Skyrimmre, Here is Karl's BLOG today and perhaps, his better explanation will help.
Oh my goodness, I hope we don't have more suicides...
Wouldn't it be nice (not a pun since Karl is from Nice, Florida) if everyone opened their eyes all at once and realized there are many more of us then there are of them?
We need more awake people to take action! Call your Senators on S-604 or Congressmen on HR-1207 and stop it in its tracks. It won't go away on its own.
SEE LIST AND PHONE NUMBERS OF SENATORS AND CONGRESSMEN HERE: POST #70 http://projectavalon.net/forum/showt...t=11766&page=3
PaL
Thursday Comes: FedWatch
Karl Denninger
Thursday, June 18. 2009
I told 'ya to watch Bernanke on Thursday. Here are the final results; as expected, he did roll some (but nowhere near all) of the expiring TAF.
That's a net $53 billion drain in system liquidity, on top of the $~70ish billion drained by TARP repayments.
Given the extraordinary "program" support of The Fed, this isn't as dramatic as what happened last September, but look folks, the record is what it is.
This is twice that I have caught meaningful "corners" in the equity market, all by watching
intentional liquidity moves by central banks.
(As a refresh, here's my Thursday call from last week)
http://market-ticker.denninger.net/a...ts-Beware.html
So far the maximum move down has been 5% since the Thursday call. That's fairly significant, and given the further drain for today, I doubt its over.
The previous "catch" was on the cusp of a 30% decline.
Those of you who think that there's something "tinfoil" about these sorts of manipulations need to consider
that this is all done right in the open, if you know where to look.
There is no attempt to hide anything and no conspiracy - simply a conflict of interests (The Fed wants a 4% mortgage rate but can't have it while throwing liquidity into the system, as both fear of hyperinflation and "risk appetite" drive bond yields the wrong way) and as such there is a forced choice - it is not possible to support
both markets at once.
You can either play "loose money/green shoots" and accept that mortgage rates will go into the 7s (at least) or you can play "tightwad" and drive down mortgage rates through a fear trade into Treasuries, but in the process stock prices will get hammered.
Clearly in September the "game" got away from Ben; this time they have (so far) managed to keep things (somewhat) under control. There is of course no assurance that it will remain under control, and in fact there is every reason to believe it won't, given that this exercise with liquidity is somewhat like herding cats - if you're trying to shoot at a specific result you're unlikely to succeed, especially if the intended attempt is to "nuance" outcomes (e.g. "let's drive down bonds and its ok if stocks decline a little bit.")
SOURCE: http://market-ticker.denninger.net/a...-FedWatch.html
Here's a good video by Karl:
Illiquid Assets
"Illiquid Assets" are not an act of the markets, nor are they an accident. They are in fact created by GOVERNMENT INTERFERENCE in the marketplace.
In 10 minutes you'll "get it" - why the government - not the markets - has led to the credit freeze. Why the market cannot clear. And why it is in fact explicitly the things that the government has done and is doing that has led us to have a "credit crunch", where assets that normally would trade won't.
VIDEO (8:43):
CATHERINE AUSTIN FITTS' BLOG:
Money & Markets ~ Charts 6.18.09
Catherine and The Solari Report, June 18, 2009 at 9:06 am
http://solari.com/blog/?p=3232