Fed Devil In The Details?
Summary
Discussion, critique and analysis of the potential impacts on equity, bond, commodity, capital and asset markets regarding the following:
Last Time Out
Of late Bitcoin and Crypto retracing their parabolic rise of late, we expressed our concerns May 22nd....
The Howling Man? Part 1
This Twilight Zone classic written by Charles Beaumont, is told in a flashback by an American called David Ellington who while on a walking trip through post World War I Europe (circa 1925).Ellington becomes lost, drenched by rain, and seeks shelter in a nearby castle, in which he collapses.
The leader of the order, Brother Jerome explains that the prisoner is not a man, but rather the devil himself. He has been locked up in the room using the "Staff of Truth" to bar the door since shortly after World War I. Ellington becomes convinced that Jerome is insane, yet sees that the staff which holds the door shut is easily within reach of the imprisoned man, Ellington briefly wonders why he hasn't simply removed it himself.
At the prisoners urging, Ellington removes the staff and releases the prisoner. After the prisoners exit, Jerome finds the collapsed Ellington and sadly explains that the inability to recognize the devil has always been Man's greatest weakness.
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Discussion, critique and analysis of the potential impacts on equity, bond, commodity, capital and asset markets regarding the following:
- Last Time Out; The Howling Man; FOMC Minutia
- Tapering; Effects: Treasury and MBS; Costs
- Banking and Economics; Asset Markets
Last Time Out
Of late Bitcoin and Crypto retracing their parabolic rise of late, we expressed our concerns May 22nd....
The contraction of 98% of BTC trading volume (in CNY), created volatility and an amplified "demand" squeeze. If one wonders are these Crypto tulips? One must ask, is there enough intrinsic value within Crypto currencies? If yes, could the price highly exceed the intrinsic value of real purchasing power? TBD and for now, we toss three Bitcoins into the fountain of Ethereum and Out. - Money or Crypto Tulips?With regard to Chinese Bank Non Deposit Liabilities in Dollar Woes: Big Trouble in Little China? ...
We could also be witnessing a big problem with bank credit circulating back into the banking system as non deposit liabilities... those holding WMP's or acting as SPV's, leveraged or otherwise, including risky equities, high yield bonds and commodities, could be creating a self reinforcing vortex of selling and margin calls which could rapidly drain systemic liquidity with little to no PBOC backstop.With the fed raising the short end, we Nattered suspicions as to why commercial whales have gone net long ED eurodollar (betting on lower LIBOR rates) to the tune of $3T notional....
Not a harbinger of good economic times, but perhaps a hedge against a flight to safety, in the bond market. And a flight from what? Economic decline and or a correction in equities valuations? Should the FOMC indicate in its minutia when the big punch bowl is getting taken away (tapered bond buying, reduction of balance sheet)... Watch for Beezlebub in the minutia of the FOMC June 14th announcement and/or the release of those notes on July 5th, then witness what could be History Repeating?As predicted, history repeating with Beezlebub appearing in the minutia...
The Howling Man? Part 1
This Twilight Zone classic written by Charles Beaumont, is told in a flashback by an American called David Ellington who while on a walking trip through post World War I Europe (circa 1925).Ellington becomes lost, drenched by rain, and seeks shelter in a nearby castle, in which he collapses.
The prostrate form of Mr. David Ellington, scholar, seeker of truth and, regrettably, finder of truth. A man who will shortly arise from his exhaustion to confront a problem that has tormented mankind since the beginning of time. A man who knocked on a door seeking sanctuary and found, instead, the outer edges of The Twilight Zone.Upon waking inside the castle, Ellington hears a disturbing wolf like howl coming from somewhere in the castle and investigates. In the bowels of the castle, he finds a bedraggled but cultured and intelligent man in a cell. The man claims to be a prisoner of an insane religious order, locked up because he kissed his sweetheart in public.
The leader of the order, Brother Jerome explains that the prisoner is not a man, but rather the devil himself. He has been locked up in the room using the "Staff of Truth" to bar the door since shortly after World War I. Ellington becomes convinced that Jerome is insane, yet sees that the staff which holds the door shut is easily within reach of the imprisoned man, Ellington briefly wonders why he hasn't simply removed it himself.
At the prisoners urging, Ellington removes the staff and releases the prisoner. After the prisoners exit, Jerome finds the collapsed Ellington and sadly explains that the inability to recognize the devil has always been Man's greatest weakness.
This missive was published as an exclusive to Seeking Alpha. To access the ENTIRE text for FREE on Seeking Alpha, please click here. The Nattering One does not receive remuneration if you register, only satisfaction.
There is no cost involved and it has been our experience that if you exert control (by unchecking a box of two) over your communications settings in your Seeking Alpha profile, your email inbox will not be polluted with one bit of Spam (not even the cured pork shoulder variety. Tasty even.)
As we are now a "contributor" at Seeking Alpha, our published articles, instablog and comments can be found here. Please continue to follow The Nattering Naybob here and at Seeking Alpha. We thank you for your support.
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