not. Since I'm mostly a trader, I mostly draw chart trend lines on the shorter term - days to a few weeks, and I occasionally use hourly or x minute based charts when things are close.
Andreuccio
08-11-08, 01:12 PM
There is no such thing as a stupid question when something isn't clearly understood.
For me, the primary indicator of the trend being against me is literally drawing a trend line on a price chart and seeing if the trend is running opposite to my position or not. Since I'm mostly a trader, I mostly draw chart trend lines on the shorter term - days to a few weeks, and I occasionally use hourly or x minute based charts when things are close.
Does that basically mean you'll wait until gold has been going up for a few days before you'll buy?
Does that basically mean you'll wait until gold has been going up for a few days before you'll buy?
There's a lot more to what it would take for me to go long gold or anything, but I certainly won't go long until we have at least one clear up time period that breaks the short term trend line. It may be shorter than a day too, which is why I used the words "time period".
Even when I do go long eventually, the trade may only last a few days or weeks... or even be a day trade if my stops unexpectedly get hit.
babbittd
08-11-08, 01:30 PM
Bart, at the bottom of the July 14th press release, we see 6,375 billion that is borrowed, but is not included in Section 1.
Did the ESF actually sell Euro holdings or just lend them out? Please explain how this works a little bit more if you can.
Bart, at the bottom of the July 14th press release, we see 6,375 billion that is borrowed, but is not included in Section 1.
Did the ESF actually sell Euro holdings or just lend them out? Please explain how this works a little bit more if you can.
I'd prefer not to go there, and hope you understand.
babbittd
08-11-08, 01:57 PM
I'd prefer not to go there, and hope you understand.
Not really, but I'm still an idiot when it comes to the stuff. I'll go back to the first post, but your response might still be the same.
What the ESF did is simply sold about 10 billion Euros and bought dollars - plain and simple massive intervention that virtually everyone has missed or ignored or pretended doesn't exist or whatever.
I sent your first post to someone that responded back with, "if you scroll to the bottom of the July 14th statement, you will see 6,375 billion that is borrowed, but is not included in Section 1. They just shifted assets around, so instead of having hard currency, they lent out their assets but are obligated in the future to buy them back. So technically they are still the owners of the 6.375 billion Euros. If the government really sold the currency, then they would have made a ton of money as the dollar appreciated against the Euro...but they didn't sell, they let someone borrow it...and they just used accounting rules to make it appear as if they sold it off, but they really didn't."
phirang
08-11-08, 01:58 PM
Not really, but I'm still an idiot when it comes to the stuff. I'll go back to the first post, but your response might still be the same.
I sent your first post to someone that responded back with, "if you scroll to the bottom of the July 14th statement, you will see 6,375 billion that is borrowed, but is not included in Section 1. They just shifted assets around, so instead of having hard currency, they lent out their assets but are obligated in the future to buy them back. So technically they are still the owners of the 6.375 billion Euros. If the government really sold the currency, then they would have made a ton of money as the dollar appreciated against the Euro...but they didn't sell, they let someone borrow it...and they just used accounting rules to make it appear as if they sold it off, but they really didn't."
Yeah, it's called a repo.
Not really, but I'm still an idiot when it comes to the stuff. I'll go back to the first post, but your response might still be the same.
I sent your first post to someone that responded back with, "if you scroll to the bottom of the July 14th statement, you will see 6,375 billion that is borrowed, but is not included in Section 1. They just shifted assets around, so instead of having hard currency, they lent out their assets but are obligated in the future to buy them back. So technically they are still the owners of the 6.375 billion Euros. If the government really sold the currency, then they would have made a ton of money as the dollar appreciated against the Euro...but they didn't sell, they let someone borrow it...and they just used accounting rules to make it appear as if they sold it off, but they really didn't."
While trying to avoid commenting in specific, nothing in that persons answer changes that there was actually an effective sale of about 10 billion Euros. Just because it wasn't done directly by the ESF doesn't mean that the current effects weren't their actual intention... especially given the actual legal purpose of the ESF. That persons apparent implied assertion that there are no such things as behind the scenes actions is disturbing.
I also note that it allows them to technically say that they didn't do any FX actions.
I also note that they did not disclose to whom the loan was made, what the period of the loan is nor what interest rate was charged, etc.
If the Treasury loans a few billion to banks and they use it to buy stocks (whether to manipulate the stocks or not), that loan is still the source for a stock move.
babbittd
08-11-08, 02:08 PM
If the Treasury loans a few billion to banks and they use it to buy stocks (whether to manipulate the stocks or not), that loan is still the source for a stock move.
thanks and for the chart too!
Yeah, it's called a repo.
There are other instruments besides repos.
Swaps is one and there are many other FX derivatives too, as well as places to buy & sell them.
krakknisse
08-11-08, 03:54 PM
Bart - you just got some coverage. Mish tries to take you and James Turk for a ride (http://globaleconomicanalysis.blogspot.com/2008/08/currency-intervention-and-other.html). Hahaha!
http://i37.tinypic.com/28l5jcn.png
Bart - you just got some coverage. Mish tries to take you and James Turk for a ride (http://globaleconomicanalysis.blogspot.com/2008/08/currency-intervention-and-other.html). Hahaha!
Thanks.
I just posted this on his blog:
"what stands out is 13 consecutive alleged interventions that all failed."
Unfortunately for you, stating something with zero facts and mere assertions says more about the quality of your observations and your care about actual facts and their effects than anything else.
