John Paulson : Buy Homes

[davelj]

[quote=bubba99]OK genius, why might it be right for the wrong reasons? [/quote]

As I said, you may end up being right. But not for the reason you purport. That’s self-explanatory. I might predict the right outcome for every football game this weekend. But it won’t be because I’m some football guru – it will be due to blind luck.

[quote=bubba99]
Here is an article from blumberg about bank treasury purchases – more than nothing

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aFJpn5iE_vVc [/quote]

Aside from the fact that the article is almost a year old, did you bother to actually read it? Here’s the money quote:

“Even after banks including Bank of America Corp. and Capital One Financial Corp. increased such investments 26 percent to $125 billion in the 12 months through June, they have only about 1 percent of their assets in Treasuries, Fed data show. That’s down from the 8.5 percent average for the year after the past five recessions. Banks would have to buy $1 trillion more to reach past levels, so demand ‘could remain quite high for some time,’ Barclays Plc said.”

Yes, banks have for the last year been buying SHORT-TERM treasuries, which they – no, make that no one – needs to dump. There’s very little duration – and thus interest-rate risk – in holding short-term treasuries.

[quote=bubba99]
Here is another an interesting article about the banks being the first wave in the calapse of the Treasury market.

At least I am not alone in “my lack of understanding of the subject”

http://gonzalolira.blogspot.com/2010/08/how-hyperinflation-will-happen.html?source=patrick.net#navbar-iframe

The applicable text being “So the TBTF banks, on seeing this run on Treasuries, will add to the panic by acting in their own best interests: They will be among the first to step off Treasuries. They will be the bleeding edge of the wave. Here the panic phase of the event begins: Asset managers—on seeing this massive Fed buy of Treasuries, and the American Zombies selling Treasuries, all of this happening within days of a largish Treasury auction—will dump their own Treasuries en masse.”[/quote]

You’re right. You’re not alone. You AND this “Writer, Filmmaker” don’t understand the relationship between the Fed, the TBTF banks and treasuries.

If FOREIGNERS start selling long-term US Treasuries (or not buying them “when issued”), THEN we have a problem. The same applies to other LARGE buyers of LONG-TERM Treasuries. But banks don’t hold much in the way of Treasuries (and, again, what they do hold are short-term) in the whole scheme of things as the graph in my prior post makes abundantly clear. You’re chasing a red herring. Because, like your “Writer, Filmmaker” friend above, you don’t know any better.

[faterikcartman]

[quote=davelj] If FOREIGNERS start selling long-term US Treasuries (or not buying them “when issued”), THEN we have a problem. [/quote]

As I’m sure you know Dave, the canary in the coal mine reads like this: “If CHINA starts selling […] or not buying […]”.

[faterikcartman]

[quote=davelj] If FOREIGNERS start selling long-term US Treasuries (or not buying them “when issued”), THEN we have a problem. [/quote]

As I’m sure you know Dave, the canary in the coal mine reads like this: “If CHINA starts selling […] or not buying […]”.

[faterikcartman]

[quote=davelj] If FOREIGNERS start selling long-term US Treasuries (or not buying them “when issued”), THEN we have a problem. [/quote]

As I’m sure you know Dave, the canary in the coal mine reads like this: “If CHINA starts selling […] or not buying […]”.

[faterikcartman]

[quote=davelj] If FOREIGNERS start selling long-term US Treasuries (or not buying them “when issued”), THEN we have a problem. [/quote]

As I’m sure you know Dave, the canary in the coal mine reads like this: “If CHINA starts selling […] or not buying […]”.

[faterikcartman]

[quote=davelj] If FOREIGNERS start selling long-term US Treasuries (or not buying them “when issued”), THEN we have a problem. [/quote]

As I’m sure you know Dave, the canary in the coal mine reads like this: “If CHINA starts selling […] or not buying […]”.

[sobmaz]

[quote=patb][quote=davelj]I’m not saying he’s wrong, but… I’m filing this under: I’m Talking My Own Book, By the Way.[/quote]

i think with the destruction of asset prices?

no sign of inflation for a while[/quote]

UMMMM…..If you recall, throughout the 90’s and 00’s asset prices skyrocketed and there was NO INFLATION, or very little, officially.

