> Fed mantiene tipos de interés y QE2

[Warren]

http://www.cincodias.com/articulo/ec...5cdscdseco_18/

El hombre de la barba está cometiendo “seppuku” con su país, lamentablemente nos va a arrastrar a todos al abismo.

[Davy]

Gracias Ben por esos magnificos QEs.

Dentro de poco QE3 en vuestras salas de cine...

Y QE4, 5, 6... ad infinitum...

Se rumorea que nuestro colega Ben cambiara la inscripción en los billetes americanos "In God we trust" a "In Ponzi we trust".

[silverado]

Tal como está el tema no podía hacer otra cosa, el Trichett tampocó creo que mueva tipos, se le van a atragantar sus palabras.

Considero que la desgracia de Japón es lo más parecido a una guerra que vá a convertir la economía de ese país en la economía de guerra que todos los países necesitan en este momento, no por la guerra, sino por la perfección que representa la destrucción, reconstrucción en la economía.

Todo en esta vida tiene su motivo, o casi todo.

Gracias warren por toda la información que aportas.

[Warren]

Iniciado por silverado

Tal como está el tema no podía hacer otra cosa, el Trichett tampocó creo que mueva tipos, se le van a atragantar sus palabras.

Considero que la desgracia de Japón es lo más parecido a una guerra que vá a convertir la economía de ese país en la economía de guerra que todos los países necesitan en este momento, no por la guerra, sino por la perfección que representa la destrucción, reconstrucción en la economía.

Todo en esta vida tiene su motivo, o casi todo.

Gracias warren por toda la información que aportas.

Siempre hay alternativas silverado, devaluar la moneda es el recurso de países bananeros o el del ocaso de un país con un modelo económico que ha sido la hegemonía mundial.

[Warren]

Iniciado por Davy

Gracias Ben por esos magnificos QEs.

Dentro de poco QE3 en vuestras salas de cine...

Y QE4, 5, 6... ad infinitum...

Se rumorea que nuestro colega Ben cambiara la inscripción en los billetes americanos "In God we trust" a "In Ponzi we trust".

Se da por hecho que pudiera existir un QE 3, lo que pudiera entenderse que sería el momento idóneo para entrar comprador, se subestima la hipótesis que quien entro comprador durante el QE 1 pudiera posicionarse vendedor durante este hipotético QE 3, existen voces discrepantes dentro de la FED (FED de Dallas) que consideran que el QE 2 debe reducirse o incluso agotarse antes de tiempo.
Niega la inflación en USA y Europa considerándolos indicadores internos, cuando ya no lo son, el indicador es global, y sino que revise datos de China, Brasil, India…
Las subidas de tipos de interés llegaran antes a Europa que a USA, hecho histórico por cierto, la confluencia de subida de tipos de interés con eliminación de planes de estímulos y barra libre de liquidez, tanto por parte de la FED como del BCE, marcaran techo de mercados americanos y europeos, por lo que en el medio-largo plazo el lado corto será el ganador.

[hackhez]

Iniciado por Warren

Se da por hecho que pudiera existir un QE 3, lo que pudiera entenderse que sería el momento idóneo para entrar comprador, se subestima la hipótesis que quien entro comprador durante el QE 1 pudiera posicionarse vendedor durante este hipotético QE 3, existen voces discrepantes dentro de la FED (FED de Dallas) que consideran que el QE 2 debe reducirse o incluso agotarse antes de tiempo.
Niega la inflación en USA y Europa considerándolos indicadores internos, cuando ya no lo son, el indicador es global, y sino que revise datos de China, Brasil, India…
Las subidas de tipos de interés llegaran antes a Europa que a USA, hecho histórico por cierto, la confluencia de subida de tipos de interés con eliminación de planes de estímulos y barra libre de liquidez, tanto por parte de la FED como del BCE, marcaran techo de mercados americanos y europeos, por lo que en el medio-largo plazo el lado corto será el ganador.

Es posible tu escenario.
Aunque yo plantearía tambien otro, algo más retorcido....

