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Thread: Can someone make sense of this? - COULD BE IMPORTANT !!!

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    Default Can someone make sense of this? - COULD BE IMPORTANT !!!

    http://www.market-ticker.org/archive...n-Process.html

    Can anyone more clearly define what might be going on here?

    I read...a lot...constantly...I try and keep my finger on the "pulse" of the financials and all other news and just came across this tidbit but don't know what to make of it.

    I think that some who post here are much better able to make sense of the complicated financial issues than I am and hope someone will chine in!

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    Default Re: Can someone make sense of this?

    Someone shifting their foreign reserves from one asset to another? Everything was sold against the USD... hmm. interesting.
    Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor
    - Dr John Zoidberg

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    Default Re: Can someone make sense of this?

    scuttlebut is eastern european currencies are imploding, thus 'rats' are running for the exit.

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    Default Re: Can someone make sense of this?

    more info ... this could be the start of something BIG !

    (snip)"Someone Wants Dollars!

    One observer at Market-Ticker.com noted that there was fierce selling of currencies Monday night originating in Asia. Here’s the post: “Someone, apparently someone in Asia, wants dollars. A LOT of dollars. There is a forced-liquidation event underway that is massive, it is against all asset classes and it is spreading. All of the primary currency crosses got hit at once - euro, pound, yen - all weakened dramatically against the dollar and it is still going on. The Asian stock markets got walloped at the same time in coordinated waves of forced selling. At the same time the US futures markets got nailed as well, down some six handles on the [E-Mini S&P futures] in a near-vertical drop. While this sounds ‘not that big,’ to move these markets in a coordinated fashion like this is a trillion-dollar enterprise. This is not some small company that went bankrupt, or even a large company.”

    Although the selling failed to gain momentum as the writer had feared, we would be foolish to ignore the possibility that this flurry of activity is warning of a global run on currencies. The fact that Western Europe’s loans to developing countries, most particularly to Eastern Europe and Latin America, are on the brink of a massive default suggests that even minor disruptions in forex markets should be taken seriously. If, in the next week or so, gold pushes above $1000 with the dollar in a strong rally, we would infer not merely a warning, but the onset of a full-blown global financial crisis. (snip)

    from


    By 'pure coincidence', this little tidbit just came out of the european media ...



    (snip)"In an interview with Swiss daily Tagesanzeiger, a well-known economist has warned that Switzerland risks bankruptcy, if the recent market turmoil centering on Eastern Europe is not contained quickly. At issue are loans made in Swiss francs to Eastern European debtors. With many countries in the region falling into depression, currencies and asset prices are plunging. Therefore, debtors domiciled in Eastern Europe are increasingly expected to have difficulty with mounting foreign debt loads — and that spells trouble for Switzerland."(snip)

    (snip)"This article fills in a lot of gaps for me. Two weeks ago, I happened to catch another post in the Swiss press about the Swiss government issuing debt in U.S. Dollars. In my post “Why are the Swiss now issuing debt in U.S. Dollars? I asked an open question as to why the Swiss were issuing debt in dollars. No one knew and I had yet to hear a satisfactory answer to this question.

    However, my post also pointed to central bank swap lines between Switzerland and a number of countries in Eastern Europe as a related event. The Tagesanzeiger article makes clear that these swap lines are needed due to Eastern European exposure to loans in Swiss Francs. I expect the U.S. dollar swap lines and dollar debt issuance are related - as are the Euro swap lines with the ECB - for liquidity in case of emergency.

    These machinations are a testament to the continued fragility of the global financial system. The interconnectedness across currencies and countries is staggering. One domino falls and the whole global financial system is at risk.

    Welcome to the dark side of globalisation."(snip)


    In case US media hasn't bothered to mention this, the US Fed has already put American taxpayers on the hook for something like $500 billion dollars worth of foreign currency swap risk versus the US dollar - plus president Obama has just announced that the US treasury will be issuing some $800 billion in 'new debt' (to fund the stimulus package) !!!


    If nothing else, it's time to quickly move out of Swiss Francs and into gold ... which is likely to explode in price as the only remaining safe 'currency' in a very troubled world which only has fiat paper currencies to offer ( as well as a world increasingly full of politicians apparently willing to print new fiat currency at will ).

    ~
    Last edited by Melonie; 02-18-2009 at 12:31 PM.

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    Default Re: Can someone make sense of this? - COULD BE IMPORTANT !!!

    and the conspiracy theorists are floating the following possibility (from the same link)

    (snip)"- X is buying USD against hard currencies (Sterling, Euro, Yen, …) : USD = appreciating

    - X is then going to Comex, buying Gold for these USD dollars : Gold = appreciating, but not too much & very controlled because :

    - Y is selling the Gold on Comex (Y is Morgan and HSBC who are the only 2 entities in the world being Net Short Gold : Fed agencies).