The CPI DOES NOT consider asset prices. So, if asset increases did not go into the CPI calculation, asset decreases do not go into the CPI calculation.

The key here is what the FED wants you to believe.

Now that we do have asset deflation the FED wants us to worry about deflation yet when they were inflating they said, “don’t worry, it’s not really inflation”.

The reason for this twisting of facts is they want everyone to think that there is nothing wrong with printing dollars endlessly when we have this supposed “deflation”.

Check the price of all commodities.

Check the price of your utilities y over y, insurance, food, all living expenses and tell me if there is deflation.

Yep, if all you do is buy plasma tvs and computers there is deflation but most people spend their money on food, rent, utilities and insurance.

[sobmaz]

[quote=patb][quote=davelj]I’m not saying he’s wrong, but… I’m filing this under: I’m Talking My Own Book, By the Way.[/quote]

i think with the destruction of asset prices?

no sign of inflation for a while[/quote]

UMMMM…..If you recall, throughout the 90’s and 00’s asset prices skyrocketed and there was NO INFLATION, or very little, officially.

The CPI DOES NOT consider asset prices. So, if asset increases did not go into the CPI calculation, asset decreases do not go into the CPI calculation.

The key here is what the FED wants you to believe.

Now that we do have asset deflation the FED wants us to worry about deflation yet when they were inflating they said, “don’t worry, it’s not really inflation”.

The reason for this twisting of facts is they want everyone to think that there is nothing wrong with printing dollars endlessly when we have this supposed “deflation”.

Check the price of all commodities.

Check the price of your utilities y over y, insurance, food, all living expenses and tell me if there is deflation.

Yep, if all you do is buy plasma tvs and computers there is deflation but most people spend their money on food, rent, utilities and insurance.

[sobmaz]

[quote=patb][quote=davelj]I’m not saying he’s wrong, but… I’m filing this under: I’m Talking My Own Book, By the Way.[/quote]

i think with the destruction of asset prices?

no sign of inflation for a while[/quote]

UMMMM…..If you recall, throughout the 90’s and 00’s asset prices skyrocketed and there was NO INFLATION, or very little, officially.

The CPI DOES NOT consider asset prices. So, if asset increases did not go into the CPI calculation, asset decreases do not go into the CPI calculation.

The key here is what the FED wants you to believe.

Now that we do have asset deflation the FED wants us to worry about deflation yet when they were inflating they said, “don’t worry, it’s not really inflation”.

The reason for this twisting of facts is they want everyone to think that there is nothing wrong with printing dollars endlessly when we have this supposed “deflation”.

Check the price of all commodities.

Check the price of your utilities y over y, insurance, food, all living expenses and tell me if there is deflation.

Yep, if all you do is buy plasma tvs and computers there is deflation but most people spend their money on food, rent, utilities and insurance.

[sobmaz]

[quote=patb][quote=davelj]I’m not saying he’s wrong, but… I’m filing this under: I’m Talking My Own Book, By the Way.[/quote]

i think with the destruction of asset prices?

no sign of inflation for a while[/quote]

UMMMM…..If you recall, throughout the 90’s and 00’s asset prices skyrocketed and there was NO INFLATION, or very little, officially.

The CPI DOES NOT consider asset prices. So, if asset increases did not go into the CPI calculation, asset decreases do not go into the CPI calculation.

The key here is what the FED wants you to believe.

Now that we do have asset deflation the FED wants us to worry about deflation yet when they were inflating they said, “don’t worry, it’s not really inflation”.

The reason for this twisting of facts is they want everyone to think that there is nothing wrong with printing dollars endlessly when we have this supposed “deflation”.

Check the price of all commodities.

Check the price of your utilities y over y, insurance, food, all living expenses and tell me if there is deflation.

Yep, if all you do is buy plasma tvs and computers there is deflation but most people spend their money on food, rent, utilities and insurance.

[sobmaz]

[quote=patb][quote=davelj]I’m not saying he’s wrong, but… I’m filing this under: I’m Talking My Own Book, By the Way.[/quote]

i think with the destruction of asset prices?

no sign of inflation for a while[/quote]

UMMMM…..If you recall, throughout the 90’s and 00’s asset prices skyrocketed and there was NO INFLATION, or very little, officially.

The CPI DOES NOT consider asset prices. So, if asset increases did not go into the CPI calculation, asset decreases do not go into the CPI calculation.