El viernes vencimiento de futuros trimestrales, por lo que empieza el maquillaje al alza.
Comienzo del siguiente vencimiento al alza hacia los 12.200.
Principios de abril se forma el techo y caidas durante abril de un 10-15% hacia los 11.000 del dow.
Se vuelve a dudar de la marcha de la economia, etc...
Y Bernanke plantea de nuevo el Q3
Los mercados hacen suelo durante mayo y junio cierran los vencimientos en tablas.
Y el vencimiento de septiembre de nuevo alcista retomando la tendencia de medio plazo

[valle]

venga vamos a seguir con la maquina de imprimir billetes.


por que no hacen lo mismo en europa?

le vendria de lujo, por que los america imprimir, imprimir,y luego seguir imprimiendo,
asi levanto la economia.

[Davy]

Warren entiendes ingles?

[Warren]

Iniciado por Davy

Warren entiendes ingles?

Si por?

[Davy]

Iniciado por Warren

Si por?

Para enviarte un articulo que tengo que buscar... era para saber si me valía de algo hacer la búsqueda jejeje

[Warren]

Iniciado por Davy

Para enviarte un articulo que tengo que buscar... era para saber si me valía de algo hacer la búsqueda jejeje

Si claro, cuelga aquí el texto de todas formas para que lo puedan leer todos.

[Davy]

Charles Biderman On How The Fed Continues To Rig The Market And Why There Will Be A QE 3...And 4



The last time Charles Biderman appeared on CNBC, he was carted onstage (and promptly off) in the late hours before Christmas Eve, when it was virtually assured nobody would hear the self-evident truths out of his mouth such as this one: "individuals have been selling, companies are net selling, insider selling and new offerings are swamping any buyback and any cash M&A activity since QE 2 was announced. Pension funds and hedge funds don't really have that much cash to invest. So what nobody's asking is what happens when QE 2 stops: if the only buyer is the Fed, and the Fed stops buying, I don't know what is going to happen...When I was on your show a year ago I was saying the same thing: we can't figure out who is doing the buying it has to be the government, and people said I was nuts. Now the government is admitting it is rigging the market." Now that the great muni scare forced retail to take proceeds from muni liquidations and invest in stocks just as the market topped out, CNBC brought Biderman on again, hoping to get something, anything, bullish out of the flow of funds expert.

Wrong. "In December of 2009 received a lot of ridicule for saying that the Fed is rigging the market which as everybody is well aware." As for the "sustainable economic recovery" i.e., what happens to Quantitative Easing: "They probably will end for a while, we think there is going to be a QE3 and 4, or until the market says: "No Mas - we are not going to believe this game the Fed is playing... The Fed is printing over $100 billion a month to buy other assets and pay bills, and economic growth is picking up at a $200 billion annual rate. This is very inefficient method of boosting the economy, and then how do we repay these trillions that have been created out of thing air in the future." At which point the producer "screams get him off my show."


Oddly enough, this form of market manipulation by the Fed is precisely what Zero Hedge has been claiming since day one, prompting our legacy media followers to brand us on occasion as "conspiratorial." Ironically, it is precisely this kind of "conspiracy theorism" that is ultimately proven to be nothing but fact in this bizarro banana republic, now that the wheels of the Ponzi system are finally coming undone (see the recent deranged ramblings of one Bill Gross for more). Yet it hasn't stopped once upon a time blogger, CNBC regular and now Bloomberg columnist, Paul Kedrosky to declare from atop his status quo-worshipping altar that Zero Hedgeis "too conspiratorial and too much of an intellectual monoculture." That's ok Paul, we realize that mainstream bashing of Zero Hedge in public, while fervently copying, pasting and/or paraphrasing from it, is all the rage for our less than sophisticated, but admittedly very, very polycultured, imitators. And yes, just like Biderman, we are happy to be called "conspiratorial" if that is the MSM's codeword for being proven right within 3 to 6 months... and actually having an original thought.