    => X and Y are the same entities? (Fed Agencies)" (snip)

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    Default Re: Can someone make sense of this? - COULD BE IMPORTANT !!!

    a more credible conspiracy theory from

    (snip)"My take is that something is cooking with the IMF. As readers may know, the IMF has the ability to create “money” known as SDRs–Special Drawing Rights. Given that the Anglo-American banking system is in terrible shape, and that peripheral Europe from Ireland to Austria is starting to crackle, I’d say that action is forthcoming. Bailing out the entire world was probably in the stars anyway. After so many governments have tried to bail out the banks, someone has to bail out the governments.

    The two currencies causing problems for the world’s reflationary efforts just now are the Yen and the Dollar. Both are too strong. Equally, the Yen and the Dollar this decade have played key, global roles in the extension of credit via their structural weakness. While I’m not making a case for resurrection of conditions that got the world into its current mess, it’s certainly true that the global policy response is an attempt at stabilization. Getting the Yen back towards its previous carry-levels [ 120+ yen to the US dollar - sic] would do alot, right now, to ease pressures.

    Here are two possibilities. One, the Dollar is devalued against gold. Second, Japan essentially lends Yen interest free to the IMF, which forms the backing of a large expansion of its balance sheet of SDRs. Those SDRs are then used to recapitalize banking systems from Austria, to Ireland. The result of these two actions is that the brunt of the Dollar devaluation is borne in part by gold, to ease the race-to-the-bottom effect on other currencies. In the case of the Yen, weakness does get restored against most foreign currencies, but, Europe is willing to pay that price as a recipient of IMF recapitalization.

    These are of course elaborate and sophisticated methods to accomplish something simple: Money Printing. Global devaluation of paper currencies, reflation, and rescue of banking systems. Those are the goals. The world will be no richer for it.

    -Gregor (snip)

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    Default Re: Can someone make sense of this? - COULD BE IMPORTANT !!!

    Thanks folks! I thought it might be worth a mention...

    I'm still mentally-pacing on this...gold and dollar did some unusual "things" yesterday in that they moved in the same direction for the first time in months.

    Central banking is losing it's power as I see it and I'm thinking that investors are running a bit "scared" and maybe preparing for an implosion in Europe?

    Good move for those who have invested in gold!

    Also heard that Gates and Buffett are making large US dollar plays in hopes of boosting USD?

    We are living in dangerous and facinating times people...

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    Default Re: Can someone make sense of this? - COULD BE IMPORTANT !!!

    at the risk of making a political statement in Dollar Den, the financial facts are that the inverse relationship between gold and the US dollar abruptly changed to the price of gold and the US dollar moving in lockstep on ... Inauguration Day !




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    Default Re: Can someone make sense of this? - COULD BE IMPORTANT !!!

    yet another conspiracy theory unfolds today via bloomberg / fox news ... over the issue of the Swiss Gov't 'rolling over' on US gov't demands that UBS (and potentially other Swiss banks with large anonymous US accounts as well) turn over details to the US gov't regarding those American account holders, their balances, their transactions etc. Prior to Swiss gov't action, Swiss bank secrecy laws prevented such disclosure unless the US gov't first proves the existance of tax fraud on the part of the American account holders. Apparently the Swiss had no such crime as 'tax avoidance' to trigger disclosure.

    At any rate, where this is headed is that UBS bank ALONE was holding over $20 billion dollars worth of accounts on behalf of anonymous 'rich' American investors ... with no provisions in place to inform the IRS of earnings / taxes in regard to to those accounts other than the voluntary compliance of the 'rich' American investors. Thus the conspiracy theory is that information in regard to the upcoming change in Swiss banking law / policy was 'leaked' to US account holders on Monday ... during which US gov't monitors were enjoying the national holiday ... which prompted many of those 'rich' American investors unloaded / close their Swiss accounts before they would appear on a report to the IRS. In turn, much of this money found its way into the purchase of first US dollars and second tax-free US bonds.

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    Default Re: Can someone make sense of this? - COULD BE IMPORTANT !!!

    Ahhhhh...I see said the blind girl!

    They are obviously looking for sources of "found money" which which to prop up their coffers here in the US.

    I give kuddos to the Swiss for protecting their depositors. The argument as to whether it's "fair and legal" to have an account there could go on forever.

    As someone who has held off-shore investments in the past and am NOT a "drug dealer" but rather someone who came into a large sum of cash after a relationship ended (I earned every cent...) there are many "reasons" why people have to keep funds elsewhere and not be taxed to DEATH on them.
    Once the freeze comes off the inheritance taxes,f-ing look out!

    You get taxed when you make it,taxed/penalized if you use it before you have permission to,taxed if you try to leave it to someone and will be taxed on it yet again when you die!

    I know...it's all being done in the interest of "National Security"...LOLROF!

    Recently here in the podunk town near where we live,the local bank sent a notice to everyone who held a safety deposit box informing them that "They would be switching to a new and more secure system" soon and if there was "anything" in your box that you didn't want to be potentially viewed by the company (or bank employees) that you'd best come and get it.

    They had a line out the door,HAHAHA! I'm thinking that a LOT of the old ranchers out here have CHUNKS of cash in their boxes.

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    Default Re: Can someone make sense of this? - COULD BE IMPORTANT !!!

