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Heh Look The Market Is Up 0.2% And You Are Starving
The MarketTicker.org ^ | 9/28/2010 | Karl Denninger

Posted on 09/28/2010 10:27:44 AM PDT by jacquej

........

"This is the game being played to "pump confidence" in the stock market. The Fed comes in and "POMOs" their so-called MBS "rolloffs", and the money immediately goes into speculation. This drives up equity prices, but it drives down the dollar by more (about 12% since this new "POMO" program began in June) and in turn this is immediately reflected in higher commodity prices."

.......


TOPICS: Business/Economy; Culture/Society; Front Page News; News/Current Events
KEYWORDS: denninger; economy; inflation; savings; ticker
I am so up set, I can't even think of what to say.

If we assume that a retired middle class couple has managed to save 100,000 to supplement SS and Medicare.... that means they have lost $12,000 dollars since June.

Obviously, this couple is clueless that the value of their savings is being eroded day by day.

Please send this on to your "representatives" in D.C. Even if "they don't give a damn"!

1 posted on 09/28/2010 10:27:45 AM PDT by jacquej
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To: jacquej

And silver goes up as the Fed buys stock. Neat trick./.....Arrest and jail them.


2 posted on 09/28/2010 10:29:17 AM PDT by screaminsunshine (counter revolutionary)
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To: screaminsunshine

The Stock Market LUVS bad news for America.


3 posted on 09/28/2010 10:30:54 AM PDT by Marty62 (marty60)
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To: jacquej
that means they have lost $12,000 dollars since June.
Not to mention no cost of living increase in SS - the first time in 35 years.
4 posted on 09/28/2010 10:31:12 AM PDT by oh8eleven (RVN '67-'68)
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To: All

don’t forget tom scroll down to the bottom to see the comments!


5 posted on 09/28/2010 10:40:24 AM PDT by jacquej
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To: oh8eleven
Not to mention no cost of living increase in SS - the first time in 35 years.

... because according to the Fed, there's no inflation... discounting food and fuel (and who needs that!!)

6 posted on 09/28/2010 10:40:43 AM PDT by 6SJ7 (atlasShruggedInd = TRUE)
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To: jacquej

There is a huge difference between starving and being sick and tired of eating cake every day


7 posted on 09/28/2010 10:43:35 AM PDT by mainsail that ('Sed quis custodiet ipsos custodes')
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To: jacquej

And how many companies on the DOW do their manufacturing and/or selling in countries other than ours?


8 posted on 09/28/2010 11:08:22 AM PDT by familyop (cbt. engr. (cbt), NG, '89-' 96, Duncan Hunter or no-vote.)
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To: jacquej

Not sure what you point is? Is it that Federal Reserve propping the stock market?

Investors know there are still companies that are profitable and good to own. They have money to speculate, and are still free to bid up stock prices, for now.

Companies that sell necessities will do well under Democrats, because that’s all most people will afford themselves, rich or poor. Everyone is on defense for now, the hoarding will continue until all tax brackets(especially and including the rich) are lowered.


9 posted on 09/28/2010 11:14:02 AM PDT by Son House (Democrats Starve The Private Sector, Yet Expect The Economy To Grow. The Recovery to Nowhere!)
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To: jacquej

Me thinks that abbreviations are fine after at least one time showing what they stand for. Betcha many are asking, What’s POMOs & MBS.


10 posted on 09/28/2010 11:30:29 AM PDT by Digger (If RINO is your selection, then failure is your election)
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To: 6SJ7

11 posted on 09/28/2010 11:40:52 AM PDT by algernonpj (He who pays the piper . . .)
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To: Digger

The comments after Denninger’s ticker article will help you understand, and perhaps it would be best to ask there.

I am no expert on these things, and would hate to give you bad info.


12 posted on 09/28/2010 11:47:33 AM PDT by jacquej
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To: Son House

I am not making a point, Son. I am reacting to Karl Denninger’s analysis of what is going on with the dollar, inflation, and the consequences to our cost of living, and the reduction in value of our savings.

Please don’t shoot the messenger?


