Debt Rattle Jun 24 2014: QE And CDS Are Weapons Of Mass Deception


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    John Vachon Soft drinks and war bonds truck, Montgomery AL March 1943 The age of financial innnovations found such an exalted high priest in Alan Gree
    [See the full post at: Debt Rattle Jun 24 2014: QE And CDS Are Weapons Of Mass Deception]


    Can’t help but wonder sometimes if deregulation wasn’t the problem here as much as was protection from failure of the scammers. Had they been allowed to fail, the next generation would have a precedent. What’s Moral Hazard again?

    There isn’t much “regulation” in the underground sectors, yet they function. Of course, so do most performers who work without a net.

    Really, what is QE, if not exemption from the efficiencies of Creative Destruction?


    Fear of a Market Event, as per the “Hedge?” Need a “Market” for that to be relevant, but.

    OK, disclaimer, I’m dabbling in the VIX. Saves $4.50 a gallon gas up to the Indian Casino, besides, how else to participate in the sport, given;

    “Whether this ‘event’ is a crash or melt-up is historically unclear ”

    No shit? You mean the indices will fluctuate?


    Yes, with guaranteed dilution of the value of government money, the trend will certainly be higher lows and higher highs over the long term. I guess volatility is the only speculative game in town. A bet, per se, on the perception of the firmness of the Feds grip on the control levers at any point in time?

    And it really is just a game, right?


    There is really only one market event that matters and that is loss of liquidity. News of events not related to the market liquidity is just noise. I suspect the driver of this unfocused fear of an ‘event’ is related to the taper but as of now the tapering has coincided almost perfectly with rising tax receipts and thus less Treasury borrowing. In other words no loss of liquidity.

    By fall however that will probably change. That is if the taper continues. I would expect some sort of stock swoon before them and the Fed ending taper and even an re acceleration of QE.

    This whole meme of fear of an ‘event’ smells of setup. They never ring a bell at the top.

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