[Davy]

Bernanke’s Unstoppable, Self Reinforcing Feedback-Loop
Our economic death spiral into the Second Great Depression
Wracked up by both parties over many decades our debt has evolved into a yearly deficit that can no longer be serviced with tax revenue and borrowing.
To avoid default Ben Bernanke chose to monetize the un-payable portion of our deficit. Each month about 100 billion dollars are created out of thin air to cover our government’s bills.
This has set forth an unstoppable, self reinforcing, feedback-loop whereby:

1. Debt monetization (printing money out of thin air to cover the portion of governments spending not satisfied by tax revenue and borrowing) reduces the value of the dollar.
2. The debt monetization triggers dollars to flow out of bonds and into commodities.
3. This increases demand, commodity prices rise.
4. As commodities make their way into the supply chains businesses and consumers realize higher prices.
5. Since globalization has caused wages to stagnate at 1970 levels, and with 23% unemployment, businesses try to eat increases, this in turn reduces hiring, causes layoffs and kills expansion.
6. Consumers reduce their purchases, case in point: Wal-Mart is losing market share to the Dollar Store - that right there spells retail health (read: it’s terminal).
7. Nations whose citizens spend 32%-52% of their entire budget on food are especially affected.
8. In those nations where citizens spend 32%-52% of total their income on food; food riots erupt, social unrest breaks out, governments topple.
9. Geographically speaking, many of these nations are in the Middle East where about a third of the world's oil supply comes from - so oil production is adversely affected, the price of oil increases. Drastically increases. The empire must then send in troops and warships to protect oil assets from being wiped off the map.
10. Oil is an integral part of everything from farming to manufacturing to transportation, therfore the prices of all goods and services rise.
11. This of course creates more stress on our economy, which drives tax revenues down, whic creates a greater deficit, which causes idtiot Ben to lean on the print button and monetize even more debt.
12. Like an infinite loop in some errant computer code we go back to #1 above and iterate back through this unstoppable, self reinforcing, negatively-insane-Ben Bernanke-code that we call a negative self reinforcing feedback loop.

Bernanke's Crimes Against Humanity

Exporting Higher Food Prices to Poor Nations:

The price of grain and many other foor comodities are set in US Dollars. Creating more dollars reduces the dollars purchasing power. Creating more dollars makes investors flee securities and rush to hard assets, like grain, corn, soy, oil, cotton, coffee, sugar and so on.
In Tunisia on December 17, 2010 a 26-year-old man who tried to supported his family by selling fruits and vegetables doused himself in paint thinner and set himself on fire in front of a local municipal office.
Police had confiscated his produce cart, the cart he needed to earn a living in order to feed his family. With rising prices he coldn't afford a permit. They also beat him when he objected. Local officials then refused listen to him.
His desperation highlighted the public's frustration over living standards and increasingly higher food prices which accounted for 32.4% of their entire earnings.
A month later the ruler of Tunisia was gone, its government collapsed.
Now it is Libya’s turn.
In Lybia 37.2% of a families budget goes to food.
Many other oil producing nations have citizens who face the same income to food budget ratios. Map of many of the countries that are experiencing protests.
Organic bond sales have been anemic. Money is flowing out of securities and into commodities. Bernanke’s plan to have Quantitative Easing reduce interest rates has so far been a failure because of these outflows. That was Bernanke's first mistake.
Rising commodity prices, which for the most part peg global food prices was his second misstake.
Actually, if you count: Bear Stearns, the housing bubble, subprime contageon, unemployment contageon and recesion contageon they are respectively Bernanke's 6th and 7th blunders. Add to that the fact that he is following the steps that Greenspan used to explain how Great Depression One was created and it soon becomes apparant that Ben Bernanke is, without a doubt, the worlds biggest economic imbicile and shouldn't be allowed to balance a checkbook - let alone run the world's (now thanks to him and Greenspan) third largest economy.
Bernanke couldn't find cause and effect in a dictionary. He is an economic moron, and a master of global disaster. The only bigger fools are our leaders who:

