Institutional Fish


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    Jack Delano. Cars being precooled at the ice plant, San Bernardino, CA Mar 1943 Large and/or institutional investors, your pension funds, your market
    [See the full post at: Institutional Fish]


    The FDIC stance on decoupling Money Market Funds from insurance coverage in the next rout should send chills down the backs of Mutual Fund investors. First, the buck will be broken in these MM institutional holdings, then up through the risk curve goes the illiquidity until it breaks them all, these funds of funds of funds.

    And yes, they are too big to bail. $15- $16 trillion plus re-hypothecated related derivatives? That’s going to require some turbo charged QE in the end. But, isn’t that obviously where this ends? I mean, when the Bread and Circuses finally end?

    Participant has something called “ELI5”, or “explain like I’m five years old”, which is generally a request to explain some complicated phenomenon or thing in the simplest possible terms to an uninitiated questioner. I was wondering if somebody could “ELI5” what detrimental consequences would attend the Fed continuing to do QE (which I realize mostly involves the Fed buying up oodles of dodgy financial paper of one kind or another in order to keep financial markets propped up; and because the Fed essentially conjures the money for doing so out of thin air, many observers liken this to “money-printing”).

    V. Arnold

    @ venuspluto67

    But, but, haven’t you answered your own question?


    @Arnold: Perhaps, but one could ask, if this sort of money-printing is so terrible, then how is it that it has managed to keep the financial markets defying the economic laws of gravity for so long? IOW, exactly what mechanisms of economic gravity would make the Fed want to stop QEverlasting if that’s mostly what’s keeping these markets propped up?

    V. Arnold

    @ venuspluto67

    When one thinks one is omnipotent, then that one tends toward the absurd.
    It is incumbent upon us, to recognize via common sense, when things have gone off the rails.
    Seeing that, we (those with common sense) tend towards reasonable behavior. At least those of us who can still see, using our common sense…
    The rest/majority? They do what they do…

    Golden Oxen

    Stocks and Poker are not comparable in my view.
    The fish in the world of investments are the ones who never participated, never bought quality stocks or funds, reinvested the dividends, understood and took advantage of compound interest, utilized dollar cost averaging to smooth the violent fluctuations in the market, never had a long term plan, just day trading in and out traders or speculators in the next hot item.
    Fear of a severe market drop, which happens often, has cost more losses and poverty; the Cassandras will never mention that fact, than being a participant with a long term, sensible, conservative investment philosophy.

    Gold, and fiat cash, as well as some silver are part and parcel of that conservative equation.


    I always enjoy the “lecturer” who shows up in comments sections. If you had just done everything perfectly (like me) you would have made a lot of money. Too bad you’re so stupid. The reality the “success” was due to a good bit, if not all, luck/coincidence. Unfortunately, those of living in our “stupid” world have things happen that are unplanned or we, actually, make an imperfect decision once in a while. I remember, as a very young, inexperienced man, doing similar lectures. Couple of unplanned layoffs, some illness, a divorce, you know, life kinds of things that happen taught me some humility and the lectures stopped. In the end, things worked out, reasonably, anyway and not because I’m some kind of genius but made a couple of decisions that worked out.

    Many yrs ago, as an Air Force pilot, used to go to Vegas (I’m not a gambler) and listened to endless tales of brilliant gambling, how much I won, etc but learned there were always part of the story left out.

    Formerly T-Bear

    @ venuspluto67 16097

    It is forbidden to notice it’s perfectly fine to print money for whatever suits our leaders and what they want to do with it. It is totally another matter when printing money is not for something the great ones have an interest in. You are not to look behind that particular curtain, ever! If this happens again, it’s room 101 for you.

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