Its somewhat amusing that you believe that an ESF operation involving 9-10 billion Euros can't move a market, especially since the avowed and actual legal purpose of the ESF is currency support and intervention.
Its also both humorous and sad how you belittle the prior and much smaller dozen or so operations, again without bothering to actually look at the facts of what actually happened to the dollar value afterward - sometimes with a small time lag.
Quite tacky Mish, I expected more from you than what boils down to yellow journalism.
bart
It appears that Mish is more into building traffic or fomenting disagreement or high emotion or BS or who-knows-what, than actual interest in facts and their effects.
I'm truly saddened that he decided to stoop that low.
edit/add:
I just checked and Mish has not allowed my comment to go public on his blog. There are a number of comments that are public after mine was posted.
He has basically proven himself more than a tiny bit slimy, as well as uninterested in actual facts.
Spartacus
08-11-08, 05:04 PM
Even supposing that the other interventions had been as large, is that proof that another intervention cannot work?
absolutely not.
Also no consideration was given to
1. compounding effects - intervention plus threatened intervention (by treasury and FED) plus declining price of petroleum plus who knows what else ....
2. tipping point or thresholding or "on the margin" effects. Price changes happen on the margin. At some times in history a small intervention has a huge effect, far larger than it would have at other times. This is related to 1. but quite different.
Thanks.
I just posted this on his blog:
It appears that Mish is more into building traffic or fomenting disagreement or high emotion or BS or who-knows-what, than actual interest in facts and their effects.
I'm truly saddened that he decided to stoop that low.
edit/add:
I just checked and Mish has not allowed my comment to go public on his blog. There are a number of comments that are public after mine was posted.
He has basically proven himself more than a tiny bit slimy, as well as uninterested in actual facts.
metalman
08-11-08, 08:30 PM
Thanks.
I just posted this on his blog:
It appears that Mish is more into building traffic or fomenting disagreement or high emotion or BS or who-knows-what, than actual interest in facts and their effects.
I'm truly saddened that he decided to stoop that low.
edit/add:
I just checked and Mish has not allowed my comment to go public on his blog. There are a number of comments that are public after mine was posted.
He has basically proven himself more than a tiny bit slimy, as well as uninterested in actual facts.
that's mish for ya. don't blame itulip for throwing him out.
that's mish for ya. don't blame itulip for throwing him out.
It does bum me out some though - he does make some contributions to the understanding of many through his blog and I cut him slack for that on a few occasions when he very significantly mis-represented my views on M3... but for him to go off into what appears to me to be yellow journalism (journalism that exploits, distorts, or exaggerates the news to create sensations and attract readers) on the ESF stuff... well, I've lost almost all the respect I had for him.
He has zero to minimal tolerance for many things that smack of "conspiracy" or behind the scenes activities, in spite of actual facts to the contrary.
Just to make sure he understands my position, I went onto another of his "public locales" and turned up the fact and flame thrower quite high, and we "traded posts" for a while.
He did finally allow both of my posts on his blog to go public about an hour ago... and continues to believe that interventions don't work.
I agree that sometimes they don't, but to flat out state that "13 consecutive alleged interventions that all failed" without even looking at the actual facts is well beneath what I consider professionalism, and also is probable evidence of a real integrity issue.
Ok... rant off... we now return you back to your regular tinfoil hat afficionado. What a day!
phirang
08-11-08, 09:15 PM
Central banks talk about intervening all the time... I don't see why they wouldn't do so at the most opportune moment, namely when the Bundesbank (ECB) announces to keep rates fixed.
Given the cost of these interventions, the CB's must strive for efficacy.
That said, I still see very positive data coming in for the steel industry, but all the data is from Asia, Middle East, and Africa!
Spartacus
08-11-08, 09:39 PM
continues to believe that interventions don't work
and continues to believe that Fannie, Freddy, Treasury and the FED created this mess, AND that interventions don't work.
and continues to believe that Fannie, Freddy, Treasury and the FED created this mess, AND that interventions don't work.
"He has all the virtues I dislike and none of the vices I admire."
-- Winston Churchill
"He has never been known to use a word that might send a reader to the dictionary."
-- William Faulkner (about Ernest Hemingway)
"He has no enemies, but is intensely disliked by his friends."
-- Oscar Wilde
"He is a self-made man and worships his creator."
-- John Bright
"I've just learned about his illness. Let's hope it's nothing trivial."
-- Irvin S. Cobb
"He is not only dull himself; he is the cause of dullness in others."
-- Samuel Johnson
"He is simply a shiver looking for a spine to run up."
-- Paul Keating
"He had delusions of adequacy."
-- Walter Kerr
"His mother should have thrown him away and kept the stork."
-- Mae West
"Some cause happiness wherever they go; others, whenever they go."
-- Oscar Wilde
Strong opinions to follow... :rolleyes:
jimmygu3
08-11-08, 10:21 PM
And the spread on AU $20 Libs over Eagles is up to $100 from $20 five years ago.
Is this numismatic premium due to fear of bullion confiscation?
Is this numismatic premium due to fear of bullion confiscation?
Not in my opinion. When I was first buying them in 2001, the premium on AU $20 gold coins over $20 bullion coins was $20 to $30. Why own chunks of metal when you can own real coins, beautifully minted and once used as money in circulation – pieces of history – for a mere $20 - $30 more? At a $100 premium I'm not sure it's worth it, but apparently a lot of people do. Try buying AU $20 Liberty Head coins today; they are very difficult to come by. They've been very popular around here among financial planners who are wise to the dollar depreciation process and buying them for their clients. I am aware of one who has amassed over $4 million of them over the years.