1. Haven't fired him.
2. Still listen to him.

Now we have 2008 redux. Commodity prices and oil prices are headed up. Will they crash or will the dollar crash? If commodity prices and oil prices crash again this time I’ll be surprised if money flows into securities again. The dollar is no longer looked at as secure now that Bernanke is monetizing the debt.
The gig is up, the game is almost over.
When High Frequency Algorithmic Trading (insider trading) became responsible for 70% of stock trades I tossed the term “stock market” out of my vocabulary and replaced it with “rigged casino.”
When Bernanke began monetizing insane amounts of money the term “Bond Vigilantes” got tossed into that same trash heap. “Bond Vigilantes” are like ants with Bernanke counterfeiting over a trillion a year.
There are no more Bond Vigilantes.
Ben Bernanke IS the bond market and so far he hasn't even stepped in enough to keep yields down, but he'll have to.
It is not the smartest or the fittest that survive, it is those who notice change first.
Ben Bernanke cannot stop Quantitative Easing. Stopping the monetization of debt means that the United States of America defaults on its obligations. That’s right, the government stops sending out Social Security payments, government workers stop getting checks, companies who do business with the government stop getting paid, Medicare stops - well, you get the picture.
The other fallacy is that we can make cuts and balance this mess. When 23% of the deficit is debt service and 57% goes to keeping grandma eating. With those two facts in mind, we quickly realize that the deficit can’t be cut. Not without default and total restructuring.
Debt is monetized when the Fed creates money with a computer and credits the Treasury Department for the Bonds it “purchased”. The treasury takes this “money” and pays the government's bills so it can stay open. So those thinking there is no velocity may want to think that through again.
With 23% unemployment and with 43 million Americans on Food Stamps and a 1.5 trillion dollar deficit the Fed can not let interest rates rise. Rising interest rates would create massive deficit pain and inflict more debt servicing nightmares. There will be no Paul Volckler's this time. Bernanke will – en-masse – drive bond prices back up and rates back down by creating massive fake demand for bonds at auction when interest rates get too out of hand.
When he does that the value of our dollar will really tank, investors will step up their continued flight to safety by purchasing commodities and commodity prices will increase even more. Higher oil prices will likely cause investors to flee the stock market, but with thin volume and 70% HFAT who knows what the rigged casino will do. They’ve made a sincere joke of the market, which for people in retirement with funds chained to the rigged house — well this is nothing but a sorrowful situation.
Saudi’s king is buying time on his remaining years – he’s 87 - by handing money out. Like the fine ZeroHedge piece said:

“Unfortunately for Saudi, Bahrain tried this and failed. Also, once you start down this path, there is no turning back, as people demand more and more.”

China is faced with its Jasmine protest.
Bernanke, the other central banks, our leaders and the leaders of the rest of the world still have time to exit this endless loop. Just about every country is broke and needs to re-value their dollar and let the people, the local and state and federal governments get out of debt.
The concern I have is that other countries may exit the loop by announcing a new world reserve currency, which may be composed of one or several [other] currencies - all but ours - or with ours being a fraction of the total reserve.
"If" (please read: When) the United States loses the reserve currency its printing and current debt levels will equate to an ugly and very weak exchange rate. In short, food priced in some other currency will leave us looking like Libya.
You can go back through thousands of years of economic history and realize one fact: No country has ever printed their way to prosperity, all who have tried have wound up in hyperinflation, war or demise. How a guy can teach himself calculis, get into Harvard, become a professor at Princeton and NOT understand that - well it totally defies logic. The idiot was asked about the one time in our history that we had no debt. (Please don't think we balanced the budget during the Clinton years - for you can't debt (apply IOU's in the Social Security Trust Fu: nd) as income.) Andrew Jackson balanced the budget and wiped away our debt by using non debt based money. Bernanke was asked about this during a recent hearing and he scoffed at it - his merit? Because it happened before the Civil War.


Fuente: Bernanke?s Unstoppable, Self Reinforcing, Negative-Feedback-Loop | FINANCIAL SENSE

[Goldman]

Interesante articulo. El tema de la especulación sobre los futuros de materias primas agrícolas es algo que los Gobiernos en algún momento van a limitar. Algo como que el que entre en este mercado se comprometa a aceptar la entrega o algo así.
Y con el petroleo igual. En mercados como el petroleo, que es global, con demanda mayor que oferta y que es clave para las economías, la necesidad de especuladores para dotar de liquidez al mercado es discutible.

