The S&P has topped !

[Locutus]

Quote from david666:

actually thats not entirely true, the riskier the asset the more the banks have to hold in liquid instruments or cash however if its very low risk, the requirements are very low. I.e. if BOA gets a lot of AA grade investments they could leverage them a lot. Once they resecurtize the toxic assets and start holding a lot of risk free grade investments, Basel III is out the window.

edit: lets not forget that the subprime debts were rated AAA, so there are always loopholes

Yes there are always loopholes but I don't see how this will lead to rampant inflation.

 

[david666]

Quote from Locutus:

Yes there are always loopholes but I don't see how this will lead to rampant inflation.

Maybe not rampant inflation but I do see it leading to inflation because once they free up all the cash they are holding on to and start lending it will add a lot of money to the system in the neighborhood of trillions it will cause inflation

 

[bkveen3]

Quote from david666:

Maybe not rampant inflation but I do see it leading to inflation because once they free up all the cash they are holding on to and start lending it will add a lot of money to the system in the neighborhood of trillions it will cause inflation

Why can't the FED simply sell all of the T-bonds and other assets they have been buying over the last two years in order to keep money supply fixed? That's what they have said they will do, what do you know that they don't? I just want you to explain why their plan won't work. All you have said so far is that it won't.

 

[ammo]

Quote from bone:

You still have a very intact trendline channel - too soon for the bears to be declaring victory. You need some legitimate technical price action to justify calling a top.

here are a couple of channels ,broke above and back into the long term, came down and stopped on the shorter term

 

[ammo]

spx daily

 

[david666]

Quote from bkveen3:

Why can't the FED simply sell all of the T-bonds and other assets they have been buying over the last two years in order to keep money supply fixed? That's what they have said they will do, what do you know that they don't? I just want you to explain why their plan won't work. All you have said so far is that it won't.

Because they are so focused on getting inflation to 2% that they keep printing money. But once it hits 2% I highly doubt its going to stop there at this point just selling t bonds won't be able to pull the money fast enough. They are going to have to raise interest rates which will halt economic growth and will ultimately led to a temporary increase in unemployment . When that happens people will start crying that another recession is coming. Politically I don't think the fed will be able to do what is necessary for long term growth because of the short term sacrifice

 

[volente_00]

Quote from volente_00:

word on the street is we make a new top at ~1340 soon

That's how you call a top drawdown.

 

[bkveen3]

Quote from david666:

Because they are so focused on getting inflation to 2% that they keep printing money. But once it hits 2% I highly doubt its going to stop there at this point just selling t bonds won't be able to pull the money fast enough. They are going to have to raise interest rates which will halt economic growth and will ultimately led to a temporary increase in unemployment . When that happens people will start crying that another recession is coming. Politically I don't think the fed will be able to do what is necessary for long term growth because of the short term sacrifice

Currently the FED is only buying assets that would be bought anyways if banks weren't being extremely risk averse. You say printing, but would it be any different if they FED printed it and loaned it out to some banks and then they purchased the assets? When the financial system is repaired and starts funding business again the FED can match its asset sales dollar for dollar with funds coming in. This keeps money supply fixed and the only thing that can increase is velocity. This would make it demand based inflation and would be considered a good thing. That's just how I'm seeing it. Economics is a guessing game sometimes.

 

[Tsing Tao]

Quote from fly down:

sing I looked at the calender and it's 2/22/2011 today. But here you are so sure nothing happens to "end of QE..not before".

I siad to you before, you don't trade stocks, so you really should not have had your hoofprints all over this thread. But do what you must.

you're so funny when you're mad. just because violente called the drop in one shot (as opposed to your...er..i lost count...attempts). dont be a hater!

that said, a one day much needed correction doesnt mean its over. or are you hopping on violente's top call too?

 

[Tsing Tao]

ES up in pre-market for all dip buyers!

situation in the ME hasnt changed, so you know the market correction was just that.