The thought has (*cough, cough*) crossed my mind... "funny" how the recent ECB gold sale of 500+ tonnes happened the same week that the ESF hasn't reported on yet.
As an aside, it's so very hard not to appear like some weirdo seeing a conspiracy or cartel or whatever behind things... with actual facts like the ESF actions and the ECB gold manipulation/control data. :(
He says dollar intervention occurs when the Treasury intervenes in the currency markets. It is not, and evidence abounds for anyone who seeks it out.
...dollar holdings of foreign governments and central banks rose by $41 billion in 1986 and kept rising this year; that represents their intervention in currency markets. Hence, at the exchange rates that prevailed last year, private capital inflows to the United States were not enough to finance its current-account deficit. ''Without official intervention,'' Mr. Perry said, ''the dollar would have fallen even further than it has. - New York Times, 1987
Mish's assertions, and unwillingness to accept your defense of your case, suggests that his approach is more ideological than logical. The purpose is to compartmentalize beliefs in order to secure audiences for advertising and subscription revenue, and to sell products such as bear and precious metals funds.
These is no way of telling whether or not Mish actually believes all of the things he says that can be so easily disproved, such as his assertions that our economy is suffering the effects of monetary deflation, but in any case he has to say them in order to be consistent with the beliefs he has developed among his readership, in order to keep them so that his employer can sell them various services.
He says dollar intervention occurs when the Treasury intervenes in the currency markets. It is not, and evidence abounds for anyone who seeks it out. ...dollar holdings of foreign governments and central banks rose by $41 billion in 1986 and kept rising this year; that represents their intervention in currency markets. Hence, at the exchange rates that prevailed last year, private capital inflows to the United States were not enough to finance its current-account deficit. ''Without official intervention,'' Mr. Perry said, ''the dollar would have fallen even further than it has. - New York Times, 1987
Mish's assertions, and unwillingness to accept your defense of your case, suggests that his approach is more ideological than logical. The purpose is to compartmentalize beliefs in order to secure audiences for advertising and subscription revenue, and to sell products such as bear and precious metals funds.
These is no way of telling whether or not Mish actually believes all of the things he says that can be so easily disproved, such as his assertions that our economy is suffering the effects of monetary deflation, but in any case he has to say them in order to be consistent with the beliefs he has developed among his readership, in order to keep them so that his employer can sell them various services.
I have to admit EJ - you were right about Mish and I blew it.
I did see and even comment on some of his various shortcomings over the years, but it boils down to me having cut him too much slack, to say the least.
There are very much a number of ideological issues he has, not the least of which is a failure to give any credence to behind the scenes action - especially ones that are inconvenient for his deflation or other cases, or his other vested interests as you noted.
That comment of his about ESF operations having "failed", while not even bothering to look at or review the actual facts, is the primary reason that it appears to me that he's practicing a form of yellow journalism... but there are other issues too.
I suspect you & others know this, but there's more than a little that I'm not saying publicly about the latest ESF operation. But if I did, it would show yet again both how little Mish actually knows about real FX intervention and also how it was and is way more important than he asserts and implies.
I was also floored last night when he brought up the $300 billion BoJ monetary base increase around 2002, and virtually ludicrously called it currency intervention - monetary base has nothing to do with currency intervention actions.
I helped him out a great deal with his offshoot of Austrian Money Supply - M Prime. And yesterday on another board he touted it as having a very good record of predicting recessions - it just plain doesn't.
He completely ignores Paul Kasriel's (of NTRS) amazing combo of yield curve and base adjusted CPI, which has a 100% record of having correctly forecasted and called every recession since 1960, and with no false signals. Mr. Kasriel doesn't tout it very much at all, but I've done my damndest to do so - it's great work.
There's also his mis-characterization of my full views on M3.
You and I have mild disagreements on various items, and even enjoy "tweaking" each other about them now & then, but you have always been extremely tolerant and allowed me and others to make some pretty outrageous statements and hold really out there views (like my TIO or ECB stuff, etc.) even though you may disagree with them.
I don't recall if I've ever thanked you for that... so thanks, sincerely! The iTulip "environment" that you have created and allowed to be created really is quite extraordinary, especially in these challenging times.
Anyhow, I have withdrawn any future support of Mish and am quite saddened and disappointed by his actions and lack of them.
Bart,
Catherine Austin Fitts is highlighting your article (http://solari.com/blog/?p=1413)
metalman
08-12-08, 10:46 PM
Bart,
Catherine Austin Fitts is highlighting your article (http://solari.com/blog/?p=1413)
fitts vs itulip vs mish...
http://widgets.alexa.com/traffic/graph/?r=6m&y=r&z=3&h=300&w=470&c=1&u%5B%5D=solari.com&u%5B%5D=http%3A%2F%2Fglobaleconomicanalysis.blogsp ot.com&u%5B%5D=itulip.com&x=2008-08-13T04%3A50%3A05.000Z&check=www.alexa.com&signature=n99GuyuZjlFpXIixNgEt7qdRjaE%3D
Lukester
08-12-08, 11:37 PM
Bart -
Do you have any provisional scenario for the dollar rally continuing right out through the end of the year and gathering pace? Dont shoot me now - just askin'! :o The scenario could look like: developing markets crash proceeds further, Euro and GBP crumble vs. USD, and the dollar's the last one left standing? Paradoxical outcome brought about by global recession and the USD purchasing power parity advantage at the outset of these difficulties? You could get a curious conjunction of PM's rallying (modestly), and the dollar rallying with surprising staying power, a good deal further than today's insights consider plausible?