[Davy]

Iniciado por Goldman

Interesante articulo. El tema de la especulación sobre los futuros de materias primas agrícolas es algo que los Gobiernos en algún momento van a limitar. Algo como que el que entre en este mercado se comprometa a aceptar la entrega o algo así.
Y con el petroleo igual. En mercados como el petroleo, que es global, con demanda mayor que oferta y que es clave para las economías, la necesidad de especuladores para dotar de liquidez al mercado es discutible.

Gracias por el aporte!

Por cierto pasate por el hilo del Gold que te hice una traduccion exclusivamente para ti!

[Davy]

Uno de mis temas favoritos, el High Frequency Trading a.k.a. el levitador de mercados:


The "Matrix" Market: Effects of Quantitative Easing, High Frequency Trading
A well-trodden meme of TV and cinema has been the plot in which someone or something uses tantalizing illusions to sap humans of their will to resist while simultaneously pursuing hostile ends. In The Martian Chronicles, the subtle race of Martians distracted the invading Americans with irresistible life-like illusions that spoke to their most intimate yearnings. In one episode of the X-Files, a fungus slowly digested an unlucky couple who lay in a field and were rendered completely passive by the fungus’ hallucinogenic properties. And then, most famously, the machines of the movie The Matrix ruled over a ruined wasteland and seduced people with a beguiling virtual reality in order to maintain their passivity while they tapped humanity’s body heat as an energy source. Now, a lot of investors believe that life is imitating art in an alliance of the Federal Reserve and the big banks to create the illusion of healthy equity markets despite massive retail equity withdrawals in the years following the financial crisis.

In this broadly believed scenario the Fed’s motives are comparatively benign -- to foster asset inflation that improves animal spirits, promotes a wealth effect, and restores access to the equity markets for financial institutions and other companies in need of capital. The idea is that through its program of quantitative easing the Fed is buying Treasuries from its primary dealers who then turn around some portion of the proceeds in the equity market. Data miners have discovered strong correlations between the Fed’s permanent open market operations (POMOs) and up days in the equity markets, with a statistically significant spike on such days during the final 45 minutes of trading. So strong is the perception that these operations pump the market that Bernanke’s announcement of a new quantitative easing program last August set off a rally that moved the market up more than 14% before the program was scheduled to begin in November.

Whether or not there is a direct connection between QE and a bid for stocks, the mere fact that the link is so widely believed has played a non-trivial role in the equity markets. Which begs the question: If the markets have risen on this scenario, does it matter whether or not an actual connection exists? After all, millions of investors have been benefiting from the ride. The cynical answer is that it probably does not matter -- if such manipulations could continue in perpetuity. There’s the rub: Nothing continues in perpetuity. In fact, QE2 is scheduled to end around midyear and if it is not extended, the markets will face a crunch whether or not there is a real connection between QE and the market. Thus, if the Fed will not (or cannot) extend QE past June, it behooves its officials to convince investors well beforehand that it has not provided the invisible hand supporting stocks.

Regardless of the Fed’s role, there have been other, more disturbing bits of evidence that we are in a Matrix Market. Exhibit One is the so-called flash crash of May 2010 during which stocks fell by 600 points in five minutes before staging and equally vertiginous recovery. The crash offered evidence that something truly scary lay behind the reassuring façade of buoyant markets. Subsequent investigation revealed that High Frequency Trading, which relies on algorithms to execute super-fast trades, exacerbated the collapse. Revelations about the extraordinary percentage (sometimes over 80%) of trading attributable to HFT programs in stocks such as Citi (C) and AIG (AIG) suggest that the metaphor of a Matrix Market may be literally as well as figuratively true, and also helped explain how a market suffering continuing retail withdrawals could still rise to a multi-year high during a very weak economic recovery. Economist Michael Hudson of the University of Missouri calculated that the average time a stock was held during 2010 was 22 seconds, not exactly buy and hold.

Of course it’s entirely possible that both HFT and the impact of the Fed’s easing program are overblown; that the market’s rise can be simply explained by solid corporate earnings and the perception of a real recovery. If that’s the case, the market will continue to plug higher so long as the recovery story remains credible to investors and earnings hold up. If, however, the rally is largely an artifact of the jet fuel supplied by the Fed and amplified by algorithmic trading, then watch out.