13 posted on 09/28/2010 11:49:23 AM PDT by jacquej
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To: jacquej
Buy more ammo.

As my old buddies are saying, "There's no bloodless way back from here."

14 posted on 09/28/2010 12:00:48 PM PDT by blam
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To: blam
But which sections of society will be targeted to take the fall. At the moment it is the retired person - the old age pensioner - the wrinkly. See what a senior Bank of England official said here:

http://www.telegraph.co.uk/finance/personalfinance/savings/8028884/Savers-told-to-stop-moaning-and-start-spending.html

It can be summarised as "suck it up and quit whining - you deserve it and can afford it."

15 posted on 09/28/2010 12:11:35 PM PDT by I am Richard Brandon
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To: jacquej

And now for something completely different....

(or don’t believe all they tell you elsewhere....there is a better reason, earnings)

* S&P 500 Sectors Forward Earnings & Valuation (weekly): What’s the latest direction in weekly forward earnings per share and valuation for the 10 S&P 500 sectors? In the week ended September 16, forward earnings edged lower for 9/10 sectors, but valuation rose for all 10 sectors. Forward earnings at a record high for Health Care, and near a record high for Consumer Discretionary, Consumer Staples, and Tech. Forward earnings near a cyclical high for the rest: Energy (21-month high), Financials (21-month high), Industrials (21-month high), Materials (23-month high), Telecom (11-month high), and Utilities (19-month high). S&P 500 P/E up to 12.2 from 11.9 and from a 16-month low of 11.5 in early July, but down from a 27-month high of 15.1 in October 2009. P/Es are up from cyclical lows 11 weeks ago for all of the sectors, but the relative P/E is near a 14-year low for Tech, and near a six-year high for Telecom. For detailed charts including squiggles, see Earnings Week (with Squiggles) on our website


16 posted on 09/28/2010 12:16:30 PM PDT by bert (K.E. N.P. N.C. +12 ..... Greetings Jacques. The revolution is coming)
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To: I am Richard Brandon; jacquej
Savers told to stop moaning and start spending

Through hard-work and thrift, I retired at age 50, seventeen years ago. If the govenment will leave me alone, I will do okay.

17 posted on 09/28/2010 12:19:34 PM PDT by blam
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To: jacquej
I am so up set, I can't even think of what to say. If we assume that a retired middle class couple has managed to save 100,000 to supplement SS and Medicare.... that means they have lost $12,000 dollars since June. Obviously, this couple is clueless that the value of their savings is being eroded day by day. Please send this on to your "representatives" in D.C. Even if "they don't give a damn"!

No! Don't send it. They will give themselves a 12% raise.

18 posted on 09/28/2010 12:33:06 PM PDT by paul51 (11 September 2001 - Never forget)
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To: jacquej

All wealth is current and future. There are no “savings” or “investment” that are not at risk from the dishonest.

When folks let the establishment — both government and business — become commonly dishonest then all savings and investment is at great risk, of not only becoming worthless, but even of becoming a serious liability.

That has happened. Public companies have no regard for fiduciary duty, private companies honor only the strongest shareholders, and our perverted government and it’s institutions honor only the most dishonest.

Who thinks they have any wealth? Today, all must WORK to gain it, and that “work” is the very hard work of restoring in our society, individual by individual, institution-by-institution, the honor of scrupulous honesty, and the awful shame of dishonesty.


19 posted on 09/28/2010 12:45:58 PM PDT by bvw
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To: blam

I wish we had succeeded as well as you have, Blam...

But, every time we had a good year (self-employed solo architect) the dadgummed .gov changed the rules on us, and we had to dip into savings to survive and raise our 4 children. We started the solo practice back in the mid 70’s.

So think back to all the changes in tax laws that affected the up and down construction industry, and know why saving was somewhat problematic.

I would assume most very tiny businesses have a similar problem of not being able to plan for the long term because of constant changes in the tax laws.

And, some of us not well informed enough to play the market games, or do not have the free time, and need to have savings to carry through a downturn.

And, Blam, I hope the .gov leaves you alone. But, I am not optimistic!