Here's Ambrose Evans Pritchard arguing why the EURO has room for a fair sized move down versus the USD. And no argument needs to be made as to why the GBP can go down for a good long while vs. USD also - it all translates to the old "race to the bottom" but with the USD having had such a head start in the past few years it may descend much more slowly than the other two, giving the impression of (even considerable) comparative strength. Is this notion impossible?
http://blogs.telegraph.co.uk/ambrose_evans-pritchard/blog/2008/08/12/stage_two_of_the_gold_bull_market_is_just_beginnin g
Evans Pritchard sees the glimmerings of the next big wave for gold coming out of the EURO's failing to fulfill all the lofty expectations as a USD alternative. Plenty of plausibility there. Yet others see a dollar bull (and resulting US stock market bull, which is even more polemical) emerging of more longevity, which is not necessarily going to be clearly inversely correlated to gold). Collapse in Euro expectations as the USD alternative could bring big changes. Gold / EURO correlation gets broken in the process, and gold tends to drift up as the currencies break ranks and begin to chase the dollar down in earnest, with the USD "appearing" the stronger for a good while.
At least Pritchard's description of the stresses fracturing the EURO seem to open up trends quite different from the past few years, where the USD was the focal point of falling currency purchasing power? Of course the appearance of a stronger dollar has absolutely zero to do with Mishian "da-flation". It's an "optical illusion" created by Euro and GBP taking the long jump due to global recession and their own deep internal (structural) problems?
Bart,
Catherine Austin Fitts is highlighting your article (http://solari.com/blog/?p=1413)
Cool, thanks Rajiv. Glad to see the data is getting more exposure so that folk see more of the behind the scenes factors.
And Mish continues in foot bullet mode by calling the intervention a failure.
Yellow journalism
Journalism that exploits, distorts, or exaggerates the news to create sensations and attract readers.
Bart -
Do you have any provisional scenario for the dollar rally continuing right out through the end of the year and gathering pace? Dont shoot me now - just askin'! :o
...
Stranger things have happened. There are always opposing scenarios like the ones you noted. Here's another one using the '70s in "history rhyme" mode.
http://www.nowandfutures.com/images/usdx1966_1980and_now.png
But the bottom line on the long term is that all fiat currencies lose value, and things like precious metals etc. maintain their value. We're also in a hard asset bull market overall and I haven't sold any of my core, although I have had a hedge in place since roughly April.
On the short & intermediate term, who knows - being a trader, I'll let the market tell me where its going and continue to watch the various charts and other factors for clues. That may sound like I'm dodging the question. but it truly is what I do.
Lukester
08-13-08, 10:38 AM
David Bensimon trumps T. Boone Pickens and Goldman Sachs! This guy's calls are awesome.
______________
INTERFAX-CHINA CHINA BUSINESS NEWS - by Interfax China Ltd.
www.interfax.cn (http://www.interfax.cn/). Shanghai. May 21, 2008
Oil prices will see downturn in the next 12 to 18 months - analyst by Jing Yang
With the world staggering at the prospect that oil prices may hit $200 per barrel in the near future after reaching $125 last week, analyst David Bensimon has rejected market consensus, instead projecting that oil prices will not spike to new historical highs straight away. Bensimon believes that oil will see a 30 percent dive over the coming 12 to 18 months before entering its next bullish phase.
“Only if prices quickly move and hold above $133 do we need to consider that something else is happening.”
Shanghai. May 21. INTERFAX-CHINA - With global attention fixated on oil prices reaching between $150 to $200 per barrel within the year, David Bensimon is one of the few industry experts that dares to challenge the status quo.
"It's not that I disagree with their target of $200 per barrel. My point is that it's just not going to happen straight away," Bensimon, a former senior interbank trader with over 20 years of active trading experience who now advises institutional investors through his company Polar Pacific, told Interfax yesterday from Singapore. "Some are looking for it to continue immediately to that level, and my view is that for a variety of technical and fundamental reasons, oil should pull back to $85 before it resumes the larger uptrend."
He attributes this expected 30 percent drop to significant resistance around the $126 to $128 benchmark and forecasts that the main decline will begin in July. In March 2005, with oil prices below $50 per barrel, Bensimon predicted that the cost of oil would reach $100 per barrel in 2007. Bensimon later highlighted a more significant target of $128, and when he spoke to Interfax in March this year, he emphasized further that once it reached that mark, there would be a buzz among the industry of prices hitting $200 per barrel.
INTERFAX-CHINA CHINA BUSINESS NEWS - Copyright © 2008 by Interfax China Ltd. www.interfax.cn (http://www.interfax.cn). page 2
"People will lift their horizons to much higher levels, simply projecting the most recent momentum and acceleration to continue into the future. That kind of maximal optimism always accompanies maximum price. That is just the nature of it," he explained. "However, my view is that it will pull back," Bensimon said. According to him, world oil prices are in the midst of a 16-year climb from December 1998 to December 2015, over which a unified five-wave sequence will play out. "The first big rally from 1998 took a couple of years and saw oil prices rise from $11 to $27. A deep correction for the second wave then pulled prices back to $17 in late 2001. Everything from $17 up to $127 represents the third wave in the series, and we have now reached the top of this movement," he said.