The recent example of the auction-rate securities market shows that fake markets can seduce and then trap the most sophisticated investors. Adapted for municipal finance in 1988 by Goldman Sachs (GS), the market grew to about $300 billion before it collapsed amid a series of failed auctions when the main players -- Citi, UBS (UBS), Morgan Stanley (MS), and Merrill Lynch (MER) -- pulled back from their practice of being the bidders of last resort. What was revealed subsequently was that for several months before that, auctions had basically been a sham with the big underwriter banks supplying the majority of bids for the securities they helped issue. Given that the investors were institutions and high-net-worth individuals, it’s remarkable that this could carry on so long without being uncovered.

The ARS market was doomed in March 2007 when FASB announced that ARS should not be counted as cash on balance sheets and liquidity began to dry up. From that point on the auction rate securities market was a ghost. Those who paid attention (which did not include me) saved themselves much grief. Others remained oblivious for 11 months before the axe fell, and when it fell, it fell suddenly -- one week after the first cracks appeared in the market, 80% of the auctions that priced the securities failed. In hindsight it’s obvious that during that “dead man walking” period it wasn't in any underwriter's or broker’s interest to say that the ground had fatally shifted under what had been a highly profitable market.

This was not a grand conspiracy or racket, but, more likely, a series of individual crimes as like-minded players continued a game because they could see no alternative. I’m sure that many of the players were amazed that it continued as long as it did. Something similar happened in the mortgage-backed securities market as firms such as Bear Stearns continued to package and push them on investors long after it became obvious that the underlying mortgages were going sour in unprecedented numbers (when the MBS market finally did collapse new issuance went from hundreds of billions annually to zero). Something very similar is going on right now in the commercial real estate market where lenders are extending maturities because no one wants to face the consequences of setting off a cascade of defaults and subsequent massive write-downs in a weak market.

Is something similar going on in the equity markets? For sure, we’re gonna find out, probably by midyear.

[Davy]

La ultima frase lo dice todo

Sean Corrigan's Letter To All The "Idiots" Who Believe The Japanese Calamity Will "Prove Positive For GDP"




All the sophist idiots (Corrigan's word not ours) in the media and the bleeding edge of financial lemmingdom who believe there could be no greater boon to global economy than the death and suffering of hundreds of thousands (you know who you are) are kindly requested to read the following missive from Diapason's Sean Corrigan who cleanly and clinically blows out this latest moronic piece of uber-false groupthink out of the water.
Fraom Sean Corrigan of Diapason Securities
Rather than pretending to a level of insight into the scale of Japan's problems which neither we nor anyone else truly possesses at this stage of the disaster, we think it might be worth while instead to run through some general considerations of what ramifications might be felt in its aftermath.
Before we do, however, we cannot abstain from expressing our utter contempt for the many idiots who have already begun parroting the standard Keynesian nonsense that this calamity will ultimately 'prove positive for GDP', or that the rebuilding efforts can only redound to the nation's well-being to the extent that they shake it out of its ongoing 'deflation'.
As is their wont, such imbecile Cargo Culters are once again making a fetish of a coarse-grained statistic which is supposed—however imperfectly—to offer a rough measure of material progress being made in the real economy and not the converse, leading them to lose all focus on what is actually happening to people's living standards and wealth accumulation.
Japan has been stricken with a huge loss of productive capital—as well as an appalling toll of human suffering—and this cannot do anything other than to leave the nation discernibly poorer and, by extension, to curtail its ability to make people across the world better off than they otherwise would be by offering them valuable goods and services as part of that beneficent mutual enrichment which is the international division of labour, conducted under conditions of free(ish) exchange.
Contrary to popular belief, the Japanese have not, in fact, been trapped in a deflationary slough of stagnation these past two decades as both the real and nominal supply of money have risen throughout his period (with the exception of the worst months of the GFC itself), while real per capita national income has also increased modestly, especially on a PPP, or TWI-adjusted basis. Granted, the consumer price basket has trended lower at a rate of less than 1% a year, but this is something which is presumably no more than a reflection of ongoing productivity gains—ones delivered, to boot, in a country formerly marvelled at for the extreme levels of its domestic pricing.
But, even were we to subscribe to this myth of secular slump, the idea that to eradicate a large quantum of people's possessions or to evaporate a sizeable fraction of their nest-eggs would be to contribute to their prosperity is to reckon that in futilely striving to heft his rock up the hill for all eternity, Sisyphus was the most tireless 'engine of growth' for Hades at large.