    I give kuddos to the Swiss for protecting their depositors
    well, at this point, the Swiss gov't is essentially abandoning their previous position re bank secrecy / protecting depositors ... which will arguably 'kill' the main selling point of Swiss banks ! There is similar scuttlebut that the same capitulation will spill over onto Lichtenstein banks as well as some central American banks ( reference the recent Stanford scandal ).

    The conspiracy theory now goes something like this (and again forgive the political content but it is inexorably tied to these changes in wealth flow) ...

    For the past 100 years, right up to and including last year's election, many 'rich' Americans were able to support 'tax and spend' politicians ... despite the fact that those politicians were openly calling for an official increase in tax rates on themselves ... because those 'rich' Americans were also confident that in the 'real world' their own wealth would actually escape higher taxes thanks to offshore banking / investing as well as other tax loopholes. However, the recent US gov't assault on UBS, on Stanford Bank, and undoubtedly on other 'foreign' financial investments that have yet to receive national press, are creating a situation where those 'rich' Americans are both losing their traditional offshore tax avoidance plus potentially subjecting those 'rich' Americans to public embarrassment at best or IRS criminal charges at worst.

    If there is no longer a 'safe' offshore haven in which to hide their money, those 'rich' Americans have little choice but to repatriate their investments as quickly as possible ... thus prompting the sale of euros / yen / other currencies for the purchase of US dollars (which explains the recent US dollar strength). But if these funds are repatriated they now become subject to easy US taxation, thus prompting the repatriated US dollars to flow into tax-free investments (which also explains the recent rise in US Treasury bonds).

    Apparently the same thing is occurring in principle in regard to your local ranchers' safety deposit boxes LOL ! Indeed the US gov't is now turning over a whole bunch of 'new rocks' in order to try and identify additional sources of tax revenue. This is totally obvious in the case of UBS, where the US justice dept had identified 19000 potential 'rich' American offshore investors evading US taxes but where the IRS has now raised the ante to 52000 ! Keep in mind that this is only UBS bank and only in Switzerland. i.e. merely a first step !



    Of course, the same conspiracy threory points to the likely probability that these US gov't enforcement actions against the offshore hordes of 'rich' American investors are precisely calculated to 'drive' that money exactly where the US gov't now badly needs it to go ... i.e. the purchase of some $50 billion per week of new US treasury bill offerings that are essential to fund continued / expanded gov't spending ... but new US treasury bill offerings that the traditional buyers i.e. Chinese and Saudis and Japanese are becoming increasingly reluctant to purchase. This idea is supported by the historical 'model' of gov't finance / spending from the days when the top US individual tax rate was over 50% ... thus encouraging 'rich' Americans to finance that gov't spending via buying / holding tax free gov't bonds (as opposed to US or foreign stock shares / corporate bonds / any other fully taxable investment vehicle).

    Of course, there is a parallel theory that points out the possibility that, rather than 'rich' Americans being forced to repatriate their offshore hordes, that this money is being directed towards commodities purchases in London, Dubai etc. This option allows the 'rich' Americans to continue hiding their wealth offshore, but as part of a separate and distinct foreign commodity exchange / brokerage / storage network into which the US has made zero inquiries so far these 'rich' Americans can continue to anonymously avoid US income / capital gains taxes without fear of exposure / prosecution. Incidentally, this would help explain why gold is again knocking on $1000 per oz price levels this week.
    ~
    Last edited by Melonie; 02-20-2009 at 05:42 AM.

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    Default Re: Can someone make sense of this? - COULD BE IMPORTANT !!!

    I thought this was more interesting
    https://www.optionmonster.com/news/a...vix_31231.html

    Institutional buying of VIX calls expecting a jump in volatility
    Rebecca Avalon







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    Default Re: Can someone make sense of this? - COULD BE IMPORTANT !!!

    Interesting indeed ... considering that institutional trading comprises some 50% of trades thus some 50% of future market volatility LOL !!! A consipiracy theorist would probably tell you that there have probably already been some hefty investment decisions made in the board rooms of those institutions ... and that they probably don't involve buying of additional US stocks !

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    Default Re: Can someone make sense of this? - COULD BE IMPORTANT !!!

    Hope you are loading up on your double inverse ETFs Mel!

    I bought some FAZ, SDP, and have been in and out of SRS and SKF
    Rebecca Avalon







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    Default Re: Can someone make sense of this? - COULD BE IMPORTANT !!!

    actually my favorite ETF , SDS, isn't really worth a damn anymore since the financial stocks in the S&P have collapsed in price so badly that they're now hardly 10% of that index. I've been drifting towards the currency ETF's like FXY in preparation of a US dollar reversal.

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    Default Re: Can someone make sense of this? - COULD BE IMPORTANT !!!

    Quote Originally Posted by britneyireland View Post
    I thought this was more interesting
    https://www.optionmonster.com/news/a...vix_31231.html

    Institutional buying of VIX calls expecting a jump in volatility
    Didn't see much of an ozzie options market reaction on Monday. Vols are boring at the moment. Hrm.
    Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor
    - Dr John Zoidberg

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