"So in the next 12 to 18 months, we should see oil prices travel between the consolidating zone of roughly $127 to $85," he added. On a smaller scale, he notes that during the next few weeks, the market could see a quick drop to about $115 per barrel, but only to rebound to highs in early July. He states that there is some room for shortterm volatility near the $127 mark, which may lead to false price hikes. However, prices will stay below $133 per barrel. "Only if prices quickly move and hold above $133 do we need to consider that something else is happening, but so far, everything is consistent with the long-held view that we are now completing exactly what needs to be done since 2001," he said. "And the natural expectation based on this nice rhythm that has unfolded so perfectly so far, is that prices need to move sideways in the next year or 18 months, including the dips to twice tag support at $85."
After reaching $85 in 2010, oil will enter another bullish run that may send final prices peaking at a stunning $400 per barrel around 2015, he predicts. "During that eventual five-year advance, oil prices will be driven not only by the global demand of oil, but also, to a large extent, by the monetary inflation of a weakening U.S. dollar," he said. Bensimon also added that the expected pullback in oil prices during 2009 will drive down production costs for corporate companies and therefore will boost world stock prices. NYMEX June West Texas Intermediate (WTI) crude oil hit a record high of $129.60 a barrel on Tuesday night after legendary Texas oil billionaire Boone Pickens publicly predicted that crude oil would reach $150 a barrel this year.
His statement also came amid speculation in the market that world oil production will be unable to meet demands as early as next decade. This speculation is supported by the robust demand growth from China, which is partly a result of the country's artificially low, government-capped fuel prices. Investment bank Goldman Sachs in its latest report raised its projection for average oil prices in the second half of this year from $107 per barrel to $141. They also said earlier in the year that international oil prices would spike to $200 per barrel in the next two years.
_______________
Oil, Gold May Fall as Slowdown Damps Demand, Polar Pacific Says
By Claire Leow
July 8 (Bloomberg) -- Crude oil and gold have already peaked this year as slower global economic growth curbs demand for raw materials, Polar Pacific said.
``We have peaked for oil for now, and we have peaked for gold at $1,030 an ounce,'' Polar Pacific Managing Director David Bensimon said yesterday in an interview in Singapore. Bensimon in March 2005 predicted oil prices would reach $102 a barrel, raising his forecast to $128 in November 2006.
Crude oil, which climbed to a record $145.85 on July 3, may decline to $123 by August, $109 by December and $98 by April next year, Bensimon said. Gold may slump by as much as 20 percent from its current price of $926.70 an ounce, he said.
The Reuters/Jefferies CRB Index of 19 commodities rose to a record this month as investors snapped raw materials as a hedge against a weaker dollar and mounting inflation. The International Energy Agency on July 1 pared more than 3 million barrels a day from its 2012 global demand forecast on expectations record prices will curb consumption.
``With gold and silver down 20 percent, energy down 30 percent overall and agricultural commodities facing its own vulnerability, all of this will take the shine off commodities, particular in the case for energy because high prices bring about a demand reduction,'' Bensimon said.
Falling commodity prices may prompt investors to switch into equities, he said.
``We're now at relative cheap levels for equities,'' Bensimon said. ``The natural thing is that as money eventually gets into cheap equities, it will come out of the expensive commodities. As oil takes 8, 9 or 10 months going down, that will power stocks higher.''
Copper, which jumped to a record in London on July 2, could ``triple in the next two years,'' Bensimon said. Investors should buy silver when it reaches $15 an ounce, he said. The metal closed at $17.78 yesterday
To contact the reporters on this story:
Claire Leow in Singapore at +65-6212-1153 or cleow@bloomberg.net
David Bensimon trumps T. Boone Pickens and Goldman Sachs! This guy's calls are awesome.
What does this have to do with the thread topic?
Lukester
08-13-08, 11:22 AM
Bart -
My apologies for posting something which strays a little from your thread topic. If you look around here 90% of all threads on these pages allow a little leeway from the strict thread topic, with the foremst criterion being that the intelligence they provide on correlated market questions be clear and strong. Evidently the calls Bensimon has made on oil and the commodities cannot be said to be "entirely unrelated" to this USD intervention topic in mid 2008, insofar as what the Bensimon quotes evidence is that there are some *very large* components of the dollars strong resurgence that do not have to do directly with currency intervention.
If you look at the largest break in the CRB in seven years coinciding with a very large break in the dollar bearish trend this summer, one would conclude the two are definitely not unrelated?
Your thread rebuts Mish's assertion that "all intervention has been 100% ineffective" as an example of Yellow Journalism, and I think you are entirely correct. I also have little admiration for Mish's style of heavy editing to buttress his arguments. However having noted that, it does certainly not follow that all, or even the greater part of the dollars recent blistering breakout move up is due to intervention. Or at any rate the observations in this thread surrounding the USD breakout certainly seem to invite arguments for contrary theories as a normal validation process? We are seeing some very large sector reversals simultaneous to this USD manipulation event.
If this trend break in commodities and oil is a once-in-seven-years event, it's correlation to any simultaneous very large USD breakout certainly should not be ignored within this discussion?