If you go to the trouble of cooking yourself a dinner, only for the dog to snatch it from the sill where you placed it to cool, do you congratulate yourself on your own good fortune as you troop back to the larder to begin again? If a sudden hailstorm strips bare the groaning ears of your wheat crop the day before you were due to harvest it, do you cheerily go about preparing the field for replanting, content in the knowledge that your doubled labour is being duly recorded in the plus column by a mindless government data-gatherer?
After all, if the awful spectacle of vast swathes of land littered with shattered buildings and crumpled vehicles—or the concern that they suffer the invisible hazards of radioactive contamination—offers such grand opportunities for advancement, why stop there?
Why wait for the vagaries of the climate, or the tortured creaking of continental plates to bring about such a 'stimulus' to growth? Why not declare war on ourselves and unleash our titanic arsenals of destruction on our own towns and cities, and rain down hellfire upon our own farms and gardens, razing the first to the ground and sowing the last with salt, until we make a self-inflicted Carthage of them, one in whose midst we can hope to become rapidly richer than our neighbours as, shivering and starving, we pick our way among the debris of our former civilisation to the nearest construction site?
This is all such arrant nonsense that you should banish from your consideration, henceforth and forever, all of the jejune scribblings of the fool whom you once catch propounding it!

But enough of this! The real crux of the matter is to look at the two sides of Japan, Inc.—both as a user (and end-consumer) of certain goods and as a provider of often highly-valued and not easily replicated material inputs to the world economy in exchange.
All else being equal, the country will be consuming some goods (e.g., lumber, steel, copper wire, concrete, fossil fuel) far more directly in the near future and, moreover, consuming them with little onward production of value from their use.

The first order effect of this would be expected to push up preferentially the prices of both the materials they will be absorbing and those whose production by them is temporarily being reduced.
Conversely, the consumption patterns of the ordinary Japanese will also suffer a compositional shift away from the enjoyment of certain goods and services and, ceteris paribus, the prices of these should be less well supported as a consequence.
Where they no longer supply goods to the market—initially being completely unable to do so, perhaps, and, later, devoting selectively less resources to that production as they first tackle the problems of rebuilding—there is certainly scope for their competitors to prosper, but also significant dangers that the partial or total absence of such goods will disrupt production in factories and fab plants elsewhere, too. [Incidentally, the possible fall in the external surplus this comprises is one offset for the fabled yen 'repatriation' flows which the market so fears].
In short, where Japan's goods are competing for sales, others may benefit at her expense: where they are complementary to them, they will equally share in her ruin. In the counter-weighting of these two factors will be decided the first question of whether output suffers beyond her shores and of what impetus is given to what prices.
By confounding entrepreneurial planning, dislocating production schedules, hampering timely onward delivery, etc., the damage could be wide spread and should certainly belie Monday's initial market insouciance. Given that profitable production is the only true source of sustainable consumption and that business-to-business spending is normally a good multiple of what is captured in the blessed GDP numbers, the earthquake-induced fall in Japanese incomes could soon be reflected elsewhere, too.
Where business planning (and the structure of financial exposures which embody this) has been too casual in its concern for such upsets (however unforeseeable the particulars of this one were), such frictions can rapidly mount to the point where they strip the drive-train of all further functionality and the firm finds itself staring failure in the face.
In this context, we again must draw attention to the alarming upsurge in pestilential credit practices—such as cov-lite, loans, PIK notes, PE dividend-stripping, and buoyant junk financing in general—which so exacerbated the last bust and which have been allowed to re-infect the economic corpus with the active cheerleading of its central banks, especially the one housed in the Mariner Eccles building.
Furthermore, financial markets have entered this crisis having only grudgingly tempered their inordinate, Fed-fostered levels of bullishness (that, as a result of the Arab unrest) and with leverage, carry-trades, and crowding therefore all notably elevated.
A narrow replay of the kind of crash which followed the San Francisco earthquake and fire of 1907 are perhaps not to be looked for in the absence of a hard money kernel to the pyramid of credit, but that is not to say that 'contagion' and the forced liquidation concomitant with it cannot course through other financial channels instead, especially since people are all too aware of the continued fragility of the associated plumbing, even here, on the third anniversary of the Bear Stearns bail out.