The key here is what the FED wants you to believe.

Now that we do have asset deflation the FED wants us to worry about deflation yet when they were inflating they said, “don’t worry, it’s not really inflation”.

The reason for this twisting of facts is they want everyone to think that there is nothing wrong with printing dollars endlessly when we have this supposed “deflation”.

Check the price of all commodities.

Check the price of your utilities y over y, insurance, food, all living expenses and tell me if there is deflation.

Yep, if all you do is buy plasma tvs and computers there is deflation but most people spend their money on food, rent, utilities and insurance.

[UCGal]

[quote=sobmaz]Check the price of your utilities y over y, insurance, food, all living expenses and tell me if there is deflation.

Yep, if all you do is buy plasma tvs and computers there is deflation but most people spend their money on food, rent, utilities and insurance.[/quote]
Gas prices are down YoY.

My mortgage rates are down YoY because of a refi.

Milk is about the same as last year – which is down considerably from 2008.

My utilities (sdg&e)are flat or down YoY (some of that may be due to conservation – I just looked at the total bills.)

More restaurants and specialty shops (bakeries etc) run specials – bringing the prices down.

Insurance – my auto insurance has been going down – but I assume that’s because my cars are getting older. My homeowners has stayed pretty flat…

I don’t see inflation on day to day expense… The only place I see a big hit is there are NO sales/discounts on airfare. You can find bargains on hotel and vacation rental deals – but airfare has gone up for lower service, higher fees, smaller seats.

[UCGal]

[quote=sobmaz]Check the price of your utilities y over y, insurance, food, all living expenses and tell me if there is deflation.

Yep, if all you do is buy plasma tvs and computers there is deflation but most people spend their money on food, rent, utilities and insurance.[/quote]
Gas prices are down YoY.

My mortgage rates are down YoY because of a refi.

Milk is about the same as last year – which is down considerably from 2008.

My utilities (sdg&e)are flat or down YoY (some of that may be due to conservation – I just looked at the total bills.)

More restaurants and specialty shops (bakeries etc) run specials – bringing the prices down.

Insurance – my auto insurance has been going down – but I assume that’s because my cars are getting older. My homeowners has stayed pretty flat…

I don’t see inflation on day to day expense… The only place I see a big hit is there are NO sales/discounts on airfare. You can find bargains on hotel and vacation rental deals – but airfare has gone up for lower service, higher fees, smaller seats.

[UCGal]

[quote=sobmaz]Check the price of your utilities y over y, insurance, food, all living expenses and tell me if there is deflation.

Yep, if all you do is buy plasma tvs and computers there is deflation but most people spend their money on food, rent, utilities and insurance.[/quote]
Gas prices are down YoY.

My mortgage rates are down YoY because of a refi.

Milk is about the same as last year – which is down considerably from 2008.

My utilities (sdg&e)are flat or down YoY (some of that may be due to conservation – I just looked at the total bills.)

More restaurants and specialty shops (bakeries etc) run specials – bringing the prices down.

Insurance – my auto insurance has been going down – but I assume that’s because my cars are getting older. My homeowners has stayed pretty flat…

I don’t see inflation on day to day expense… The only place I see a big hit is there are NO sales/discounts on airfare. You can find bargains on hotel and vacation rental deals – but airfare has gone up for lower service, higher fees, smaller seats.

[UCGal]

[quote=sobmaz]Check the price of your utilities y over y, insurance, food, all living expenses and tell me if there is deflation.

Yep, if all you do is buy plasma tvs and computers there is deflation but most people spend their money on food, rent, utilities and insurance.[/quote]
Gas prices are down YoY.

My mortgage rates are down YoY because of a refi.

Milk is about the same as last year – which is down considerably from 2008.

My utilities (sdg&e)are flat or down YoY (some of that may be due to conservation – I just looked at the total bills.)

More restaurants and specialty shops (bakeries etc) run specials – bringing the prices down.

Insurance – my auto insurance has been going down – but I assume that’s because my cars are getting older. My homeowners has stayed pretty flat…

I don’t see inflation on day to day expense… The only place I see a big hit is there are NO sales/discounts on airfare. You can find bargains on hotel and vacation rental deals – but airfare has gone up for lower service, higher fees, smaller seats.

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