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Strategies & Market Trends
The Epic American Credit and Bond Bubble Laboratory
An SI Board Since June 2003
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110189 653 0
Emcee:  TH Type:  Moderated
The board will follow the guidelines that Russ laid out below. Posters should recognize that the regular board posters believe that a credit bubble exists. Contrary opinions supported by facts are welcome; however, taunting, belittling, or arguing just to argue by bulls (or bears) won’t be tolerated. Political discussion is welcome as long as it pertains to credit bubbles. Partisan political discussions need to be taken elsewhere.

The board will discuss aspects of the epic American credit and bond bubble and it's ramifications for investors. Emphasis will be on how to profit from (or at least survive) a bond bear market and/or a credit collapse. Basic entry prerequistes to take this lab: 1. the knowledge that bond prices move inversely to interest rates. 2. an understanding that bonds can lose value if credit conditions deteriorate.

Food for thought:

"A sound banker, alas, is not one who forsees danger and avoids it, but one who, when he is ruined, is ruined in a conventional and orthodox way along with his fellows, so that no one can really blame him".
- John Maynard Keynes

"Those who had been riding the upward wave decide now is the time to get out. Those who thought the increase would be forever find their illusion destroyed abruptly, and they, also, respond to the newly revealed reality by selling or trying to sell. And thus the rule, supported by the experience of centuries: the speculative episode always ends not with a whimper but with a bang.
-John Kenneth Galbraith writes in his book "A Short History of Financial Euphoria"

Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one."
Memoirs of Extraordinary Popular Delusions and the Madness of Crowds, Charles Mackay, - 1841

"I can calculate the motions of heavenly bodies, but not the madness of people."
-Issac Newton 1721, after being ruined by the South Sea Bubble

"To combat depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about; because we are suffering from a misdirection or production, we want to create further misdirection- a procedure which can only lead to a much more severe crisis as soon as the credit expansion comes to an end."
-Fredrich Hayek, 1933

Once public opinion is convinced that the increase in the quantity of money will continue and never come to an end, and that consequently the prices of all commodities will not cease to rise, everybody becomes eager to buy as much as possible and restrict his cash holdings to minimum size… If the credit expansion is not stopped in time, the boom turns to crack-up boom: the flight into real values begins, and the whole monetary system founders.”
-- Ludwig von Mises (1949)

"The truth is that liquidity, the only significant weapon remaining in the central bank's arsenal as decision making moves to the markets, will not necessarily go where you want it to go when you need it to go there."
--Martin Meyer writes in The Fed

‘Ponzi’ finance units must increase its outstanding debt in order to meet its financial obligations.”

A transition occurs over the course of an expansion as increasingly risky positions are validated by the booming economy that renders the built in margins of error superfluous - encouraging adoption of riskier positions. Eventually, either financing costs rise or income comes in below expectations, leading to defaults on payment commitments.

--Hyman Minsky

"The length and severity of depressions depend partly on the magnitude of the 'real' maladjustments, which developed during the preceding boom and partly on the aggravating monetary and credit conditions."
- Gotfried Haberler, Prosperity and Depression, 1937

Lab tools:

Glossary of terms common to this site:

Terminology important to understanding the impending US-Asian maladjustment Train Wreck:
Message 21107936

Economic releases and data (NBER):

Treasury rates and Agency spreads:

Bloomberg interest rate quotes:

Libor and Constant Maturity Treasury yields, used to price "house as ATM card" reset costs on Adjustable Rate Mortgages:

Treasury Dept Auction Announcements and Results:

Paul Kasreil's (Northern Trust) presentation "Inevitable Rebalancing of the US Economy". A must read.

Tracking the consumer liquidity trap, Steve Church:

Fed OMO:

Bank of Japan:

Daily Treasury Statements:

Assets (loan data) and Liabilities of US commercial banks, released Fridays:

Fed govt securities bought outright (monetized) and FCB activity:

Federal Reserve Economic Data: St. Louis Fed

Company conference call transcripts:

Committment of traders (COT) reports:

Prudent Bear commentaries; key on Doug Noland's Credit Bubble Bulletin (updated weekends), Marshall Auerback, and Richard Duncan:

Financial Sense Online (Jim Puplava), some very good weekend interviews and links to other sites:

Excellent commentary and graphics from Contrary Investor:

Bank Credit Analyst:

Rasmussen Consumer polls:

Ild's charts and graphs:

Russ Winter's, Calculated Risk's, Mish's and Bart13 blog sites, good articles, and links to relevant sites:

Ben Jones housing Bubble Blog:

Mortgage Lender Croak-o-meter :

Excellent overview of the endgame of fiat
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110189OK, I usually like keeping my ideas to myself cos I'm quite paranoid but at Harshu Vyas-4/2/2022
110188 Forbearance......the new way of saying everything is coming up roses wolfstreggersh111/18/2020
110187 Forbearance......the new way of saying everything is coming up roses wolfstreggersh111/18/2020
1101867 days in Iraq: How US-Iran conflict led to general's death In one week, thebruiser98-1/4/2020
110185Danielle DiMartino Booth of Quill Intelligence on Fed Reserve consideration in pbruiser98-1/3/2020 US National Debt Spiked by $1.3 Trillion in 12 Months, to $23 Tnggersh-11/19/2019
110183What the Fed Knows and Isn't Telling: Danielle DiMartino-Booth, Pt-1 [youtubruiser98-8/3/2019
110182The Global Collateral Trap & An Asset Market Collapse (w/ Michael Howell) Pbruiser98-7/7/2019
110181Ominous Outlook for Autos & the Economy (w/ Danielle DiMartino-Booth & Dbruiser9817/6/2019
110180Bitcoin could cost us our clean-energy future Interesting rebuttals bruiser98-12/12/2017
110179How do you feel about the Nikkei is now -333.99 (-2.00%) TIA. JPJohn Pitera-6/11/2017
110178Endless Fed Deceit - Craig Hemke The video is interesting. [ybruiser9813/7/2017
110177Richard Werner: Monetary Policy Revolution - QE, Nominal GDP Targeting and the Ibruiser98-9/17/2016
110176Richard Werner at the Rhodes Forum 2015 Interesting part about money creation bbruiser98-9/17/2016
110175Can banking be this absurdly lucrative? You loan me $10k at 10% simple interestbruiser98-9/7/2016
110174You can understand why so many Americans want all Catholics deported. They don&#Elroy Jetson-6/24/2016
110173methinks the Feebs have zero credibility [youtube video]Broken_Clock-6/23/2016
110172So now we are supposed to accept that the perp was not a Muslim terrorist and thFreedomForAll-6/23/2016
110171Orlando gunman Omar Mateen was allegedly captured on surveillance cameras durinElroy Jetson-6/23/2016
110170Big Hedge Fund Bridgewater Approved to Set Up Shanghai Subsidiary Company registJohn Pitera-5/22/2016
110169Some economic lessons here? The slow and deadly dzud in Mongolia bbc.combruiser98-5/14/2016
110168The Great Ponzi Scheme of the Global Economy Michael Hudson counterpunch.orgbruiser9814/2/2016
110167Cool ggersh-3/23/2016
110166Another statist. Does not appeat to be a relevant response to my post. (Of coursFreedomForAll-3/23/2016
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