20 posted on 09/28/2010 12:48:16 PM PDT by jacquej
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To: bvw
the honor of scrupulous honesty

No. There is no honor in honesty. Honesty is a default requirement for minimum human decency, like caring for one's children or not assaulting people on the street.

In the moral scheme, dishonesty gets you demerits while honesty gets you no credits. It is to be expected from everyone at all times.

21 posted on 09/28/2010 12:54:28 PM PDT by Chunga (The Democratic Party Is A Criminal Enterprise)
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To: Chunga

A market market that highly values honesty, honors it. Most assuredly there is both a practical and spiritual value in honesty — honesty is NOT the default. The default condition of humanity is self-deception and deception.

It takes effort and training to be honest. It is not default in nearly all humans.

Although I did meet a young woman recently who seemed completely honest — but she was an moron with Down’s Syndrome. I am not using the word moron as a slight to her, it is the word to describe her actual mental condition. See http://www.neatorama.com/2006/12/11/whats-the-difference-idiot-vs-moron/ I could describe her as a shining soul, trapped behind a think curtain of retardation of a mild-moderate level. She seems ever happy, and she has a job as a bagger in a grocery store.

Respect for honesty has many ramifications. It means also that we do not tolerate spiteful name-calling, in order that we may honestly use accurate terms such as moron, imbecile, idiot, without a sense of meanness being attached to them.

The interesting thing with humans is that the smarter we not only are we more able we are to be dishonest, by the default condition of our souls we are more LIKELY to be dishonest. As I said, honesty must be honored and valued and worked toward.


22 posted on 09/28/2010 1:19:01 PM PDT by bvw
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To: Chunga

[Fix up reposting.]

A market that highly values honesty, honors it. Most assuredly there is both a practical and spiritual value in honesty — honesty is NOT the default. The default condition of humanity is self-deception and deception.

It takes effort and training to be honest. It is not the default for most of us.

Although I did meet a young woman recently who seemed completely honest — but she was an moron with Down’s Syndrome. I am not using the word moron as a slight to her, it is the word to describe her actual mental condition. See http://www.neatorama.com/2006/12/11/whats-the-difference-idiot-vs-moron/ I could describe her as a shining soul, trapped behind a think curtain of retardation of a mild-moderate level. She seems ever happy, and she has a job as a bagger in a grocery store.

Respect for honesty has many ramifications. It means also that we do not tolerate spiteful name-calling, in order that we may honestly use accurate terms such as moron, imbecile, idiot without a sense of meanness being attached to them.

The interesting thing with humans is that it is obvious that the smarter we are the more ABLE we are to be dishonest, yet by the default condition of our souls the smarter we are the more LIKELY we are to be dishonest. To be honest we have to be trained to be honest and in a lifetime we have to continue training in order to continue being honest.

The reason for such a seemingly negative spiritual default, is that it allows us to achieve, but only with effort, a higher level of spiritual understanding.

As I said, honesty must be honored and valued and worked toward.


23 posted on 09/28/2010 1:31:12 PM PDT by bvw
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To: jacquej

THe “12%” figure is relative to certain other currencies that are of little direct concern to these old people. It hasn’t translated into consumer price increases yet in any real manner.

If we get to where the foreign component of our food supply becomes a significant factor, currency movements could start hurting old people. But for now, most everything they need is produced in american dollars. Food, housing, drugs are all home-grown. Not quite so much clothes, but they are artificially cheap because of cheap foreign labor that also isn’t effected significantly by the price swings.

The biggest hit would be in oil, except the gasoline prices haven’t swung any more than usual yet (we are in a traditionally downward-moving period now, so we’ll know by November if the dollar currency drop has propped up gasoline prices).


24 posted on 09/28/2010 1:41:07 PM PDT by CharlesWayneCT
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To: Digger

POMO - Permanent Open Market Operations.

This is the program that provides liquidity to the banking system to prevent another freezeout of money market funds. The Treasury sells treasury bills to banks when things are good, and when it looks tight, they buy them back, providing cash which the banks can lend out to people who need to make payroll, etc.

