What is wrong the following headline?
Fed Pumps $41B Into US Financial System
Plain and simple it is a lie, or at least not the entire truth. You see, the Federal Reserve did pump $41B of liquidity into the system through purchasing agency securities. That part is truth. The untruth is that $42.5B in Fed repurchase agreements expired today, essentially draining liquidity by $1.5B ($42.5B - $41M). So, this "pump" of liquidity was actually a drain on the monetary system.
For a good source of the net liquidity "pumped" into the system by the Fed on a daily basis, see the following excellent link:
As long as the MSM keeps serving us headlines of Fed liquidity pumping, Wall Street continues to party. On a day when the markets were down about 2.5%, it is important to keep the psyche positive, thus we have headlines indicating that liquidity is entering the system, ready to be deployed and continue asset inflation. The truth of the matter is that this is one big psychological head game by both the Fed and the MSM. I would actually make the argument that liquidity is becoming constrained within the capital markets due to credit conditions worsening. Nothing like a good old fashioned credit crunch to truly drain liquidity from the system. After yesterday's bogus inflation deflator on the GDP number and this headline today, we would be wise to ignore most financial headlines from mainstream media sources, or at the least dig beneath the headlines a little bit.
...California Home Prices are Over-Valued by 35-40%.
Thanks Goldman Sachs. Without that report I would have never figured out how expensive California real estate is.
This is awesome:
In conjunction with the Simpsons movie coming out next week, 7-11 has converted eleven stores (get it?) into Kwik-E-Marts. They looks awesome. Now if I can just find a list of where they are located at to see if any are within driving distance.
I can't even believe it. I have no clue what to say. First Rod Beck over the weekend and now Chris Benoit. I am angry right now at Benoit for being a coward and taking his wife and son's life before his own. What a sad, sad weekend.
Kinda tired and down today, not sure why. Work has become more stressful but I guess that is what I get for being responsible. Still not sure I like working a desk job but until I come up with a better idea, I will keep moving forward.
The markets continue to be crazy. I see a correction coming but who knows about timing. Since the February 27th crash in the Shanghai index, it is up 45%! That is amazing and reaching nose-bleed section. What goes up must come down. Still think gold and silver are a good buy but I have been slowly reevaluating my thesis. I have been holding them since late 2003 so it might be time to take some profits. The problem is that my profits are in US dollars, which continue to weaken. I just allocated 25% of my 401(k) contributions to an international bond fund, thinking that the US dollar continues to weaken and that foreign currencies might be a better idea. Who knows, just trying to think about the worse case scenarios and plan accordingly.
Went to Pittsburgh last weekend. Interesting big city. Not too busy even though it has a decent population. Customer service sucked but the people were friendly. Amanda and I left early so I guess that speaks to how much there is to do there, oh well.
Anyway, about to read the weekly Hussman comments and then head to bed for an early night.
It has been many years but everything is coming to fruition. Check out the following blogs to figure out what "it" is:
Calculated Risk
Housing Panic
Winter on Economics
Market Oracle
As I said many years ago on a different blog - buy gold and silver now.
It has been awhile but I am back in the blog game. Much has changed since my last posting on a totally different site. The long and short of it - left Berkeley, went to business school at Davis, graduated and moved to Washington DC for work. Learning to adjust and not really liking the weather but overall my life is good. I am out of debt, I have a great job, a stress-free girlfriend, and a little money in the bank - things are good.
Anyway, not trying to talk about myself but instead want to use this blog as an outlet for what I enjoy in life. Right now I am thoroughly enjoying the sub-prime blow ups going on in the mortgage market. I have witnessed the real estate bubble first hand in California and waited patiently for normality to resume in the markets. Without naming names, I had an old acquaintence peddling sub-prime mortgages - I wonder how he is doing today with a wife, two kids, and a large mortgage tying him down.
If anyone wants great, basic investing advice, please read Rule #1.