One obvious fracture plane could be the finances of Japan itself, a legacy of two decades of failed New Deals whose eventual unravelling has been exciting the attention of the bears for some good while since. The usual defence is that Japan 'owes much of the debt to itself' - a macro-accounting identity which an Austrian is willing to concede while questioning its practical validity.
That some elements of Japanese society have debts greatly in excess of assets (principally, the state) while others (mainly in the private sector) are in the opposite condition is only a comfort inasmuch as it reduces the nation's exposure to the vicissitudes of the forex market or to the vagaries of offshore investor sentiment.
Thus, while it may provide a convenient smoke-screen under the cover of which today's hard-won savings are funnelled to Leviathan, there to plug the holes left by the squandering of yesterday's savings, as well as to disburse the doles from which a good percentage of tomorrow's savings are, in turn, generated, this quadrillion yen round-robin cannot permanently disguise the chronic nature and mind- stretching scale of the capital consumption it entails.
The circling financial vultures are therefore looking forward to the moment when domestic Japanese investment is no more sufficient to absorb all the government's issues, (without perhaps contemplating the drain on the other improvidents when the giant, state-owned—or state-cajoled—institutions sell their USTs and kangaroo bonds, and realise their Nasdaq holdings and Eurobank CoCos in the effort to plug this gap).
What they now anticipate is that the costs likely to arise in the course of rebuilding the nation cannot fail to have advanced the date of that long-awaited morrow when the piper must be paid and JGB yields start to soar in consequence (even though, were we consistent, the Keynesian theory of fruitful holocaust would suggest 'growth' could, meanwhile, repair the finances painlessly).
In this, they may even be right, yet their position-ing may well not survive to see the great denoue-ment, for the route to a complete breakdown in the Japanese fiscal position surely lies through the Nihonbashi and the unbridled monetization powers of the BOJ.
Indeed, the additional threat posed to the economy—not just of Japan, but on those of all of its foreign trading partners—is not so much that the government runs out of cash, but that the whole country comes to drown in the stuff.

Indeed, while recognising the short-term, emergency need to reassure people that they willcon-tinue to have access to a medium of exchange and a functioning payments system, it is more than a little worrisome that the Bank has doubled its long-term QE programme, citing a desire to 'pre-empt a deterioration in business sentiment... from adversely affecting economic activity' and to '...make contributions...' in order to '...overcome deflation...'

As we wrote of a New Zealand whose own afflic-tion has been swiftly forgotten in this larger trag-edy, no good can come of a policy which can only serve to add to the confusion and bewilderment already occasioned by the violence of the tectonic shift in trying to suppress—by means of a crude resort to the printing press—the all-too evident fact that Japan is less well endowed with capital than it was and thus, that interest rates should naturally rise to reflect this inescapable verity.
It is not Yen that Japan now finds itself short of, but potable water, medical supplies, bridging materials, constructional steel, and electric power. The BOJ cannot help deliver these more readily or more efficiently by debauching the currency via its attempt to divorce financial asset prices from the diminished earning potential they incorporate.
Similarly perilous is the incitement this will give to the pump-primers elsewhere in maintaining- or even extending—their own easing programmes. Nor will they be consistent in this for, if they conveniently ignore the rise in food and energy prices, they will just as conveniently point to any liquidation-induced falls in these groupings to confirm the accuracy of their interpretation. On top of this, the many extant doves will be only too happy to protract their tenure as supposed saviours of the universe by enacting extra easing measures should Japan's woes conspire to slow the upward momentum in the local recovery
Do not write-off QE-III just yet.

[Warren]

Muchas gracias por colgar los artículos Davy, muy interesantes.

[Warren]

Marc Faber: "Ante el mercado bajista, la Fed insistirá en imprimir más dinero" - 2908164 - elEconomista.es

[Davy]

De nada. Si quieres mas del mismo tipo, mirate www.zerohedge.com