I don't see how that is off topic, other than that by minor corollary it references Mr. Bensimon making calls on commodities and oil, which on a cursory glance may appear not directly related to USD major moves? Rather the point seems squarely on topic as it seems we've just transited through a very large inflexion point of a bull move in commodities stretching all the way back to 2001 (the current large trend change which Bensimon describes as "end of the third wave"). This would suggest due to it's multi-year trend breadth of event, that it is in fact quite possibly the larger influence on the USD breakout, and the recent very large sale of EUROs by the Stabilization Fund kicks the trend off sharply, but is not the sole factor?
I am skeptical that an engineered currency manipulation can impart that kind of strength to the USD move unaided - and I did not consider that off topic.
I'm offering some disagreement to the primary thesis of this thread - is that inappropriate? Having said that I think this is a fantastic thread Bart, and would certainly not want to introduce irrelevancies. Let me know if you don't consider this idea to contribute to the process of "validating the primary thesis".
Respectfully.
...
Your thread rebuts Mish's assertion that "all intervention has been 100% ineffective" as an example of Yellow Journalism, and I think you are entirely correct. I also have little admiration for Mish's style of heavy editing to buttress his arguments. However having noted that, it does certainly not follow that all, or even the greater part of the dollars recent blistering breakout move up is due to intervention. Or at any rate the observations in this thread surrounding the USD breakout certainly seem to invite arguments for contrary theories as a normal validation process? We are seeing some very large sector reversals simultaneous to this USD manipulation event.
If this trend break in commodities and oil is a once-in-seven-years event, it's correlation to any simultaneous very large USD breakout certainly should not be ignored within this discussion?
I don't see how that is off topic, other than that by minor corollary it references Mr. Bensimon making calls on commodities and oil, which on a cursory glance may appear not directly related to USD major moves? Rather the point seems squarely on topic as it seems we've just transited through a very large inflexion point of a bull move in commodities stretching all the way back to 2001 (the current large trend change which Bensimon describes as "end of the third wave"). This would suggest due to it's multi-year trend breadth of event, that it is in fact quite possibly the larger influence on the USD breakout, and the recent very large sale of EUROs by the Stabilization Fund kicks the trend off sharply, but is not the sole factor?
I am skeptical that an engineered currency manipulation can impart that kind of strength to the USD move unaided - and I did not consider that off topic.
...
Fair enough - I was just hoping that the thread wouldn't get into the oil is or is not a bubble area or related areas.
I totally agree that the ESF intervention is in no way the entire story on the recent dollar move. Nothing in investing or trading has only one or even a few causes, and that's also one of the better illustrations of why I maintain literally hundreds if not thousands of charts.
The main points of the initial post were to publicly show the ESF's actual work, that it was almost 100% date coincident with the recent dollar bottom and that behind the scenes things do exist... and without being conspiracies.
As far as Mish and yellow journalism - stay tuned.
Lukester
08-13-08, 06:37 PM
As far as Mish and yellow journalism - stay tuned.
Excellent thread and excellent scoop Bart. Much valued intelligence, and I for one hope you don't spend too much time and effort on your own Nowandfutures website [ ;) ] and instead bring the iTulipers lots of similar juicy "scoops" to come. This one sounded like it made quite a few waves outside the "iTulip-o-sphere". Your laid back understated style is perfectly suited for "dropping stealthy bombs" such as this. I don't envy Mish now that you've got him in your sights. :D
Jim Nickerson
08-14-08, 08:19 PM
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/14/ccfunds114.xml&CMP=ILC-mostviewedbox
Ambrose Evans-Pritchard
Last Updated: 11:51am BST 14/08/2008
Mounting fears of a full-fledged global recession have caused a profound shift in investor strategy over the last month, setting off a powerful dollar rebound and a flight to relative safety in US assets.
The latest survey of fund managers across the world by Merrill Lynch found that expectations of inflation have fallen to the lowest level in six years, an astonishing shift in attitude from the scare of the early summer.
"People think the credit crunch is mutating," said David Bowers, chief consultant to the report.
"What started as a US financial crisis is morphing into a global economic crisis. Investors now expect a downturn of such intensity that it will prevent inflation from taking hold," he said. Half the fund managers think the world will slide into recession over the next year, and a quarter suspect that it may already have begun.
A blizzard of dire data from Europe, Japan, Canada and Australasia has shattered assumptions that the world economy can decouple from the United States, and there is a growing suspicion central banks have been too slow to respond.
A net 18pc of investors now think inflation will fall over the next year, the most "deflationary" count since 2002. Bets that central banks would have to keep raising interest rates have been unwound almost overnight. Cuts are now expected. "Inflation is viewed as yesterday's story," said the report.
"We have seen an extraordinary sea-change, but this is very controversial. Investors may be reading too much into the fall in oil prices," said Mr Bowers. Energy analysts are deeply split over the outlook for crude after its dramatic 22pc slide from a peak of $147 a barrel in early July.
Merrill Lynch said there had been a "brutal reversal" across the whole gamut of investments as funds switch to a radically different strategy. The dollar has suddenly become the darling of the currency markets.
A net 58pc of fund managers think the greenback is undervalued, the highest level since the survey began. The euro is now the skunk at the garden party: a net 71pc say it is overvalued and most think it will fall next year.