Some people speculate that the treasury is buying back too much of their t-bills, and the banks are using the money to invest in stocks. Since there is speculation that the banks are sitting on trillions of dollars in assets, you’d have to think some of that would be in equities, although I bet most of it is in real estate they can’t really sell, so they don’t REALLY have trillions to lend out.

MBS - Mortgage Backed Security. The thing that allows a mortgage company to sell the cash flow from the mortgages they hold without having to transfer the underlying mortgages. It “spreads the risk”, but also hides the risk, and when the mortgages were crappy subprimes, the securities often got miscategorized as highly-rated instruments simply because of the expectation that the government would step in and back the quasi-public mortgage lenders.


25 posted on 09/28/2010 1:46:16 PM PDT by CharlesWayneCT
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To: oh8eleven

There is no cost of living increase, because the cost of living has not increased.


26 posted on 09/28/2010 1:47:06 PM PDT by CharlesWayneCT
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To: 6SJ7

food and fuel are not discounted in the CPI numbers. They are ignored in the monthly figures, because the price of food and fuel swings wildly from month to month for cyclical and other reasons having nothing to do with the underlying economy.

Their movements are averaged in to get a somewhat fuller picture each month which is published separately from the core inflation numbers.


27 posted on 09/28/2010 1:49:09 PM PDT by CharlesWayneCT
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To: algernonpj

SGS - Shadow Government Statistics, an online “newsletter” published by John Williams, which you can get in full subscription form for the low low price $89 for six months, or $175 a year (a savings of $3!!!!).

The online posting is free, and is meant to entice you to purchase the full newsletter.

Is it working?


28 posted on 09/28/2010 1:52:31 PM PDT by CharlesWayneCT
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To: CharlesWayneCT

I have waded through 28 posts on this thread, and all I know is the DOW was 12,398 when the Pelosi/Reid Cartel took control of Congress three years and nine months ago.


29 posted on 09/28/2010 1:59:02 PM PDT by csmusaret (If the Bush recession ended in June 2009, did the Obama economy begin in July 2009?)
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To: CharlesWayneCT
"There is no cost of living increase, because the cost of living has not increased"

Hah! laughable.

30 posted on 09/29/2010 12:57:54 AM PDT by Puddleglum ("due to the record harvest, rationing will continue as usual")
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To: jacquej

Don’t panic! Their $100k has pretty much the same purchasing power now as it did in June. Cannot buy as many Swiss Francs or Gold doubloons, or AAPL stock, but food, clothing, computers, autos, houses, etc. it is just as good, if not better. If one looks at purchasing power in terms of a basket of goods that people need and use, many other currencies are judged as overvalued in terms of the $. A MacCoffee in Sweden is the Krona equivalent of $2, here, $1.


31 posted on 09/29/2010 1:44:36 AM PDT by GregoryFul
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To: CharlesWayneCT
the cost of living has not increased.
Surely, you jest.
32 posted on 09/29/2010 6:18:09 AM PDT by oh8eleven (RVN '67-'68)
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To: blam

To paraphrase Leon Trotsky: “You may not be interested in government, but government is interested in you.”


33 posted on 09/29/2010 6:23:54 AM PDT by Mr. Jeeves ( "The right to offend is far more important than any right not to be offended." - Rowan Atkinson)
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To: Puddleglum

SS Adjustments are lagging. The CPI last year didn’t increase.

It’s funny, I remember the arguments about how CPI was overstating inflation for seniors, and bankrupting Social Security, and the answer was to develop a new CPI just for seniors that could be used for the Social Security calculations.

Obviously you could never do that, if even conservatives scream bloody murder if SS doesn’t go up every year by large sums.


34 posted on 09/29/2010 6:33:10 AM PDT by CharlesWayneCT
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To: CharlesWayneCT

I don’t disagree about indexes being jiggered to justify whatever result is desired. I just know grocery prices are going up, as are health costs, tuition, insurance, many basic consumer goods and services. But definitely groceries. Bigger prices, smaller containers, hamburger at steak prices, etc. I want my steak at steak prices, please.


35 posted on 09/29/2010 9:55:34 AM PDT by Puddleglum ("due to the record harvest, rationing will continue as usual")
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