David Bloom, HSBC's currency chief, said the greenback's moment of schadenfreude had come, ending a seven-year slide that has called into question its viability as the world's reserve currency. "It has become apparent that other economies are deteriorating fast, and the whole decoupling thesis has started to come apart at the seams. Canada is frozen over. We have Arctic conditions in Sweden, a landslide in Germany, and the UK is falling off the white cliffs of Dover," he said
"Foreign exchange is a relative concept. It is not that the US is in good shape, just that others are slowing sharply. Central banks have been too worried about inflation when they should have been thinking about growth," he said.
Merrill Lynch said the crowded bet known as "long oil/short banks" had unwound viciously since mid-July, leaving some funds nursing hefty loses. The decision by the US authorities to enforce a temporary ban on short-trading on 17 bank and financial stocks set in motion a swift "short squeeze" that compounded the pain.
"Long oil/short banks has been the dominant trade of the credit crunch," said Mr Bowers. "It was almost the only game in town, so to see such a dramatic reversal raises a lot of questions. Is there something deep-seated in this slowdown?"
Karen Olney, Merrill's European equity strategist, said it was too early to tell whether investors are turning their backs on commodities or just taking profits. "You can only stretch a piece of elastic so far before it snaps back. We think this pessimism on the oil sector is overdone," she said.
Funds are still hoarding cash everywhere until the storm subsides. A net 83pc think the earnings estimates of analysts are "too high" and underestimate the margin crunch that is about to hit companies as unit labour punches higher, especially in Europe.
"Watch out for the profits squeeze in the third quarter. Investors have turned a blind eye to the second-round effects of inflation, such as rising inflation. It will take several months of slowing global growth to be sure that the inflationary dragon has been slain," she said.
The new favourite among the big OECD economies is the United States, where a disaster scenario is (arguably) already priced into battered equities and where the Federal Reserve has taken pre-emptive action to cushion the hard landing. A net 12pc are now overweight US stocks and shares, the highest level of optimism towards Wall Street in six years.
"US equities are back to 2001 levels of popularity. Sentiment has moved a long way. Not so cool Britannia remains unloved," said Merrill. The appetite for UK stocks is at revulsion levels last seen in the depths of the dotcom bust.
In the wider world, Russia is still top dog with a net 56pc of funds overweight, but the data was collected before the country went to war in Georgia. Korea has slithered down the charts. The mood is still jaundiced towards China, Poland, India, South Africa, Taiwan, Malaysia, and Chile. Exporting commodities is no longer enough to lure investors.
The survey is based on 193 fund managers managing $611bn. It is often used as a contrarian indicator, revealing clusters of overcrowded investment positions that are overstretched and likely to reverse.
JN EMPHASIS
Most of the major world markets have been and are down more than the US major equity indices. So now, the US is supposed to be the good place to invest?
This little rally in US equities over the last month has been on about the most suck-ass volume I can remember. One can get some idea from this NYA chart:
http://stockcharts.com/h-sc/ui?s=$NYA&p=D&yr=1&mn=0&dy=0&id=p17349261849&a=87574255 or from the SPX chart http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=8&dy=0&id=p83194106067&a=127347583
In the SPX chart note as the index has increased the daily volumes have not.
metalman
08-14-08, 09:25 PM
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/14/ccfunds114.xml&CMP=ILC-mostviewedbox
Ambrose Evans-Pritchard
Last Updated: 11:51am BST 14/08/2008
JN EMPHASIS
Most of the major world markets have been and are down more than the US major equity indices. So now, the US is supposed to be the good place to invest?
This little rally in US equities over the last month has been on about the most suck-ass volume I can remember. One can get some idea from this NYA chart:
http://stockcharts.com/h-sc/ui?s=$NYA&p=D&yr=1&mn=0&dy=0&id=p17349261849&a=87574255 or from the SPX chart http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=8&dy=0&id=p83194106067&a=127347583
In the SPX chart note as the index has increased the daily volumes have not.
ah, yes. i can hear it now... 'deflation! oh no!'
deflation in what? newspapers? cause that's what our money is.
once again... more cheap gold for me...
ps... gold at 600 is my dream. that means that when the boyz crank it up this time we go to 2000 9 months later.
phirang
08-14-08, 10:35 PM
I love how financial media and brokerages change their theses every quarter... great way to get more commissions.
With such dire predictions for the world, I wonder why EVERY steel manufacturer is increasing production? Are they all stupid?
Andreuccio
08-15-08, 08:27 AM
It's possible, but best guess - no.
Also, I never trade until the trend is no longer against me.
Are we there yet? :) ;)
Are we there yet? :) ;)
Does this ( http://www.nowandfutures.com/grins/eat_short.mp3 ) answer your question? ;)
Andreuccio
08-15-08, 01:05 PM
Does this ( http://www.nowandfutures.com/grins/eat_short.mp3 ) answer your question? ;)
Let's see:
Eat my shorts.
You're unloading your shorts. Time to go long. A clear BUY signal.
Thanks for the tip. ;) :D
Let's see:
Eat my shorts.
You're unloading your shorts. Time to go long. A clear BUY signal.
Thanks for the tip. ;) :D
Cage. You. Now.
(have you been taking lessons from Lukester? :eek: ;) )
Andreuccio
08-15-08, 01:47 PM
Cage. You. Now.
(have you been taking lessons from Lukester? :eek: ;) )
Oooh! Oooh! Wait! I could have done it better. I should have said:
You're dropping your shorts.
Is it too late to start over? :D ;)
(If I were taking lessons from Lukester, I might have said the same thing, but it would have taken me 3 pages to do it. ;))
Oooh! Oooh! Wait! I could have done it better. I should have said:
You're dropping your shorts. Is it too late to start over? :D ;)
(If I were taking lessons from Lukester, I might have said the same thing, but it would have taken me 3 pages to do it. ;))
One comment: http://www.nowandfutures.com/grins/kinky.wav :eek: ;)
(great recap type comment on Lukester! :D )
And by the way, part two of the dollar intervention story should be up later today along with sone observations about Mish's "treatment" of it.
Andreuccio
08-15-08, 01:55 PM
And by the way, part two of the dollar intervention story should be up later today along with sone observations about Mish's "treatment" of it.
Looking forward to it.
BTW, while I've got your attention. I had a question or two a few days ago about some charts I saw over on your website. Is there a way to post comments/questions there? (I didn't see one.) I was hesitant to do it here, although maybe EJ/Fred wouldn't care.
Looking forward to it.
BTW, while I've got your attention. I had a question or two a few days ago about some charts I saw over on your website. Is there a way to post comments/questions there? (I didn't see one.) I was hesitant to do it here, although maybe EJ/Fred wouldn't care.
I've intentionally never installed a feedback or comment mechanism, due to time issues.
If you think the questions or whatever would have appeal to others, then I don't think EJ would care. But if there's any doubt just use a private message here.
Is this just a reload?
The most recent on the Treasury site is 7/25.
---
NY Fed: Foreign Ctrl Bks Sell Tsys, Add To Agency Holdings
Thu, Aug 14 2008, 20:36 GMT
http://www.djnewswires.com/eu
"NY Fed: Foreign Ctrl Bks Sell Tsys, Add To Agency Holdings
NEW YORK (Dow Jones)--Foreign central banks' sold U.S. Treasurys and added modestly to their agency holdings in the week ended Aug. 13.
Average daily custody holdings of U.S. Treasurys for foreign official accounts held by the Federal Reserve fell by $3 billion to about $1.416 trillion. At the same time, the weekly average of the Fed's custody holdings of agency securities rose by $2 billion to $979.054 billion.
On a Wednesday-to-Wednesday basis, custody holdings of U.S. government securities fell by $6 billion to about $2.394 trillion. Foreign central banks sold $828 million of Treasurys and sold $5.43 billion of agency securities.
The data cover investments held at the Fed on behalf of foreign central banks. "
Is this just a reload?
The most recent on the Treasury site is 7/25.
---
NY Fed: Foreign Ctrl Bks Sell Tsys, Add To Agency Holdings
Thu, Aug 14 2008, 20:36 GMT
http://www.djnewswires.com/eu
"NY Fed: Foreign Ctrl Bks Sell Tsys, Add To Agency Holdings
NEW YORK (Dow Jones)--Foreign central banks' sold U.S. Treasurys and added modestly to their agency holdings in the week ended Aug. 13.
Average daily custody holdings of U.S. Treasurys for foreign official accounts held by the Federal Reserve fell by $3 billion to about $1.416 trillion. At the same time, the weekly average of the Fed's custody holdings of agency securities rose by $2 billion to $979.054 billion.
On a Wednesday-to-Wednesday basis, custody holdings of U.S. government securities fell by $6 billion to about $2.394 trillion. Foreign central banks sold $828 million of Treasurys and sold $5.43 billion of agency securities.
The data cover investments held at the Fed on behalf of foreign central banks. "
If my math is correct, that's 1/4th of 1%. Wonder what else they bought? Fannie stock perhaps?
Currency interventions used to be obvious, done by the treasury in full view. Except for custodial holdings, now we have to wait until the Fed Flow of Funds report comes out each quarter to see what happened the previous quarter.
Next come the opaque sovereign wealth funds. No consistent reporting requirements exists.
The hand of government in markets is becoming ever more difficult to follow.
Is this just a reload?
The most recent on the Treasury site is 7/25.
---
NY Fed: Foreign Ctrl Bks Sell Tsys, Add To Agency Holdings
Thu, Aug 14 2008, 20:36 GMT
http://www.djnewswires.com/eu
"NY Fed: Foreign Ctrl Bks Sell Tsys, Add To Agency Holdings
NEW YORK (Dow Jones)--Foreign central banks' sold U.S. Treasurys and added modestly to their agency holdings in the week ended Aug. 13.
Average daily custody holdings of U.S. Treasurys for foreign official accounts held by the Federal Reserve fell by $3 billion to about $1.416 trillion. At the same time, the weekly average of the Fed's custody holdings of agency securities rose by $2 billion to $979.054 billion.
On a Wednesday-to-Wednesday basis, custody holdings of U.S. government securities fell by $6 billion to about $2.394 trillion. Foreign central banks sold $828 million of Treasurys and sold $5.43 billion of agency securities.
The data cover investments held at the Fed on behalf of foreign central banks. "
I'm not sure what you're driving at, but EJ's facts are correct. Also and just in case, keep in mind that custodials and ESF actions are very different items. Amongst other things, custodials are managed by the Fed and the ESF is part of the Treasury.
Also, the overall total custodial balance only dropped about $.8 billion on a net basis, which was not noted in that news blurb and sort of implies things are worse than they are.
Additionally and for perspective, since my records started in 1996, weekly drops have been as high as -$18 billion and weekly gains as high as $77 billion. In other words, the data is extremely volatile so be very wary of drawing any conclusion from just one week's data.
And this also virtually always applies:
The market can stay irrational longer than you can stay solvent.
-- John Maynard Keynes
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